Revenue-enhancing Trade Liberalization in Developing Countries

Recovering revenue loss due to the reduction in import tariffs is a major concern of many developing economies. In an economy with free entry, which affects the product market competition, we show that, even if there is no other tax reform such as a profit tax reform, the market mechanism itself takes care of the loss of government revenue following a tariff reduction if entry is sufficiently costly. A compensatory profit tax to compensate the loss of government revenue following a tariff reduction is required for an intermediate level of entry cost. If the entry cost is very small, the loss of government revenue following a tariff reduction cannot be compensated even with a profit tax reform. Hence, the net effect of a tariff reduction on government revenue therefore depends on how much tariff and tax revenues are created by entry, which is affected by changes in both the tariff rate and the profit tax rate.Free Entry; Entry Cost; Trade Liberalization

Public Expenditures, Bureaucratic Corruption and Economic Development

This paper presents a dynamic general equilibrium analysis of public sector corruption and economic growth. In an economy with government intervention and capital accumulation, state-appointed bureaucrats are charged with the responsibility for procuring public goods which contribute to productive efficiency. Corruption arises because of an opportunity for bureaucrats to appropriate public funds by misinforming the government about the cost and quality of public goods provision. The incentive for each bureaucrat to do this depends on economy-wide outcomes which, in turn, depend on the behaviour of all bureaucrats. We establish the existence of multiple development regimes, together with the possibility of multiple, frequency-dependent equilibria. The predictions of our analysis accord strongly with recent empirical evidence on the causes and consequences of corruption in public office.

Corruption, Seigniorage and Growth: Theory and Evidence

This paper presents an analysis of the effect of bureaucratic corruption on economic growth through a public finance transmission channel. At the theoretical level, we develop a simple dynamic general equilibrium model in which financial intermediaries make portfolio decisions on behalf of agents, and bureaucrats collect tax revenues on behalf of the government. Corruption takes the form of the embezzlement of public funds, the effect of which is to increase the government’s reliance on seigniorage finance. This leads to an increase in inflation which, in turn, reduces capital accumulation and growth. At the empirical level, we use data on 82 countries over a 20-year period to test the predictions of our model. Taking proper account of the government’s budget constraint, we find strong evidence to support these predictions under different estimation strategies. Our results are robust to a wide range of sensitivity tests.corruption, seigniorage, inflation, growth

Impact of Rohingya Refugees on Food Prices in Bangladesh: Evidence from a Natural Experiment

The Rohingya crisis is the fourth largest displacement of population in the world, with most refugees sheltering in neighbouring Bangladesh. We use this event as a natural experiment to examine the impact of the sudden influx of Rohingyas on food prices in the main host region of Bangladesh. We have pieced together a unique data set on food prices based on unpublished information at local government levels covering the pre- and post-influx period. We use a difference-in-difference approach to identify the impact of the refugee influx on the prices in the local area. Our baseline results indicate that overall food prices increased by 8 percent in the host sub-district of Ukhia, with prices of protein and vegetables increasing by 7 and 36 percent, respectively. For aid-supplied food products, such as cereals and lentils, we do find a statistically significant mitigating effect on prices. However, they were not substantial enough to reverse the increase in food prices

Product Differentiation in a Vertical Structure

We consider final goods producers' preference for horizontal product differentiation in the presence of strategic input price determination. Final goods producers may not prefer maximal differentiation but may prefer moderate differentiation under both Cournot and Bertrand competition in the final goods market if product differentiation does not increase the market size significantly and there is either free entry in the input market or the input supplier has increasing returns to scale technology. Thus, we provide a new rationale for moderate product differentiation. Our reasons are different from the existing reasons of mixed pricing strategy, endogenous leadership, no-buy option for the consumers and the relative performance incentive schemes

Structural Elucidation of a Protective B Cell Epitope on Outer Surface Protein C (OspC) of the Lyme Disease Spirochete, Borreliella burgdorferi

Outer surface protein C (OspC) plays a pivotal role in mediating tick-to-host transmission and infectivity of the Lyme disease spirochete, Borreliella burgdorferi. OspC is a helical-rich homodimer that interacts with tick salivary proteins, as well as components of the mammalian immune system. Several decades ago, it was shown that the OspC-specific monoclonal antibody, B5, was able to passively protect mice from experimental tick-transmitted infection by B. burgdorferi strain B31. However, B5’s epitope has never been elucidated, despite widespread interest in OspC as a possible Lyme disease vaccine antigen. Here, we report the crystal structure of B5 antigen-binding fragments (Fabs) in complex with recombinant OspC type A (OspCA). Each OspC monomer within the homodimer was bound by a single B5 Fab in a side-on orientation, with contact points along OspC’s α-helix 1 and α-helix 6, as well as interactions with the loop between α-helices 5 and 6. In addition, B5’s complementarity-determining region (CDR) H3 bridged the OspC-OspC′ homodimer interface, revealing the quaternary nature of the protective epitope. To provide insight into the molecular basis of B5 serotype specificity, we solved the crystal structures of recombinant OspC types B and K and compared them to OspCA. This study represents the first structure of a protective B cell epitope on OspC and will aid in the rational design of OspC-based vaccines and therapeutics for Lyme disease