The public finance of healthy behavior

Lifestyle can often affect the likelihood an individual will have a future illness. Subsidies often mitigate the consequences of poor lifestyle choices. In this paper we explore tax-subsidy policies that lower the consequences of incurring ill health. We find that a funding mechanism consistent with current US policy lowers the investment in healthy lifestyles by both the wealthy, who pay taxes, and the poor, who receive subsidies. We also explore alternative policy interventions such as investing in research to lessen the impact or probability of the disease.     

The Final Frontier: China,Taiwan, and the United States in Strategic Competition for Central America

China’s rise as a global power corresponded with a diminution of Taiwanese diplomacy, which has left Central America as the last region to host a continuous bloc of countries that recognize the ROC. In this article, we argue that China’s success in gaining diplomatic recognition from Taiwan’s former allies has largely resulted from China's economic policy, specifically its promises of large-scale infrastructure projects and the integration of Central American economies with Chinese markets. However, there are limits to how far China has advanced in gaining full recognition from the region. The competing political and economic interests of China, Taiwan, the United States, and the Central American countries themselves, continue to influence patterns of diplomatic switching. More specifically, we argue that the threat of punitive measures from the United States combined with a turn in Taiwanese diplomacy toward assistance efforts to combat Covid-19 may deter future switching in the short to medium-term. Our analysis offers case studies of four Central American countries (Costa Rica, Panama, El Salvador and Nicaragua) to illustrate the multi-year processes by which China’s economic strategy leads to diplomatic switching and examine the paths ahead for the remaining holdouts facing the prospect of economic and political penalties by the United States.

     

Promoting customer engagement: A new trend in utility regulation

This paper traces a new development in regulation that encourages utilities to engage more directly with their customers. We make four contributions: First, we perform a comprehensive analysis of how regulators are using customer engagement, and offer a simple model for understanding different customer engagement initiatives. Second, we review assessments of customer engagement. We find that there are no quantitative, empirically robust assessments of the effectiveness of customer engagement as a regulatory tool. Third, we develop two detailed case studies of an energy regulator and a water regulator that are in the forefront of customer engagement efforts. We find that there is no direct link between the engagement strategy used and the economic incentives received by a firm. Finally, we propose a framework for improving the customer engagement process. The new framework relies on microeconomics, modern tools of program evaluation, and supplying the regulated firm with direct incentives to engage with the customer.