Design and implementation issues in Swedish individual pension accounts

Sweden's new multipillar pension system includes a system of mandatory fully funded individual accounts. The Swedish system offers contributors more than 600 fund options from a variety of private-sector fund managers. However, in the most recent rounds of fund choice, more than 90 percent of new labor market entrants have not made an active choice of funds and thus have ended up in a government-sponsored default fund. The Swedish system offers a number of lessons about implementing a mandatory individual account tier. Centralized administration keeps administrative costs down but requires considerable lead time. A very large number of fund options are likely to be offered unless strong entry barriers are in place. Engaging new labor market entrants in fund choice is likely to be difficult. A significant percentage of those making an active fund choice may choose funds that are very specialized and risky. Finally, special care must be devoted to designing a default fund and continual consumer communication.     

Estimating Tax Evasion Losses: The Road Fund Case

Federal, state, and local government concern about the loss of state revenues from tax evasion has increased in recent years. In order for policymakers to address this issue effectively, more information regarding the nature and magnitude of the problem is needed. This article reports on research that focuses on estimating the level of road fund tax evasion for several states. Estimates of road fund tax evasion are developed from previous research regarding individual state evasion levels, perceptions of road fund tax evasion by state revenue officials, and a statistical estimate of road fund tax evasion.     

The Politics of Local Government Stabilization Funds

The adoption, maintenance, and prudent use of budgetary stabilization funds are fundamental financial management precepts, yet the variables that influence the size of these funds are poorly understood. This article contributes to the stabilization fund literature by examining the extent to which variation in stabilization fund balances across municipalities and over time can be explained by a community's political culture and financial management capacity. The balanced panel research design includes archival data for 239 Massachusetts municipalities for each of 18 fiscal years. Stabilization fund balances are lower in communities with either an anti‐tax or a pro‐spending political culture. Stabilization fund balances are higher in communities that have the financial management capacity to accumulate budget surpluses that can be made available for appropriation to stabilization funds. Communities with the open town meeting form of government also have higher stabilization fund balances.     

The Optimal Size of Countercyclical Budget Stabilization Funds: A Case Study of Ohio

Ohio is one of several states that has instituted a Budget Stabilization Fund to serve as a tool to fight the impacts of economic fluctuations on state finances. The optimal size and rate of contribution to the fund are explored in this study. A widely accepted target of 5 percent of general fund revenue for the budget stabilization fund is found inadequate to provide any degree of normalization of state general fund revenue when Ohio's recent fiscal experiences are examined. An optimal size of close to 13 percent emerges as a more likely target for Ohio along with an annual contribution rate approaching 4 percent of revenues in average non-contractionary years.     

What Stabilizes State General Fund Expenditures in Downturn Years—Budget Stabilization Fund or General Fund Unreserved Undesignated Balance?

This article strictly defines the budget stabilization fund (BSF) as a counter-cyclical reserve, and with a panel data set examines the effects of BSF and general fund unreserved undesignated balances (UUB) on stabilizing state general fund expenditure during downturns. The article finds that BSFs bolster spending in lean years: each percentage point increase of BSF balance as a percent of general fund expenditure can minimize negative expenditure gap by a quarter percentage point. But the article does not find evidence that UUB is a counter-cyclical fiscal tool, indicating that wide adoption of BSF may have changed the nature and use of UUB.     

证券投资基金模式演变的几个理论解释

一百多年来,证券投资基金不断得到发展,基金形式也从早期单一的封闭式基金演变成为开放式基金占主导.本文试从科斯的交易成本理论、委托代理理论和契约理论来对这种演变进行解释.     

宏观调控下我国房地产企业融资渠道的探讨

房地产行业的融资问题是影响房地产企业发展的关键问题.在宏观调控累积效应的影响下,我国房地产市场进入周期性调整阶段,融资难度加大.当前,充分发展现有的融资模式的同时,应大力发展房地产信托,减少银行压力,缓解社会矛盾.     

我国基金业突破发展瓶颈的途径

我国基金业在经历了十多年快速的规模扩张之后,近几年遇到了较大的瓶颈。通过分析阻碍我国基金业发展中所存在的系统性风险较大、基金资产组合趋同、人才缺乏、公司体制落后等主要问题,提出了相应的解决对策。     

Socioeconomic Investment Practices of State Pension Funds: The Results of a National Survey

State pension fund managers appear to be under increasing pressure to promote social, ethical, or economic development goals with at least some of their investments. This article offers a conceptual framework for considering socioeconomic investing by these funds, and uses it in a national survey of state pension fund investment practices. True "social" investing, involving the expected sacrifice of market average rates of return for social or ethical goals, appears to be much less widespread than expected. However, the survey also suggests that policies and procedures designed to insure the prudence and accountability of fund managers with regard to socioeconomic investing may not be in place in many states.     

The Role of Slack in Local Government Finances

The research presented here adopts an organizational approach to develop three regression models that examine why local governments accumulate slack in the form of unreserved fund balances, and what is the impact of slack resources on local governments' short‐term fiscal conditions and decisions about spending and revenues. Using data on Chicago suburban municipalities and their governments, the first model estimates the effects of long‐term and short‐term conditions (fiscal and governing) on unreserved fund balances. The second and third models examine the impact of slack resources and other factors on year‐end deficits or surpluses and changes in spending and own‐source revenues. The results show that ending balances, expenditures (size), and long‐term fiscal conditions have the greatest effect on fund balances, and that slack and current fiscal conditions have the greatest effect on ending balances and changes in revenues and spending.     

Congressional allocation of federal funds: The Job Training Partnership Act of 1982

This paper examines the allocation of federal funds to the fifty states through the Job Training Partnership Act of 1982. Targeted at the economically disadvantaged, its allocation formula nevertheless places heavy weights on unemployment measures unrelated to the target group. Evidence is presented that supports the premise that JTPA formula allocations across states reflect political influence. This is the first study to find evidence of a relationship between state representative legislative tenure and federal fund allocations. The importance of a state's political power in influencing federal fund allocations is also revealed.     

The Implementation and Utilization of Stabilization Funds by Local Governments in Massachusetts

This paper examines the management of stabilization funds by local governments in Massachusetts. It assesses the implementation and funding of stabilization funds and explores how they were utilized to respond to a midyear reduction in state aid. We find that stabilization funds correlate weakly with unreserved general fund balances. We also construct multiple regression models to predict stabilization and general fund balances. We surmise that communities have either implicit or explicit financial management strategies in which slack resources play more than countercyclical roles. Further research is needed to determine the role of stabilization funds in local government financial management strategies.     

分税制改革后省级预算外收入膨胀的原因分析

预算外收入是我国公共财政中极为奇特的一部分。20世纪80年代的分权化改革为预算外收入打开了缺口,使之成为一个不受正规财政管理约束、却又足以影响国民经济增长及其结构的变量。将研究范围集中于1994年分税制改革后省一级的预算外收入状况,从1994年的分税制改革、我国现阶段的财政转移支付制度和对预算外收入的管理体制这三方面分析了1994年以后省级预算外收入膨胀的原因。最后提出,要化解中国现今出现的财政混乱,关键在于制度的建设与转型,也就是在财政领域上建立一个规范合理的制度框架,以此影响和制约地方政府的行为,并最终使得中央与地方的关系在一个制度化的框架内正常发展以至相互协调。     

Public Pension Funds and Operating Budgets: A Tale of Three States

This article provides a normative framework for understanding the important link between public pension fund management and government operating budgets. Three aspects of pension fund management are discussed that have a significant impact on the operating budget: pension contribution, investment strategy, and the funding of pension liabilities. Three cases concerning West Virginia, New Jersey, and New York City are discussed to illustrate these three important aspects. The normative framework and the case studies demonstrate two important principles in prudently managing public pension funds: ensuring intergenerational equity and protecting the long-term health of government budgets.     

Are Colombian sickness funds cream skimming enrollees? An analysis with suggestions for policy improvement

One of the primary objectives of Colombian social health insurance reform was to increase competition among for-profit insurers. Unfortunately, the flat capitated formula creates an opportunity for sickness funds to maximize reimbursement gains by cream skimming--selecting against unhealthy individuals. This paper explores sickness fund selection behavior to evaluate the efficiency losses associated with the introduction of managed competition in Colombia. Data from a 1997 Colombian household survey are analyzed with a bivariate probit model with partial observability using instrumental variables. The model yields some evidence of sickness fund selection based on health status. Public policy options to discourage risk selection by health status are discussed.     

Fiscal Slack and Counter‐Cyclical Expenditure Stabilization: A First Look at the Local Level

There is a rich literature on how state governments use slack fiscal resources—most often in the form of rainy day funds and budget stabilization funds—to minimize the effect of economic downturns. This paper presents the first known examination of whether slack resources have the same counter‐cyclical effects at the local level. It uses a panel data set to determine whether one particular form of local fiscal slack, general fund balance, stabilizes current annual expenditures among a sample of 103 Minnesota cities from 1990 to 2000. The findings suggest different fund balance portions have marginal but nonetheless important effects on expenditures.     

Does type of well drilling matter for local governments' fund balances?

The purpose of this study is to examine whether the type of wells drilling in Pennsylvania matters to the fund balance of local governments in Pennsylvania. After conducting one‐way analysis of variance and Kruskal–Wallis equality‐of‐populations rank test, the median value of fund balance of local governments have differences by the type of wells drilling. This result can suggest that the local governments of Pennsylvania should consider how to levy the level of impact fee to the companies operating wells for extracting shale gas. In other words, it should be designed more systemically by the type of wells drilling in Pennsylvania.     

What's So Magical about Five Percent? A Nationwide Look at Factors That Influence the Optimal Size of State Rainy Day Funds

State rainy day funds have increased in popularity as countercyclical planning devices over the past 15 years. The view is widely held that all states need a rainy day fund balance of five percent in order to guard themselves against the threat of budgetary dislocation. This article compares the actual balances in state rainy day funds in 1997 to several factors affecting budgetary volatility. Little relationship is found between rainy day fund balances and the actual level of volatility in a given state. The article finds no justification for a "one size fits all" approach; each state should design policies based on its own peculiar needs.     

Investment of Social Security reserves in three countries

The current buildup of the U.S. Social Security Trust Fund has caused speculation about both the potential consequences of the buildup under different policy objectives and the fund's management. As is often the case, the search for precedents under similar circumstances abroad has been quite extensive on the part of legislators and U.S. experts in the field of financial policy. This article summarizes the experiences of Canada, Japan, and Sweden--all of whom have accumulated large trust fund reserves--with a focus on their investment policies. Trust fund investments in the three countries are similar as to types of investments, but the pattern of distribution of these investments varies widely from one country to another.     

'These mad abandon'd times'

Abstract

The existing academic literature on financialization points to multiple instances in which firms attempt to demonstrate the vitality of their stock-market position in ways which ultimately prove to be self-harming. I demonstrate, in the first instance as a matt er of immanent logic, that these actions are linked to the interplay of contradictory tendencies in the microfoundations of financialization. Under conditions of financialization, firms create additional sources of credit to capitalize their productive activities by driving their stock price into greater increases than the market average, thereby generating capital gains. Yet, the more it becomes public knowledge that the financing tricks used to inflate the stock price provide no productive benefit to the firm, the more it would seem to create incentives for fund managers to hold portfolios that replicate the stock market as a whole. In this way, they will minimize their exposure to financial misrepresentation. Such a stance undermines financialized business models, but it does in any case conform to fund managers’ basic theoretical training, which revolves around the logical demonstration that an individual stock cannot systematically out-perform the market average. I review the available empirical studies of fund manager decision-making to show that they find against the existence of a simple performativity loop operating between finance theory and fund manager behaviour. However, on many points the empirical evidence does confirm the theoretically derived conclusion concerning the potentially contradictory microfoundations of financialization. Fund managers often do act in a way which is consistent with finance theory's core claim that an index-tracking strategy represents the only equilibrium portfolio, even if this is only rarely as a result of the direct performativity of the theory.