PUBLIC DEBT STABILIZATION: REDISTRIBUTIVE DELAYS VERSUS PREEMPTIVE ANTICIPATIONS

This article illustrates and formalizes the conditions under which majority voting can lead to either delays or anticipations in public debt stabilizations. Under the assumptions of proportional taxation and universal public expenditures, we present an intertemporal version of the “Meltzer-Richard” result, which captures the difficulty of controlling increases in public expenditures. In the benchmark model delays are endogenous and have redistributive effects, but when a relatively rich minority makes the decisions, we may observe anticipation in public debt stabilization.Stabilization delays, Economic adjustments, Economic reforms, Majority voting

Building Bridges: Heterogeneous Jurisdictions, Endogenous Spillovers, and the Benefits of Decentralization

We model two heterogeneous districts of unequal size that may enjoy each other's local public good if a costly national infrastructure (the bridge) is provided. We compare a decentralized regime where local public goods are decided locally and the bridge centrally, with a centralized regime where all decisions are taken centrally, under both benevolent planner and median voter decision making. In both cases, it may happen that either both regimes build the bridge, none, or only one does. We provide a full-edged welfare comparison of all the possibilities. When the bridge is built in both regimes, centralization dominates if the spillovers allowed by the bridge are sufficiently high. When the bridge is not built in the centralized regime, decentralization is always preferred. We also show that, under some circumstances, it may happen that decentralization dominates even if it does not build the bridge, while the centralized regime does. Finally, we suggest a simple mechanism to avoid the costs imposed by the centralized regime upon minorities: allocating decision power over the local public goods and the bridge to different local constituents.Local public goods; Endogenous Spillovers; Fiscal (de)centralization.

The politics of growth: Can lobbying raise growth and welfare?

This paper aims at analyzing the effects of lobbying over economic growth and primarily welfare. We model explicitly the interaction between policy-makers and firms in a setup where the latter undertakes political contributions to the former in exchange for more restrictive market regulations which induce exit and enhance the profitability of the market. In a sectorial equilibrium, despite stimulating growth, lobbying restricts the market structure and reduces welfare when compared to the free-entry outcome. However, once general equilibrium considerations are taken into account, we find that lobbying may improve welfare over a welfare maximizing free-entry equilibrium, by means of an expansion in aggregate demand. This introduces a new paradigm in the literature about the effects of lobbying over economic performance.Funda cão para a Ciência e Tecnologia (BD/36542/2007), Fundação Amélia de Mell

The Politics of Growth: Can Lobbying Raise Growth and Welfare?

This paper analyses the link between lobbying, market structure, growth, and welfare. We consider a setup where lobbyist firms undertake contributions to a policy-maker in exchange for profit increasing regulations, in a general equilibrium model of R&D driven growth. We find that, despite increasing concentration – which leads to higher prices and less varieties – lobbying may stimulate growth and increase welfare by means of an expansion in aggregate demand if its real costs are small. This conclusion is supported by a simple calibration exercise.Lobbying; Market structure; R&D investment; Growth; Welfare.

FDI and institutional reform in Portugal

This article analyses the effects of several geographic, economic and institutional factors on bilateral inward FDI in Europe. Moreover, it assesses the required reform effort, and the expected benefits, for Portugal to converge with the EU in the institutional variables that are relevant to attract investment. We conclude that good institutions favouring economic freedom and the ease of doing business, and geography, market size and labor costs, affect bilateral inward FDI. Political risk does not lead to significant differences in FDI across the EU. The results are robust to different methods – principal component analysis, factor-based scores and by considering several institutional indicators successively. We also find that most promising reforms arise in the financial system, corruption, property rights, and in some business regulations associated with starting a business. Increasing labor market flexibility to the EU level has also a large impact on inward FDI, but this reform comes at a comparatively higher effort.FDI, Institutional reform, Institutions, Portugal, EU

Endogenous spillovers in the trade-off between centralization and decentralization

In this paper, we revisit the classical trade-off between centralized and decentralized provision of local public goods, in a setting where interregional spillovers depend on the level of a national public good. We compare the standard benevolent planner approach with a political economy in which decisions, in a centralized system, are undertaken by a non-cooperative legislature with no separation of powers. We observe that the policy-maker in a centralized system is able to play both with local public goods and spillovers, a mechanism that is not available under a decentralized system. When compared to the traditional exogenous spillovers assumption, this improves the case for centralization under the standard benevolent planner approach. However, the same is not necessarily true in the non-cooperative legislature, as in this case the interests of the legislator do not need to be aligned with those of the society. Finally, we extend the traditional political economy analysis by considering a legislature in which decisions are undertaken by different committees (separation of powers), and show that it performs better than the original non-cooperative legislature, greatly improving the case for centralization.Funda cão para a Ciência e Tecnologia (BD/36542/2007

Management control of intangibles

This paper analyzes the importance of management control on the intangible elements considering its contribution for value creation. Some intangible evaluation models and methodologies are discussed, taking into consideration their utility. A new methodological framework that considers the objectives of management control as well as its applicability is presented

Modified gravity models and the central cusp of dark matter haloes in galaxies

The N-body dark matter (DM) simulations point that DM density profiles, e.g. the Navarro Frenk White (NFW) halo, should be cuspy in its centre, but observations disfavour this kind of DM profile. Here we consider whether the observed rotation curves close to the galactic centre can favour modified gravity models in comparison to the NFW halo, and how to quantify such difference. Two explicit modified gravity models are considered, Modified Newtonian Dynamics (MOND) and a more recent approach renormalization group effects in general relativity (RGGR). It is also the purpose of this work to significantly extend the sample on which RGGR has been tested in comparison to other approaches. By analysing 62 galaxies from five samples, we find that (i) there is a radius, given by half the disc scale length, below which RGGR and MOND can match the data about as well or better than NFW, albeit the formers have fewer free parameters; (ii) considering the complete rotation curve data, RGGR could achieve fits with better agreement than MOND, and almost as good as a NFW halo with two free parameters (NFW and RGGR have, respectively, two and one more free parameters than MOND)

Evaluation of fruit and seed diversity and characterization of carob (Ceratonia siliqua L.) cultivars in Algarve region

The genetic diversity of 15 carob ( Ceratonia siliqua L.) cultivars located in an experimental field from Algarve (Portugal) was evaluated over 7 years using 12 fruit and seed phenotypic characters, in order to characterize carob cultivars. The values of morphological traits obtained by cultiv ar were compared with those from other countries of the Mediterranean basin. Statistically significant differences were found between cultivars for al l characters which were examined, what indicates a high genetic diversity. The relationship among these characters was analyzed by principal component analysis (PCA) resulting in the separation of these cultivars classed in four groups (clusters I–IV) and in four ungrouped cultivars. A three dimension of the model was found to be significant and explained 74.5% of the total variation, in which the first component accounting for 34.6% of the total variation is dominated by fruit characters, while the second component is dominated by seed characters. Cultivars plotted on the left-lower quadrant on the space determined by principal components 1 and 2 are characterized by fruits with high seed yield more appropriated for industrial rentability. The correlation analyses established by cultivar provided a specific understanding about the way how fruit and seed characteristics correlate within each cultivar. This approach can be useful for the development of a breeding programme, aiming to increase the seed yield, seed thickness, individual and total seed weight by fruit, characteristics that are determinant to improve the industrial exploitation of carob