The provision of public services by government funded decentralized agencies

Public services are often provided by lower level agencies that are funded by higher level government. Since markets for such services do not exist, normal pressures to minimize costs do not operate; indeed, usually these costs are unobservable. We study a principal-agent model which emphasizes the distinction between the financing and provision of public services. Two broad situations are analyzed: (i) the agencies are induced to reveal true costs; and (ii) in addition, to minimize costs, agencies must be induced to exert effort. The characteristics of the optimal funding contract and the marginal cost of public funds are derived in each case.     

A Magnet for Foreign Students

<正>In the last couple of years,China has moved to a different level in attracting foreign students,becoming one of the top six nations to host international students.New data show there are as many international students in China as there are in     

Economic vulnerability and poverty in Tajikistan

We examine the profile of poverty and vulnerability in Tajikistan using household level panel data for 2004 and 2005. The drop in poverty was largely due to increase in remittances from workers working overseas. Households are more likely to be poor if they live in (a) rural areas, (b) large households, (c) households with a large proportion of children; or are pensioners or live in a household whose head is a pensioner. One half of the households observed to be non-poor are vulnerable to poverty. With expected utility approach, our analysis suggests that vulnerability associated with inequality is very large, whereas that from idiosyncratic risk is moderate. Aggregate shocks have been favorable and reduced vulnerability. We advance several policy recommendations.     

Towards measuring allocative efficiency in selected industries of India

This paper examines trends in allocative efficiency over the period 1960–1961 to 1986–1987 in seven Indian industries, namely refining and manufacture of sugar; petroleum refining; manufacture of chemicals, fertilizers and pesticides locomotives and parts, locomotives, and cotton textiles. We discover that allocative inefficiency has been non zero in each industry for every year. Allocative inefficiency has not declined over time in those industries where prices are administered, whereas in industries where prices are not administered it has. Industries that are predominantly in the public sector are not necessarily characterized by greater allocative inefficiency than those that are predominantly in the private sector.