Forest fires: Evaluation of government intervention measures

The purpose of this paper is to examine the relation between government measures, volunteer participation, climate variables and forest fires. A number of studies have related forest fires to causes of ignition, to fire history in one area, to the type of vegetation and weathercharacteristics or to community institutions, but there is little research on the relation between fire production and government prevention and extinction measures from a policy evaluation perspective.An observational approach is first applied to select forest fires in the north east of Spain. Taking a selection of fires with a certain size, a multiple regression analysis is conducted to find significant relations between policy instruments under the control of the government and the number of hectares burn in each case, controlling at the same time the effect of weather conditions and other context variables. The paper brings evidence on the effects of simultaneity and the relevance of recurring to army soldiers in specific days with extraordinary high simultaneity. The analysis also brings light on the effectiveness of twopreventive policies and of helicopters for extinction tasks.

Openness, government size and the terms of trade

This paper investigates the relationship between trade openness and the size of government, both theoretically and empirically. We show that openness can increase the size of governments through two channels: (1) a terms of trade externality, whereby trade lowers the domestic cost of taxation and (2) the demand for insurance, whereby trade raises risk and public transfers. We provide a unified framework for studying and testing these two mechanisms. First, we show how their relative strength depends on a key parameter, the elasticity of substitution between domestic and foreign goods. Second, while the terms of trade externality leads to inefficiently large governments, the increase in public spending due to the demand for insurance is optimal. We show that large volumes of trade may result in welfare losses if the terms of trade externality is strong enough while small volumes of trade are always beneficial. Third, we provide new evidence on the positive association between openness and the size of government and test whether it is consistent with the terms of trade externality or the demand for insurance. Our findings suggest that the positive relationship is remarkably robust and that the terms of trade externality may be the driving force behind it, thus raising warnings that globalization may have led to inefficiently large governments.

Fiat money, intrinsic properties and government transaction policy

Why do people coordinate on the use of valueless piecesof paper as generally accepted money? A possible answeris that these objects have intrinsic properties that make them better candidates to be used as media of exchange. Another answer stresses the fact that unconvertible fiat money will not easily appear unless there is a centralized institution that favors its use.The main objective of the paper is to analyze these questions. In order to do this, we take a model of commodity money in which fiat money does not play any significant role and modify it to examine under which circumstances fiat money might come to circulate as medium of exchange. Some of the results obtained from the model differ in a rather substantial way from previous related literature.

Understanding the effects of government spending on consumption

Recent evidence suggests that consumption rises in response to an increase in government spending. That finding cannot be easily reconciled with existing optimizing business cycle models. We extend the standard new Keynesian model to allow for the presence of rule-of-thumb consumers. We show how the interaction of the latter with sticky prices and deficit financing can account for the existing evidence on the effects of government spending.

Government consumption and private consumption correlations

This paper examines whether the introduction of government consumptionexpenditure in a standard one good model of the international real businesscycle is sufficient to reconcile the theory with the existing pattern ofinternational consumption and output correlations. I calibrate the model totwo different pairs of countries and generate the simulated distribution ofconsumption and output correlations implied by several specifications of themodel. It is shown that the model can account for existing internationalconsumption correlations only under very specific assumptions about the sizeof effect of government expenditure on agents' utility or the variabilityof government expenditure shocks. Crucial parameters are identified and thesensitivity of the results discussed.

Banks, government bonds, and default: what do the data say?

We use data from Bankscope to analyze the holdings of public bonds by over 18,000 banks located in 185 countries and the role of these bonds in 18 sovereign debt crises over the period 1998-2012. We find that: (i) banks hold a sizeable share of their assets in government bonds (about 9% on average), particularly in less financially developed countries; (ii) during sovereign crises, banks on average increase their bondholdings by 1% of their assets, but this increase is concentrated among larger and more profitable banks, and; (iii) the correlation between a bank's holdings of public bonds and its future loans is positive in normal times, but turns negative during defaults. A 10% increase in bank bond-holdings during default is associated with a 3.2% reduction in future loans, and bonds bought in normal times account for 75% of this effect. Our results are consistent with the view that there is a liquidity benefit for banks to hold public bonds in normal times, which is critical for understanding bank fragility during sovereign crises.

The dynamic adjustment of local government budgets : Does Spain behave differently?

[spa] El objetivo de este trabajo es analizar si los municipios españoles se ajustan en presencia de un shock presupuestario y (si es así) qué elementos del presupuesto son los que realizan el ajuste. La metodología utilizada para contestar estas preguntas es un mecanismo de corrección del error, VECM, que estimamos con un panel de datos de los municipios españoles durante el período 1988-2006. Nuestros resultados confirman que, en primer lugar, los municipios se ajustan en presencia de un shock fiscal (es decir, el déficit es estacionario en el largo plazo). En segundo lugar, obtenemos que cuando el shock afecta a los ingresos el ajuste lo soporta principalmente el municipio reduciendo el gasto, las transferencias tienen un papel muy reducido en este proceso de ajuste. Por el contrario, cuando el shock afecta al gasto, el ajuste es compartido en términos similares entre el municipio – incrementado los impuestos – y los gobiernos de niveles superiores – incrementando las transferencias. Estos resultados sugieren que la viabilidad de las finanzas pública locales es factible con diferentes entornos institucionales.

A note on the coincidence between Stackelberg and Nash equilibria in a differential game between government and firms

[cat] A Navas i Marín Solano es va demostrar la coincidència entre els equilibris de Nash i de Stackelberg per a una versi´o modificada del joc diferencial proposat por Lancaster (1973). Amb l’objectiu d’obtenir una solució interior, es van imposar restriccions importants sobre el valors dels paràmetres del model. En aquest treball estenem aquest resultat, en el límit en que la taxa de descompte és igual a zero, eliminant les restriccions i considerant totes les solucions possibles.

The dynamic adjustment of local government budgets : Does Spain behave differently?

[spa] El objetivo de este trabajo es analizar si los municipios españoles se ajustan en presencia de un shock presupuestario y (si es así) qué elementos del presupuesto son los que realizan el ajuste. La metodología utilizada para contestar estas preguntas es un mecanismo de corrección del error, VECM, que estimamos con un panel de datos de los municipios españoles durante el período 1988-2006. Nuestros resultados confirman que, en primer lugar, los municipios se ajustan en presencia de un shock fiscal (es decir, el déficit es estacionario en el largo plazo). En segundo lugar, obtenemos que cuando el shock afecta a los ingresos el ajuste lo soporta principalmente el municipio reduciendo el gasto, las transferencias tienen un papel muy reducido en este proceso de ajuste. Por el contrario, cuando el shock afecta al gasto, el ajuste es compartido en términos similares entre el municipio – incrementado los impuestos – y los gobiernos de niveles superiores – incrementando las transferencias. Estos resultados sugieren que la viabilidad de las finanzas pública locales es factible con diferentes entornos institucionales.

A note on the coincidence between Stackelberg and Nash equilibria in a differential game between government and firms

[cat] A Navas i Marín Solano es va demostrar la coincidència entre els equilibris de Nash i de Stackelberg per a una versi´o modificada del joc diferencial proposat por Lancaster (1973). Amb l’objectiu d’obtenir una solució interior, es van imposar restriccions importants sobre el valors dels paràmetres del model. En aquest treball estenem aquest resultat, en el límit en que la taxa de descompte és igual a zero, eliminant les restriccions i considerant totes les solucions possibles.

Shrouded costs of government: The political economy of state and local public pensions

Why do public-sector workers receive so much of their compensation in the formof pensions and other benefits? This paper presents a political economy model inwhich politicians compete for taxpayers' and government employees' votes by promising compensation packages, but some voters cannot evaluate every aspect of promisedcompensation. If pension packages are "shrouded", so that public-sector workers better understand their value than ordinary taxpayers, then compensation will be highlyback-loaded. In equilibrium, the welfare of public-sector workers could be improved,holding total public-sector costs constant, if they received higher wages and lowerpensions. Centralizing pension determination has two offsetting effects on generosity:more state-level media attention helps taxpayers better understand pension costs, andthat reduces pension generosity; but a larger share of public-sector workers will votewithin the jurisdiction, which increases pension generosity. A short discussion of pensions in two decentralized states (California and Pennsylvania) and two centralizedstates (Massachusetts and Ohio) suggests that centralization appears to have modestlyreduced pensions, but, as the model suggests, this is unlikely to be universal.

Political centralization and government accountability

This paper studies fiscal federalism when regions differ in voters' ability to monitor publicofficials. We develop a model of political agency in which rent-seeking politicians providepublic goods to win support from heterogeneously informed voters. In equilibrium, voterinformation increases government accountability but displays decreasing returns. Therefore,political centralization reduces aggregate rent extraction when voter information varies acrossregions. It increases welfare as long as the central government is required to provide publicgoods uniformly across regions. The need for uniformity implies an endogenous trade off between reducing rents through centralization and matching idiosyncratic preferences throughdecentralization. We find that a federal structure with overlapping levels of government canbe optimal only if regional differences in accountability are sufficiently large. The modelpredicts that less informed regions should reap greater benefits when the central governmentsets a uniform policy. Consistent with our theory, we present empirical evidence that lessinformed states enjoyed faster declines in pollution after the 1970 Clean Air Act centralizedenvironmental policy at the federal level.

The influence of the quality of government institutions on entrepreneurial motivation: exploring the variance across countries

Despite the increasing understanding of the relationships between institutions and entrepreneurship, the influence of the quality of government institutions on entrepreneurship is less addressed. This paper focuses on this critical determinant of entrepreneurship in developing and developed countries. Drawing from institutional theory we hypothesize and empirically assess the role of the quality of institutions in entrepreneurial activity. We examine how the quality of government institutions influences the rate of necessity-based entrepreneurial activity across countries and over time by using a cross-sectional time-series approach on data from the Global Entrepreneurship Monitor (GEM) database covering the years 2001–2011. Our results suggest that higher economic development associated with better quality of institutions reduces the prevalence of necessity-based entrepreneurship. Our findings imply that developing countries must rationally organize their functions, and seek to remove unnecessary barriers, decrease political instability, and controls that hamper entrepreneurial activity

Hollywood Films in the Non-Western World: What Are the Criteria Followed by the Chinese Government When Choosing Hollywood Film Imports?

This dissertation argues that the Government of the People’s Republic of China, when it made the decision to import a quota of Hollywood films in 1994 to revive the failing domestic film industry, had different possible criteria in mind. This project has studied four of them: first, importing films that gave a negative image of the United States; second, importing films that featured Chinese talent or themes; third, importing films that were box office hits in the United States; and fourth, importing films with a strong technological innovation ingredient. In order to find out the most important criteria for the Chinese Government, this dissertation offers a dataset that analyzes a population of 262 Hollywood films released in the PRC between 1994 and 2010. For each unit, a method has been developed to compile data that will determine whether the film reflects any of the four criteria, and findings in the form of yearly percentages have been drawn. Results show that, out of the four studied criteria, the two predominant reasons for China to import films were technological innovation and box office hits. This tells us that, at this point, the Chinese Government shows more interest in obtaining big revenues and learning from technically innovative American films than in delivering underlying political messages. This dissertation contributes to the existing literature by analyzing the content of all the films imported by China between 1994 and 2010, while integrating in the analysis variables based on the existing knowledge.

The Institutional, Economic and Social Determinants of Local Government Transparency

Interest in public accountability and government transparency is increasing worldwide. The literature on the determinants of transparency is evolving but is still in its early stages. So far, it has typically focused on national or regional governments while neglecting the local government level. This paper builds on the scarce knowledge available in order to examine the economic, social, and institutional determinants of local government transparency in Spain. We draw on a 2010 survey and the transparency indexes constructed by the NGO Transparency International (Spain) in order to move beyond the fiscal transparency addressed in previous work. In so doing, we broaden the analysis of transparency to the corporate, social, fiscal, contracting, and planning activities of governments. Our results on overall transparency indicate that large municipalities and left-wing local government leaders are associated with better transparency indexes; while the worst results are presented by provincial capitals, cities where tourist activity is particularly important and local governments that enjoy an absolute majority. The analysis of other transparency categories generally shows the consistent impact of these determinants and the need to consider a wider set of variables to capture their effect.