Article

Public Finance: Essay for the Encyclopedia of Public Choice

Authors:
To read the full-text of this research, you can request a copy directly from the author.

Abstract

Public Finance is the branch of economics that studies the taxing and spending activities of government. The term is something of a misnomer, because the fundamental issues are not financial (that is, relating to money). Rather, the key problems relate to the use of real resources. For this reason, some practitioners prefer the label public sector economics or simply public economics. Public finance encompasses both positive and normative analysis. Positive analysis deals with issues of cause and effect, for example, “If the government cuts the tax rate on gasoline, what will be the effect on gasoline consumption?” Normative analysis deals with ethical issues, for example, “Is it fairer to tax income or consumption?” Modern public finance focuses on the microeconomic functions of government, how the government does and should affect the allocation of resources and the distribution of income. For the most part, the macroeconomic functions of government--the use of taxing, spending, and monetary policies to affect the overall level of unemployment and the price level--are covered in other fields.

No full-text available

Request Full-text Paper PDF

To read the full-text of this research,
you can request a copy directly from the author.

... On the other hand, normative analysis relates to ethical issues, for instance, is it good to impose high taxes on necessary commodities? (Rosen 2004). ...
... Modern public finance stresses the microeconomic functions of government, for instance, how the government functions in an economy and the justification why the government should determine the allocation of resources and the distribution of income. On the other hand, the macroeconomic functions of the government, through taxing, spending, and monetary policies, may impact on the level of employment, growth, and price level (Rosen 2004). However, public finance is classified into main categories, such as revenue receipts or public revenue and capital receipts. ...
Chapter
Full-text available
The government has economic policies, which are basically reflected in the budget. Through the budget, the government of a country mobilizes and allocates resources, accelerates capital formation, and creates greater employment opportunity and equal distribution of resources. In addition, budget is an annual statement of estimated revenues and expenses. The term “budget” is derived from a French word, bougette meaning a pouch, bag, or wallet. In 1873, the term for the first time was used in its present form, in a satire directed against Robert Walpole’s annual financial plan. Since then, the budget is used for an annual financial plan, containing income and expenditure of the government (Bhattacharya 2007). However, the entry is to briefly discuss the different aspects and classification of budget and to explore the nexus between budgeting and finance.
... In human capital theory, Schultz (1961) established'human capital' is the key factor that adds towards economic development (Kown, 2009). The theory word of 'human capital' assumes the notion as an 'investment in knowledge, skills, and attitude' that makes an individual enhance his/her productivity (Rosen, 2004). ...
Article
This paper establishes a theoretical lens through which funding bodies can see the effectiveness of an entrepreneurial education program, from the perspective of institutional accountability. In this regard, quality notions; exception, fitness for purpose, perfection, transformation, and value for money are put to the investigation during semi-structured interviews. The interviewed data were analyzed qualitatively by employing 'discourse analysis'. The findings of the research suggest that the notion of quality in the entrepreneurship program is a blend of 'value for money' and 'transformation'.
... According to relational theory, to create a society in which there is equal respect, regardless of whether there is any actual material equality of condition, what matters is the relations between people in a diverse society (Rosen, 2004). The provision of sufficient capabilities in heterogeneous communities is required so that no-one is forced to feel ashamed of their circumstances. ...
Article
Full-text available
Diversity plays a vital role in sustainable development of any country. Discrimination, segregation and bigotry are escalating the pressure on the world’s population. This study aims to investigate the impact of ethnic and religious diversity on social exclusion (in the form of economic exclusion, exclusion from public service and exclusion from civic and public participation as indicated by United Nations Development Program (UNDP) by using data from 187-countries. Based on panel data methodology this study concludes that diversity, either ethnic or religious or both, can increase social exclusion and affect wellbeing at a population level. This study suggests that ethnic and religious diversity is an inherent part of most societies in a globalised world and is unlikely to be halted yet the unintended negative impacts of such increased diversity can be minimized by establishing cohesiveness in society.
... Since market mechanisms and economic incentives are the core tools in the unit-based waste pricing system, the waste charge is the key policy instrument [17]. Many economists apprehend the unit-based waste charging policy as a Pigouvian tax that embedded economic incentive and market mechanism to reduce pollution [18]. If environmental damages such as food-waste pollution can be measured exactly, and if waste charge is charged in proportion to the amount of the emission, an economic-incentive instrument can control waste disposal behavior. ...
Article
Full-text available
This research explores the impact of the Radio Frequency Identification (RFID) Household-Based Food Waste Charging System (RHWC) on the reduction of food waste in Mapo-Gu district located in Seoul city from June 2013 to July 2016. Through comparing the amount of food waste disposal between 12 apartment complexes with the RHWC policy (treatment group) and 61 apartment complexes (control group) without the policy, we attempt to identify whether the RHWC can contribute in reducing food waste. In June 2013, all these apartment complexes adopted an apartment complex unit-based food-waste system (i.e., Community-Based Waste Charging system-CWC), but, in January 2016, the 12 apartment complexes introduced the RHWC policy, while the other 61 apartment complexes kept the CWC policy. This natural experiment setting allows us to compare the difference in the quantity of food waste disposal between these two payment policies. The RHWC uses a weight based payment design, through which each household is electronically charged for the weight of food waste they disposes, while the CWC uses a group incentive system where residents pay the same price by dividing total amount of waste charge by total number of household in apartment complex. We, relying on propensity score matching and Difference-In-Difference (PSM-DID) methodology, found a significant difference in the amount of food waste disposal between these two payment systems. Our empirical finding shows that the RHWC deign can reduce more food waste than the CWC design. This study suggests that municipalities can reduce food waste through redesigning incentive mechanism in which it is able to reduce free riding by electronically identifying and monitoring how much residents throw out thanks to RFID technology.
... Asumsi tersebut meliputi seluruh pelaku produksi dan konsumsi merupakan kompetitor sempurna, dengan catatan salah satunya tidak menguasai pasar; dan suatu pasar menjadi tempat bagi arus komoditi. Dalam suatu keadaan, hasil formalisasi ini merupakan cara pandang lama ketika hal ini muncul untuk menyediakan barangbarang dan pelayanan (providing goods and services), kebebasan sistem perusahaan yang cukup produktif (Harvey S. Rossen, 2002). ...
Data
Full-text available
The relation between religion, economy, and country became the main topic of building a public welfare system. Human beings have the potential to realize the political level of moral conscience to make ends meet, but man as a creature of religion must have a balance between religious morality and economy morality. With economic ethics are supported by religious morality, the welfare system can be realized systemically if the state, communities, and individuals can realize the six-dimensional: the religion that is adhered to, good governance, justice, national security, the prosperity of society, and the vision of the nation.
... Improvements in transport business reducing internal costs often lead to increasing of external costs (Table 3). Rosen (2002) defines the externalities as follows: "When the activity of one entity (a person or a firm) directly affects the welfare of another in a way that is outside the market mechanism, that effect is called an externality." The cost of damage from such activities that is not covered by the entity that has done it, represents a social cost and is called the external cost. ...
Article
Full-text available
Maritime transport logistics outgrows the competence of classic freight forwarders deleting the boundaries among forwarders, brokers, and carriers and creates a new profession, logistics operator. They are now faced with the need for careful planning and coordination among multiple parties for shifting the freight logistics industry towards more sustainable goals. Significant need for political and operational respect of principles of sustainable development, and also external costs in this context, undertakes logistics operators to review their solutions in accordance with adequate knowledge, skills, and competencies. It is particularly important in forecasting the external costs which are not a central business interest. The above mentioned competencies are described focusing on subjects (issues and knowledges) through whom logistics operators should be trained. Moreover, logistics operators have a greater responsibility towards carriers but also an opportunity to reduce not only the cost of transportation but also the external costs within the logistic supply chain. In this paper calculation of external costs is, practically, shown in the example of towing in the port. The old education programs were compared with the new demands of the market. The substantial difference was evident in the subject of Marine Ecology whose content is becoming the central issue of sustainability of transport modalities. New competencies of logistics operators will become the relevant factor of sustainable development and competitiveness on the freight logistics market. That confirm the analysed current projects about present trends in the transport sector in which the green logistics including external costs become the important and binding element of cargo flow planning.
... Such assumptions include all players in the production and consumption is a perfect competitor, with a record of one of them does not dominate the market; and a place for the current market is becoming a commodity. In some circumstances, the results of this formalisation is an old perspective when it appeared to provide goods and services (providing goods and services), freedom of enterprise systems was quite productive (Harvey S. Rossen, 2002). Support for the fulfilment of these conditions indicate the required two assumptions. ...
Article
Full-text available
The relation between religion, economy and the country became a major topic in the development of public welfare systems. Humans are political creatures that have the potential to realise the level of moral conscience to meet the needs of a better life, but humans as spiritual beings must have a balance between religious morality and economic morality. With economic ethics are supported by religious morality, the welfare system can be realised systemically if the state, communities and individuals can realise the six-dimensional form: religious observance, good governance, justice, national security, the prosperity of society and the nation's vision. JEL Classification: B3, I3, N3, P5, Z12
... Cybersecurity has both private and public good characteristics: while investment in security protection entails private costs and benefits for the decision-maker, it may also benefit or harm other Internet actors. These interdependencies are called externalities-formally defined as the direct effect of the activity of one actor on the welfare of another that is not compensated by a market transaction ( Rosen 2004). Much of the economic literature on security economics is concerned with externalities that can be negative or positive. ...
Thesis
Full-text available
Research in the field of information security economics has clarified how attacker and defender incentives affect cybersecurity. It has also highlighted the role of intermediaries in strengthening cybersecurity. Intermediaries are organizations and firms that provide the Internet’s infrastructure and platforms. This dissertation looks at how intermediary behavior and incentives can be understood from measurements—such as incident data and network logs. The question is answered through a literature review, four empirical studies, and two reflection chapters. The studies researched the role of ISPs in mitigating botnets, the success of anti-botnet initiatives in Conficker cleanup, vulnerabilities in the certificate authority ecosystem, and ISP incentives to deploy deep packet inspection, all using cross-country and longitudinal measurements. The dissertation concludes by reflecting on both the methodology and the broader implications for cybersecurity policy.
... Asumsi tersebut meliputi seluruh pelaku produksi dan konsumsi merupakan kompetitor sempurna, dengan catatan salah satunya tidak menguasai pasar; dan suatu pasar menjadi tempat bagi arus komoditi. Dalam suatu keadaan, hasil formalisasi ini merupakan cara pandang lama ketika hal ini muncul untuk menyediakan barangbarang dan pelayanan (providing goods and services), kebebasan sistem perusahaan yang cukup produktif (Harvey S. Rossen, 2002). ...
Data
Full-text available
Relasi agama, ekonomi dan negara menjadi topik utama dalam membangun suatu sistem kesejahteraan masyarakat. Manusia sebagai makhluk politik memiliki potensi dalam mewujudkan tingkat kesadaran moral untuk memenuhi kebutuhan hidup, namun manusia sebagai makhluk beragama harus memiliki keseimbangan antara moralitas agama dan moralitas ekonomi. Dengan etika ekonomi yang didukung dengan moralitas agama, sistem kesejahteraan dapat terwujud secara sistemik apabila negara, masyarakat, dan individu dapat mewujudkan enam dimensi berupa agama yang ditaati, pemerintahan yang baik, keadilan, keamanan nasional, kemakmuran masyarakat, dan visi bangsa. Latar Belakang Untuk mewujudkan kesejahteraan masyarakat, al-Mawardi (d. 450/1058) memulai pembahasannya tentang etika-politik secara filosofis dan akhlak muslim dengan penekanan pada peranan individu dan masyarakat yang dapat menciptakan integritas dan keseimbangan sosial. Bahkan, tujuan yang hendak dicapai ditetapkan untuk mewujudkan kebahagiaan hidup di dunia dan di akhirat (al-Arzanjani, 1328: 221-223). Dengan menerapkan postulal-postulat filosofis bagi dasar keagamaan yang kokoh, al-Mawardi menjelaskan manusia sebagai makhluk politik (M. Arkoun, 2000: 250). Jika manusia adalah makhluk politik, karena ia pada dasarnya lemah (QS. al-Nisa', 4: 28), maka ia tidak bisa hidup tanpa bantuan sesamanya, berbeda dengan binatang yang mampu hidup secara mandiri (al-Mawardi, 1996:92-93; al-Arzanjani, 1328: 218-219). Ada beberapa hal yang perlu diperhatikan berkaitan dengan konsep " manusia sebagai makhluk politik ". Pertama, al-Mawardi terpengaruh oleh pemikiran filsafat melalui difusi, yaitu pada saat produksi pemikiran filosofis secara luas. Hal ini nampak pada kutipannya terhadap al-Kindi dan Aristoteles dalam Adab al-Dunya wa-al-Din, dan beberapa pembahasan filsafat seperti akal dan wahyu. Kedua, berbeda dengan filosof yang menggunakan metode filosofis dan pemikirannya yang bersifat rasional-spekulatif, sedangkan al-Mawardi
... Such assumptions include all players in the production and consumption is a perfect competitor, with a record of one of them does not dominate the market; and a place for the current market is becoming a commodity. In some circumstances, the results of this formalisation is an old perspective when it appeared to provide goods and services (providing goods and services), freedom of enterprise systems was quite productive (Harvey S. Rossen, 2002). Support for the fulfilment of these conditions indicate the required two assumptions. ...
... Such assumptions include all players in the production and consumption is a perfect competitor, with a record of one of them does not dominate the market; and a place for the current market is becoming a commodity. In some circumstances, the results of this formalisation is an old perspective when it appeared to provide goods and services (providing goods and services), freedom of enterprise systems was quite productive (Harvey S. Rossen, 2002). Support for the fulfilment of these conditions indicate the required two assumptions. ...
Article
Full-text available
The relation between religion, economy and the country became a major topic in the development of public welfare systems. Humans are political creatures that have the potential to realise the level of moral conscience to meet the needs of a better life, but humans as spiritual beings must have a balance between religious morality and economic morality. With economic ethics are supported by religious morality, the welfare system can be realised systemically if the state, communities and individuals can realise the six-dimensional form: religious observance, good governance, justice, national security, the prosperity of society and the nation's vision. Keywords: religion, economy, state, ethics, welfare state JEL Classification: B3, I3, N3, P5, Z12 MPRA Paper No. 72090
Article
Full-text available
This study aims to provide an overview of the transparency of village financial management in Pulau Morotai Regency, North Maluku Province, Indonesia. The sample in this study was taken by using a purposive sampling method, involving 440 respondents, and spread in 88 villages in Pulau Morotai Regency. Data processing techniques used descriptive statistics with a class interval approach. The results show that the indicators of clarity of roles and responsibilities, implementation of government affairs are still dominated by the head of the village who has the authority for village financial management. Indicators of budget disclosure show relatively the same as indicators of clarity of roles and responsibilities. The indicators of information availability indicate that the accessibility of public information in villages located in the subdistrict capital is relatively good. In contrast, the last indicator, integrity assurance, shows that data validity still being a problem in the village planning process. This study also discusses the implications as well as suggestions for future studies.
Conference Paper
Full-text available
Public financial management by the government is very important in view of the level of welfare in Indonesia is still low, as there is still much poverty with the level of fulfillment of the needs of low, corruption that occurs in every area of government, income distribution is uneven, low economic growth, and various irregularities other budgets. With a qualitative approach that emphasizes the phenomenon of social reality and the country's financial management practices in Indonesia, the approach to history and historical analysis is able to provide solutions to the existing problems. Reviewing public financial revenues and government spending become instruments in creating public welfare.
Article
Full-text available
Pemerintahan Kabupaten Bungo dalam menjawab janji politik Bupati terpilih membuat sebuah kebijakan melalui Peraturan Bupati Bungo Nomor 5 Tahun 2017 Tentang Pedoman Umum dan Petunjuk Teknis Program Gerakan Dusun Membangun (GDM), yaitu memberikan bantuan keuangan kepada dusun sejumlah Rp 250.000.000 per dusun. Pelaksanaannya dikelola berdasarkan asas-asas transparan, akuntabel, partisipatif serta dilakukan dengan tertib dan disiplin anggaran. Dalam melakukan penelitian tentang Akuntabilitas Politik Dalam Anggaran Publik (Studi Kasus: Pengelolaan Dana Dusun Membengun (GDM) di Kabupaten Bungo ini, menggunakan Metode Penelitian Deskriptif Kualitatif. Adapun alasan penelitian ini menggunakan pendekatan kualitatif adalah karena dalam penelitian ini data yang dihasilkan berupa data deskriptif yang diperoleh dari data-data berupa tulisan, kata-kata dan dokumen yang berasal dari sumber atau informan yang berkaitan dengan akuntabilitas politik ini dan stakeholder yang dapat dipercaya. Hasil analisis dari penelitian ini, bahwa Pemerintah Kabupaten Bungo telah Akuntabel dalam merealisasikan janji politiknya. Kemudian Dusun Lubuk Beringin dan Tombolasi telah sama-sama akuntabel dalam penggunaan dana GDM. Namun hal yang berbeda terdapat di Dusun Sinamat Ulu Pemerintahan ini sama sekali tidak akuntabel, karena realisasi anggaran yang fiktif. Kabupaten sebaiknya dapat memberikan system yang lebih ringkas dan mudah untuk diaplikasikan oleh Pemerintah Dusun namun dapat di petanggungjawabkan.
Article
In the half century since the founding of the US Environmental Protection Agency, public and private US sources have spent nearly $5 trillion ($2017) to provide clean rivers, lakes, and drinking water (annual spending of 0.8 percent of US GDP in most years). Yet over half of rivers and substantial shares of drinking water systems violate standards, and polls for decades have listed water pollution as Americans’ number one environmental concern. We assess the history, effectiveness, and efficiency of the Clean Water Act and Safe Drinking Water Act and obtain four main conclusions. First, water pollution has fallen since these laws were passed, in part due to their interventions. Second, investments made under these laws could be more cost effective. Third, most recent studies estimate benefits of cleaning up pollution in rivers and lakes that are less than the costs, though these studies may undercount several potentially important types of benefits. Analysis finds more positive net benefits of drinking water quality investments. Fourth, economic research and teaching on water pollution are relatively uncommon, as measured by samples of publications, conference presentations, and textbooks.
Chapter
This chapter assumes that there is a gap between the request for non-profit sector managerialism and the need to ensure that it continues to represent the economic actor (probably the only one, in this sense) able to ensure the provision of goods and services of high social value for citizens and communities. In this perspective, we should abandon the idea that the non-profit sector can be a mere tool to “fill” the residual spaces left by the two “giants”: the market and the public administration. In this sense, the main aim of the research is to identify a possible link between accountability, responsibility, public trust, and communication in NPIs, possibly through a potential multidimensional managerial model in which these conceptual elements can be represented in a coordinated and systemic way.
Chapter
Full-text available
The utility of crowdfunding in promoting sustainable development is beyond doubt due to its popularity in the Global North. The application of this concept in the Global South, especially in Africa, is illunderstood and questionable considering the high levels of corruption, poverty, and poor governance. Applying the concept of crowdfunding in Africa then becomes problematic. The chapter aims to undertake a critical analysis of the concept of crowdfunding and its sustainability in advancing the success of urban-based projects in African cities. What can (or should) be the defining pillars for sustainable and inclusive crowdfunding? What are the known (or even unknown) limits and prospects to initiatives like crowdfunding? What are the answers to the colonial legacy derived scepticisms about self-worth and context? What options do the African cities have? The chapter engages a mix of methodologies including literature review, document review, and case studies. Thematic content analysis is applied in building up the discourse. From the study, five critical observations emerge.
Article
Full-text available
Public financial management by the government is very important in view of the level of welfare in Indonesia is still low, as there are still much poverty with the level of fulfillment of the needs of low, corruption that occurs in every area of government, income distribution is uneven, low economic growth, and various irregularities other budget. With a qualitative approach that emphasises the phenomenon of the social reality and the country's financial management practices in Indonesia, the approach to history and historical analysis is able to provide solutions to the existing problems. Reviewing public financial revenues and government spending become instruments in creating public welfare.
Article
This is an empirical study on the effect of house price on stock-market participation and its depths based on unique China Household Finance Survey (CHFS) data in 2011 and 2013 including 36213 sample households. We mainly found that, with an increase of one thousand RMB per square meter in macro house price, the probability to participate in the stock market will increase by 5.4% before controlling for wealth effect and 2.84% afterwards, indicating the existence of wealth effect. The participation depths of the stock-total asset ratio is expected to decrease by 0.23%and absolute stock asset is observed to decrease by 5.8 thousand RMB in response to one thousand RMB increase of per square meter house price. The effect of house price on participation decision is also related to housing area, and the negative effect of house price on stock market participation depths gets more intense with the increase of the stock-total asset ratio.
Conference Paper
This article offers a comparative view of applied risk management in market-based operation of the next generation power grid, based on the principles and lessons of risk management developed in the financial sector. It argues that the dual signatures of public and private goods on electricity products and services in wholesale power markets are the roots of many fundamental challenges including risk management, and due to the symbiotic public and private goods properties of electricity products, the general risk management framework should be more appropriate to support the decisions under uncertainty, instead of the classic ones for complete market environments. Further, we overview the subjective and objective aspects of risk management followed by explanation of three managing philosophies concerning ontological attitude. Based on the conceptual discussions, we show the importance of in-depth understanding of characteristics of the next generation power grid to risk management. In addition, the unique features of risk analysis in power system and market operations are discussed, comparing to those in the financial sector. Finally, some lessons learned from practices in financial sectors as well as the challenges to the power industry are summarized.
Data
Full-text available
Public financial management by the government is very important in view of the level of welfare in Indonesia is still low, as there are still much poverty with the level of fulfillment of the needs of low, corruption that occurs in every area of government, income distribution is uneven, low economic growth, and various irregularities other budget. With a qualitative approach that emphasises the phenomenon of the social reality and the country's financial management practices in Indonesia, the approach to history and historical analysis is able to provide solutions to the existing problems. Reviewing public financial revenues and government spending become instruments in creating public welfare.
Conference Paper
Full-text available
Public financial management by the government is very important in view of the level of welfare in Indonesia is still low, as there are still much poverty with the level of fulfillment of the needs of low, corruption that occurs in every area of government, income distribution is uneven, low economic growth, and various irregularities other budget. With a qualitative approach that emphasises the phenomenon of the social reality and the country's financial management practices in Indonesia, the approach to history and historical analysis is able to provide solutions to the existing problems. Reviewing public financial revenues and government spending become instruments in creating public welfare.
Data
Full-text available
Public financial management by the government is very important in view of the level of welfare in Indonesia is still low, as there are still much poverty with the level of fulfillment of the needs of low, corruption that occurs in every area of government, income distribution is uneven, low economic growth, and various irregularities other budget. With a qualitative approach that emphasizes the phenomenon of the social reality and the country's financial management practices in Indonesia, the approach to history and historical analysis is able to provide solutions to the existing problems. Reviewing public financial revenues and government spending become instruments in creating public welfare.
Conference Paper
Full-text available
Public financial management by the government is very important in view of the level of welfare in Indonesia is still low, as there are still many poverty with the level of fulfillment of the needs of low, corruption that occurs in every area of government, income distribution is uneven, low economic growth, and various irregularities other budget. With a qualitative approach that emphasizes the phenomenon of the social reality and the country's financial management practices in Indonesia, the approach to history and historical analysis is able to provide solutions to the existing problems. Reviewing public financial revenues and government spending become instruments in creating public welfare.
Book
The Commission of the European Union has identified divergences between the national contract laws of the Member States as an obstacle to the completion of the European Internal Market and put this issue on its highest political agenda. Alexander J. Wulf analyses and predicts the effects. The study is situated in the context of the recent developments in the discussion on European contract law. The book begins with an introduction to the economic and legal theories that serve as the rationale for the development of the line of argument. These theories are then applied to the issues involved in the current controversy on European contract law. The author develops a model that he uses to analyze the institutional processes of European contract law. Empirical data are employed to test this model and discuss the results. From his analysis the author develops criteria that can serve as a starting point for thinking about the economic desirability of an optional European contract law.
Article
Full-text available
In this report, they provide an overview of the estate tax debate. The report lays out the main features of estate and gift taxation in the U.S., describes and critiques the main components of the cases for and against the taxation of wealth transfers, and discusses possibilities for reform. The report shows that many arguments commonly made against the estate tax are demonstrably specious. To the extent that any of them are valid, they typically suggest reform rather than abolition. On the other hand, many arguments made in favor of the tax actually support maintaining some sort of wealth transfer tax, but not necessarily the existing version. The report is based on a longer draft, "Rethinking the Estate and Gift Taxation: An Overview," which contains all of the references and sources for the analysis reported here and which is available at http://www.brook.edu/views/papers/gale/20000728.htm. That paper in turn draws on the papers presented at the conference "Rethinking the Estate and Gift Tax," jointly sponsored by the Office of Tax Policy Research and Brookings, held at Brookings on May 4 and 5 of this year; information about the conference and papers may be obtained by accessing the Office of Tax Policy Research Web site at http://www.otpr.org.
Article
Full-text available
Since the late 1960s, the VAT has become one of the mainstays of the tax systems in over one hundred countries. Apparently, its revenue raising and neutrality properties make it an attractive tax in a rapidly integrating, high-tax world. Following an overview of VATs throughout the world, this article examines various VAT structure and policy issues under the following headings: tax coverage features, tax base aspects, hard-to-tax sectors, rate structure issues, and interjurisdictional coordination problems. It is shown that the normative requirements of a ‘good’ VAT are often met only in the breach. Copyright Kluwer Academic Publishers 1998
Article
Full-text available
Recent social experiments have evaluated two reforms of the unemployment insurance (UI) system: reemployment bonuses and job search programs. The bonus experiments show that economic incentives affect the length of UI receipt and provide weak evidence that an earlier return to work does not decrease earnings. The experiments do not show the favorability of a permanent bonus program as they ignore its effect on the number of the claimants. The job search experiments test several more promising reforms. Nearly all of the combinations of services and increased enforcement reduce UI receipt and have favorable cost/benefit analyses. Earnings often increase, though the estimates are imprecise.
Article
This paper relates quality and uncertainty. The existence of goods of many grades poses interesting and important problems for the theory of markets. On the one hand, the interaction of quality differences and uncertainty may explain important institutions of the labor market. On the other hand, this paper presents a struggling attempt to give structure to the statement: “Business in under-developed countries is difficult”; in particular, a structure is given for determining the economic costs of dishonesty. Additional applications of the theory include comments on the structure of money markets, on the notion of “insurability,” on the liquidity of durables, and on brand-name goods.
Article
This paper analyzes the distortions created by taxation and the features of tax systems that minimize such distortions (subject to achieving other government objectives). It starts with a review of the theory and practice of deadweight loss measurement, followed by characterizations of optimal commodity taxation and optimal linear and nonlinear income taxation. The framework is then extended to a variety of settings, initially consisting of optimal taxation in the presence of externalities or public goods. The optimal tax analysis is subsequently applied to situations in which product markets are imperfectly competitive. This is followed by consideration of the features of optimal intertemporal taxation. The purpose of the paper is not only to provide an up-to-date review and analysis of the optimal taxation literature, but also to identify important cross-cutting themes within that literature. JEL Classification: H21.
Article
This paper focuses on the difference between de novo tax design and the reform of existing tax laws. Issues of efficiency and equity in optimal tax reform are discussed. Principles for balancing horizontal equity and efficiency are discussed. The paper also examines critically the utilitarian criterion of social choice that has been the basis of recent theoretical studies of optimal tax design. The Haig-Simons standard, as a principle of either design or reform, is criticized as both inefficient and inequitable in the light of optimal tax theory and the theory of tax incidence.
Article
Incl. index, bibliographical notes and references
Article
This chapter reviews the concepts, methods, and results of studies that analyze the incidence of taxes. The purpose of such studies is to determine how the burden of a particular tax is allocated among consumers through higher product prices, workers through a lower wage rate, or other factors of production through lower rates of return to those factors. The methods might involve simple partial equilibrium models, analytical general equilibrium models, or computable general equilibrium models. We review partial equilibrium models, where the burden of a tax is shown to depend on the elasticity of supply relative to the elasticity of demand. In particular, we consider partial equilibrium models with imperfect competition. Turning to a general equilibrium setting, we review the classic model of Harberger (1962) and illustrate its generality by applying it to a number of different contexts. We also use this model to demonstrate the practicality of analytical general equilibrium modeling through the use of log linearization techniques. We then turn to dynamic models to show how a tax on capital affects capital accumulation, future wage rates, and overall burdens. Such models might also provide analytical results or computational results. We also focus on relatively recent models that calculate the lifetime incidence of taxes, with both intratemporal and intertemporal redistribution. Finally, the chapter reviews the use of incidence methods and results in the policy process.
Article
I. Introduction, 488. — II. The model with automobiles as an example, 489. — III. Examples and applications, 492. — IV. Counteracting institutions, 499. — V. Conclusion, 500.
Article
This paper, a forthcoming chapter in the Handbook of Public Economics, reviews the theoretical and empirical issues dealing with Social Security pensions. The first part of the paper discusses pure pay-as-you-go plans. It considers the effects of introducing such a plan on the present value of consumption, the optimal level of benefits in such plans, and the emprical research on the effects of pay-as-you-go pension systems on labor supply and saving. The second part of the paper discusses the transition to investment-based systems, analyzing the effect on the present value of consumption of such a transition and considering such issues as the distributional effects and risk associated with such systems.
Article
This paper provides a few historical notes on government involvement in health, followed by a summary of the theoretical arguments that economists offer in its support. Irving Fisher's views and recommendations about health are examined in the light of today's perceptions concerning health, health economics, and health policy. The wide variety of roles that the U.S. and other governments currently play in health is reviewed and the ability of economics to explain these roles is assessed. The consequences of government involvement for the health of populations, for expenditures on health care, and for political and social stability are examined. The paper concludes with an overview of new worldwide trends in health policy and some probable explanations for these trends.
Article
Despite the fact that the tax structure is a product of the political process, rarely does an economic analysis of tax policy take account of the political environment within which the tax structure is designed. The analysis that follows begins with the recognition that the political system uses resources to desing tax systems, and these costs should be taken into account along with other welfare costs of the tax system. While public choice theory might offer much to help advance the theory of taxation, the main focus of this essay will be policy-oriented, and will begin by explicitly recognizing the political costs that are created when people try to influence tax law for their benefit.
Article
This paper surveys the literature on the macroeconomic effects of government debt. It begins by discussing the data on debt and deficits, including the historical time series, measurement issues, and projections of future fiscal policy. The paper then presents the conventional theory of government debt, which emphasizes aggregate demand in the short run and crowding out in the long run. It next examines the theoretical and empirical debate over the theory of debt neutrality called Ricardian equivalence. Finally, the paper considers the various normative perspectives about how the government should use its ability to borrow.
Article
This paper is a selective survey of fiscal federalism. It begins with a brief review and some reflections on the traditional theory of fiscal federalism: the assignment of functions to levels of government, the welfare gains from fiscal decentralization, and the use of fiscal instruments. It then explores a series of important topics that are the subject of current research: laboratory federalism, interjurisdictional competition and environmental federalism, the political economy of fiscal federalism, market-preserving federalism, and fiscal decentralization in the developing and transitional economies.
What Should Be Taxed: Income or Expenditure?” Washington: The Brookings InstitutionThe Pure Theory of Public ExpenditureExperience with Market-Based Environmental Policy Instruments
  • Joseph A Pechman
  • Paul A Samuelson
Pechman, Joseph A. (ed.), What Should Be Taxed: Income or Expenditure?” Washington: The Brookings Institution, 1980. Samuelson, Paul A., “The Pure Theory of Public Expenditure,” Review of Economics and Statistics, November 1954, 36, pp. 387-89. r33 Stavins, Robert N., “Experience with Market-Based Environmental Policy Instruments,” in The Handbook of Environmental Economics. Eds: Karl-Goran Maler and Jeffrey Vincent, Amsterdam: North-Holland/Elsevier Science, forthcoming.
Social Security Working Paper No. 8541 r32 Fullerton, Don and Gilbert Metcalf, “Tax Incidence
  • Feldstein
  • Jeffrey B Martin
  • Liebman
Feldstein, Martin and Jeffrey B. Liebman, “Social Security,” Working Paper No. 8541, National Bureau of Economic Research, September 2001. r32 Fullerton, Don and Gilbert Metcalf, “Tax Incidence.” in Handbook of Public Economics, Ed: Alan Auerbach and Martin Feldstein, forthcoming
  • Victor Fuchs
  • Health
  • Irving Government
  • Fisher
Fuchs, Victor, "Health, Government, and Irving Fisher," Working Paper No. 8490, National Bureau of Economic Research, August 1998.