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Using rural household survey data from West Bengal, we find that voters respond positively to excludable government welfare benefits but not to local public good programs, while reporting having benefited from both. Consistent with these voting patterns, shocks to electoral competition induced by exogenous redistricting of villages resulted in upper‐tier governments manipulating allocations across local governments only for excludable benefit programs. Using a hierarchical budgeting model, we argue these results provide credible evidence of the presence of clientelism rather than programmatic politics. [ABSTRACT FROM AUTHOR]

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The government often contracts with private firms to deliver in-kind safety net benefits. These public–private partnerships generate agency problems that could increase costs, but cost containment reforms may discourage firm participation. We study a 2012 reform of California's Special Supplemental Nutrition Program for Women, Infants, and Children that reduced the number of small vendors. We show that within-zip-code access to small vendors increases take-up among first-time and foreign-born mothers, suggesting that small vendors are distinctly effective at lowering take-up barriers among women with high program learning costs. Thus, cost containment reforms may have unintended consequences of inequitably reducing program access. [ABSTRACT FROM AUTHOR]

In this paper, we present a series of environmental policies that were implemented by the city-state of Athens during the Classical period (508–323 BCE) through a specific set of environmental institutions. They included: waste management, the implementation of a recycling process regarding animal manure as well as hygiene practices. Special administrative bodies were set up for this purpose with the power to impose heavy fines to offenders, and the actual job of environmental protection was contracted out to private operators. We argue that the success of the Athenian environmental institutions should primarily be attributed to the economic stimuli that the Athenian state provided to their staff so as to perform their duties efficiently, as well as to the imposition of fines and/or other penalties if they provided subpar services. We finally provide proposals as to how the Athenian environmental policies may be seen as an inspiration for our modern societies. [ABSTRACT FROM AUTHOR]

This article studies the distribution of income in Luxembourg by integrating two aspects that have been previously neglected: indirect taxation and in-kind transfers. The integration of the latter is essential in Luxembourg, the country with the highest public expenditure per capita in the Organisation for Economic Co-operation and Development (OECD). These issues have been understudied because of some methodological challenges, including the lack of data containing all the necessary information for this type of analysis. However, with the EUROMOD microsimulation model, different data sources, and imputation methods, we are able to obtain a more complete view of the income distribution in Luxembourg. We find that, as in many developed countries, indirect taxes are regressive. On the other hand, in-kind transfers play an important role in reducing income inequality, in particular through education and health services. [ABSTRACT FROM AUTHOR]

We provide regression discontinuity evidence on long-run impacts of a temporary increase in federal transfers to local governments in Brazil. Revenues and expenditures in treatment communities increased by about 20 percent during a four-year period in the early 1980s. Previously established schooling and literacy gains of school-age cohorts as well as reduced poverty in the community overall as of 1991 are generally attenuated but persist in 2000. Children and adolescents born after the funding boost show gains of about 0.06–0.10 standard deviation across the entire score distribution of two nationwide exams at the end of the 2000s. [ABSTRACT FROM AUTHOR]

Total cost estimates for crime in the USA are both out-of-date and incomplete. We estimated incidence and costs of personal crimes (both violent and non-violent) and property crimes in 2017. Incidence came from national arrest data, multi-state estimates of police-reported crimes per arrest, national victimization and road crash surveys, and police underreporting studies. We updated and expanded upon published unit costs. Estimated crime costs totaled $2.6 trillion ($620 billion in monetary costs plus quality of life losses valued at $1.95 trillion; 95 % uncertainty interval $2.2–$3.0 trillion). Violent crime accounted for 85 % of costs. Principal contributors to the 10.9 million quality-adjusted life years lost were sexual violence, physical assault/robbery, and child maltreatment. Monetary expenditures caused by criminal victimization represent 3 % of Gross Domestic Product – equivalent to the amount spent on national defense. These estimates exclude the additional costs of preventing and avoiding crime such as enhanced lighting and burglar alarms. They also exclude crimes against businesses and most white-collar and corporate offenses. [ABSTRACT FROM AUTHOR]

Benefit–cost analysis (BCA) is often viewed as measuring the efficiency of a policy independent of the distribution of its consequences. The role of distributional effects on policy choice is disputed; either: (a) the policy that maximizes net benefits should be selected and distributional concerns should be addressed through other measures, such as tax and transfer programs or (b) BCA should be supplemented with distributional analysis and decision-makers should weigh efficiency and distribution in policy choice. The separation of efficiency and distribution is misleading. The measure of efficiency depends on the numéraire chosen for the analysis, whether monetary values or some other good (unless individuals have the same rates of substitution between them). The choice of numéraire is not neutral; it can affect the ranking of policies by calculated net benefits. Alternative evaluation methods, such as BCA using a different numéraire, weighted BCA, or a social welfare function (SWF), may better integrate concerns about distribution and efficiency. The most appropriate numéraire, distributional weights, or SWFs cannot be measured or statistically estimated; it is a normative choice. [ABSTRACT FROM AUTHOR]

We examine public project provision and redistribution in a model of legislative bargaining and provide a foundation of how to channel the say. We consider a large and heterogeneous legislature and show that socially optimal outcomes are obtained by a mechanism based on the majority rule that involves two proposal-making rounds, with the minority moving first and the majority moving second. [ABSTRACT FROM AUTHOR]

This paper examines the causal effects of the proportion of low-ability students in the classroom on the academic performance of regular students, exploiting random assignment of students to classes within middle schools in China. We show that the share of students in a class who are low achievers has a significant negative impact on the academic achievement of regular students in the seventh grade. The peer effects are heterogeneous along their achievement distribution, with the strongest adverse impact at the bottom end but no discernable impact at the top end. In contrast, there is no evidence that low-ability students influence any part of the achievement distribution of regular students in the ninth grade. Therefore, peer effects in academic outcomes can vary with the length of regular students' exposure to the same group of low-ability classmates. We further show that the differences in peer effects of low-ability students in seventh and ninth grades are driven by the adjustments of students' friendship formation and learning environment when approaching the completion of middle school. [ABSTRACT FROM AUTHOR]

Do Republican and Democratic presidents vary in their geographic allocations of federal spending? Recent scholarship suggests that US presidents provide more federal outlays to districts represented by their co-partisans, but leave the issue of partisan affiliation unanswered. We explore that question using an updated database that covers federal spending programs over the 1984–2014 period. We show that the alignment effect found in previous studies cannot be observed for Republican presidents. We argue that Republican presidents may not use pork as much as Democratic presidents because their core constituency is fiscally conservative. One implication of the results reported herein is that the electoral benefits of distributive politics depend on the fiscal preferences of the electorate. [ABSTRACT FROM AUTHOR]

This paper studies the effect of public sector efficiency on firm productivity using data from more than 400,000 Italian firms. Exploiting the large heterogeneity in the efficiency of the public sector across Italy's provinces and the intrinsic variation in the dependence of industries on the government, we find that public sector inefficiency significantly reduces the productivity of private sector firms. The results suggest that raising public sector efficiency could yield large economic benefits: If the efficiency in all provinces reached the frontier, output per employee for the average firm would increase by 9%. [ABSTRACT FROM AUTHOR]

Universities are an important actor for innovation. Their contributions to technological and scientific knowledge development have been supported by various types of funding. The current study investigates the impacts of two academic research funding sources—industry and competitive—on academic patents. We measure the effects with two indicators—creation of progenitor inventions and the degree of diffusion. Using a patent database, this paper identifies a progenitor invention if a patent is granted without any backward citations and measures the degree of diffusion with patent citations. Focusing on Japanese university patents, the main finding of this paper is that competitive funding tends to produce progenitor inventions whereas industry funding is not likely to do so. By contrast, inventions produced from competitive funding are not likely to diffuse, whereas those produced from industry funding are likely to diffuse. Based on our findings, we argue that the competitive funding may work better when diffusion mechanism is introduced. An example is to increase academic researchers' proximity to the industry. Additionally, our findings also imply that when setting new funding or changing academic funding system such as replacing block funding with other types, it is important to understand what kind of outcomes are expected from the funding method. [ABSTRACT FROM AUTHOR]

We examine how democratic mechanisms can yield socially desirable outcomes in the presence of uncertainty about an underlying state of nature. We depart from a conventional mechanism design approach because we aim for democratic mechanisms to reflect some basic properties of decision-making in democracies. In particular, actual decisions are made by majority voting. The proposals to be voted upon are made by a selfish agenda-setter. Moreover, communication is limited to a binary message space (that is, voting Yes or No). We show how suitable democratic mechanisms can resolve uncertainty, reveal the state of nature, and implement the Condorcet winner. We demonstrate that this implementation result requires (at most) two voting stages regardless of the number of states or the number of alternatives. We also show that implementation requires a conditional privilege for a small representative subset of the population. [ABSTRACT FROM AUTHOR]

This paper models the provision of a local public good that is simultaneously utilized as a public consumption good and a public intermediate good. Since the public good enters both utility and production functions, it is considered a "generalized public good." This is done to model the provision of infrastructure by sub-federal governments, which is financed with taxes on local residents. Households are mobile in the model, and the theoretical analysis provides a benefit–cost rule for public good provision by a rent-maximizing local government. Illustrative calculations of the marginal cost of public funds are provided, and they show a wide range of values matching previous estimates of the marginal productivity of infrastructure. The impact of intergovernmental transfers on the provision of infrastructure by rent-maximizing local governments is presented. [ABSTRACT FROM AUTHOR]

We analyze the strategic interaction of regional and federal governments using a model that includes fiscal externalities in the form of inter-regional capital tax competition and technical externalities in the form of inter-regional spillovers. The federal government aims to correct for these inefficiencies using a transfer system. If the regional governments are policy leaders (such that federal policy is set conditional on regional choices), they will internalize both fiscal and technical externalities but free-ride on the transfer system. Efficiency can be achieved by introducing a second transfer scheme that is independent of regional public production. If the federal government sets its policy first and can commit itself to it, the outcome is efficient only if matching grants are used that are financed outside of the transfer system. [ABSTRACT FROM AUTHOR]

This paper examined the impact of the inflow of new immigrants on public and out-of-pocket health expenditure in 33 Organisation for Economic Cooperation and Developments (OECD) countries over the period of 2000–2015. Dynamic panel data analysis is carried out using the one-step system 'Generalised Method of Moments' and the instrumental variable (IV) estimation approach whilst controlling for potential endogeneity. The inflow of new immigrants is modelled as a determinant of health expenditure. The results are robust to both static and dynamic models. The results show that an increasing inflow of immigrants is significantly related to out-of-pocket, but, surprisingly, not with public health expenditure. Moreover, the findings are similar for countries that primarily have publicly funded healthcare systems or those more dominated by private financing of healthcare. It can be concluded that new immigrants do not seek publicly funded healthcare at least at the initial years of their relocation and that their arrival does not trigger a significant rise in public healthcare expenditure in the OECD countries. [ABSTRACT FROM AUTHOR]

Policy makers are increasingly embracing the idea of using industrial and innovation policy to tackle the 'grand challenges' facing modern societies. This article argues that through well-defined goals, or more specifically 'missions', that are focused on solving important societal challenges, policymakers have the opportunity to determine the direction of growth by making strategic investments across many different sectors and nurturing new industrial landscapes, which the private sector can develop further, and as a result induce cross-sectoral learning and increase macroeconomic stability. This 'mission-oriented' approach to industrial policy is not about 'top down' planning by an overbearing state; it is about providing a direction for growth and increasing business expectations about future growth areas and catalysing activity that otherwise would not happen. It is not about de-risking and levelling the playing field, nor about supporting more competitive sectors over less since the market does not always 'know best' but tilting the playing field in the direction of the desired societal goals, such as the sustainable development goals. To achieve this requires a different policy framework, what we call the 'ROAR' framework, which involves strategic thinking about the desired direction of travel (Routes), the structure and capacity of public sector Organisations, the way in which policy is Assessed and the incentive structure for both private and public sectors (Risks and Rewards). The article argues that if we want to take grand challenges such as the SDGs seriously as policy goals, market shaping should become the over-arching approach followed in various policy fields. [ABSTRACT FROM AUTHOR]

This research investigates the relationship between national identity and public goods provision across a wide range of countries. The analysis shows that national identity, measured based on survey data, and public goods provision, measured by a broad set of indicators, are negatively related. This result is explained through a proposed short-run model on country stability, where the provision of national identity and public goods are substitutable. The findings challenge the conventional wisdom on nation-building as a policy tool for mitigating the adverse effects of fractionalization, suggesting that generally it is used as a tool for governments to divert the attention of its citizens from most pressing issues, such as the provision of elementary public goods. [ABSTRACT FROM AUTHOR]