Accumulating Technology and Location Spillovers Among Firms in Taiwan's Electronics Industry

Using firm-level panel data from the Taiwanese Census of Manufactures for 1986 and 1991 in the context of a modified selection model, we focus on three activities that contribute to the productivity growth of firms in the electronics industry: research and development, direct foreign investment and exports. In particular we address the issue of whether, in addition to the direct benefits of these activities, there are spillovers to other firms within the same four-digit industry or within the same geographical county. Our empirical results indicate that while the survival and direct productivity growth effects of R&D, exports and DFI are positive and statistically significant, intra-industry and geographical spillover effects are consistently present only for the export activity. That is, a firm's expected future TFP is positively and significantly affected by being located in a county and industry with more export activity. In addition, there is some evidence that the indirect effects generated by DFI firms, in the form of location spillover benefits to other firms, are also positive and significant. Finally, the empirical results indicate that the above direct and indirect benefits of the technological activities under study accrue principally to Taiwan's small and medium enterprises, rather than its large firms.     

Do Citizens Trust the Civil Service Differently? Comparing the Determinants of Confidence in Political-Administrative Institutions

This paper asks whether citizens judge public administration to be trustworthy using different criteria from other political institutions. Using survey data, we estimate ordered logistic and multivariate regressions to compare the determinants of trust in six different political-administrative institutions. Findings show that social trust, political interest, as well as other individual characteristics, have very similar effects on trust regardless of the institution. The evidence shows that people who are older and more educated, interested in politics, and employed in the public sector, are only slightly more likely to make some sort of distinction. Implications for non-discriminant judgement mechanisms are discussed.     

The Flypaper Effect: Do Political Institutions Affect Danish Local Governments’ Response to Intergovernmental Grants?

Abstract

Despite a large number of empirical studies on the flypaper effect, it remains disputed whether the effect exists and to what extent it is asymmetrical. The flypaper effect suggests that intergovernmental grants tend to result in higher increases in public expenditures than a similar increase in citizens’ private income would have led to. An asymmetrical effect exists when the fiscal response differs depending on whether grants are increased or decreased. By considering political institutions that moderate the effect of intergovernmental grants, this article offers a theoretical explanation that accounts for the mixed empirical evidence. The local response to intergovernmental grants is tested using a reform of the Danish intergovernmental grant scheme in 2007. In line with the expectation, the article finds a strong asymmetrical effect, but more surprisingly, this effect is found both when subnational budget institutions are centralised and when they are fragmented.     

Post-Soviet politics in Kyrgyzstan: between centralism and localism?

Kyrgyzstan is a country that has recently attracted attention with its different features in post-Soviet Central Asia. The country could not be institutionalized by either an authoritarian means or a democratic regime after her independence in 1992. Political life has been shaped by political confrontation between administrative authorities that have tendencies to strengthen the authoritarian regime and local political leaders who act centrifugally. This article, in the light of this background, aims to investigate the political process in the framework of the ‘Tulip Revolution’ that took place in 2005. Initially, social, economic and cultural dynamics, which have impacts on the political processes, are analysed, and next, the contemporary implications of these dynamics are examined in detail. Finally, probable influences of the political developments witnessed after 2005 and the potential direction of transformation of the political regime are discussed.     

A Cross-Country Comparison of Corruption and Public Expenditures: A Panel Data Approach

Corruption is an especially serious problem for all countries, and has damaging effects on sustainable economic growth. Although there is a significant relationship between corruption and public expenditures, the degree and way of this relationship is changed according to countries. The main objective of this article is to analyze the relationship between corruption and the level and composition of public expenditures, using data from 21 countries which are classified as countries in above and below average corruption perception indices. In empirical analysis, panel data were used in modeling of the effects of corruption on public expenditures. The empirical results show the findings support the hypothesis that the composition of public expenditures has an important element on corruption for countries.     

Does the Restrictiveness of State Tax and Expenditure Limitations Affect State Revenues and Expenditures?

This paper examines the impact of tax and expenditure limitations (TELs) on state governments. We examine how TELs are represented in empirical modeling. We compare and contrast an index of state-level TEL restrictiveness to a simple dummy variable approach. We use a panel of data for the 50 U.S. states to capture changes in state TELs and a generalized method of moments (GMM) dynamic panel estimator. We find that results vary across the two methods of capturing the presence of TELs, suggesting that simple dummy variables are not sufficient to capture the heterogeneity of TELs across states and over time.     

Women's Capabilities and the Right to Education in Bangladesh

The World Bank promotes women's education because it is an input into human capital. In the capabilities approach, education is a force that enables women to have expanded choices. Using data from in-depth interviews conducted in two villages in 1996 and 2000, we examine how rural Bangladeshis perceive women's education and to what extent those perceptions concur with the World Bank's instrumentalist view and with the capabilities approach. Parents educate their daughters because women's education is valued in the marriage market, and marriage is the best way to secure their daughters' well-being. Schooling has also enhanced women's capabilities by increasing their earning potential.     

Merging county administrations – cross-national evidence of fiscal and political effects

ABSTRACT

While many central governments amalgamate municipalities, mergers of larger county administrations are rare and hardly explored. In this article, we assess both fiscal and political effects of county mergers in two different institutional settings: counties act autonomously as upper-level local governments (Germany), or counties being decentralised branches of the state government (Austria). We apply difference-in-differences estimations to county merger reforms in each country. In both cases, some counties were amalgamated while others remain untouched. Austrian counties (Bezirke) and German counties (Landkreise) widely differ in terms of autonomy and institutions, but our results are strikingly similar. In both cases, we neither find evidence for cost savings nor for staff reductions. Instead, voter turnout consistently decreases in merged counties, and right-wing populists seem to gain additional support. We conclude that political costs clearly outweigh fiscal null benefits of county merger reforms – independent of the underlying institutional setting.     

An Analysis of Institutional and Political Factors Affecting State Capital Expenditure

Abstract

This article examines state government spending patterns for capital projects during the late 1970s and early 1980s as a function of some of the institutional arrangements and procedural characteristics of state legislatures. The analysis is informed by the literature on distributive policymaking, which argues that lawmakers seek to send targetable benefits, such as capital projects, to their constituencies in pursuit of personal electoral benefits. Using a pooled, cross‐sectional time‐series approach, the authors find that states with a large number of seats in the lower chambers of their legislatures devoted a somewhat smaller portion of their state budgets to capital projects than did states with smaller lower chambers, ceteris paribus. Contrary to some log‐rolling models, the number of appropriations bills employed by a legislature seems to discourage capital spending, as does membership turnover in the upper chamber. This indicates that the capital budgeting process is not nearly as dominated by the executive branch as is commonly believed.     

A critique of bourgeois theories of economic development

Festival expenditures amount to over 15 per cent of a household's annual expenditures in rural India. Yet they have never been studied by economists. This article uses both qualitative and quantitative data from a case study of three South Indian villages to show that festivals are important public goods in the village, but neither a pure entertainment motive nor an altruistic desire to contribute to a public event seems to explain their size. Households which spend money on festivals, everything else held equal, are able, however, to generate tangible rewards - lower prices on food, higher social status and more invitations to meals from other families. This indicates that active participation in festivals generates private economic and social returns which help resolve a potential free-rider problem. The evidence is consistent with the notion that festivals serve as mechanisms by which communities build social networks.