An Enabling Regulatory Environment for Sustainable Investment: The Example of Trade Law

There is broad international agreement that investment flows to the agricultural sector in developing countries need to be increased. But there is also agreement that such investments need to be sustainable. For being sustainable, they must not only be beneficial to the public economy, but also to rural households and to the environment in the short and the long run. Whether sustainable investments take place, not least depends on the legal framework within which these investments are situated. This is true for the domestic legal frameworks of both the home country and of the host country of the investment. But also the international legal frameworks in which home and host states are embedded set either positive or negative incentives for investments to be sustainable. The paper presents an overview on regulatory frameworks which come to focus in this regard. It then elaborates on international agricultural trade regulation, by assuming that sustainable investments in agriculture presume a ‘sustainable trade regime’. By doing so, the paper presents parts of the debate about a sustainable agricultural trade regime, as it has been resumed and further developed by the author in recent years. Key words. Agricultural sector, sustainable investment, regulatory environment, sustainable trade regime.

Cross-sectional study of 168 patients with hepatorenal tyrosinaemia and implications for clinical practice

BackgroundHepatorenal tyrosinaemia (Tyr 1) is a rare inborn error of tyrosine metabolism. Without treatment, patients are at high risk of developing acute liver failure, renal dysfunction and in the long run hepatocellular carcinoma. The aim of our study was to collect cross-sectional data.MethodsVia questionnaires we collected retrospective data of 168 patients with Tyr 1 from 21 centres (Europe, Turkey and Israel) about diagnosis, treatment, monitoring and outcome. In a subsequent consensus workshop, we discussed data and clinical implications.ResultsEarly treatment by NTBC accompanied by diet is essential to prevent serious complications such as liver failure, hepatocellular carcinoma and renal disease. As patients may remain initially asymptomatic or develop uncharacteristic clinical symptoms in the first months of life newborn mass screening using succinylacetone (SA) as a screening parameter in dried blood is mandatory for early diagnosis. NTBC-treatment has to be combined with natural protein restriction supplemented with essential amino acids. NTBC dosage should be reduced to the minimal dose allowing metabolic control, once daily dosing may be an option in older children and adults in order to increase compliance. Metabolic control is judged by SA (below detection limit) in dried blood or urine, plasma tyrosine (<400 ¿M) and NTBC-levels in the therapeutic range (20¿40 ¿M). Side effects of NTBC are mild and often transient.Indications for liver transplantation are hepatocellular carcinoma or failure to respond to NTBC. Follow-up procedures should include liver and kidney function tests, tumor markers and imaging, ophthalmological examination, blood count, psychomotor and intelligence testing as well as therapeutic monitoring (SA, tyrosine, NTBC in blood).ConclusionBased on the data from 21 centres treating 168 patients we were able to characterize current practice and clinical experience in Tyr 1. This information could form the basis for clinical practice recommendations, however further prospective data are required to underpin some of the recommendations.

Effectiveness of Justice-Based Measures in Managing Trust and Privacy Concerns on Social Networking Sites: Intercultural Perspective

The unprecedented success of social networking sites (SNSs) has been recently overshadowed by concerns about privacy risks. As SNS users grow weary of privacy breaches and thus develop distrust, they may restrict or even terminate their platform activities. In the long run, these developments endanger SNS platforms’ financial viability and undermine their ability to create individual and social value. By applying a justice perspective, this study aims to understand the means at the disposal of SNS providers to leverage the privacy concerns and trusting beliefs of their users—two important determinants of user participation on SNSs. Considering that SNSs have a global appeal, empirical tests assess the effectiveness of justice measures for three culturally distinct countries: Germany, Russia and Morocco. The results indicate that these measures are particularly suited to address trusting beliefs of SNS audience. Specifically, in all examined countries, procedural justice and the awareness dimension of informational justice improve perceptions of trust in the SNS provider. Privacy concerns, however, are not as easy to manage, because the impact of justice-based measures on privacy concerns is not universal. Beyond theoretical value, this research offers valuable practical insights into the use of justice-based measures to promote trust and mitigate privacy concerns in a cross-cultural setting.

Risk-conscious Reconstruction in Pakistan-administered Kashmir. A Case Study of the Chakhama Valley

The Chakhama Valley, a remote area in Pakistan-administered Kashmir, was badly damaged by the 7.6-magnitude earthquake that struck India and Pakistan on 8 October 2005. More than 5% of the population lost their lives, and about 90% of the existing housing was irreparably damaged or completely destroyed. In early 2006, the Aga Khan Development Network (AKDN) initiated a multisector, community-driven reconstruction program in the Chakhama Valley on the premise that the scale of the disaster required a response that would address all aspects of people's lives. One important aspect covered the promotion of disaster risk management for sustainable recovery in a safe environment. Accordingly, prevailing hazards (rockfalls, landslides, and debris flow, in addition to earthquake hazards) and existing risks were thoroughly assessed, and the information was incorporated into the main planning processes. Hazard maps, detailed site investigations, and proposals for precautionary measures assisted engineers in supporting the reconstruction of private homes in safe locations to render investments disaster resilient. The information was also used for community-based land use decisions and disaster mitigation and preparedness. The work revealed three main problems: (1) thorough assessment of hazards and incorporation of this assessment into planning processes is time consuming and often little understood by the population directly affected, but it pays off in the long run; (2) relocating people out of dangerous places is a highly sensitive issue that requires the support of clear and forceful government policies; and (3) the involvement of local communities is essential for the success of mitigation and preparedness.

The inverse problem for Schwinger pair production

The production of electron–positron pairs in time-dependent electric fields (Schwinger mechanism) depends non-linearly on the applied field profile. Accordingly, the resulting momentum spectrum is extremely sensitive to small variations of the field parameters. Owing to this non-linear dependence it is so far unpredictable how to choose a field configuration such that a predetermined momentum distribution is generated. We show that quantum kinetic theory along with optimal control theory can be used to approximately solve this inverse problem for Schwinger pair production. We exemplify this by studying the superposition of a small number of harmonic components resulting in predetermined signatures in the asymptotic momentum spectrum. In the long run, our results could facilitate the observation of this yet unobserved pair production mechanism in quantum electrodynamics by providing suggestions for tailored field configurations.

Choosing the path of austerity: how parties and policy coalitions influence welfare state retrenchment in periods of fiscal consolidation

What are the conditions under which some austerity programmes rely on substantial cuts to social spending? More specifically, do the partisan complexion and the type of government condition the extent to which austerity policies imply welfare state retrenchment? This article demonstrates that large budget consolidations tend to be associated with welfare state retrenchment. The findings support a partisan and a politico-institutionalist argument: (i) in periods of fiscal consolidation, welfare state retrenchment tends to be more pronounced under left-wing governments; (ii) since welfare state retrenchment is electorally and politically risky, it also tends to be more pronounced when pursued by a broad pro-reform coalition government. Therefore, the article shows that during budget consolidations implemented by left-wing broad coalition governments, welfare state retrenchment is greatest. Using long-run multipliers from autoregressive distributed lag models on 17 OECD countries during the 1982–2009 period, substantial support is found for these expectations.

Ernährungssicherheit in der Schweiz

Viele Länder verankern die Versorgungs- oder Ernährungssicherheit als staatspolitisches Ziel in ihrem Grundgesetz. Neuerdings wird auch das Recht auf Nahrung und auf die Erfüllung weiterer Grundbedürfnisse aufgeführt. Das Schweizer Parlament hat darüber hinaus sogar den Grundsatz der Ernährungssouveränität im Landwirtschaftsgesetz verankert. Die zur Förderung dieser Ziele genannten Aufgaben und Eingriffsrechte des Staates sind jeweils unterschiedlich und unterschiedlich präzise formuliert. Dabei gibt es für jedes Land eigentlich nur zwei Möglichkeiten zur Ernährung: Inlandproduktion und Einfuhr. Eine zusätzliche Option ist die Bildung von Nahrungsmittelreserven zur Überbrückung von Versorgungsengpässen. Die Schweiz benützt und fördert alle drei Möglichkeiten zu ihrer Ernährungssicherheit, im Wesentlichen mit vier Politiken: Versorgungs-, Aussenwirtschafts-, Agrar- und Entwicklungspolitik. Bei Störungen sollen die durch Grenzabgaben finanzierten Pflichtlager während rund sechs Monaten die Inlandnachfrage sichern. Die Optimierung und die Abstimmung unter den verschiedenen Sektorpolitiken, welche unter Berücksichtigung der internationalen Rahmenbedingungen eine grösstmögliche Ernährungssicherheit herbeiführen, gehört zu den Kernaufgaben jedes Staates. Die Umsetzung der genannten Sektorpolitiken ist jedoch in der Praxis nicht immer kohärent, geschweige denn konfliktfrei. Dieser Artikel beschreibt zunächst die internationalen rechtlichen und ökonomischen Parameter für die Schweizer Versorgungspolitik und ihre Beziehung zur Wirtschaftsfreiheit im Allgemeinen, und speziell auf ihre Zweckmässigkeit hinsichtlich der Ernährungssicherheit. Die Analyse der Wechselwirkungen und der Konflikte bei der Umsetzung zeigt, dass die Schweizer Ernährungssicherheitspolitik (food security) in Wirklichkeit eine Politik zur einheimischen Produzentensicherheit ist (farm security). Den Abschluss bilden einige Vorschläge zur Minderung der sektorpolitischen Inkohärenzen und der festgestellten negativen Auswirkungen der Agrarpolitik auf die Schweizer und globale Ernährungssicherheit.

Capital Accumulation in the Presence of Informal Credit Contracts: Does the Incentive Mechanism Work Better than Credit Rationing Under Asymmetric Information?

Credit markets with asymmetric information often prefer credit rationing as a profit maximizing device. This paper asks whether the presence of informal credit markets reduces the cost of credit rationing, that is, whether it can alleviate the impact of asymmetric information based on the available information. We used a dynamic general equilibrium model with heterogenous agents to assess this. Using Indian credit market data our study shows that the presence of informal credit market can reduce the cost of credit rationing by separating high risk firms from the low risk firms in the informal market. But even after this improvement, the steady state capital accumulation is still much lower as compared to incentive based market clearing rates. Through self revelation of each firm's type, based on the incentive mechanism, banks can diversify their risk by achieving a separating equilibrium in the loan market. The incentive mechanism helps banks to increase capital accumulation in the long run by charging lower rates and lending relatively higher amount to the less risky firms. Another important finding of this study is that self-revelation leads to very significant welfare improvement, as measured by consumptiuon equivalence.

Efficient Unit Root Tests of real Exchange Rates in the Post-Bretton Woods Era

We apply the efficient unit-roots tests of Elliott, Rothenberg, and Stock (1996), and Elliott (1998) to twenty-one real exchange rates using monthly data of the G-7 countries from the post-Bretton Woods floating exchange rate period. Our results indicate that, for eighteen out of the twenty-one real exchange rates, the null hypothesis of a unit root can be rejected at the 10% significance level or better using the Elliot et al (1996) DF-GLS test. The unit-root null hypothesis is also rejected for one additional real exchange rate when we allow for one endogenously determined break in the time series of the real exchange rate as in Perron (1997). In all, we find favorable evidence to support long-run purchasing power parity in nineteen out of twenty-one real exchange rates. Second, we find no strong evidence to suggest that the use of non-U.S. dollar-based real exchange rates tend to produce more favorable result for long-run PPP than the use of U.S. dollar-based real exchange rates as Lothian (1998) has concluded.

Non-Parametric Tests of Real Exchange rates in the Post-Bretton Woods Era

This paper examines the mean-reverting property of real exchange rates. Earlier studies have generally not been able to reject the null hypothesis of a unit-root in real exchange rates, especially for the post-Bretton Woods floating period. The results imply that long-run purchasing power parity does not hold. More recent studies, especially those using panel unit-root tests, have found more favorable results, however. But, Karlsson and Löthgren (2000) and others have recently pointed out several potential pitfalls of panel unit-root tests. Thus, the panel unit-root test results are suggestive, but they are far from conclusive. Moreover, consistent individual country time series evidence that supports long-run purchasing power parity continues to be scarce. In this paper, we test for long memory using Lo's (1991) modified rescaled range test, and the rescaled variance test of Giraitis, Kokoszka, Leipus, and Teyssière (2003). Our testing procedure provides a non-parametric alternative to the parametric tests commonly used in this literature. Our data set consists of monthly observations from April 1973 to April 2001 of the G-7 countries in the OECD. Our two tests find conflicting results when we use U.S. dollar real exchange rates. However, when non-U.S. dollar real exchange rates are used, we find only two cases out of fifteen where the null hypothesis of an unit-root with short-term dependence can be rejected in favor of the alternative hypothesis of long-term dependence using the modified rescaled range test, and only one case when using the rescaled variance test. Our results therefore provide a contrast to the recent favorable panel unit-root test results.

The Aggregate Demand for Private Health Insurance Coverage in the U.S.

This paper estimates the aggregate demand for private health insurance coverage in the U.S. using an error-correction model and by recognizing that people are without private health insurance for voluntary, structural, frictional, and cyclical reasons and because of public alternatives. Insurance coverage is measured both by the percentage of the population enrolled in private health insurance plans and the completeness of the insurance coverage. Annual data for the period 1966-1999 are used and both short and long run price and income elasticities of demand are estimated. The empirical findings indicate that both private insurance enrollment and completeness are relatively inelastic with respect to changes in price and income in the short and long run. Moreover, private health insurance enrollment is found to be inversely related to the poverty rate, particularly in the short-run. Finally, our results suggest that an increase in the number cyclically uninsured generates less of a welfare loss than an increase in the structurally uninsured.

The Real Exchange Rate in Small Open Developed Economies: Evidence from Cointegration Analysis

We examine the effects of the terms of trade and the expected real interest rate differential on the real exchange rate in a sample of small open developed economies. We employ cointegration analysis to search for possible long-term linkages. We find that while both the terms of trade and the expected real interest rate differentials affect the real exchange rate in the long run, the role of the terms of trade generally proves more consistent across countries. The speed of adjustment for the expected real interest rate differential in the error-correction model, however, is quantitatively larger than it is for the terms of trade.

Nonparametric Measures of Capacity Utilization: A Dual Approach

This paper develops a nonparametric method of obtaining the minimum of the long run average cost curve of a firm to define its capacity output. This provides a benchmark for measuring of capacity utilization at the observed output level of the firm. In the case of long run constant returns to scale, the minimum of the short run average cost curve is determined to measure short run capacity utilization. An empirical application measures yearly rates of capacity utilization in U.S. manufacturing over the period 1968-1998. Nonparametric determination of the short run average cost curve under variable returns to scale using an iterative search procedure is described in an appendix to this paper.

Dynamic Stock Market Interactions between the Canadian, Mexican, and the United States Markets: The NAFTA Experience

This paper explores the dynamic linkages that portray different facets of the joint probability distribution of stock market returns in NAFTA (i.e., Canada, Mexico, and the US). Our examination of interactions of the NAFTA stock markets considers three issues. First, we examine the long-run relationship between the three markets, using cointegration techniques. Second, we evaluate the dynamic relationships between the three markets, using impulse-response analysis. Finally, we explore the volatility transmission process between the three markets, using a variety of multivariate GARCH models. Our results also exhibit significant volatility transmission between the second moments of the NAFTA stock markets, albeit not homogenous. The magnitude and trend of the conditional correlations indicate that in the last few years, the Mexican stock market exhibited a tendency toward increased integration with the US market. Finally, we do note that evidence exists that the Peso and Asian financial crises as well as the stock-market crash in the US affect the return and volatility time-series relationships.

Which School Attributes Matter? The Influence of School District Performance and Demographic Composition on Property Values

Increasing levels of segregation in American schools raises the question: do home buyers pay for test scores or demographic composition? This paper uses Connecticut panel data spanning eleven years from 1994 to 2004 to ascertain the relationship between property values and explanatory variables that include school district performance and demographic attributes, such as racial and ethnic composition of the student body. Town and census tract fixed effects are included to control for neighborhood unobservables. The effect of changes in school district attributes is also examined over a decade long time frame in order to focus on the effect of long run changes, which are more likely to be capitalized into prices. The study finds strong evidence that increases in percent Hispanic has a negative effect on housing prices in Connecticut, but mixed evidence concerning the impact of test scores on property values. Evidence is also found to suggest that student test scores have increased in importance for explaining housing prices in recent years while the importance of percent Hispanic has declined. Finally, the study finds that estimates of property tax capitalization increase substantially when the analysis focuses on long run changes.