Location Efficiency and Mortgage Risks for Low-Income Households

Abstract

Household energy expenditures, especially for transportation, are fairly inelastic. Their effects on low-income households may be significant, due to the potential for energy consumption to displace other types of consumption when energy prices rise. Using accessibility as a proxy for lower transportation costs, we test the hypothesis that low- and moderate-income residents are less likely default when they are located in more accessible places. We find that regional accessibility has almost no effect on risks of default, but local job diversity has moderate mitigating effect.     

Coups d’état and defense spending: a counterfactual analysis

We explore how institutional set-ups, in particular changes in political institutions through coups d’état, can affect the way military expenditures are determined. We use a counterfactual approach, the synthetic control method, and compare the evolution of the military burden for 40 countries affected by coups with the evolution of a synthetic counterfactual that replicates the initial conditions and the potential outcomes of the countries of interest before exposure to coups. Our case studies suggest that successful coups result in a large increase in the military burden. However, when no effects or a decrease in the defense burden are found, it is often the consequence of a democratization process triggered by the coup. These results are in keeping with recent theoretical developments on the bargaining power of the military in authoritarian regimes. Failed coups, by contrast, produce a smaller, and mostly positive, effect on the military burden, possibly as a result of the incumbent’s strategy to avert further challenges to the stability of the regime by buying off the military.     

The East African community and Europe

The European Union and Russia are preparing to negotiate a new comprehensive agreement at a time when their bilateral relations have become increasingly prickly. On the one hand, Vladimir Putin's Russia is perceived as having gone undesirably far in reverting to a semi-authoritarian state and in exerting economic and political pressures on some pro-Western, former Soviet states. On the other hand, the EU's Russia policy remains ambivalent because of the continuing deference towards Moscow of a number of large European countries and the confrontational posture of some new EU member states. Other factors add to this deteriorating state of affairs. For one, there are a number of legal complications coming from the shape and scope of the new agreement. Perhaps more importantly, there are several political uncertainties, first and foremost the definition of those “common values” upon which the new treaty should be based. To get out of this quandary, the two sides will have to scale down their ambitions on the new agreement. A mutually acceptable formula might imply the negotiation of a concise “framework” treaty, accompanied in due time by sector-specific agreements.     

Policies for full employment and more efficient utilization of resources and new trends in European regional development

Democracy promotion in the middle east. Business as usual?

La questione della democrazia nel mondo arabo ; stati, società e conflitti / a cura di Federica Bicchi, Laura Guazzone, Daniela Pioppi. ‐ Monza : Polimetrica, c2004. ‐ 396 p. ‐ (Islamica). ‐ ISBN 88–7699–008–9     

Preventive servicing is good for business and affordable homeownership policy

Abstract

This article documents the growing importance of preventive servicing—business practices that emphasize early intervention in delinquency and default management practices that also help financially troubled borrowers avoid foreclosure. We suggest that the loan servicing side of the affordable housing delivery system may be underappreciated and undercapitalized.

We use a database of more than 28,000 affordable housing loans to test several preventive servicing‐related propositions and find that after we control for loan and borrower characteristics, the likelihood that a delinquent mortgagor within this universe will ultimately default varies significantly across servicers. This suggests that loan servicing is an important factor in determining whether low‐ and moderate‐income borrowers who fall behind in their mortgage payments will end up losing their homes through foreclosure. It also suggests a need for policy makers to incorporate preventive servicing into affordable homeownership programs.