Share the Wealth: Redistribution Can Increase Economic Efficiency

People frequently face uncertain income and the threat of loss can inhibit economic investments. Government redistribution can insure citizens against economic losses, but its effect on people’s investment decisions depends on how they react to redistributive rules. We apply methods from experimental economics to study how a redistributive institution affects people’s investment decisions. Experiment 1 tests whether redistribution can increase economic efficiency when people face risk problems—investment opportunities that are profitable on average but could result in a loss. In a between-subject design, participants decide whether to make a risky investment either individually or under an institution that redistributes earnings equally among four group members. We find greater investment and profits when participants are required to share their earnings. In Experiment 2, we examine free-riding by comparing an institution that allows non-investors to exploit investors to an assortment institution that matches investors with investors. We find that vulnerability to free-riding suppresses investment, whereas an assortment mechanism increases investment by preventing free-riding and thereby facilitating risk pooling.     

Transaction costs can encourage Coasean bargaining

When there are three parties, instability problems brought about by the emptiness of the core of the corresponding cooperative game may cause the Coase Theorem to fail, even when other more direct impediments to bargaining are low. We show that the standard Coasean bargaining game involving three parties is strategically equivalent to an asymmetric three-player majority game. Hence, when there are three parties, instability problems will cause the Coase Theorem to fail if and only if the core of the corresponding three-player majority game is empty. We use this equivalence result to derive all instances in which the Coase Theorem will and will not hold with three parties, and show that a priori, such instability problems are likely to be rare—the Coase Theorem will actually hold most (over 80 %) of the time. We also demonstrate that it is always possible to find a set of transaction costs which, when introduced into a frictionless bargaining situation, will cause an empty core to become non-empty. In other words, transaction costs can mitigate instability problems: situations exist in which the presence of transaction costs will cause the Coase Theorem to hold when, in the absence of those direct transaction costs, it would fail to hold. When there are three parties, rather than hindering agreements, the existence of direct transaction costs can sometimes—but not always—reduce instability and encourage Coasean bargaining.     

Statism and asian political economy: Is there a new paradigm?

Abstract

Given that statism has been so intensively reviewed recently, it is reasonable to ask why there is a need to produce another review. The key lies in the nature, not the quantity, of the previously published reviews. A survey of the existing literature shows that most of the reviewers are loyalist critics whose goal is to build statism as a new paradigm of Asian political economy. Emphasizing statism's contribution in expanding the debate on Newly Industrializing Countries (NICs) beyond the market-centric analysis, they offer opinions on this theory that are positive—not surprisingly—and on the whole even generous. Misled by statism's anti-market rhetoric, some writers from a more critical tradition have also embraced statism as a new departure for studies of Asian capitalist development. Consequently, statism has escaped a rigorous scrutiny, which is long overdue.     

Public Managers' Religiosity: Impacts on Work Attitudes and Perceptions of Co-Workers

ABSTRACT

Do public managers' religious beliefs and behaviors affect their work and their work-related attitudes? Perhaps due to the sensitive nature of this question, there is almost no empirical work on the topic. Our study uses questionnaire data (n = 765) from the National Administrative Studies Project-III to test hypotheses about the impacts of U.S. public managers' religiosity, as well as their political activity, on work attitudes. Religiosity is defined by public managers' responses about attending religious services. Political behavior is defined in terms of membership in political organizations and election groups. An application of ordinary least squares regression shows that religious public managers tend to have a stronger orientation toward job security and a more favorable view of their organization and fellow employees. Public managers are no more or less oriented to security than other respondents in the sample, but they have more negative views about their organization and fellow employees. These findings do not change when obvious controls are introduced into the model.