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Author: Jean-Jacques Laffont
Publisher: Oxford University Press
ISBN: 0198294247
Category : Fiction
Languages : en
Pages : 270
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Book Description
Mainstream economics has recognized only recently the necessity to incorporate political constraints into economic analysis intended for policy advisors. Incentives and Political Economy uses recent advances in contract theory to build a normative approach to constitutional design in economic environments.The first part of the book remains in the tradition of benevolent constitutional design with complete contracting. It treats politicians as informed supervisors and studies how the Constitution should control them, in particular to avoid capture by interest groups. Incentive theories for the separation of powers or systems of checks and balances are developed.The second part of the book recognises the incompleteness of the constitutional contract which leaves discretion to the politicans selected by the electoral process. Asymmetric information associates information rents with economic policies and the political game becomes a game of costly redistribution of those rents. Professor Laffont investigates the trade-offs between an inflexible constitution which leaves little discretion to politicians but sacrifices ex post efficiency and a constitutionweighted towards ex post efficiency but also giving considerable discretion to politicians to pursue private agendas.The final part of the book reconsiders the modeling of collusion given asymmetric information. It proposes a new approach to characterizing incentives constraints for group behaviour when asymmetric information is non-verifiable. This provides a methodology to characterise the optimal constitutional response to activities of interest groups and to study the design of any institution in which group behavior is important.
Author: Jean-Jacques Laffont
Publisher: Oxford University Press
ISBN: 0198294247
Category : Fiction
Languages : en
Pages : 270
Get Book
Book Description
Mainstream economics has recognized only recently the necessity to incorporate political constraints into economic analysis intended for policy advisors. Incentives and Political Economy uses recent advances in contract theory to build a normative approach to constitutional design in economic environments.The first part of the book remains in the tradition of benevolent constitutional design with complete contracting. It treats politicians as informed supervisors and studies how the Constitution should control them, in particular to avoid capture by interest groups. Incentive theories for the separation of powers or systems of checks and balances are developed.The second part of the book recognises the incompleteness of the constitutional contract which leaves discretion to the politicans selected by the electoral process. Asymmetric information associates information rents with economic policies and the political game becomes a game of costly redistribution of those rents. Professor Laffont investigates the trade-offs between an inflexible constitution which leaves little discretion to politicians but sacrifices ex post efficiency and a constitutionweighted towards ex post efficiency but also giving considerable discretion to politicians to pursue private agendas.The final part of the book reconsiders the modeling of collusion given asymmetric information. It proposes a new approach to characterizing incentives constraints for group behaviour when asymmetric information is non-verifiable. This provides a methodology to characterise the optimal constitutional response to activities of interest groups and to study the design of any institution in which group behavior is important.
Author: Nathan M. Jensen
Publisher: Cambridge University Press
ISBN: 1108311423
Category : Political Science
Languages : en
Pages : 271
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Book Description
Policies targeting individual companies for economic development incentives, such as tax holidays and abatements, are generally seen as inefficient, economically costly, and distortionary. Despite this evidence, politicians still choose to use these policies to claim credit for attracting investment. Thus, while fiscal incentives are economically inefficient, they pose an effective pandering strategy for politicians. Using original surveys of voters in the United States, Canada and the United Kingdom, as well as data on incentive use by politicians in the US, Vietnam and Russia, this book provides compelling evidence for the use of fiscal incentives for political gain and shows how such pandering appears to be associated with growing economic inequality. As national and subnational governments surrender valuable tax revenue to attract businesses in the vain hope of long-term economic growth, they are left with fiscal shortfalls that have been filled through regressive sales taxes, police fines and penalties, and cuts to public education.
Author: Stefanie Haeffele
Publisher: Rowman & Littlefield
ISBN: 1786603993
Category : Political Science
Languages : en
Pages : 302
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Book Description
This book, authored by public policy practitioners and researchers, tackle such pressing issues as public education, the process for approving medical devices, tax policy, and land use regulation.
Author: Donald E. Campbell
Publisher: Cambridge University Press
ISBN: 1108547958
Category : Business & Economics
Languages : en
Pages : 700
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Book Description
When incentives work well, individuals prosper. When incentives are poor, the pursuit of self-interest is self-defeating. This book is wholly devoted to the topical subject of incentives from individual, collective, and institutional standpoints. This third edition is fully updated and expanded, including a new section on the 2007–08 financial crisis and a new chapter on networks as well as specific applications of school placement for students, search engine ad auctions, pollution permits, and more. Using worked examples and lucid general theory in its analysis, and seasoned with references to current and past events, Incentives: Motivation and the Economics of Information examines: the performance of agents hired to carry out specific tasks, from taxi drivers to CEOs; the performance of institutions, from voting schemes to medical panels deciding who gets kidney transplants; a wide range of market transactions, from auctions to labor markets to the entire economy. Suitable for advanced undergraduate and graduate students studying incentives as part of courses in microeconomics, economic theory, managerial economics, political economy, and related areas of social science.
Author: Serguey Braguinsky
Publisher: Princeton University Press
ISBN: 0691225362
Category : Business & Economics
Languages : en
Pages : 295
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Book Description
Here, for the first time, two of Russia's leading economists provide an authoritative analysis of the transition to a democratic market economy that has taken place in Russia since 1990. Serguey Braguinsky, a Russian economist with extensive international experience, and Grigory Yavlinsky, leader of the liberal "Yabloko" party and a major public figure in Russia, focus on the institutions that are critical to a successful transition and the economic incentives needed to make these institutions work. Finally, they discuss in detail the specific components of the economic processes that are necessary for economic transition in general and they draw lessons that can be applied to other nations dealing with similar transitions. In 1989, Grigory Yavlinsky became a member of the Commission for Economic Reform and wrote the groundbreaking "500 Day Plan," which outlined the first program of transition to a market economy. Two years later, he co-wrote the program of strategic cooperation between the Soviet government and the West (known as the "Grand Bargain"). Here he and Serguey Braguinsky examine what went wrong with the Russian plan--and what is needed to put the economy back on the road to becoming a fully functioning market economy. The first section of the book presents a new interpretation of the political economy of the socialist state and the incentives and institutions that underpin it, with an emphasis on the present Russian situation. The second part deals with the political economy of "spontaneous transition" and the inefficiencies inherent in economies that lack the organizations and institutions that inhere in established Western democratic economies. In the final section, the authors present a program of actions to put the economic transition in Russia back on track, based on their assessment of the actual current state of both the economy and the government. Their approach is unique in emphasizing organizational evolution at the microeconomic level instead of stressing macroeconomic issues such as money and inflation that are at the heart of most arguments. This is a thoughtful and thought-provoking book and one that will be widely discussed and debated.
Author: Theodore Groves
Publisher: U of Minnesota Press
ISBN: 1452908044
Category : Business & Economics
Languages : en
Pages : 410
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Book Description
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Author: Jean-Jacques Laffont
Publisher: Princeton University Press
ISBN: 1400829453
Category : Business & Economics
Languages : en
Pages : 440
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Book Description
Economics has much to do with incentives--not least, incentives to work hard, to produce quality products, to study, to invest, and to save. Although Adam Smith amply confirmed this more than two hundred years ago in his analysis of sharecropping contracts, only in recent decades has a theory begun to emerge to place the topic at the heart of economic thinking. In this book, Jean-Jacques Laffont and David Martimort present the most thorough yet accessible introduction to incentives theory to date. Central to this theory is a simple question as pivotal to modern-day management as it is to economics research: What makes people act in a particular way in an economic or business situation? In seeking an answer, the authors provide the methodological tools to design institutions that can ensure good incentives for economic agents. This book focuses on the principal-agent model, the "simple" situation where a principal, or company, delegates a task to a single agent through a contract--the essence of management and contract theory. How does the owner or manager of a firm align the objectives of its various members to maximize profits? Following a brief historical overview showing how the problem of incentives has come to the fore in the past two centuries, the authors devote the bulk of their work to exploring principal-agent models and various extensions thereof in light of three types of information problems: adverse selection, moral hazard, and non-verifiability. Offering an unprecedented look at a subject vital to industrial organization, labor economics, and behavioral economics, this book is set to become the definitive resource for students, researchers, and others who might find themselves pondering what contracts, and the incentives they embody, are really all about.
Author: Robert B. Ekelund
Publisher: Edward Elgar Publishing
ISBN: 1781005044
Category : Political Science
Languages : en
Pages : 265
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Book Description
'Economists owe a great debt to Ekelund and Price for making us aware of Edwin Chadwick's seminal contributions. Chadwick lived in the middle of the 19th century, but he anticipated many of the theoretical and practical advances that culminated in the law and economics revolution of the late 20th century. These include Coase's analysis of social cost and Demsetz's proposal for franchise bidding in natural monopolies. Read the summary of Chadwick's ideas about railroads and consider that Britain adopted many of them but only more than a century later (while the US continues to wallow in ignorance). The book is full of similar examples where Chadwick's prescience is extraordinary. Economists, legal scholars and practitioners, especially those working at the intersection of law and economics, will want to read this book.' – Sam Peltzman, University of Chicago, US Sir Edwin Chadwick (1800–1890) is hardly a household name among economists, although he is a well-known hero to sanitation engineers and utilitarian social reformers. His brilliant and cunning ideas relating to contemporary economic policy are illuminated for the first time in this pioneering study. The authors detail Chadwick's sophisticated conceptions of moral hazard, common pool problems, asymmetric information, and theory of competition, all of which differ starkly from those promulgated by Adam Smith and other classical economists. Also examined are Chadwick's views on government versus market role in dealing with problems created by natural monopoly, and whether some or all market problems justify government regulation or alterations of property rights. The authors investigate Chadwick's utilitarian approach to labor, business cycles, and economic growth, contrasting his modern view with those of his classical economic contemporaries. Chadwick's enormous output and cutting-edge methods undoubtedly establish him as an original and trenchant thinker in economic matters as well as a prophetic voice on contemporary issues in economics. This unique look at his less familiar research will interest academic regulatory economists, sociologists, students and scholars of law and economics, and all those interested in the fundamentals of social reform.
Author: Glenn Blackmon
Publisher: Springer Science & Business Media
ISBN: 1461527066
Category : Business & Economics
Languages : en
Pages : 138
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Book Description
The class is theory of price regulation assumed that the regulator knows the fIrm's costs, the key piece of information that enables regulators to pressure fmns to choose appropriate behaviors. The "regulatory problem" was reduced to a mere pricing problem: the regulator's goal was to align price with marginal cost, subject to the constraint that revenues must cover costs. Elegant and important insights ensued. The most important was that regulation was inevitably a struggle to achieve second-best outcomes. (Ramsey pricing was a splendid example. ) Reality proved harsh to regulatory theory. The fmn's costs are by no means known to the regulator. At best, the regulator may know how much is currently spent to provide services, but hardly what costs would be if the fmn vigorously pursued effIciency. Even if the current cost curve were known to the regulator, technologies change so swiftly that today's costs are a very poor indicator of tomorrow's, and those are the costs that will determine the fIrm's future decisions. With the burgeoning attention to information considerations and game theory in economics, the regulator's problem of eliciting host information about cost has received considerable attention. In most cases, however, it has been in context that are both static and stylized; such analyses rarely capture many of the essential elements of real world regulatory issues. This volume represents a fresh approach. It reflects Glenn Blackmon's twin strengths, a keen analytic mind and important experience in the regulatory arena.
Author: Steven Kelman
Publisher: Praeger
ISBN:
Category : Business & Economics
Languages : en
Pages : 200
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Book Description
Sets forth in a straightforward and sensible way the philosophical reasons for the non-economist's skepticism of the economist's view of the world. Its relevance extends beyond environmental issues to other areas where microeconomic theory is being applied to public policy. Kelman cites results to confirm his view that both opponents and supporters of economic incentives have important philosophical concerns. He takes the role of an advocate of the use of incentives in formulating an environmental policy. He also discusses political strategy from the point of view of the policy entrepreneur who is trying to get ideas adopted. Economists and non-economists alike will welcome this book as a bridge over a perceptual gap in an important area of policymaking.
