The public demand for smoking bans

Smoking bans are gaining widespread support in the United States and other countries. While supporters argue that bans are necessary to resolve market failures associated with negative externalities, the Coase Theorem predicts that, under various conditions, private markets internalize negative externalities. We examine the smoking issue within the framework of the Coase Theorem and hypothesize that smoking bans misallocate air space resources shared by smokers and nonsmokers. Because smoking bans shift ownership of scarce resources, they are also hypothesized to transfer income from one party (smokers) to another party (nonsmokers). Supporting evidence for these hypotheses is provided by an examination of a comprehensive smoking ban imposed in San Luis Obispo, CA.     

The political economy of central bank intervention

This paper analyzes an exchange rate policy game between a central bank and rational speculators under symmetric information. The central bank tries to counteract shocks to the exchange rate by means of sterilized intervention working through the expectations channel. Private speculators resist being fooled. They anticipate the interventions. An “intervention bias” results with an inefficiently high equilibrium volume of intervention which does not reduce the impact of shocks to the exchange rate. The model implies that the more independent the central bank the smaller and the more consistent the intervention efforts. An empirical illustration lends some support to the model.     

CEOs, POLICIES AND PUBLIC BODIES

Abstract: The literature on statutory authorities has concentrated largely upon matters of structure and administrative arrangements. One significant dimension which has received scant treatment is the idiosyncratic role of chief executive officers in such organisations and their ability to capture both the agency and policy-direction, often in ways immune from government control. This article mainly examines one example from the Northern Territory, the Darwin Trade Development Zone, but evidence is included to support the contention that similar processes occur in other statutory authorities both locally and elsewhere in Australia. It is argued that structural reforms cannot by themselves remedy the gap between expectation and policy-delivery. Avenues for reform are discussed, including the more orthodox accountability linkages, and the conclusions drawn argue for greater attention to be given to the appropriateness of chief executive appointments within a context of more disciplined and coherent policy-direction.     

EXEMPT PROPRIETARY COMPANY ANNUAL REPORTING REQUIREMENTS: PUBUC INTEREST OR BUREAUCRATIC EMPIRE-BUILDING?

Abstract: Australian small business enterprises, operated as exempt proprietary companies, are exposed to numerous statutory requirements. The Corporations Law Simplification Taskforce has proposed a number of changes with the stated objective of minimising the statutory burdens faced by small business. One of the recommendations of the taskforce is that most exempt proprietary companies be exempted from the requirement to supply key financial data in annual returns lodged with the Australian Securities Commission. This paper provides a review of the existing statutory responsibility for exempt proprietary companies to prepare annual returns including key financial data and lodge them with the ASC. A common justification offered for the introduction and continued maintenance of annual reporting requirements has been the protection of the public interest. The “public choice” theory of regulation provides alternative explanations for the regulation, including the promotion of producer interests or the promotion of the interests of the regulatory agency responsible for the administration of the legislation, the Australian Securities Commission, and other government departments such as Attorney-General's, Finance and Treasury. The existence of alternative explanations raises the possibility that the regulation is not motivated exclusively by the public interest. Indirect evidence of the usefulness of the annual reporting requirements was gathered with a consideration of the quality of the key financial data disclosed in annual returns. More than 40% of the annual returns lodged by a sample of exempt proprietary companies, during the years 1986 to 1989, contained key financial data which was inconsistent with being extracted from a properly prepared balance sheet (where assets minus liabilities equal shareholders' equity). The possibility that the maintenance of annual reporting requirements is not in the public interest, and the limited reliability of key financial data disclosures made, offers some support for the recent recommendations of the Corporations Law Simplification Taskforce that annual reporting requirements for small business enterprises be modified.     

Workplace education for hourly workers

Concerns about U.S. competitiveness have increasingly focused the attention of policymakers on the workforce and mechanisms that could be used to enhance both the quality and quantity of human capital in the workplace. This article focuses on basic skills education of hourly workers, precisely the type of human capital which is likely to be most underprovided by the private market. Five questions are addressed: First, what is the nature of workplace education programs? Second, why do some firms provide workplace education programs while others do not? Third, what, if any, characteristics distinguish those firms that provide workplace education programs from seemingly comparable firms that do not? Fourth, what, if any, evidence can be found identifying the effects of these programs on the firms that sponsor them? Fifth, what policies appear most likely to stimulate additional workplace education?