Optimal universal and categorical benefits with classification errors and imperfect enforcement

We determine the optimal combination of a universal benefit, B, and categorical benefit, C, for an economy in which individuals differ in both their ability to work – modelled as an exogenous zero quantity constraint on labour supply – and, conditional on being able to work, their productivity at work. C is targeted at those unable to work, and is conditioned in two dimensions: ex-ante an individual must be unable to work to be awarded the benefit , whilst ex-post a recipient must not subsequently work. However, the ex-ante conditionality may be imperfectly enforced due to Type I(false rejection) and Type II (false award) classification errors, whilst, in addition, the ex post conditionality may be imperfectly enforced. If there are no classification errors – and thus no enforcement issues – it is always optimal to set C>0, whilst B=0 only if the benefit budget is sufficiently small. However, when classification errors occur, B=0 only if there are no Type I errors and the benefit budget is sufficiently small, while the conditions under which C>0 depend on the enforcement of the ex-post conditionality. We consider two discrete alternatives. Under No Enforcement C>0 only if the test administering C has some discriminatory power. In addition, social welfare is decreasing in the propensity to make each type of error. However, under Full Enforcement C>0 for all levels of discriminatory power, including that of no discriminatory power. Furthermore, whilst social welfare is decreasing in the propensity to make Type I errors, there are certain conditions under which it is increasing in the propensity to make Type II errors. This implies that there may be conditions under which it would be welfare enhancing to lower the chosen eligibility threshold – supporting the suggestion by Goodin (1985) to “err on the side of kindness”.Postprin

Measuring the effectiveness of anti-cartel interventions : a conceptual framework

This paper develops a model of the birth and death of cartels in the presence of enforcement activities by a Competition Authority (CA). We distinguish three sets of interventions: (a) detecting, prosecuting and penalising cartels; (b) actions that aim to stop cartel activity in the short-term, immediately following successful prosecution; (c) actions that aim to prevent the re-emergence of prosecuted cartels in the longer term. The last two intervention activities have not been analysed in the existing literature. In addition we take account of the structure and toughness of penalties. In this framework the enforcement activity of a CA causes industries in which cartels form to oscillate between periods of competitive pricing and periods of cartel pricing. We determine the impact of CA activity on deterred, impeded, and suffered harm. We derive measures of both the total and the marginal effects on welfare resulting from competition authority interventions and show how these break down into measures of the Direct Effect of interventions (i.e. the effect due to cartel activity being impeded) and two Indirect/Behavioural Effects – on Deterrence and Pricing. Finally, we calibrate the model and estimate the fraction of the harm that CAs remove as well as the magnitude of total and marginal welfare effects of anti-cartel interventions.Publisher PD

Music at the Close: Richard II in the Elizabethan Anthologies

The dying words spoken by John of Gaunt have a long afterlife: as sententious lines bound to catch the eye of a commonplacing reader, they seem almost designed to appear outside their dramatic setting, in manuscript and printed compilations. This essay reads Gaunt’s deathbed scene, "Richard II" 2.1, in the light of two anthologies printed in 1600, "Englands Parnassus" and "Belvedere", both derived in some way from the circle of printers and editors surrounding John Bodenham. "Richard II"’s strong representation in both volumes testifies to its wider popularity, and that popularity was doubtless aided in turn by these volumes. Beyond that, though, this moment of the play seems peculiarly anthologizable. Words spoken on the point of death were frequently thought to acquire a special truthfulness, even a sense of prophecy. Through an examination of dying moments in a variety of early modern sources, from Michel de Montaigne to Antonio Minturno, this essay is an experiment in thinking about how Shakespeare might have shaped his plays for a commonplace-book culture. It looks closely at the unexpectedly lyrical quality of the sententiae themselves, and the intimate relationship between lyric and sententiae in the play and the anthologies. It reads Gaunt’s famous encomium to “this sceptred Ile” as it appears when read through the anthologies’ negotiation of poetry and nationhood. And it considers the affinity between the peculiar life of the “choicest flowers” gathered in these anthologies, and the dying words they choose.The Wolfson Foundatio

Public policies and financing for Mexican SMEs in the face of the Covid19 pandemic

Objetivos: El trabajo está enfocado a conocer el accionar de las políticas públicas a las Pequeñas y Medianas Empresas, especialmente, los apoyos financieros para enfrentar la crisis ocasionada por la pandemia Covid19. Para ello, se expone la hipótesis que estos apoyos no fueron suficientes para reponer el desempeño de estas empresas. Métodos: Se utilizan métodos de estadísticas descriptivas de corte transversal con base a estadísticas, censos y encuestas oficiales de gobierno, además del análisis de políticas públicas locales y a nivel de los países de la región. Resultados: Los resultados muestran que convergen con el planteamiento teórico sobre las limitaciones endógenas de las Pequeñas y Medianas Empresas para acceder al financiamiento bancario, en este sentido, se encuentra una situación previa a la pandemia de bajo acceso al financiamiento que genera empresas con estructuras financieras deterioradas en el tiempo y con mayor exposición frente a las crisis. Las políticas no han generado una relación más fluida entre entras empresas y el financiamiento con instituciones financieras formales, generándose un fuerte lazo con proveedores. Conclusión: Las políticas que se implantaron fueron paliativa, en el contexto de la crisis, sin embargo, el problema de la fragilidad de estas empresas persiste, lo cual requiere encaminar las políticas para fortalecerlas considerando su aporte fundamental en la estructura empresarial del país.Background and objectives: This article is focused on understanding the impact of public policies on Small and Medium Enterprises, especially in terms of financial support in the face of the crisis caused by the Covid19 pandemic. To this end, the hypothesis is presented that this support was not sufficient to restore the performance of these companies. Methods: Cross-sectional descriptive statistics methods are used based on statistics, censuses, and official government surveys, as well as analysis of national public policies in the region. Findings: The results converge with the theoretical approach on the endogenous limitations of Small and Medium Enterprises to access bank funding. Prior to the pandemic, there was a low level of access to such funding, which over time generated companies with deteriorated financial structures vulnerable to crises. The policies have not generated a more fluid relationship between companies and funding from formal financial institutions, generating a strong bond with suppliers. Conclusion: The policies that were implemented were palliative, in the context of the crisis; however, the problem of the fragility of these companies persists, which requires directing policies to strengthen them considering their fundamental contribution to the country's business structure