Control of the Australian life insurance industry: an example of regulatory externalities within the Australian financial sector 1870-1945

The regulatory environment in which the Australian life insurance industry operates has its antecedents in two major periods of legislative intervention. The first established the principle of ‘freedom with disclosure’ in the 1870s, which has since formed the basis of the regulatory approach. In the 1940s, the second refined the concept in the context of a general recognition of an interventionist approach to financial markets. It is suggested that regulation of the life insurance market in Australia came about not in response to problems associated with market failure but in reaction to external influences not directly related to conditions in the Australian life insurance industry. This was impacted not only on the timing of intervention but on the approach taken as well.

Tourism, globalization, social externalities, and domestic welfare

One of the impacts of globalisation has been the growth in tourism and mobility of capital. This paper examines the welfare effect of tourism on the host economy with imperfect competition. Three channels that affects domestic welfare by tourism are: social externalities accompanied with tourists, the terms of trade effect via rises in the non-tradable prices, and the resource movement effect to the manufacturing sector. Owing to the positive terms-of-trade effect and/or the beneficial resource movement effect, the optimal levels of tourism occur at the situations that tourists bring negative social externalities to the economy.

Existence of externalities from investment in higher education research and development

Research undertaken for this thesis supports the underlying claim that education does generate externalities. By examining the impact of higher education R&D on Australian state production, the results suggest that both pure and applied R&D have a statistically significant impact on Australia's regional economic performance.

Is the treatment of economic loss by the Australian courts in torts cases anomalous?

The well developed economic theory of tort liability has never been able to comfortably accommodate negligence cases causing pure economic loss as opposed to physical damage or injury. In fact, contrary to received opinion, Australian Courts at least, are increasingly allocating pure economic losses to achieve predominantly an efficiency objective, with corrective justice notions relegated into the background. Consequently, it is difficult to classify these cases as anomalous in the sense of falling outside the efficiency paradigm.

Local perceptions of sustainability indicators: issues of scale and implications for management

A key factor impacting upon sustainable development are the perceptions people hold of their local social, economic and ecological environment. These perceptions influence how communities fashion the local landscape and in turn help to condition the ways people adapt themselves to their local spatial realities. Implicit in these perceptions are indicators of sustainability that may or may not be integrated across the social, economic and ecological realms. Further, these local indicators may not accord with those adopted at the national or global scale. Accordingly, spatial scale presents a particular set of challenges in identifying appropriate indicators of sustainability. In the same way that aggregated changes at a local scale influence sustainability on a broad scale, national and global externalities profoundly affect perceptions relating to sustainable development at the finest of spatial scales.

This paper focuses on one aspect of the issue of scale in sustainable indicator selection: local perceptions of sustainability. In this paper we report on a survey of perceptions of sustainability conducted across thirty-two sub-catchments in three major catchments in south west Victoria. We sought to uncover what people within each sub-catchment perceived as socially, economically and ecologically sustainable. Responses were compared across sub-catchments to determine whether perceptions at the sub-catchment scale were shared across the region. The results indicate that perceptions of sustainability varied between sub-catchments, which means that perceptions relating to sustainability at the regional scale may mask local trends.

Research methodologies for planning ecotourism and nature conservation

Ecotourism is an important niche market in the world tourism industry. It is becoming increasingly popular as an alternative to mass tourism. The emergence of ecotourism was facilitated by the environmental damage associated with mass tourism. Ecotourism is defined in many ways and there is no consensus as to its exact meaning. However, a number of salient elements, such as environmental conservation, maintenance of biodiversity, a satisfying experience for the visitors, study and appreciation of nature and sustainable community development, are included in many definitions. Tourism creates negative environmental externalities in the form of environmental damage. Such adverse effects can have serious implications for the tourism industry because they damage the very natural resource that forms the raw material for ecotourism. Ecotourism ventures should thus be properly planned and implemented and carefully monitored. Proper planning of ecotourism is hampered by the paucity of relevant qualitative and quantitative information. The use of analytical tools such as the Contingent Valuation Method, carrying capacity, decision analysis techniques with which multiobjective and uncertain consequences can be analysed, and other management strategies, such as the Safe Minimum Standard, can be useful in enabling better planning of ecotourism. Ecotourism can thus enhance the opportunities for better management of natural resources while providing a satisfying experience for the visitor.

Is the Genuine Progress Indicator really genuine? Considering well-being impacts of exports and imports

The Genuine Progress Indicator (GPI) is estimated as if nations operate within a closed economy. Therefore, in terms of coverage, the GPI is most analogous to Gross Domestic Product (GDP). Indeed, within the relevant literature, these two indicators are most often contrasted. However, consideration should be given to adapting the GPI, so it has more in common with Gross National Income (GNI). As with GDP, the GPI is concerned only with a particular physical location. Yet, it may be more effective if the GPI was freed from these physical boundaries in a similar manner to GNI. The GPI should be concerned more with the 'ownership' of the costs and benefits associated with economic growth than with the 'location' of those costs and benefits. Those that derive the most benefit from exploitation of the environment are often physically removed from the location of that damage. The GPI does not consider the net consumers of the negative externalities of environmental costs, merely the producers. Currently, however, the structure of the GPI allows a nation to enjoy, without penalty, the benefits of importing goods from countries which bear a disproportionately large cost of environmental degradation. This results in an overstatement of the real progress experienced by the county importing 'dirty goods'. This paper will investigate how certain GPI adjustments may be adapted to overcome this present shortcoming. However, the purpose of this paper is not only to empirically implement this new approach, but also to stimulate debate as to its potential merit.

Illegal migrants, tourism and welfare : a trade theoretic approach

Many countries receive illegal migrants but are reluctant to accept them due to possible negative externalities. We provide a rationale for not policing illegal migration by linking it to the tourism industry. By paying illegal migrants less than local workers, the relative price of the non-traded goods is shown to be lower than it would be in the absence of such workers. An expansion in tourist trade, under certain intensity conditions, necessarily raises resident welfare and employment. This tourist boom necessarily lowers the welfare of the illegal migrants. It is established that an increase in tourism increases the supply of illegal migrants.

Soil erosion in developing countries: a socio-economic appraisal

Soil erosion is the single most important environmental degradation problem in the developing world. Despite the plethora of literature that exists on the incidence, causes and impacts of soil erosion, a concrete understanding of this complex problem is lacking. This paper examines the soil erosion problem in developing countries in order to understand the complex inter-relationships between population pressure, poverty and environmental-institutional dynamics. Two recent theoretical developments, namely Boserup's theory on population pressure, poverty and soil erosion and Lopez's theory on environmental and institutional dynamics have been reviewed. The analysis reveals that negative impacts of technical change, inappropriate government policies and poor institutions are largely responsible for the continued soil erosion in developing countries. On the other hand, potential for market-based approaches to mitigate the problem is also low due to the negative externalities involved. A deeper appreciation of institutional and environmental dynamics and policy reforms to strengthen weak institutions may help mitigate the problem.

Regional trade agreements : performance evaluation and research agenda

This paper proposes a broad model for key success factors in Regional Trade Agreements (RTAs). Current literature is relatively limited in its focus on largely economic consequences of RTAs and the externalities are mostly ignored. This model incorporates five predictor dimensions forming the character of a RTA as follows: (1) Economic, (2) Socio-Cultural, (3) Negotiation, (4) Country Objectives and (5) Review process. It proposes a methodology for the empirical testing of the proposed model. The proposed model, potentially, facilitates the measurement of the character of a RTA and its association with various RTA objectives.

Social and environmental accounting research : major contributions and future directions for developing countries

A review is provided of major contributions in social and environmental accounting literature focussing on the issues of developing countries. The review of prior research shows that the major contributions have been related to the motivations for social and environmental disclosure. However, other important research areas such ethical/accountability issues and how to cost externalities which have already been considered within the context of developed countries are yet to emerge within the
developing country context. Contemporary social and environmental issues such as climate change and greenhouse gas emissions affecting the global community also appear to be key issues of research to scholars in both developed and developing countries. Finally, some future research directions are identified.

Is all cartel activity evil?

The new Australian cartel laws prohibit a provision of a contract, arrangement or understanding that inter alia, results in price fixing and output restriction between competitors in the relevant market. This is subject to a recognition that sometimes such conduct can be in the public interest, in which case the Australian Competition and Consumer Commission (ACCC) may grant an authorisation. One such instance may be an activity characterised by substantial externalised cost. An authorisation application would need to provide suitable evidence in support of the underlying case being argued. Traditionally in Australia, such evidence has been qualitative in nature; however, where possible, the ACCC and its counterparts in the EU and New Zealand encourage quantitative estimates. This is a case study of the welfare impact of output restrictions in the Australian beer industry, which is a source of substantial negative externalities. A standard simulation exercise is utilised as an example of how applicants and the competition regulator might combine theoretical and quantitative concepts to better achieve the objectives of the new legislation.

Market failure, policy failure and other distortions in chronic disease markets

Background: The increasing prevalence of chronic disease represents a significant burden on most health systems. This paper explores the market failures and policy failures that exist in the management of chronic diseases.
Discussion: There are many sources of market failure in health care that undermine the efficiency of chronic disease management. These include incomplete information as well as information asymmetry between providers and consumers, the effect of externalities on consumer behaviour, and the divergence between social and private time preference rates. This has seen government and policy interventions to address both market failures and distributional issues resulting from the inability of private markets to reach an efficient and equitable distribution of resources. However, these have introduced a series of policy failures such as distorted re-imbursement arrangements across modalities and delivery settings.
Summary: The paper concludes that market failure resulting from a preference of individuals for 'immediate gratification' in the form of health care and disease management, rather than preventative services, where the benefits are delayed, has a major impact on achieving an efficient allocation of resources in markets for the management of chronic diseases. This distortion is compounded by government health policy that tends to favour medical and pharmaceutical interventions further contributing to distortions in the allocation of resources and inefficiencies in the management of chronic disease.

Is it really good to annuitize?

Although rational consumers without bequest motives are better off investing exclusively with annuitized instruments in partial equilibrium, we demonstrate the welfare effect of annuitization is ambiguous in general equilibrium on account of pecuniary externalities. Absent institutional constraints like prices and budgets, the optimal consumption rule would have marginal utility increase at the preferential discount rate. In a rational competitive equilibrium where households fully annuitize, the growth rate of marginal utility will be the discount rate minus the interest rate, resulting in a consumption profile that is too flat. Accidental bequests transfer wealth from the old to the young, steepening the consumption profile and yielding a better equilibrium. If households are restricted to Keynesian consumption functions, the optimal irrational equilibrium with standard preferences can replicate observed consumption and macroeconomic behavior, and the equilibrium without annuities delivers higher utility than the equilibrium with annuities. Whereas preceding papers have merely hypothesized that households might engage in socially optimal, yet irrational behavior, the failure of households to annuitize is a real-world example of this. Policymakers should not take steps to encourage more annuitization by the public.