Optimal foreign aid and tariffs

This paper investigates the optimal choice of foreign aid when trade policies are decided in a non-cooperative fashion. Three alternative scenarios, depending on the timing of the actions and on whether aid is tied, are analyzed. It is shown that, in the case where aid is decided before tariffs, untied aid can lead to the reduction of the recipient's optimal trade tax. When the donor can tie the aid to a reduction in the recipient's tariff, the optimal aid level is always positive and the world can always achieve a Pareto-efficient equilibrium.

The politics of foreign aid: A median voter perspective

The paper presents a model where the median voter in the donor country determines the support of foreign aid. It is first established that an individual in the donor country is affected by the direct benefits (due to altruism) and costs (due to taxes) of giving aid, and by the indirect benefits or costs of a change in the terms of trade. Then it is shown that the latter effect works through changing both the donor country's average income and its distribution of income. Given the stylized facts of a capital-abundant donor country and relatively capital-poor median voter, it is shown how redistribution-of-income effects soften the impact of terms-of-trade changes on the political support for foreign aid.

Public good provision and the welfare effects of indirect tax harmonisation

The paper considers the welfare effect of the harmonisation of indirect taxes in two open economies. The revenue from taxation is used for the production of a non-tradeable public good. The welfare levels are affected via two channels: (i) changes in the levels of public good provision, and (ii) changes in deadweight loss associated with the taxes. We develop a number of rules of harmonisation and derive conditions under which they lead to potential Pareto improvement.

Reducing tariffs according to WTO accession rules: The case of Vietnam

When Vietnam joined the World Trade Organization (WTO) in 2007 it was granted an accession period up to 2014. During this period tariffs would have to fall according to the accession agreement. This paper evaluates this 2007–2014 trade liberalization by building an applied general equilibrium model and calibrating it to the Vietnamese data. The model pays careful attention to the fact that Vietnam has many state-owned enterprises. The model simulations show that the WTO tariff reductions will reduce overall welfare. Moreover, the biggest loss will take place among the poor rural households in Vietnam. This paper proposes other tariff reforms that will both raise overall welfare and reduce income inequality.

Steepest ascent tariff reform

The policy reform literature is primarily concerned with the construction of reforms that yield welfare gains. By contrast, this paper’s contribution is to develop a theoretical concept for which the focus is upon the sizes of welfare gains accruing from policy reforms rather than upon their signs. In undertaking this task, and by focusing on tariff reforms, we introduce the concept of a steepest ascent policy reform, which is a locally optimal reform in the sense that it achieves the highest marginal gain in utility of any feasible local reform. We argue that this reform presents itself as a natural benchmark for the evaluation of the welfare effectiveness of other popular tariff reforms such as the proportional tariff reduction and the concertina rules, since it provides the maximal welfare gain of all possible local reforms. We derive properties of the steepest ascent tariff reform, construct an index to measure the relative welfare effectiveness of any given tariff reform, determine conditions under which proportional and concertina reforms are locally optimal and provide illustrative examples.

Tariff strategies and small open economies

In this paper we examine the issue of optimal tariffs for a small economy that trades with a large economy. We define ‘small’ and ‘large’ in the sense that the world prices are determined solely by the large country, and, therefore, the small country faces exogenously given world prices. Within this framework it is shown that there exist situations in which the small country has an incentive to behave as a Stackelberg leader by committing itself to a non-zero optimal tariff. Although the small country is unable to directly affect world prices, by pre-committing to a non-zero trade tax it may induce a reduction of the large country's optimal trade tax, thereby indirectly improving its terms of trade and welfare. JEL Classification: F13, F35

Tariff-tax reforms and market access

Reducing tariffs and increasing consumption taxes is a standard IMF advice to countries that want to open up their economy without hurting government finances. Indeed, theoretical analysis of such a tariff–tax reform shows an unambiguous increase in welfare and government revenues. The present paper examines whether the country that implements such a reform ends up opening up its markets to international trade, i.e. whether its market access improves. It is shown that this is not necessarily so. We also show that, comparing to the reform of only tariffs, the tariff–tax reform is a less efficient proposal to follow both as far as it concerns market access and welfare.

Taxes and decision rights in multinationals

We examine how a multinational's choice to centralize or decentralize its decision structure is affected by country tax differentials. Within a simple model that emphasizes the multiple conflicting roles of transfer prices in multinational enterprises (MNEs)—here, as a strategic precommitment device and a tax manipulation instrument—we show that centralization is more profitable when tax differentials are large. When tax differentials are small, decentralization can be performed in two different ways each providing the highest profits in a particular range of the tax differential. Hence, the paper emphasizes the organizational flexibility that MNEs have in pursuing tax optimization.

Tied aid, unemployment and welfare

The effect of foreign aid on the welfare levels of both the recipient and the donor country has been a much analysed topic for research in both the theory of international trade and development economics. In the development economics literature, concerns have been raised since the 1960s on the possible adverse effect of foreign aid on domestic savings and growth.1 The trade theory literature in this respect is much older and dates back to the 1920s when Professors Keynes and Ohlin debated on the effect of foreign aid on international terms of trade.2 Ever since, the terms of trade effect has been the cornerstone in the analysis of the welfare effect of foreign aid in the trade theory literature.3 After some early confusion, it is now well established that in a Walrasian stable world economy with two countries, a necessary condition for foreign aid to have perverse effects is that there is some distortion in either of the two countries.4 It is also known that, under normality and substitutability of goods, untied aid cannot be strictly Pareto-improving in a tariff distorted world.5

Transfer pricing rules and competing governments

The literature on the regulation of multinationals' transfer prices has not considered the possibility that governments may use transfer pricing rules strategically when they compete with other governments. The present paper analyses this case and shows that, even in the absence of agency considerations, a non‐cooperative equilibrium is characterised by above‐optimal levels of effective taxation. We then derive conditions under which harmonization of transfer pricing rules lead to a Pareto improvement, and show that harmonization according to the ‘arm's length’ principle—the form of harmonization advocated by the OECD—may not be Pareto improving.

Effects of turbidity on feeding and distribution of fish

In aquatic systems, the ability of both the predator and prey to detect each other may be impaired by turbidity. This could lead to significant changes in the trophic interactions in the food web of lakes. Most fish use their vision for predation and the location of prey can be highly influenced by light level and clarity of the water environment. Turbidity is an optical property of water that causes light to be scattered and absorbed by particles and molecules. Turbidity is highly variable in lakes, due to seasonal changes in suspended sediments, algal blooms and wind-driven suspension of sediments especially in shallow waters. There is evidence that human activity has increased erosion leading to increased turbidity in aquatic systems. Turbidity could also play a significant role in distribution of fish. Turbidity could act as a cover for small fish and reduce predation risk. Diel horizontal migration by fish is common in shallow lakes and is considered as consequences of either optimal foraging behaviour for food or as a trade-off between foraging and predator avoidance. In turbid lakes, diel horizontal migration patterns could differ since turbidity can act as a refuge itself and affect the predator-prey interactions. Laboratory experiments were conducted with perch (Perca fluviatilis L.) and white bream (Abramis björkna (L.)) to clarify the effects of turbidity on their feeding. Additionally to clarify the effects of turbidity on predator preying on different types of prey, pikeperch larvae (Sander lucioperca (L.)), Daphnia pulex (Leydig), Sida crystallina (O.F. Müller), and Chaoborus flavicans (Meigen) were used as prey in different experiments. To clarify the role of turbidity in distribution and diel horizontal migration of perch, roach (Rutilus rutilus (L.)) and white bream, field studies were conducted in shallow turbid lakes. A clear and a turbid shallow lake were compared to investigate distribution of perch and roach in these two lakes in a 15-year study period. Feeding efficiency of perch and white bream was not significantly affected with increasing clay turbidity up to 50 NTU. The perch experiments with pikeperch larvae suggested that clay turbidity could act as a refuge especially at turbidity levels higher than 50 NTU. Perch experiments with different prey types suggested that pikeperch larvae probably use turbidity as a refuge better compared to Daphnia. Increase in turbidity probably has stronger affect on perch predating on plant-attached prey. The main findings of the thesis show that turbidity can play a significant role in distribution of fish. Perch and roach could use turbidity as refuge when macrophytes disappear while small perch may also use high turbidity as refuge when macrophytes are present. Floating-leaved macrophytes are probably good refuges for small fish in clay-turbid lakes and provide a certain level of turbidity and not too complex structure for refuge. The results give light to the predator-prey interactions in turbid environments. Turbidity of water should be taken in to account when studying the diel horizontal migrations and distribution of fish in shallow lakes.

Insights into Atmospheric Nucleation

Atmospheric aerosol particles have a strong impact on the global climate. A deep understanding of the physical and chemical processes affecting the atmospheric aerosol climate system is crucial in order to describe those processes properly in global climate models. Besides the climatic effects, aerosol particles can deteriorate e.g. visibility and human health. Nucleation is a fundamental step in atmospheric new particle formation. However, details of the atmospheric nucleation mechanisms have remained unresolved. The main reason for that has been the non-existence of instruments capable of measuring neutral newly formed particles in the size range below 3 nm in diameter. This thesis aims to extend the detectable particle size range towards close-to-molecular sizes (~1nm) of freshly nucleated clusters, and by direct measurement obtain the concentrations of sub-3 nm particles in atmospheric environment and in well defined laboratory conditions. In the work presented in this thesis, new methods and instruments for the sub-3 nm particle detection were developed and tested. The selected approach comprises four different condensation based techniques and one electrical detection scheme. All of them are capable to detect particles with diameters well below 3 nm, some even down to ~1 nm. The developed techniques and instruments were deployed in the field measurements as well as in laboratory nucleation experiments. Ambient air studies showed that in a boreal forest environment a persistent population of 1-2 nm particles or clusters exists. The observation was done using 4 different instruments showing a consistent capability for the direct measurement of the atmospheric nucleation. The results from the laboratory experiments showed that sulphuric acid is a key species in the atmospheric nucleation. The mismatch between the earlier laboratory data and ambient observations on the dependency of nucleation rate on sulphuric acid concentration was explained. The reason was shown to be associated in the inefficient growth of the nucleated clusters and in the insufficient detection efficiency of particle counters used in the previous experiments. Even though the exact molecular steps of nucleation still remain an open question, the instrumental techniques developed in this work as well as their application in laboratory and ambient studies opened a new view into atmospheric nucleation and prepared the way for investigating the nucleation processes with more suitable tools.

Saving Indigenous nurses and midwives from historical oblivion

Learning about the Indigenous women who had worked between 1950-2005 was a surprise to me. This area of under researched Australian history became a passion which I've continued to explore and, in recent years. have extended. It's a challenging field. with issues familiar to many historians. There may be many documentary records about Indigenous nurses, hidden in publicly accessible archives and collections, but individuals may not easily be identified as Indigenous. Another enormous challenge is to question widely-held assumptions. Historically, Aboriginal people have been positioned within a deficit model and cast as recipients of health care. So it's assumed that Indigenous people did not deliver care in any way. were not part of formal training schemes, or were not in paid employment. More evidence is emerging that counters those assumptions. Aboriginal women have worked as nurses and midwives within Australia as far back as the 1890s and, who knows, perhaps earlier. Their contribution is a hidden but significant element in Indigenous and Australian history