Carlo Perroni

• University of Warwick

We explore the link between online salience and charitable donations. Using a unique dataset on phone text donations that includes detailed information on the timing of cash gifts to charities, we link donations to time variation in online searches for words that appear in those charities’ mission statements. The results suggest that an increase in...

We look at the formation of new Indian states in 2001 to uncover the effects of political secession on the comparative economic performance of natural resource rich and natural resource poor areas. Resource rich constituencies fared comparatively worse within new states that inherited a relatively larger proportion of natural resources. We argue th...

We analyze implications of market size for market structure in the charity sector. While a standard model of oligopolistic for-profit competition predicts a positive relationship between market size and firm size, our analogous model of competition between prosocially motivated charities predicts no such correlation. If charities are biased towards...

Tax relief for private donations towards the provision of collective goods can protect minorities from majority-driven outcomes in which tax revenues are exclusively used to finance the provision of public goods that are only valued by the majority. In this paper we show that non-discriminatory tax relief for private donations can arise in politica...

We study contestability in charity markets where non-commercial, not-for-profit providers supply a homogeneous collective good through increasing-returns-to-scale technologies. Unlike in the case of for-profit competition, the absence of price-based sales contracts for charities means that fixed costs can translate into entry barriers, protecting t...

In this paper, we examine the theoretical rationale for WTO rules on the special and differential treatment (SDT) of developing countries. We describe a model of bilateral trade between a small country and a large trading partner, in which the small country suffers from a domestic commitment problem in trade policy. This problem arises because inve...

We describe a model of multi-trait matching and inheritance in which individuals’ attractiveness in the marriage market depends on their market and non-market characteristics. Gender differences in social mobility can arise if market characteristics are relatively more important in determining marriage outcomes for men than they are for women, and...

Abstract We examine how trade liberalization by a large trading partner affects the ability of a small country’s government to sustain free trade through a reputational mechanism. Unconditional liberalization by the large trading partner has an ambiguous effect on the small country’s dynamic incentives. Liberalization through a reciprocal trade agr...

Empirical studies of intergenerational social mobility have found that women are more mobile than men. To explain this finding, we describe a model of multi-trait matching and inheritance, in which individuals’ attractiveness in the marriage market depends on their market and non-market characteristics. We show that the observed gender differences...

Abstract We examine how trade liberalization by a large trading partner affects the ability of a small country’s government to sustain free trade through a reputational mechanism. Unconditional liberalization by the large trading partner has an ambiguous effect on the small country’s dynamic incentives. Liberalization through a reciprocal trade agr...

We describe a two-sector, general-equilibrium model of productive sorting under output risk and incomplete information. Risk-neutral (entrepreneurial) individuals can either produce alone, or – acting as employers/insurers – team up with risk-averse (non-entrepreneurial) individuals. Although the latter option has the potential to generate more sur...

We examine the implications for the viability of multilateral cooperation of different legal principles governing how separate international agreements re- late to each other. We contrast three alternative rules: conditionality-making cooperation in one area a condition for cooperation in another; separation- forbidding sanctions in one area to be...

This paper studies the impact of a World Trade Organization withdrawal of trade concessions against countries that fail to respect globally recognized environmental standards. We show that a punishing tariff can be effective when environmental and trade policies are endogenous. When required standards are not too stringent with respect to the margi...

Presents some estimates of the consequences of Uruguay Round liberalisation based on a global trade model developed for this purpose. We analyse two possible conclusions of the Uruguay Round: a "comprehensive' outcome with major reforms in all areas under negotiation and a modest "face-saving' outcome with enough of an agreement to preserve some se...

Taxation is only sustainable if the general public complies with it. The theoretical public finance literature has interpreted tax constitutions as binding contracts by which the power to tax is irretrievably conferred by individuals to government, which can then levy any tax it chooses. However, in the absence of an outside party enforcing contrac...

We analyze a two-sector, general-equilibrium model of productive matching and sorting, where risky production is carried out by pairs of individuals both exerting effort. Risk-neutral (entrepreneurial) individuals can match either with other risk-neutral individuals, or – acting as employers/ insurers – with risk-averse (nonentrepreneurial) individ...

We examine gender differences in intergenerational patterns of social mobility for second-generation migrants. Empirical studies of social mobility have found that women are generally more mobile than men. Matching theory suggests that this may be because the importance of market characteristics (financial wealth and earning power) relative to non-...

Bargaining theory suggests that married women who experience a relative improvement in their labour market position should experience a comparative gain within their marriage. However, if renegotiation possibilities are limited by institutional mechanisms that achieve long-term commitment, the opposite may be true, particularly if women are special...

We examine the relationship between international policy coordination and domestic policy reputation when both are self-sustaining. We show that domestic policy commitment does not necessarily facilitate international cooperation; rather, efficient policies may be most easily sustained when governments are unable to pre-commit to policy domesticall...

We consider a setting in which capital taxation is characterized by two distortions working in opposite directions. On one hand, governments engage in tax competition and are tempted to lower capital tax rates. On the other hand, they are unable to commit to future policies and, once capital has been installed, have incentives to increase taxes. In...

Differences in gender-based labour market discrimination across countries imply that migration may affect husbands and wives differently. If migrant wives experience a relative improvement in their labour market position, bargaining theory suggests that they should experience comparatively larger gains. However, if renegotiation possibilities are l...

We examine the theoretical rationale for the simultaneous granting of temporary Special and Differential (S&D) treatment to developing countries - both in ite protection and market-access components - under the WTO agreements. S&D rules constitute the centrepiece of the WTO’s strategy for integrating developing countries into the trading system, bu...

Under existing WTO rules developing countries are granted Special and Dif-ferential (S&D) treatment, i.e. special rights and privileges not extended to developed countries. This paper provides a theoretical rationale for the simul-taneous presence of protection based and market-access based S&D rules, as well as for their temporary nature. We show...

Taxation is only sustainable if the general public complies with it. This observation is uncontroversial with tax practitioners but has been ignored by the public finance tradition, which has interpreted tax constitutions as binding contracts by which the power to tax is irretrievably conferred by individuals to government, which can then levy any...

Using a general-equilibrium model of world trade, this paper evaluates the benefits of most-favored-nation (MFN) treatment to developing countries in multilateral relative to bilateral or regional trade agreements, from three sources. First, developing countries may be able to free-ride on bilateral tariff concessions exchanged between larger count...

Taxation is only sustainable if the general public complies with it. This observation is uncontroversial with tax practitioners but has been ignored by the public finance tradition, which has interpreted tax constitutions as binding contracts by which the power to tax is irretrievably conferred by individuals to government, which can then levy any...

We consider the implications of a lack of policy commitment when policies are chosen through a political process and individuals are ex-ante identical. We show that politics, by allowing ex-post distributional tensions to shape policy, can make it possible to sustain non-trivial equilibria in which the commitment problem is alleviated or fully elim...

We explore the relationship between international policy coordination and domestic policy credibility when both must be self-supporting. Our arguments are presented in the context of a two-country, two-period model of dynamic emission abatement with transboundary pollution, where government policies suffer from a time-consistency problem. In the ab...

We describe a model of dynamic pollution abatement choices with heterogeneous agents where, due to the presence of a distributional objective and to the absence of incentive-compatible compensation mechanisms, the choice of a second-best level of emission taxation is time-inconsistent. In this model, we investigate whether investment subsidies can...

This paper studies the impact of a World Trade Organization withdrawal of trade concessions against countries that fail to respect globally recognized environmental standards. We show that a punishing tariff can be effective when environmental and trade policies are endogenous. When required standards are not too stringent with respect to the margi...

We describe a model of international, multidimensional policy coordination where countries can enter into selective and separate agreements with different partners along different policy dimensions. The model is used to examine the implications of negotiation tie-in — the requirement that agreements must span multiple dimensions of interaction — fo...

When consumers can privately monitor public provision of goods and services, tax earmarking can foster accountability independently of how taxes are earmarked, because it introduces a more direct linkage between private monitoring choices and taxes paid.

This paper examines how capital tax competition affects jurisdiction formation. We describe a non-cooperative locational model of public goods provision choices, where the levels of taxation and the local public good varieties provided within jurisdictions are selected by majority voting, and where equilibrium jurisdictions consist of consumers wit...

We study majority voting over a bidimensional policy space when the voters' type space is either uni- or bidimensional. We show that a Condorcet winner fails to generically exist even with a unidimensional type space. We then study two voting procedures widely used in the literature. The Stackelberg (ST) procedure assumes that votes are taken one d...

This paper examines how capital tax competition affects jurisdiction formation. We describe a locational model of public goods provision, where jurisdictions are represented by coalitions of consumers with similar tastes, and where the levels of taxation and local public goods provision within jurisdictions are selected by majority voting. We show...

We consider renegotiation of social earnings insurance arrangements by majority voting in an economy where ex-ante identical individuals make unobservable private investments in education. We show that voting-based renegotiation can result in a higher expected level of investment in comparison to the case where social insurance is determined by an...

Several of the recently negotiated regional trade agreements contain significantly fewer concessions by the large countries to smaller countries than vice versa. In this paper, we compute post-retaliation Nash tariffs by region under various regional trade arrangements using a calibrated numerical general equilibrium model of world trade. Regional...

This paper investigates how subsidies to environment improving investment can be used to overcome dynamic consistency problems in environmental policy choices, in the presence of dynamic pollution abatement, heterogeneous agents, and governments that pursue both efficiency and distributional objectives

We discuss most favoured nation (MFN) treatment in trade agreements, and its significance for developing countries, suggesting that its value to individual countries depends critically on the relevant model solution concept used to evaluate it. We analyze both rights to MFN treatment in foreign markets, and the obligation to grant MFN treatment in...

Recent literature has explored both physical and policy linkage between trade and environment. Here we explore linkage through leverage in bargaining, whereby developed countries can use trade policy threats to achieve improved developing country environmental management, while developing countries can use environmental concessions to achieve trade...

This paper examines the choice between alternative trade-based approaches to reducing global environmental damage, such as trade-related process standards and tariff-based approaches. Estimates of the effects of alternative policies are presented, using a calibrated global trade model with pollution externalities. It is found that both trade-relate...

This note describes how a convex N-input-M -output production possibility frontier can be locally approximated by means of a flexible Nonseparable Nested Constant-Elasticity-of-Substitution/Constant-Elasticity-of-Transformation (NNCES-CET) restricted profit function. This technique yields a summary representation of technology sets that is globally...

This paper uses a calibrated general-equilibrium model of North–South trade with carbon emissions to explore the strategic, open-economy implications of price- and quantity-based instruments for CO2 emission reduction. We compute non-cooperative environmental and trade policy equilibria and Nash bargaining outcomes in environmental policies with si...

This paper numerically investigates the significance of rents for both the welfare costs and the optimal design of commodity taxes using a general-equilibrium model calibrated to 1986 Canadian data. In the data we use, Ricardian rents are concentrated in agriculture and utilities, with market structure rents concentrated in manufacturing. Different...

This paper describes a procedure for testing the global properties of functional forms which recognizes their specific role in economic equilibrium modelling. This procedure is employed to investigate the global regularity and third-order curvature properties of three widely used flexible functional forms, the Translog, the Generalized Leontieff an...

This paper examines the welfare impacts of tax reformin the context of a perfect-foresight two-sector model with linearendogenous growth, where new knowledge is a byproduct of productionactivities. A calibrated version of this model is used to obtainnumerical estimates of the welfare impact of equal-yield unanticipatedtax changes through transition...

This paper analyses, in a simple two-region model, the undertaking of noxious facilities when the central government has limited prerogatives. The central government decides whether to construct a noxious facility in one of the regions, and how to …nance it. We study this problem under both full and asymmetric information on the damage caused by th...

This paper analyses, in a simple two-region model, the undertaking of noxious facilities when the central government has limited prerogatives. The central government decides whether to construct a noxious facility in one of the regions, and how to …nance it. We study this problem under both full and asymmetric information on the damage caused by th...

Cet article offre une évaluation des impacts possibles du "Final Act" de l'Uruguay Round, en prêtant une attention particulière au Canada. Nos deux principaux résultats peuvent être résumées comme suit: premièrement, les impacts estimés de l'Uruguay Round sont plus modestes que les résultats précédents; notre deuxième résultat concerne la libéralis...

Discusses what a competition policy negotiation might entail for the developing countries, and attempts to delineate their position in such a negotiation vis-a-vis developed countries. Then outlines the various implications of competition policies, both for domestic economic efficiency and their impacts on international trade-flows. Finally, summar...

This paper describes a procedure for testing the global properties of functional forms which recognizes their specific role in economic equilibrium modelling. This procedure is employed to investigate the global regularity and third-order curvature properties of three widely used flexible functional forms, the Translog, the Generalized Leontieff an...

This paper develops a life-cycle growth model with endogenous human capital accumulation and variable leisure, which is employed to simulate dynamic equal-yield changes from an income tax to a consumption tax. Although endogenizing human capital investment decisions raises partial-equilibrium estimates of the efficiency costs of capital income taxa...

This paper examines the implications of environmental externalities for income tax design in a growing economy. We describe a model with endogenously generated knowledge, in which technical progress reduces the emissions generated by production activities. In this setting, the lack of internalization of environmental externalities results in an abo...

This paper develops a numerical general equilibrium model of the world economy with local and global environmental externalities. The model is then used to investigate the relationship between trade and the environment. The authors' results suggest that international trade has little impact on environmental quality. Furthermore, the magnitude of th...

This paper discusses the implications of rents and regulations which support them for the design of indirect taxes such as VATS. Intuition suggests high tax rates on industries or products with rents; but we argue that whether rents are natural (due to fixed factors) or market structure related (monopolistic) makes a large difference. In the latter...

Restrictions on carbon dioxide emissions affect international trade and the pattern of comparative advantage. This paper, based on calculations with a static general equilibrium model, suggests that international trade in carbon rights is a substitute for trade in energy-intensive goods, and thus international trading in carbon rights reduces secto...

This note describes a methodology through wich well-behaved, non-homothetic preferences can be locally approximated by means of a globally regular, homogeneous expenditure function.

A recently developed demand system, nicknamed AIDADS (An Implicit, Directly Additive Demand System), offers an approach to capturing consumer preferences across a wide range of expenditure levels. AIDADS generalizes the LES by assuming marginal budget shares vary with utility and hence with expenditure. Like the LES, AIDADS includes subsistence par...

We describe a two-sector, general-equilibrium model of productive sorting un-der output risk and incomplete contracting. Risk-neutral (entrepreneurial) indi-viduals can either produce alone, or – acting as employers/insurers – team with risk-averse (non-entrepreneurial) individuals. Although the latter option has the potential to generate more surp...

We consider a small open economy that faces a commitment problem in trade liberalization. We examine how the small country's relationship with a large trad- ing partner affects the ability of the small country's government to sustain free trade through a reputational mechanism. If the small country's government is patient enough, it can overcome it...

We look at how uncertainty in the production process shapes institutions when firms produce goods of variable quality, quality is unobservable to con-sumers, and low quality can stem from a bad productivity shock or low effort. We compare two institutions that solve the asymmetric information problem: an informal mechanism, reputation, achieved via...