MARKET POWER AND COLLUSION IN THE OCEAN SHIPPING INDUSTRY: IS A BIGGER CARTEL A BETTER CARTEL?

The regulatory structure of the ocean shipping industry allows carriers to enter into joint pricing agreements (conference agreements) that are free from antitrust scrutiny, and requires freight rates to be published and policed by a government agency. We test whether this regulatory structure leads to the exercise of market power, and identify whether that market power resides with conferences themselves or requires the participation of carriers outside the conference. The results suggest that liner conferences are not particularly effective cartels although some market power may exist in ocean shipping. Market concentration may be a contributing factor to this market power. (JEL L12, L43, L92, K21)     

STACKELBERG, COURNOT AND COLLUSIVE MONOPOLY: PERFORMANCE AND WELFARE COMPARISONS

This article compares and evaluates performance and welfare in three classical oligopoly models: Stackelberg leader, Cournot, and collusive monopoly. Hahn's stability conditions render an unambiguous ranking of market price; the monopoly price is highest and the Stackelberg price is lowest. Welfare comparisons are less clear-cut due to additional effects coming from reallocation of outputs among sellers. Conditions under which these reallocation effects will enhance or offset the unambiguous price effects on welfare are discussed and examples are given. Possible implications for antitrust policy, regarding constraints on market share of large producers in noncompetitive markets, are examined.     

EFFICIENCY EFFECTS OF EXCLUSIVE TERRITORIES: EVIDENCE FROM THE INDIANA BEER MARKET

The welfare effects of vertically imposed exclusive territories and the appropriate antitrust policy toward them have long been debated. This paper sheds light on the exclusive-territory controversy by examing the effects of Indiana's 1979 ban on the grant of exclusive territories to beer wholesalers. Using time-series data for 1948–1990 we find the ban reduced beer consumption in Indiana by 6 percent. Coupled with previous evidence that Indiana's ban reduced price, our results suggest that exclusive territories in the beer industry increase demand and enhance welfare by stimulating the provision of dealer services.     

Growth with Endogenous Risk of Biological Invasion

We model biological invasions as an unintended by-product of capital accumulation. We distinguish three spillover effects: (1) a negative production externality, (2) a negative or positive consumption externality and (3) an increase in the risk of future welfare loss. We also consider the implications when households self-protect by allocating income to reduce the potential damages from a biological invasion. An optimal output tax for production externalities is straightforward and can be augmented in the case of negative or positive spillover effects on consumer welfare. Policies to correct the effect of invasions on endogenous risk are more difficult to design.     

Declining Share of Small Firms in U.S. Output: Causes and Consequences

We develop a dynamic general equilibrium model, with large and small firms, to examine possible causes and welfare implications of a declining trend in small firms' share of U.S. output since 1958. Numerical experiments indicate that recent technological advances and government tiering policies that have reduced fixed setup costs of production benefit the emergence of small firms, but lower their output share due to competition for resources among firms. However, this outcome is welfare improving. Therefore, if the policy objective is to raise small firms' output share and economic welfare simultaneously, it is desirable to concentrate on increasing antitrust and deregulatory efforts.     

A note on the strategic aspects of the transfer paradox

It is well known that an agent can be hurt by accepting a gift, the donor of which is made better off. Why then does the recipient accept this welfare reducing gift? This paper examines the strategic aspects of the paradox. It shows that if the recipient refuses the gift, it would suffer an even greater loss of welfare since there is a mutually advantageous reallocation between the donor and a third agent. It is shown that the recipient does have a viable alternative strategy: it could destroy some of its endowment, raising its welfare level and reducing that of the potential donor.     

QUANTIFYING THE DETERRENT EFFECT OF ANTICARTEL ENFORCEMENT

This paper presents a rare attempt to quantify the deterrent effect of anticartel policy. It develops a conceptual framework, which establishes the sort of information necessary for such quantification. This is then illustrated and calibrated by drawing upon existing literatures and using evidence from legal cartels to approximate what would be observed absent policy. Measuring impact by the proportion of all potential harm that is deterred, our best estimate is two‐thirds and, even on conservative assumptions, at least half of all harms (or seven times the detected harm) is deterred. (JEL H11, K21, L44)     

MAKING AND MANAGING ELECTRONIC CHILDREN: E-assessment in child welfare

'Every Child Matters' (ECM) is a government response to longstanding concerns about child welfare and protection. A key feature is the use of information and communication technologies (ICTs) to improve information sharing and inter-professional communication. One of the proposals requires the establishment of an index, ContactPoint, which is a database containing information on all children in their area, to be used by child welfare professionals to indicate their involvement with a child and, where there is 'cause for concern', to facilitate joint action. Whilst these proposals for harnessing ICTs within child welfare are a central part of the government's modernization strategy, plans for the Index have been heavily criticized for its panoptic potential to invade privacy and override professional discretion and judgement. This paper reports findings from an ethnographic study funded by the ESRC e-Society Programme. Drawing on data collected in one 'Trailblazer' local authority area during the pilot phase, it describes the introduction of a local child index and the ways in which professionals and the technologies are drawn together within the local child welfare network. For the Index to achieve its original purpose of improving information sharing and inter-professional communication it must be 'used' by child welfare practitioners. But establishing the Index as a friend to the child welfare professional is not a straightforward process. The research suggests this is dependent on a set of relations that are being constantly negotiated and accomplished in everyday practice. It is clear the deployment of ICTs in professional practice is highly contingent upon local policy implementation, the local arrangement of services and the everyday practices of busy and sceptical practitioners.     

ANTITRUST and COMPETITION, HISTORICALLY CONSIDERED

Although antitrust laws enjoy wide support among economists, there was almost no such support during the early years of the Sherman Act. One reason for this transformation is a change in the theory of competition. Until the 1920s most economists viewed competition as a dynamic, rivalrous process that would be stifled by antitrust laws. Once the perfect competition model–which largely ignores rivalry–was accepted, economists' opinions of antitrust grew more favorable. To the extent that antitrust interferes with rivalry and enterprise, the competitive model has very likely misdirected the profession, at least as far as antitrust policy is concerned.     

THE LEGISLATIVE HISTORY OF THE SHERMAN ACT RE-EXAMINED

According to Robert Bork's influential analysis, the Sherman Act was expressly instituted by the 51st Congress to advance consumer welfare, but has often been misinterpreted by federal courts handing down anticonsumer decisions. This paper suggests that the political coalition backing the 1890 antitrust statute sought multiple social ends and did not faithfully seek to impose economic efficiency. The key evidence includes historical economic trends, congressional debate, the legislative agenda of Senator John Sherman, and the political conflict generated by the most contentious (and most electorally important) issue of the 51st Congress: the highly protectionist McKinley Tariff Act.     

PRIVATE INTEREST SUPPORT FOR EFFICIENCY ENHANCING ANTITRUST POLICIES

Recent discussions of antitrust based on the private interest theory of government conclude that the real, as opposed to the stated, purpose of antitrust legislation is to protect politically influential industries against competition. Yet several prominent antitrust scholars who accept the private interest theory of government in general see antitrust legislation serving the public interest by increasing competition. We argue that the private interest theory of government is consistent with the view that antitrust legislation promotes competition. Indeed antitrust legislation may be supported by organized interest groups because such legislation increases the competition they face.     

Liability in child welfare

Child welfare workers and agencies are vulnerable to lawsuits. Recent court rulings have more clearly defined the liability of workers. The distinguishing variable is custody. Children injured while in the custody of the state are entitled to sue for damages. Children injured by their parent, even if under the supervision of a child welfare agency, are not entitled to claim a violation of their 14th Amendment rights. These cases are reviewed and strategies designed to minimize vulnerability are offered.     

“No One Acknowledged My Loss and Hurt”: Non-death Loss,Grief, and Trauma in Foster Care

How do youth in foster care experience non-death loss? Drawing upon the theories of ambiguous loss, symbolic loss, and disenfranchised grief, this applied theoretical article integrates research findings to address how youth experience loss, grief, and trauma in foster care. Youth’s reports illustrate experiences of non-death loss, the impact of non-death loss on psychological and emotional well-being, and how non-death losses are disenfranchised and enfranchised within the foster care system. Recommendations are made that child welfare agencies consider how their practices and policies can be enhanced to meet the needs of grieving youth in foster care.     

RACISM AS RENT SEEKING

Rules governing social and economic interactions among ethnic groups are modeled as public goods. The publicness of social rules can explain why race has been so consistently politicized. The potential gains from public provision attract political entrepreneurs into the field. In the absence of some constitutional restraints upon such rent seeking, race is bound to be politicized. In addition, the model can explain the existence of many government policies concerning race that are not apparently motivated by economic gain. Finally, government enforcement of ethnic economic cartels can explain some of the persistent differences in earnings across ethnic groups.     

THE BEHAVIOR OF REGULATORY ACTIVITY OVER THE BUSINESS CYCLE: AN EMPIRICAL TEST

This paper tests a prediction of the interest-group theory of regulation which suggests that regulators generally will not force any one group to bear the full adjustment costs associated with variations in the business cycle. That is, the interest-group model predicts that regulatory agencies will redistribute cyclical gains and losses by supplying more "producer protection" regulation during contractions and more "consumer protection" regulation during expansions; i.e., regulatory activity which reduces consumer welfare will tend to be countercyclical, intensifying when aggregate demand falls and abating as demand increases.
The empirical results show a countercyclical and statistically significant ceteris paribus relationship between Federal Trade Commission enforcement efforts under the Robinson-Patman Act and several alternative measures of general business conditions. Since the Robinson-Patman Act is viewed widely as anti-consumer, the findings suggest that in cyclical downturns the Commission moves to protect producers against losses by bringing more cases which limit the tendency for prices to fall. This result may be rationalized under the view that during recessions, the Federal Trade Commission is in the business of transferring wealth from consumers either to protect small business or to bolster cartels. On the other hand, during business expansions the Commission reduces its Robinson-Patman case load, and such a change in enforcement may serve to mitigate producer gains, transferring wealth to consumers at the margin. In any case the paper offers empirical support for the interest-group model by providing evidence that the business cycle plays an important part in explaining the level and pattern of regulatory activity.     

The implications of employment liability for welfare reform

We analyze the importance of employment liability as a potential barrier to welfare reform. In particular, research linking wrongful termination doctrines to labor market outcomes is integrated with empirical analyses of welfare caseloads to obtain evidence of the likely importance of liability risk to the willingness of firms to hire welfare participants. Calculations suggest that liability concerns were probably not a major factor in past decisions about whether or not to hire AFDC recipients. Nationally, the elimination of tort liability for wrongful termination could have provided additional jobs for fewer than one percent of welfare recipients. However, with evolving court doctrines, liability risks could become more important in the future, especially in those state jurisdictions, such as California, where employers traditionally have faced the prospect of punitive damages for wrongful termination.     

Resisting the Neo‐liberal Poverty Discourse: On Constructing Deadbeat Dads and Welfare Queens

This article describes the impact of both neo‐liberal and conservative discourse upon poverty policy and welfare reform. In it, I summarize the discursive construction of welfare queens and deadbeat dads and the influence upon welfare reform while incorporating globalization in the discursive critique. This paper also describes the resistance to the discourse evidenced by those most affected by the poverty or welfare reform discourse. I suggest ways of critically examining our own discourse as well as the welfare reform discourse and our participation in it or resistance to it. The conclusion questions assumptions about dependency, welfare receipt and justice.     

THE INFLUENCE OF ECONOMICS ON ANTITRUST LAW

Economists today play prominent roles in formulating antitrust policy and litigating antitrust cases. This paper explains why economics influences antitrust law and describes how economic theories enter and shape the antitrust system. Antitrust policy and doctrine change over time in response to developments in economic theory, and the decentralization of the antitrust adjudication system and the wide latitude accorded judges in interpreting antitrust statutes ensure that legal rules will reflect advances in the economic literature concerning the appropriate content of standards governing business conduct.     

ANTITRUST POLICY AND MERGERS: THE WEALTH EFFECT OF SUPREME COURT DECISIONS

Many believe that antitrust policy has had a dramatic impact on merger strategies in the United States. For this to be true, enforcement of antitrust laws must affect a wide range of firms, not just those firms whose mergers are contested. This study tests whether or not firms engaged in uncontested mergers are affected by antitrust enforcement, as signalled by Supreme Court decisions. Using event study methodology, we find that antitrust policy against mergers was binding during the 1960s and 1970s as it ulowered the value of targets in ucontested ongoing mergers.     

Workfare Programs

Abstract

Workfare initially originated as an approach to guide welfare recipients towards self-sufficiency. Today, the same strategy is being utilized as a desperate means by the States to move welfare recipients into the workforce in order not to suffer further cuts in federal assistance.

This paper reviews many of the common barriers which participants experience as they attempt to move from being welfare recipients to employees. In addition, it presents effective workfare programs, identifies critically needed support services for workfare participants, and suggests policy recommendations for the future.