Agricultural policies and development: A socioeconomic investigation applied to Sri Lanka

This paper explores the interrelationship between agricultural policies and development by means of a dynamically recursive, computable general equilibrium model applied to Sri Lanka. The agricultural policies investigated include elimination of the food subsidy, land reform, and technical change in agriculture. The goals considered are the levels and growth rates of GNP and employment, the distribution of income, and the real income level of the lowest income group. The study provides a quantitative assessment of the association between policies and goals and identifies the key economic mechanisms in this association.     

The impact of India’s food security policy on domestic and international rice market

Food security policy making in India is at crossroads. India has emerged as a leading rice exporter. The Government of India has introduced the National Food Security Act which requires 33.6 million tons of rice per year for its public food distribution system. In this study, we modeled India’s rice market and analyzed policy implications of the long-term impact of India’s food security act on domestic and international rice market. We developed a structural economic demand and supply model for India’s rice market and further added subsidy equations to trace the consequence of National Food Security Act on domestic rice consumption and on the international market. We specifically focus on three different scenarios: subsidy as price effect, subsidy as inelastic income effect, and subsidy as elastic income effect under the broader framework of National Food Security Act. We found that at the end of the projection period (2024–2025), as a result of rice subsidy program, the consumption of rice increases significantly in the case of price effect while the inelastic income effect has no or less impact on production, consumption, and export of rice. Hence, the policy implication of our study is that if the objective of the National Food Security Act is to increase consumption then it needs to be implemented as price effect.     

Universal basic income: A feasible alternative to move people out of poverty in Mexico?

This paper evaluates the effectiveness of social policy to alleviate poverty in Mexico; where poverty is persistent, social programs are numerous and complex to monitor. Our analysis uses MEXMOD tax-benefit microsimulation. We simulate four scenarios that grant direct money transfers to individuals in multidimensional poverty, elderly people, families with children under 15 years old, and a universal basic income. The more generous and broader the coverage is, the costlier the policies. The first-best policy is the universal basic income, which can eradicate extreme poverty at the cost of 10.61 % of the gross domestic product. The least effective policy transfers only to older people.     

Distributional and employment effects of labour tax changes in Finland

Labour income taxes in Finland decreased considerably during the period 1996–2008. At the same time the Finnish economy grew rapidly. Nevertheless, there was another coincidental trend in this period: a rapid rise in inequality. This study aims to answer to what extent labour income tax reductions between 1996 and 2008 contributed to this trend in inequality. The study also examines how much more employment was achieved owing to the labour tax reforms. To answer these questions, I build a dynamic general equilibrium model with heterogeneous agents. The model is calibrated to fit the Finnish economy. The study finds that the labour income tax cuts fractionally raised the Gini coefficient for net labour income. They also increased the concentration of wealth. The employment gains due to the reforms have been modest, but nevertheless significant.     

Behavioral responses and the distributional effects of the Russian ‘flat’ tax

This paper simulates the distributional impact of the Russian personal income tax (PIT) following the flat tax reform of 2001 using data from the Russian Longitudinal Monitoring Survey. I decompose the change in the distribution of net income into a direct (tax) effect and an indirect effect. The indirect effect is further decomposed into evasion and productivity effects using existing estimates of these respective elasticities. As expected, the direct tax effect increased net income inequality. Changes in the pre-tax distribution (indirect effect), on the other hand, had a large negative impact on inequality thus leading to an overall decline in net income inequality. I also find that the tax-induced evasion response increased reported net income inequality while reducing consumption inequality. To the extent that consumption approximates actual income, these results demonstrate that the flat tax reform had a much smaller effect on actual income inequality than on reported income inequality. More importantly, relative to non-tax factor, the reform had little overall effect on income inequality. This suggests that objection to flatter tax schedules on the grounds of income inequality is mostly misguided, especially in transitional countries with high levels of evasion.     

Calibrating Hypothetical Willingness to Pay Responses

Experimental data comparing hypothetical and real dichotomous choice responses for two different goods were used to estimate a statistical bias function to calibrate the hypothetical yes responses. The probability that a hypothetical yes response would be a real yes response was estimated as a function of the individual's self-assessed certainty of the hypothetical yes response (assessed on a 0–10 scale) and a variable representing the price level. Without calibration the hypothetical yes responses significantly exceeded the proportion of real yes responses, but after calibration the null hypothesis of no difference between hypothetical and real responses could not be rejected in any of the experiments.     

Housing and the business cycle in South Africa

This paper examines the housing-output growth nexus in South Africa by accounting for the time variation in the causal link with a bootstrapped rolling Granger non-causality test. We use quarterly data on real gross domestic product, real house prices, real gross fixed capital formation and number of building plans passed. Our data span 1971Q2–2012Q2. Using full sample bootstrap Granger causality tests, we find a uni-directional causality from output to number of building plans passed; a uni-directional causality from real house price to output and a bi-directional causal link between residential investment and output. However, using parameter stability tests, we show that estimated VARs are unstable, thus full-sample Granger causality inference may be invalid. Hence, we use a bootstrap rolling window estimation to evaluate Granger causality between the housing variables and the growth rate. In general, we find that the causality from housing to output and, vice versa, differ across different sample periods due to structural changes. Specifically speaking, house price is found to have the strongest causal relationship with output compared to residential investment and number of building plans passed, with real house price showing predictive ability in all but one downward phase of the business cycle during this period.     

Distributional Impacts of Pension Policy in Argentina: Winners and Losers within and Across Generations

The paper deals with the life‐cycle intra‐ and intergenerational income transfers operated by the pension system in Argentina by estimating the internal rates of return obtained by different generations and types of workers from their participation in the system. The empirical analysis confirms that earlier generations of workers benefited from higher social security returns than later generations, which retired under a matured system with large deficits. The worst‐affected cohorts were those born after 1920, particularly suffering from a social security crisis and falling real wages. For future generations retiring fully under the new mixed pension system, returns will more closely depend on financial market performance and the evolution of administration costs. Intragenerational transfers were also observed for all cohorts under study, as a result of the original system design as well as adjustments adopted during the implementation process. The real distributional impact of progressive benefit formulas could, however, be offset by state transfers to cover pension deficits and forward tax shifting in a context of unequal pension coverage.     

The effects of income transfers on poverty reduction in people with disabilities in South Korea

Using a nationally representative sample dataset from the 2016 Korean Welfare Panel Study, we examined the anti‐poverty effects of income transfers in people with disabilities. Our findings indicate that in households with a person with a disability, income transfers decreased by 55.9% and 84.8% of the pre‐transfer poverty rate and poverty gap, respectively. Before income transfers, households with a person with a disability were 1.94 times more likely to be poor compared to those without a person with a disability. When income transfers were offered, the chance of being poor in the disability group was only 1.11 times higher than that in the non‐disability group. Findings from the aggregated data suggest that means‐tested income transfers were more effective in reducing poverty levels than social insurance or private income transfers. At the individual level, the provision of means‐tested programs was also more likely to decrease the likelihood of experiencing poverty than social insurance and private income transfers.     

Structural pressures, social policy and poverty

The purpose of this article is twofold. The first aim is to examine 15 OECD countries from the point of view of the so-called third-generation studies, analysing if the development of poverty and income transfers has been uniform in countries classified under the same welfare state models. This has been done to test how appropriate it is to use welfare state models as an analytical tool in comparative welfare state research. The second aim is to examine the effect of different structural factors on poverty and income transfers. Obtained results indicate that two demographic variables studied behave somewhat differently. The share of older people in the population is – not very surprisingly – connected to an increase in income transfers. In the case of younger population groups, the results are the opposite. The results show that the greater the proportion of older people in the population, the lower the poverty rates. Social policy has in many countries consisted primarily of pension policy, and investments in the elderly population are now beginning to bear fruit. Good pension schemes diminish the immediate poverty risk of older people. As a consequence of their increased well-being, the overall poverty rate will fall. In addition to demographic factors, the results indicate that the unemployment rate is connected, on the one hand, to growth in income transfers and, on the other hand, also to increases in poverty. However, unemployment's effect on poverty is not straightforward. The direct effect is indeed an increase in poverty but, if income transfers are taken into account, the indirect effect is a decrease in poverty, since unemployment increases income transfers (unemployment benefits), which on their side alleviate poverty.     

The impact of political parties on the distribution of state and local tax burdens

Using a disaggregated measure that allows us to examine the distribution of state and local tax burdens between high and low income groups better, this research finds that in many models, Democratic control is positively associated with a lower relative tax burden on the poor. The results are stronger for average Democratic strength in the state government than for unified Democratic strength. The results are strongest when comparing income groups just below the richest 1% (the next richest 2–5% and the next richest 6–20%) with the poorest 20%.     

事业单位岗位绩效工资改革的现实审视与思路创新

我国2006年事业单位岗位绩效工资制度改革,旨在建立符合事业单位特点、体现岗位绩效和分级分类管理的收入分配制度。事业单位岗位绩效工资由岗位工资、薪级工资、绩效工资和津贴补贴四部分组成,其中岗位工资和薪级工资为基本工资。目前,我国事业单位已顺利完成了基本工资的套改工作,绩效工资的推进却任重而道远,但改革势在必行,尤其是高等院校,绩效工资的改革受诸多因素的影响和制约,进展缓慢,绩效工资的分配至今尚未真正落实。绩效工资的设计和实施应着眼于高校发展的目标,以岗位设置和聘任为切入点,以绩效考核为重点,以绩效工资分配为落脚点。     

From Means-Test Schemes to Basic Income in Brazil: Exceptionality and Paradox

This article reflects upon probabilities for the progressive implementation of a basic income in Brazil and presents a proposal to that end. It considers short‐ to medium‐term prospects within a context that lacks a tradition of universal policies. Although a Law approving the right to a basic income became effective in 2005, Brazilian social policies are increasingly focused on increasing the number of means‐tested income programmes while making them conditional on a proven lack of resources and targeting only the very poorest segments of society for a limited period. Such is the case with the Bolsa‐Família programme, which is at the forefront of the Brazilian government's agenda. Our proposal is to progressively move from means‐tested programmes to a basic income through the adoption of a universal child benefit scheme.     

Inequality of opportunity in the United Kingdom, 1991–2008

We investigate the extent to which the tax-and-transfer system of the United Kingdom equalizes opportunities for income attainment among citizens. Within the framework of Roemer’s theory of Equality of Opportunity, and using individual data from the British Household Panel Survey from 1991 to 2008, we calculate the tax rates necessary to equalize opportunities for different circumstances. We provide a ranking of these circumstances by the degree to which they influence income attainment. Although pre-fisc equality of opportunity increases over time, the tax rate necessary to equalize opportunities remains higher than the observed tax rate. Only under a relatively high labour supply elasticity the observed UK tax rate fares well in equalizing opportunities for income attainment.     

Commodity prices and the world distribution of income

Some advocates of a new international economic order recommend raising prices of commodities exported by developing countries as a means of reducing the inequality of world income distribution. A simulation model using commodity trade data and income distribution data for 68 industrial and developing countries examines this policy alternative. Initial data compilation reveals that internal inequality is as important as international: The world income share of the poorest 40% of people would be twice as high in the absence of intracountry inequality. Calculations using actual price experience in the “great inflation” of 1972–1975 show that despite the large relative price changes for some commodities (especially oil), these changes left the world size distribution of income virtually unchanged. Separate policy simulations show that even a quadrupling of the price of ali “equalizing” commodities (those mainly exported by LDCs) would leave the size distribution of world income practically unaltered (even under optimistic assumptions about intracountry distributional incidence), although some individual LDCs would gain. Increasing commodity prices therefore appears to be an ineffective means of increasing international equity, quite apart from questions about the feasibility of cartels or commodity agreements.     

Energy supply shocks: Macroeconomic consequences for Ukraine

In exploring the short-term macroeconomic effects of energy supply shocks in Ukraine, this paper relies on the simplifying assumption that enterprises face economic regulation but not ownership uncertainty or a soft budget constraint that would adversely affect their behavior. In a sense, it assumes that Ukraine's economy is already at the second stage of reform, when ownership, contract-enforcement, and hard budget constraint questions are less of an issue. Under these assumptions and if real wages are protected, the analysis yields clear messages. Protecting the domestic economy by not passing through external price increases may cushion the decline in production and social welfare, but at a heavy cost to savings and investment; not only does it postpone adjustment and the emergence of a competitive economy, but it also deprives the economy of investible resources. Passing through external price increases while maintaining a fixed-price regime may improve the mobilization of resources but at a heavy cost to output and welfare, because it induces a heavy contraction in activity. Liberalizing prices in the nonenergy sectors in conjunction with passing through external price increases allows these sectors to generate the larger resource transfers required by a deteriorating terms of trade, in turn pulling up output; the economy can settle at a higher level of activity and welfare than in the presence of fixed prices. The conclusion is that Ukraine must clarify ownership and contract-enforcement issues as well as harden the budget constraints of enterprises as rapidly as possible, liberalize nonenergy prices at a minimum, and begin adjusting domestic energy prices to reflect the opportunity cost of these resources. Since the fall of 1994, Ukraine has proceeded to liberalize its price and trade regime, which should bring the economy a long way to recovery as outlined in this paper.     

Social Protection in Vietnam and Obstacles to Progressivity

The present paper analyzes the incidence and progressivity of Vietnamese state income transfers using survey data from the Vietnamese Household Living Standards Survey 2004. Data quality and sample selection issues are highlighted, especially in the coverage of rural-urban migrants. Simple income-based profiles of incidence are matched to several influences that confound and complicate the measurement of progressivity. The issue of the informal economy is highlighted through analysis of both the extent of private inter-household transfers and remittances and their relationship with state transfers, and in the informal charges that accompany uptake of state services and other petty corruption. Second, the issue of user-charges for health and education services is considered, as a considerable portion of state transfers are related to the take up of schooling and health care. Third, the issue of behavioral effects is also considered, concentrating on private inter-household transfers. The paper concludes by drawing together the evidence and the obstacles to measurement and progressivity to argue a range of data collection, methodological and policy recommendations.     

Mark Latham's Third Way: Income Support,Civic Renewal and Collectivism

The core aim of Mark Latham's Third Way‐style policy proposals is to promote the revivification of civil society as part of the renewed pursuit of the common good. I critically examine this core aim with reference to Mark Latham's proposed changes to income support. I claim that Latham's tendency to focus on disadvantaged communities as sites of normative dysfunction only reinforces the traditional conceptual division between deserving employed citizens and undeserving income recipients. It also neglects the real difficulties experienced by mainstream communities, such as the growing time deficit in working households. I conclude that Latham misses a real opportunity to re‐legitimise collective provision and revive the social sphere using a universal rather than a residual policy perspective that shows concern for the well‐being of all Australian citizens.     

Fiscal stringency and fiscal sustainability: Panel evidence from the American state and local governments

Most state (and local) governments in the U.S. operate under formal fiscal rules which limit their ability to run budget deficits and resort to debt financing. A priori, one would expect to find evidence in favor of an intertemporally balanced budget, or fiscal sustainability, for these states, especially those characterized by a relatively high degree of fiscal stringency. We test this hypothesis for a panel of 47 state–local government units (1961–2006) using four budget balance definitions and several subsamples defined based on regional classifications, or presence of certain balanced budget requirements (BBRs). Our results, obtained from panel estimation techniques that allow for general forms of serial and cross-sectional dependence, suggest that a sufficient condition for “strong” sustainability is consistently satisfied for the full sample and all subsamples in relation to balances that include special funds and/or federal grants. However, we find evidence consistent with the “weak” version of sustainability for the full sample and some regional subsamples (particularly Far West dominated by California) in at least one of the two balances that exclude these items. Finally, the BBRs seem to matter only in relation to the sustainability of the more narrowly defined balances. We discuss the implications of these findings for the role of fiscal rules and federal grant policies.     

Economic empowerment or cash‐dependency for orphans and vulnerable children in Kenya: Evidence from an alternative to cash‐only models

Orphan and vulnerable children (OVC) often have worse educational, developmental, nutritional, and behavioral outcomes than non‐OVC. Much of these disparities come from reduced household earnings due to the loss of parental income. The present study used conditional process analysis to evaluate income and savings among OVC households, using cross‐sectional data from 1,060 OVC in a 3‐year Kenyan empowerment program that combined elements of cash transfer, psychosocial support, and small business entrepreneurship. Higher monthly earnings were significantly associated with program participation in a graded fashion. Approximately one‐third of the association was mediated by material inputs, indicating that a substantial portion may be explained by other unobserved program elements. Eighty‐five percent of increased rates of saving money in the past year were mediated by improved monthly income, cash transferred and improved food consumption. Data analysis highlights the need for multisectoral approaches and the need for more research to understand how to improve household economic stability among OVC. Key Practitioner Message: ? Orphans and vulnerable children (OVC) are at risk of greater poverty, leading to multiple developmental and health challenges; ? Current policy in Kenya to offset costs of caring for OVC utilizes monthly cash transfers to households providing care for OVC; ? The present study found that increases in monthly income in an OVC multisectoral empowerment program were largely due to factors beyond the material inputs.