International Tax Competition: A Case for International Cooperation in Globalization

The liberalization of international financial flows and foreign direct investment has induced countries to use diverse measures to attract inflow of foreign capital and foreign direct investment, which is expected to have a positive effect on the growth of GDP and thus a positive effect on social welfare. Tax exemption, reduction of tax rate, tax holiday, or diverse subsidies are some of the most important measures used. In this paper we study international tax cooperation, i.e., countries change and especially reduce tax rate for corporate income or for asset revenues to attract inflow of foreign direct investment. Both theoretical and empirical studies have shown the sensibility of foreign direct investment decision with respect to tax rate differences between home countries and host countries. In general, more inflow of foreign direct investment can be expected if the tax rate of the home country is lower than that of foreign countries. This is the main reason for international tax cooperation. In this paper we propose a simple model to prove the sub-optimal Nash non cooperative solution in a two-country tax-competition game. The model shows that international tax cooperation can improve welfare of the participating countries. How to reach a cooperative solution for an international tax competition game (ITCG) is therefore an important issue for further discussions and studies. International institutions can play a crucial role to reach international tax cooperation or international tax harmonization.     

A “brer rabbit” case for reverse mandated benefits

Reverse mandated benefits is a government-mandated policy that requires employees to provide their employers with benefits that workers would not provide otherwise. Of course, only those benefits would be mandated that are worth more to employers than they cost, as determined by political authorities. My case for such a policy argues that it is at least as sensible as policies mandating that employers provide benefits to their employees that would not be provided otherwise.     

Adult Drug Treatment Courts: A Review

Drug treatment courts (DTCs), an alternative to traditional criminal courts, provide an innovative way to legally process some drug offenders. The origin and recent growth of the drug court system in the USA can be explained as an unintended consequence of a failing 'war on drugs'. In this article, we discuss the spread of adult DTCs throughout the USA, the main components of drug courts, controversies surrounding DTCs, and some criticisms of drug courts. We summarize the recent evaluations of adult DTCs, and highlight various DTC factors that have been found to reduce individual drug use and criminal activity. We also offer suggestions for future research on DTCs and conclude with policy recommendations.     

POTENTIAL COMPETITION AND POSSIBLE COLLUSION IN FOREST SERVICE TIMBER AUCTIONS

Potential competition significantly affects the size of winning bids in Forest Service sealed-bid timber auctions and has little effect on winning bids in oral auctions. Winning sealed bids depend even more, however, on actual competition, a result suggesting collusion. This explanation is supported using an index representing the likelihood an auction was rigged. Preclusive bidding (a type of collusion) in oral auctions is indicated by a positive relationship between hauling distances and the size of winning sealed bids. Comparisons of winning-bid variances, overbids, and numbers of bidders across auction type support this explanation of oral auction prices.     

Individual irrationality and social welfare

Individual preferences inconsistent with personal welfare caused neither by ignorance nor by a positive consideration for the welfare of others are defined as (welfare) irrational. Sources of irrationality (rigid adherence to moral principles, excessive fear of danger, excessive tempetation of pleasure, revenge, inertia, faulty telescopic faculty, the fallacy of diminishing marginal utility of utility, etc.) are discussed. An evolutionary explanation of irrationality is suggested and some implications for individual decision and social policy indicated.I am grateful to two anonymous referees for comments.     

Cohort shifts in the timing of births in Ghana

A comparison of cohorts of ever-married Chanaian women suggests evidence of a fertility transition beginning among younger women and select subgroups. Ghana's crude birth rate declined from a high of 50/1000 population in 1970 to 38.8/1000 in 1985. To ascertain whether marital fertility is now being controlled through conscious attempts to lengthen birth intervals, World Fertility Survey data from 1979-80 on the timing of births among different birth cohorts were analyzed. It was hypothesized that, as a result of the influence of Western values that stress independence from parents and the introduction of compulsory education, cohorts of the mid-1950s and 1960s would be more likely to postpone childbearing, more active in the modern sector of the economy, and more accepting of modern contraceptive usage for birth spacing than women in the 1930-39, 1940-49, and 1950-59 cohorts. For the 1940-49 cohort, it took 10.8 months for 25% to have a birth following 1st marriage, 18.7 months for 50% to have a 1st birth, and 27.4 months for 75% to complete this step. By comparison, these figures for the 1955-64 birth cohort were 9.9, 16.7, and 20.5 months, respectively. The significantly shorter (p 0.01) interval between marriage and 1st birth found among younger women in part reflects rising age at marriage; mean age at 1st marriage was 17.9 years for the 1940 cohort and 21.6 years for the most recent cohort. After the birth of the 1st child, recent cohorts were more likely to wait longer for the 2nd birth. For women born in 1950-64, it took 21.8, 36.7, and 44.6 months for 25%, 50%, and 75%, respectively, to reach parity 2. This pattern of lengthened birth interval beyond the 1st birth was apparent at all parities in the youngest cohort and indicates increasing acceptance of contraception among those who have come of age during a period of rapid social change.