Joint estimates of automatic and discretionary fiscal policy: the OECD 1981-2003

Official calculations of automatic stabilizers are seriously flawed since they rest on the assumption that the only element of social spending that reacts automatically to the cycle is unemployment compensation. This puts into question many estimates of discretionary fiscal policy. In response, we propose a simultaneous estimate of automatic and discretionary fiscal policy. This leads us, quite naturally, to a tripartite decomposition of the budget balance between revenues, social spending and other spending as a bare minimum. Our headline results for a panel of 20 OECD countries in 1981-2003 are .59 automatic stabilization in percentage-points of primary surplus balances. All of this stabilization remains following discretionary responses during contractions, but arguably only about 3/5 of it remains so in expansions while discretionary behavior cancels the rest. We pay a lot of attention to the impact of the Maastricht Treaty and the SGP on the EU members of our sample and to real time data.

Joint estimates of automatic and discretionary fiscal policy: the OECD 1981-2003

Official calculations of automatic stabilizers are seriously flawed since they rest on the assumption that the only element of social spending that reacts automatically to the cycle is unemployment compensation. This puts into question many estimates of discretionary fiscal policy. In response, we propose a simultaneous estimate of automatic and discretionary fiscal policy. This leads us, quite naturally, to a tripartite decomposition of the budget balance between revenues, social spending and other spending as a bare minimum. Our headline results for a panel of 20 OECD countries in 1981-2003 are .59 automatic stabilization in percentage-points of primary surplus balances. All of this stabilization remains following discretionary responses during contractions, but arguably only about 3/5 of it remains so in expansions while discretionary behavior cancels the rest. We pay a lot of attention to the impact of the Maastricht Treaty and the SGP on the EU members of our sample and to real time data.

Commitment vs. Discretion in the UK: An Empirical Investigation of the Monetary and Fiscal Policy Regime

This paper investigates the conduct of monetary and fiscal policy in the post-ERM period in the UK. Using a simple DSGE New Keynesian model of non-cooperative monetary and fiscal policy interactions under fiscal intra-period leadership, we demonstrate that the past policy in the UK is better explained by optimal policy under discretion than under commitment. We estimate policy objectives of both policy makers. We demonstrate that fiscal policy plays an important role in identifying the monetary policy regime.

Legal Uncertainty, Competition Law Enforcement Procedures and Optimal Penalties

In this paper we make three contributions to the literature on optimal Competition Law enforcement procedures. The first (which is of general interest beyond competition policy) is to clarify the concept of “legal uncertainty”, relating it to ideas in the literature on Law and Economics, but formalising the concept through various information structures which specify the probability that each firm attaches – at the time it takes an action – to the possibility of its being deemed anti-competitive were it to be investigated by a Competition Authority. We show that the existence of Type I and Type II decision errors by competition authorities is neither necessary nor sufficient for the existence of legal uncertainty, and that information structures with legal uncertainty can generate higher welfare than information structures with legal certainty – a result echoing a similar finding obtained in a completely different context and under different assumptions in earlier Law and Economics literature (Kaplow and Shavell, 1992). Our second contribution is to revisit and significantly generalise the analysis in our previous paper, Katsoulacos and Ulph (2009), involving a welfare comparison of Per Se and Effects- Based legal standards. In that analysis we considered just a single information structure under an Effects-Based standard and also penalties were exogenously fixed. Here we allow for (a) different information structures under an Effects-Based standard and (b) endogenous penalties. We obtain two main results: (i) considering all information structures a Per Se standard is never better than an Effects-Based standard; (ii) optimal penalties may be higher when there is legal uncertainty than when there is no legal uncertainty.

Policy initiatives and firms’ access to external finance: Evidence from a panel of emerging Asian economies

This paper analyses the impact of policy initiatives co-ordinated by Asian national governments on firms' access to external finance, using a unique firm-level database of eight Asian countries- Hong Kong SAR, Indonesia, Korea, Malaysia, Philippines, Singapore, Taiwan and Thailand over the period of 1996-2012. Using a difference-indifferences approach and controlling for firm-level and macroeconomic factors, the results show a significant impact of policy on firms' access to external finance. After splitting firms into constrained and unconstrained, using several criteria, the results document that unconstrained firms benefited significantly in obtaining external finance, compared to their constrained counterparts. Finally, we show that the increase in access to external finance after the policy initiative helped firms to raise their investment spending, especially for unconstrained firms.

Durcissement des lois sociales et santé des migrants forcés: trois ans après (a Loi sur l'asile (LAsi) [Social policy hardening and forced immigrant's health: 3 years after the Asylum Law (LAsi)'s introduction].

In the canton de Vaud, General Practioners (GPs) caring for asylum seekers under the "aide d'urgence" regime can ask for an adaptation of their housing conditions, by filling out a specific form and addressing it to the medical commission responsible for advising the EVAM (the housing institution for asylum seekers) on these issues. The forms addressed to the commission are indicative of a worrisome state of health in this population, especially for mental health. More than 70% report at least one psychiatric diagnosis. Most frequent are anxiety and depressive disorders, as well as many posttraumatic stress disorders, associated with traumatic events both in the country of origin and in Switzerland. Adapting the housing conditions, based on vulnerabilities that the GP has specifically documented, may contribute to improve the health of the most vulnerable asylum seekers.

The de facto independence of regulatory agencies and its consequences for policy making and regulatory outcomes

This dissertation focuses on the practice of regulatory governance, throughout the study of the functioning of formally independent regulatory agencies (IRAs), with special attention to their de facto independence. The research goals are grounded on a "neo-positivist" (or "reconstructed positivist") position (Hawkesworth 1992; Radaelli 2000b; Sabatier 2000). This perspective starts from the ontological assumption that even if subjective perceptions are constitutive elements of political phenomena, a real world exists beyond any social construction and can, however imperfectly, become the object of scientific inquiry. Epistemologically, it follows that hypothetical-deductive theories with explanatory aims can be tested by employing a proper methodology and set of analytical techniques. It is thus possible to make scientific inferences and general conclusions to a certain extent, according to a Bayesian conception of knowledge, in order to update the prior scientific beliefs in the truth of the related hypotheses (Howson 1998), while acknowledging the fact that the conditions of truth are at least partially subjective and historically determined (Foucault 1988; Kuhn 1970). At the same time, a sceptical position is adopted towards the supposed disjunction between facts and values and the possibility of discovering abstract universal laws in social science. It has been observed that the current version of capitalism corresponds to the golden age of regulation, and that since the 1980s no government activity in OECD countries has grown faster than regulatory functions (Jacobs 1999). Following an apparent paradox, the ongoing dynamics of liberalisation, privatisation, decartelisation, internationalisation, and regional integration hardly led to the crumbling of the state, but instead promoted a wave of regulatory growth in the face of new risks and new opportunities (Vogel 1996). Accordingly, a new order of regulatory capitalism is rising, implying a new division of labour between state and society and entailing the expansion and intensification of regulation (Levi-Faur 2005). The previous order, relying on public ownership and public intervention and/or on sectoral self-regulation by private actors, is being replaced by a more formalised, expert-based, open, and independently regulated model of governance. Independent regulation agencies (IRAs), that is, formally independent administrative agencies with regulatory powers that benefit from public authority delegated from political decision makers, represent the main institutional feature of regulatory governance (Gilardi 2008). IRAs constitute a relatively new technology of regulation in western Europe, at least for certain domains, but they are increasingly widespread across countries and sectors. For instance, independent regulators have been set up for regulating very diverse issues, such as general competition, banking and finance, telecommunications, civil aviation, railway services, food safety, the pharmaceutical industry, electricity, environmental protection, and personal data privacy. Two attributes of IRAs deserve a special mention. On the one hand, they are formally separated from democratic institutions and elected politicians, thus raising normative and empirical concerns about their accountability and legitimacy. On the other hand, some hard questions about their role as political actors are still unaddressed, though, together with regulatory competencies, IRAs often accumulate executive, (quasi-)legislative, and adjudicatory functions, as well as about their performance.

A Study of a Staff Alcohol Policy in a Large Public Health Organisation, Looking at the Policy Content, the Policy Development and the Implementation Process, and the Policy Impact

There are different approaches to dealing with alcohol related problems in the workplace. A literature review indicates that two of the models that underpin programmes to deal with alcohol related problems in the workplace are the disease model and the health promotion model. The disease model considers alcoholism as an illness and uses curative techniques to restore the individual to sobriety. The health promotion model looks at the determinants of health and promotes changes in the environment and structures, which would support healthy behaviour in relation to alcohol. Employee Assistance Programmes (EAPs) may have elements of both theses models. Dealing with alcohol problems at work involves a captive audience and the workplace as a setting can be used to influence healthier lifestyles. A workplace alcohol policy is a mechanism through which alcohol related issues might be dealt with, and the necessary resources and commitment of managers and staff channelled to this end. The policy aims should be clear and unambiguous, and specific plans put in place for implementing all aspects of the policy. In the case of the alcohol policy in the organisation under study, the policy was underpinned by a health promotion ethos and the policy document reflects broad aims and objectives to support this. The steering group that oversaw the development of the policy had particular needs of their own which they brought to the development process. The common theme in their needs was how to identify and support employees with alcohol related problems within an equitable staff welfare system. The role of the supervisor was recognised as crucial and training was provided to introduce the skills needed for an early intervention and constructive confrontation with employees who had alcohol related problems. Opportunities provided by this policy initiative to deal with broader issues around alcohol and to consider the determinants of health in relation to alcohol were not fully utilised. The policy formalised the procedures for dealing with people who have alcohol related problems in an equitable and supportive manner. The wider aspect of the health promotion approach does not appear to have been a priority in the development and implementation of the policy.This resource was contributed by The National Documentation Centre on Drug Use.

NanoImpactNet - building a multi-stakeholder dialogue on the health and environmental impact of nanomaterials

NanoImpactNet (NIN) is a multidisciplinary European Commission funded network on the environmental, health and safety (EHS) impact of nanomaterials. The 24 founding scientific institutes are leading European research groups active in the fields of nanosafety, nanorisk assessment and nanotoxicology. This 4-year project is the new focal point for information exchange within the research community. Contact with other stakeholders is vital and their needs are being surveyed. NIN is communicating with 100s of stakeholders: businesses; internet platforms; industry associations; regulators; policy makers; national ministries; international agencies; standard-setting bodies and NGOs concerned by labour rights, EHS or animal welfare. To improve this communication, internet research, a questionnaire distributed via partners and targeted phone calls were used to identify stakeholders' interests and needs. Knowledge gaps and the necessity for further data mentioned by representatives of all stakeholder groups in the targeted phone calls concerned: • the potential toxic and safety hazards of nanomaterials throughout their lifecycles; • the fate and persistence of nanoparticles in humans, animals and the environment; • the associated risks of nanoparticle exposure; • greater participation in: the preparation of nomenclature, standards, methodologies, protocols and benchmarks; • the development of best practice guidelines; • voluntary schemes on responsibility; • databases of materials, research topics and themes, but also of expertise. These findings suggested that stakeholders and NIN researchers share very similar knowledge needs, and that open communication and free movement of knowledge will benefit both researchers and industry. Subsequently a workshop was organised by NIN focused on building a sustainable multi-stakeholder dialogue. Specific questions were asked to different stakeholder groups to encourage discussions and open communication. 1. What information do stakeholders need from researchers and why? The discussions about this question confirmed the needs identified in the targeted phone calls. 2. How to communicate information? While it was agreed that reporting should be enhanced, commercial confidentiality and economic competition were identified as major obstacles. It was recognised that expertise was needed in the areas of commercial law and economics for a wellinformed treatment of this communication issue. 3. Can engineered nanomaterials be used safely? The idea that nanomaterials are probably safe because some of them have been produced 'for a long time', was questioned, since many materials in common use have been proved to be unsafe. The question of safety is also about whether the public has confidence. New legislation like REACH could help with this issue. Hazards do not materialise if exposure can be avoided or at least significantly reduced. Thus, there is a need for information on what can be regarded as acceptable levels of exposure. Finally, it was noted that there is no such thing as a perfectly safe material but only boundaries. At this moment we do not know where these boundaries lie. The matter of labelling of products containing nanomaterials was raised, as in the public mind safety and labelling are connected. This may need to be addressed since the issue of nanomaterials in food, drink and food packaging may be the first safety issue to attract public and media attention, and this may have an impact on 'nanotechnology as a whole. 4. Do we need more or other regulation? Any decision making process should accommodate the changing level of uncertainty. To address the uncertainties, adaptations of frameworks such as REACH may be indicated for nanomaterials. Regulation is often needed even if voluntary measures are welcome because it mitigates the effects of competition between industries. Data cannot be collected on voluntary bases for example. NIN will continue with an active stakeholder dialogue to further build on interdisciplinary relationships towards a healthy future with nanotechnology.

Fiscal decentralization policies and sub-national government debt in evolving federations

As part of a process of democratization, many countries spanning Europe, Latin Amertica, Africa, and Asia are reorganizing their governments bydevolving fiscal responsibility and authority to newly empowered regionaland local governments. Although decentralization in each country proceedsdifferently, a common element tends to be an initially heavy relianceon central government grants to fund regional spending. We develop atheoretical model of regional borrowing decisions in which the incentivesfor regional borrowing depend crucially on how the regions expect thefederal system of finance to evolve. We examine the implications of themodel using data on Spanish regions for the period 1984-1995 and findevidence that regions may be borrowing inefficiently in response toincentives imbedded in the Spanish system of fiscal decentralization.

Policy Environment and Public Service Motivation

This article analyzes whether and to what extent the policy environment of civil servants has an impact on their level of Public Service Motivation (PSM). It hypothesizes that public employees working in different policy domains and stages of the policy cycle are diversely motivated by four PSM orientations (Compassion, Commitment to the public interest, Self-sacrifice and Attraction to politics). The empirical results are based on a survey of 6885 Swiss civil servants. They show that those in charge of Welfare State policies are inclined to have higher levels of 'Compassion', whereas those performing core state functions report lower levels. Furthermore, employees whose main tasks are related to policy formulation display high levels of the 'Attraction to politics' dimension of PSM. This study questions the generalization of previous findings on PSM that are based on heterogeneous survey populations.

Issue review : school aid funding for fiscal year 2010 and fiscal year 2011.

State school aid accounts for approximately 41.3 percent of the total general fund appropriations for fiscal year 2010. The current law estimate for fiscal year 2011 state school aid totals 2.689 billion dollars, an increase of 542.7 million dollars compared to the net fiscal year 2010 amount.This issue review provides an analysis of school aid funding for fiscal year 2010 and fiscal year 2011 and provides some alternatives that the General Assembly may wish to consider for fiscal year 2011.