Natural resource windfalls and efficiency of local government expenditures: evidence from Peru

We study the role of natural resource windfalls in explaining the efficiency of public expenditures. Using a rich dataset of expenditures and public good provision for 1,836 municipalities in Peru for period 2001-2010, we estimate a non-monotonic relationship between the efficiency of public good provision and the level of natural resource transfers. Local governments that were extremely favored by the boom of mineral prices were more efficient in using fiscal windfalls whereas those benefited with modest transfers were more inefficient. These results can be explained by the increase in political competition associated with the boom. However, the fact that increases in efficiency were related to reductions in public good provision casts doubts about the beneficial effects of political competition in promoting efficiency.

On the concept of the public: the local museums’ case

Globally, the public is understood as the whole of a service’s users. In the specific case of the museums, the users are all those who make use of the service offered by the museum institution. Thus, the museum’s public corresponds not only to the visitors (people who enter or have entered the museum), but also to the part of those who, in some way, with no relationship of presence within the museum, have enjoyed the services or property made available by it (for instance the ordering of books or other material by catalogue, visit to travelling exhibitions, end users of pedagogical actions carried out in schools…) On the other hand, when we refer to the public, it is necessary to make another distinction: between the real or effective public and the potential public. The former is the group of individuals who have visited or have used the museum, while in the second case are included all the people who, due to their specific characteristics, are susceptible to become the real or effective public.

Human Health Impacts of Contaminants Found in Local Drinking Water Supply

Many contaminants are currently unregulated by the government and do not have a set limit, known as the Maximum Contaminant Level, which is dictated by cost and the best available treatment technology. The Maximum Contaminant Level Goal, on the other hand, is based solely upon health considerations and is non-enforceable. In addition to being naturally occurring, contaminants may enter drinking water supplies through industrial sources, agricultural practices, urban pollution, sprawl, and water treatment byproducts. Exposure to these contaminants is not limited to ingestion and can also occur through dermal absorption and inhalation in the shower. Health risks for the general public include skin damage, increased risk of cancer, circulatory problems, and multiple toxicities. At low levels, these contaminants generally are not harmful in our drinking water. However, children, pregnant women, and people with compromised immune systems are more vulnerable to the health risks associated with these contaminants. Vulnerable peoples should take additional precautions with drinking water. This research project was conducted in order to learn more about our local drinking water and to characterize our exposure to contaminants. We hope to increase public awareness of water quality issues by educating the local residents about their drinking water in order to promote public health and minimize exposure to some of the contaminants contained within public water supplies.

Three applications of the marginal cost of public funds concept

This paper illustrates the use of the marginal cost of public funds concept in three contexts. First, we extend Parry’s (2003) analysis of the efficiency effects excise taxes in the U.K., primarily by incorporating the distortion caused by imperfect competition in the cigarette market and distinguishing between the MCFs for per unit and ad valorem taxes on cigarettes. Our computations show, contrary to the standard result in the literature, that the per unit tax on cigarettes has a slightly lower MCF than the ad valorem tax on cigarettes. Second, we calculate the MCF for a payroll tax in a labour market with involuntary unemployment, using the Shapiro and Stiglitz (1984) efficiency wage model as our framework. Our computations, based on Canadian labour market data, indicate that incorporating the distortion caused by involuntary unemployment raises the MCF by 25 to 50 percent. Third, we derive expressions for the distributionally-weighted MCFs for the exemption level and the marginal tax rate for a “flat tax”, such as the one that has been adopted by the province of Alberta. This allows us to develop a restricted, but tractable, version of the optimal income tax problem. Computations indicate that the optimal marginal tax rate may be quite high, even with relatively modest pro-poor distributional preferences.

The marginal cost of funds from public sector borrowing

An expression for the welfare cost of a marginal increase in the public debt is derived using a simple AK endogenous growth model. This measure of the marginal cost of public funds (MCF) can be interpreted as the marginal benefit-cost ratio that a debtfinanced public project needs in order to generate a net social gain. The model predicts an increase in the public debt ratio will have little effect on the optimal public expenditure ratio and that most of the adjustment will occur on the tax side of the budget.

Road safety and public health: the cost of treating and rehabilitating the injured in Chile, Colombia and Peru

This issue of the FAL Bulletin examines the implications of road safety for the health-care system. It focuses on the economic cost of treating and rehabilitating road traffic injury victims and, for the sake of better public policy, proposes policy changes aimed at improving data collection as well as coordination among government agencies.

Social movement, public policy changes and partnerships building for local development

O artigo discute a influência do movimento social rural sobre as mudanças na política de apoio ao pequeno produtor rural e para a criação de parcerias entre o Governo e as Organizações Locais para o desenvolvimento local na Amazônia, em particular no estado do Pará. O objetivo do artigo é examinar a parceria como um resultado de um processo interativo entre as mudanças nas políticas públicas e as demandas dos movimentos sociais. O artigo mostra que embora os movimentos sociais façam parte de uma relação conflituosa entre o Estado e a sociedade civil, tais movimentos no estado do Pará foram uma pré-condição para mudanças na política pública, estrutura de financiamento e prioridades das agencias regionais que resultaram em proposições para cooperação entre o Governo e as Organizações Locais em nível municipal.

The Timeliness and Cost-Effectiveness of the Local and Regional Procurement of Food Aid

Local and regional procurement (LRP) of food aid is often claimed to lead to quicker and more cost-effective response. We generate timeliness and cost-effectiveness estimates by comparing US-funded LRP activities in nine countries against in-kind, transoceanic food aid shipments from the US to the same countries during the same timeframe. Procuring food locally or distributing cash or vouchers results in a time savings of nearly 14 weeks, a 62 percent gain. Cost-effectiveness varies significantly by commodity type. Procuring grains locally saved over 50 percent, on average, while local procurement of processed commodities was not always cost-effective. (C) 2013 Elsevier Ltd. All rights reserved.

The Impact of the Sarbanes-Oxley Act on the Cost of Going Public

This paper examines the impact of the Sarbanes-Oxley Act (SOX), a legal framework intended to increase transparency and accountability of listed companies, on the cost of going public in the US. We expect SOX to increase the direct cost of going public, but decrease the underpricing because of reduced asymmetric information. Our main results corroborate these hypotheses. First, we find an increase in the cost of going public of 90 bp of gross proceeds. Second, we record a reduction in underpricing of 6 pp, which is related to a reduced offer price adjustment. This supports our hypothesis that SOX represents a mechanism to reduce asymmetric information.