Three Essays on the Formation and Impact of Economic Policy

Introduction In my thesis I argue that economic policy is all about economics and politics. Consequently, analysing and understanding economic policy ideally has at least two parts. The economics part, which is centered around the expected impact of a specific policy on the real economy both in terms of efficiency and equity. The insights of this part point into which direction the fine-tuning of economic policies should go. However, fine-tuning of economic policies will be most likely subject to political constraints. That is why, in the politics part, a much better understanding can be gained by taking into account how the incentives of politicians and special interest groups as well as the role played by different institutional features affect the formation of economic policies. The first part and chapter of my thesis concentrates on the efficiency-related impact of economic policies: how does corporate income taxation in general, and corporate income tax progressivity in specific, affect the creation of new firms? Reduced progressivity and flat-rate taxes are in vogue. By 2009, 22 countries are operating flat-rate income tax systems, as do 7 US states and 14 Swiss cantons (for corporate income only). Tax reform proposals in the spirit of the "flat tax" model typically aim to reduce three parameters: the average tax burden, the progressivity of the tax schedule, and the complexity of the tax code. In joint work, Marius Brülhart and I explore the implications of changes in these three parameters on entrepreneurial activity, measured by counts of firm births in a panel of Swiss municipalities. Our results show that lower average tax rates and reduced complexity of the tax code promote firm births. Controlling for these effects, reduced progressivity inhibits firm births. Our reading of these results is that tax progressivity has an insurance effect that facilitates entrepreneurial risk taking. The positive effects of lower tax levels and reduced complexity are estimated to be significantly stronger than the negative effect of reduced progressivity. To the extent that firm births reflect desirable entrepreneurial dynamism, it is not the flattening of tax schedules that is key to successful tax reforms, but the lowering of average tax burdens and the simplification of tax codes. Flatness per se is of secondary importance and even appears to be detrimental to firm births. The second part of my thesis, which corresponds to the second and third chapter, concentrates on how economic policies are formed. By the nature of the analysis, these two chapters draw on a broader literature than the first chapter. Both economists and political scientists have done extensive research on how economic policies are formed. Thereby, researchers in both disciplines have recognised the importance of special interest groups trying to influence policy-making through various channels. In general, economists base their analysis on a formal and microeconomically founded approach, while abstracting from institutional details. In contrast, political scientists' frameworks are generally richer in terms of institutional features but lack the theoretical rigour of economists' approaches. I start from the economist's point of view. However, I try to borrow as much as possible from the findings of political science to gain a better understanding of how economic policies are formed in reality. In the second chapter, I take a theoretical approach and focus on the institutional policy framework to explore how interactions between different political institutions affect the outcome of trade policy in presence of special interest groups' lobbying. Standard political economy theory treats the government as a single institutional actor which sets tariffs by trading off social welfare against contributions from special interest groups seeking industry-specific protection from imports. However, these models lack important (institutional) features of reality. That is why, in my model, I split up the government into a legislative and executive branch which can both be lobbied by special interest groups. Furthermore, the legislative has the option to delegate its trade policy authority to the executive. I allow the executive to compensate the legislative in exchange for delegation. Despite ample anecdotal evidence, bargaining over delegation of trade policy authority has not yet been formally modelled in the literature. I show that delegation has an impact on policy formation in that it leads to lower equilibrium tariffs compared to a standard model without delegation. I also show that delegation will only take place if the lobby is not strong enough to prevent it. Furthermore, the option to delegate increases the bargaining power of the legislative at the expense of the lobbies. Therefore, the findings of this model can shed a light on why the U.S. Congress often practices delegation to the executive. In the final chapter of my thesis, my coauthor, Antonio Fidalgo, and I take a narrower approach and focus on the individual politician level of policy-making to explore how connections to private firms and networks within parliament affect individual politicians' decision-making. Theories in the spirit of the model of the second chapter show how campaign contributions from lobbies to politicians can influence economic policies. There exists an abundant empirical literature that analyses ties between firms and politicians based on campaign contributions. However, the evidence on the impact of campaign contributions is mixed, at best. In our paper, we analyse an alternative channel of influence in the shape of personal connections between politicians and firms through board membership. We identify a direct effect of board membership on individual politicians' voting behaviour and an indirect leverage effect when politicians with board connections influence non-connected peers. We assess the importance of these two effects using a vote in the Swiss parliament on a government bailout of the national airline, Swissair, in 2001, which serves as a natural experiment. We find that both the direct effect of connections to firms and the indirect leverage effect had a strong and positive impact on the probability that a politician supported the government bailout.

Positive Torsional Strain Causes the Formation of a Four-Way Junction at Replication Forks.

Research by L. Postow, C. Ullsperger, R.W. Keller, C. Bustamante, A.V. Vologodskii, and N.R. Cozzarelli, J. Biol. Chem. 2001, 276, 2790 Condensation and commentary by Alexander Bucka and Andrzej Stasiak, Universite ´ de Lausanne, Switzerland Purpose of the Study To demonstrate that positive torsional strain generated during DNA replication can lead to reversals of replication forks and, consequently can result in the formation of four-way DNA junctions

Endothelial nitric oxide synthase gene transfer restores endothelium-dependent relaxations and attenuates lesion formation in carotid arteries in apolipoprotein E-deficient mice.

Nitric oxide (NO) and monocyte chemoattractant protein-1 (MCP-1) exert partly opposing effects in vascular biology. NO plays pleiotropic vasoprotective roles including vasodilation and inhibition of platelet aggregation, smooth muscle cell proliferation, and endothelial monocyte adhesion, the last effect being mediated by MCP-1 downregulation. Early stages of arteriosclerosis are associated with reduced NO bioactivity and enhanced MCP-1 expression. We have evaluated adenovirus-mediated gene transfer of human endothelial NO synthase (eNOS) and of a N-terminal deletion (8ND) mutant of the MCP-1 gene that acts as a MCP-1 inhibitor in arteriosclerosis-prone, apolipoprotein E-deficient (ApoE(-/-)) mice. Endothelium-dependent relaxations were impaired in carotid arteries instilled with a noncoding adenoviral vector but were restored by eNOS gene transfer (p < 0.01). A perivascular collar was placed around the common carotid artery to accelerate lesion formation. eNOS gene transfer reduced lesion surface areas, intima/media ratios, and macrophage contents in the media at 5-week follow-up (p < 0.05). In contrast, 8ND-MCP-1 gene transfer did not prevent lesion formation. In conclusion, eNOS gene transfer restores endothelium-dependent vasodilation and inhibits lesion formation in ApoE(-/-) mouse carotids. Further studies are needed to assess whether vasoprotection is maintained at later disease stages and to evaluate the long-term efficacy of eNOS gene therapy for primary arteriosclerosis.

Notch signaling in the pigmented epithelium of the anterior eye segment promotes ciliary body development at the expense of iris formation.

The ciliary body and iris are pigmented epithelial structures in the anterior eye segment that function to maintain correct intra-ocular pressure and regulate exposure of the internal eye structures to light, respectively. The cellular and molecular factors that mediate the development of the ciliary body and iris from the ocular pigmented epithelium remain to be fully elucidated. Here, we have investigated the role of Notch signaling during the development of the anterior pigmented epithelium by using genetic loss- and gain-of-function approaches. Loss of canonical Notch signaling results in normal iris development but absence of the ciliary body. This causes progressive hypotony and over time leads to phthisis bulbi, a condition characterized by shrinkage of the eye and loss of structure/function. Conversely, Notch gain-of-function results in aniridia and profound ciliary body hyperplasia, which causes ocular hypertension and glaucoma-like disease. Collectively, these data indicate that Notch signaling promotes ciliary body development at the expense of iris formation and reveals novel animal models of human ocular pathologies.

An unexpected role of semaphorin3a-neuropilin-1 signaling in lymphatic vessel maturation and valve formation.

RATIONALE: Lymphatic vasculature plays important roles in tissue fluid homeostasis maintenance and in the pathology of human diseases. Yet, the molecular mechanisms that control lymphatic vessel maturation remain largely unknown. OBJECTIVE: We analyzed the gene expression profiles of ex vivo isolated lymphatic endothelial cells to identify novel lymphatic vessel expressed genes and we investigated the role of semaphorin 3A (Sema3A) and neuropilin-1 (Nrp-1) in lymphatic vessel maturation and function. METHODS AND RESULTS: Lymphatic and blood vascular endothelial cells from mouse intestine were isolated using fluorescence-activated cell sorting, and transcriptional profiling was performed. We found that the axonal guidance molecules Sema3A and Sema3D were highly expressed by lymphatic vessels. Importantly, we found that the semaphorin receptor Nrp-1 is expressed on the perivascular cells of the collecting lymphatic vessels. Treatment of mice in utero (E12.5-E16.5) with an antibody that blocks Sema3A binding to Nrp-1 but not with an antibody that blocks VEGF-A binding to Nrp-1 resulted in a complex phenotype of impaired lymphatic vessel function, enhanced perivascular cell coverage, and abnormal lymphatic vessel and valve morphology. CONCLUSIONS: Together, these results reveal an unanticipated role of Sema3A-Nrp-1 signaling in the maturation of the lymphatic vascular network likely via regulating the perivascular cell coverage of the vessels thus affecting lymphatic vessel function and lymphatic valve development.

Biofilm formation on bone grafts and bone graft substitutes: comparison of different materials by a standard in vitro test and microcalorimetry.

We analyzed the initial adhesion and biofilm formation of Staphylococcus aureus (ATCC 29213) and S. epidermidis RP62A (ATCC 35984) on various bone grafts and bone graft substitutes under standardized in vitro conditions. In parallel, microcalorimetry was evaluated as a real-time microbiological assay in the investigation of biofilm formation and material science research. The materials beta-tricalcium phosphate (beta-TCP), processed human spongiosa (Tutoplast) and poly(methyl methacrylate) (PMMA) were investigated and compared with polyethylene (PE). Bacterial counts (log(10) cfu per sample) were highest on beta-TCP (S. aureus 7.67 +/- 0.17; S. epidermidis 8.14 +/- 0.05) while bacterial density (log(10) cfu per surface) was highest on PMMA (S. aureus 6.12 +/- 0.2, S. epidermidis 7.65 +/- 0.13). Detection time for S. aureus biofilms was shorter for the porous materials (beta-TCP and processed human spongiosa, p < 0.001) compared to the smooth materials (PMMA and PE), with no differences between beta-TCP and processed human spongiosa (p > 0.05) or PMMA and PE (p > 0.05). In contrast, for S. epidermidis biofilms the detection time was different (p < 0.001) between all materials except between processed human spongiosa and PE (p > 0.05). The quantitative analysis by quantitative culture after washing and sonication of the material demonstrated the importance of monitoring factors like specific surface or porosity of the test materials. Isothermal microcalorimetry proved to be a suitable tool for an accurate, non-invasive and real-time microbiological assay, allowing the detection of bacterial biomass without removing the biofilm from the surface.

Review on polyhydroxyalkanoate formation in the model plant Arabidopsis thaliana

In order to explore potential alternatives to the production of polyhydroxyalkanoates (PHAs) in bacteria, the enzymes of Alcaligenes eutrophus involved in the synthesis of polyhydroxybutyrate (PHB) have been expressed in the model plant Arabidopsis thaliana. Following the successful production of low amounts of high molecular weight PHB in plants expressing the acetoacetyl-CoA reductase and the PHB synthase in the cytoplasm of Arabidopsis cell, expression of the PHB pathway in the pastids was achieved by modifying the PHB enzymes with plastid targeting signals. This strategy resulted in a significant increase in the formation of PHB in Arabidopsis, with a maximum of 14% of the leaf dry weight . The increase in PHB production is most likely due to the higher flux in the plastids of acetyl-CoA, the precursor for PHB synthesis. A detailed study of metabolic fluxes in Arabidopsis plants producing high levels of PHB could help to determine the potential problems and limitations of PHB synthesis in Arabidopsis and could be useful for optimising strategies for the production of PHB in crop plants. The knowledge on PHB production could also be used for the production of PHAs other than PHB. Apart from PHB, no other PHAs have been produced in an eukaryotic system. Arabidopsis will therefore be used as a model system for the production in eukaryotes of more complex PHAs, such as poly(hydroxybutyrate-co-hydroxyvylerate) or medium-chain-lenght-PHAs.

The roles of flux- and decompression melting and their respective fractionation lines for continental crust formation: Evidence from the Kohistan arc

Delamination and foundering of the lower continental crust (LCC) into the mantle is part of the crust-forming mechanism. However, knowledge of the composition and mineralogy of the preserved or delaminated LCC over geological timescales remains scarce. We provide a synopsis of recent research within the Kohistan arc (Pakistan) and demonstrate that hydrous and less hydrous liquid lines of descent related to flux assisted and decompression mantle melting, respectively, produce compositionally different lower crustal rocks. The argument refers to two lower crustal sections exposed in Kohistan, the older Southern Plutonic Complex (SPC) and the younger Chilas Complex. The SPC typifies a hydrous, high-pressure fractionation sequence of olivine-pyroxenes-garnet-Fe/Ti-oxide-amphibole-plagioclase. The Chilas Complex illustrates a less hydrous fractionation sequence of olivine-clinopyroxene-orthopyroxene-plagioclase-amphibole. Despite the similarity of the Chilas Complex rocks to proposed lower crust compositions, the less hydrous fractionation results in unrealistically small volumes of silica-rich rocks, precluding the Chilas Complex gabbros to represent the magmatic complement to the upper crust. The composition of the SPC lower crust differs markedly from bulk lower crust estimates, but is complementary to silica-rich rocks exposed along this section and in the Kohistan batholith. These observations inspire a composite model for the formation of continental crust (CC) where the negatively buoyant delaminated and the buoyant preserved lower continental crusts (LCC) differ in genesis, mineralogy, and composition. We propose that the upper, non-sedimentary subsequent removal of the complementary, negatively buoyant garnet-pyroxene-amphibole-plagioclase-rich cumulates. In contrast, the LCC, which is buoyant and preserved over geological timescales, is formed by less hydrous parental mantle melts. We suggest that the bulk continental crust composition is related to mixing of these petrologically not directly related end members. Published by Elsevier B.V.

A Mixed-method Social Networks Study Design for Research on Transnational Families

This paper advocates the adoption of a mixed-methods research design to describe and analyze ego-centered social networks in transnational family research. Drawing on the experience of the Social Networks Influences on Family Formation project (2004-2005), I show how the combined use of network generators and semistructured interviews (N = 116) produces unique data on family configurations and their impact on life course choices. A mixed-methods network approach presents specific advantages for research on children in transnational families. On the one hand, quantitative analyses are crucial for reconstructing and measuring the potential and actual relational support available to children in a context where kin interactions may be hindered by temporary and prolonged periods of separation. On the other hand, qualitative analyses can address strategies and practices employed by families to maintain relationships across international borders and geographic distance, as well as the implications of those strategies for children's well-being.

Alps, genes, and chromosomes: their role in the formation of species in the Sorex araneus group (Mammalia, Insectivora), as inferred from two hybrid zones.

During the Pleistocene glaciations, the Alps were an efficient barrier to gene flow between isolated populations, often leading to allopatric speciation. Afterwards, the Alps strongly influenced the post-glacial recolonization of Europe and represent a major suture zone between differentiated populations. Two hybrid zones in the Swiss and French Alps between genetically and chromosomally well-differentiated species-the Valais shrew, Sorex antinorii, and the common shrew, S. araneus-were studied karyotypically and by analyzing the distribution of seven microsatellite loci. In the center of the Haslital hybrid zone the two species coexist over a distance of 900 m. Hybrid karyotypes, among them the most complex known in Sorex, are rare. F-statistics based on microsatellite data revealed a strong heterozygote deficit only in the center of the zone, due to the sympatric distribution of the two species with little hybridization between them. Structuring within the species (both F(IS) and F(ST)) was low. An hierarchical analysis showed a high level of interspecific differentiation. Results were compared with those previously reported in another hybrid zone located at Les Houches in the French Alps. Genetic structuring within and between species was comparable in both hybrid zones, although chromosomal incompatibilities are more important in Haslital, where a linkage block of the race-specific chromosomes should additionally impede gene flow. Evidence for a more restricted gene flow in Haslital comes from the genetically intermediate hybrid karyotypes, whereas in Les Houches, hybrid karyotypes are genetically identical to individuals of the pure karyotypic races. Genic and chromosomal introgression was observed in Les Houches, but not in Haslital. The possible influence of a river, separating the two species at Les Houches, on gene flow is discussed.

Global DNA hypomethylation coupled to repressive chromatin domain formation and gene silencing in breast cancer.

While genetic mutation is a hallmark of cancer, many cancers also acquire epigenetic alterations during tumorigenesis including aberrant DNA hypermethylation of tumor suppressors, as well as changes in chromatin modifications as caused by genetic mutations of the chromatin-modifying machinery. However, the extent of epigenetic alterations in cancer cells has not been fully characterized. Here, we describe complete methylome maps at single nucleotide resolution of a low-passage breast cancer cell line and primary human mammary epithelial cells. We find widespread DNA hypomethylation in the cancer cell, primarily at partially methylated domains (PMDs) in normal breast cells. Unexpectedly, genes within these regions are largely silenced in cancer cells. The loss of DNA methylation in these regions is accompanied by formation of repressive chromatin, with a significant fraction displaying allelic DNA methylation where one allele is DNA methylated while the other allele is occupied by histone modifications H3K9me3 or H3K27me3. Our results show a mutually exclusive relationship between DNA methylation and H3K9me3 or H3K27me3. These results suggest that global DNA hypomethylation in breast cancer is tightly linked to the formation of repressive chromatin domains and gene silencing, thus identifying a potential epigenetic pathway for gene regulation in cancer cells.

Volcanic debris avalanche deposits of the upper Maronne valley (Cantal Volcano, France): evidence for contrasted formation and transport mechanisms

The deposits of two volcanic debris avalanches (VDA I and II) that occur in the upper Maronne valley, northwest sector of Cantal Volcano, France, were studied to establish their mechanisms of formation, transport and deposition. These two volcanic debris avalanches that clearly differ with regard to their structures, textures and extensions, exemplify the wide spectrum of events associated with large-scale sector collapse. VDA I is voluminous (similar to1 km(3) in the upper Maronne valley) and widespread. The deposits comprise two distinct facies: the block facies that forms the intermediate and upper part of the unit and the mixed facies that crops out essentially at the base of the unit. The block facies consists of more or less brecciated lava, block-and-ash-flow breccia and pumice-flow tuff megablocks set in breccias resulting from block disaggregation. Mixing and differential movements are almost absent in this part of the VDA. The mixed facies consists of breccias rich in fine particles that originate from block disagregation, as well as being picked up from the substratum during movement. Mixing and differential movements are predominant in this zone. Analysis of fractures on lava megablocks suggests that shear stress during the initial sliding is the principal cause of fracture. These data strongly indicate that VDA I is purely gravitational and argue for a model in which the initial sliding mass transforms into a flow due to differential in situ fragmentation caused by the shear stress. VDA II is restricted to low-topography areas. Its volume, in the studied area, is about 0.3 km(3). The deposits consist of brecciated, rounded blocks and megablocks set in a fine-grained matrix composed essentially of volcanic glass. This unit is stratified, with a massive layer that contains all the megablocks at the base and in the intermediate part, and in the upper part a normally graded layer that contains only blocks <1 m in size. The different lithologies present are totally mixed. These observations suggest that VDA II may be of the Bezymianny-type and that it underwent a flow transformation from a turbulent to a stratified flow consisting of a basal hyperconcentrated laminar body overlain by a dilute layer. (C) 2000 Elsevier Science B.V. All rights reserved.