Greek Economists for Reform.com

This blog publishes articles by leading academic economists on issues relevant to economic policy and reforms in Greece. The crisis in Greece is also a time of opportunity: ambitious reforms can be undertaken that will not only stave off bankruptcy, but also modernize Greece’s economy and raise the productivity and incomes of Greek citizens on a sustainable basis. The articles in this blog aim to offer constructive proposals and impartial analysis of potential, proposed or implemented reforms that are based on the principles of modern economics and on lessons from recent cutting-edge research.

Democratization, Education Reform, and the Mexican Teachers' Union

This study examines the effect of democratization on a key education reform across three Mexican states. Previous scholarship has found a positive effect of electoral competition on social spending, as leaders seek to improve their reelection prospects by delivering services to voters. However, the evidence presented here indicates that more money has not meant better educational outcomes in Mexico. Rather, new and vulnerable elected leaders are especially susceptible to the demands of powerful interest groups at the expense of accountability to constituents. In this case, the dominant teachers' union has used its leverage to exact greater control over the country's resource-rich merit pay program for teachers. It has exploited this control to increase salaries and decrease standards for advancement up the remuneration ladder. The evidence suggests that increased electoral competition has led to the empowerment of entrenched interests rather than voters, with an overall negative effect on education.

Risk Factors for Physical Restraint Use in Nursing Homes: The Impact of the Nursing Home Reform Act

This study examined the impact of the Nursing Home Reform Act of 1987 on resident-and-facility-level risk factors for physical restraint use in nursing homes. Data on the 1990 and 1993 cohorts were obtained from 268 facilities in 10 states, and data on a 1996 cohort were obtained from the Medical Expenditure Panel Survey, which sampled more than 800 nursing homes nationwide. Multivariate logistic regression models were generated for each cohort to identify the impact of resident- and facility-level risk factors for restraint use. The results indicate that the use of physical restraints continues to decline. Thirty-six percent of the 1990 cohort, 26 percent of the 1993 cohort, and 17 percent of the 1996 cohort were physically restrained. Although there was a reduced rate of restraint use from 1990 to 1996, similar resident-level factors but different facility-level factors were associated with restraint use at different points in time.

Value Choice of Russia in the Reform Process: The Sociological Aspect

The transition in Central and Eastern Europe since the late 1980s has provided a testing ground for classic propositions. This project looked at the impact of privatisation on private consumption, using the Czech experiment of voucher privatisation to test the permanent income hypothesis. This form of privatisation moved state assets to individuals and represented an unexpected windfall gain for participants in the scheme. Whether the windfall was consumed or saved offers a clear test of the permanent income hypothesis. Of a total population of 10 million, 6 million Czechs, i.e. virtually every household, participated in the scheme,. In a January 1996 survey, 1263 individuals were interviewed , 75% of whom had taken part. The data obtained suggests that only a small quantity of transferred assets were cashed in and spent on consumption, providing support for the permanent income hypothesis. The fraction of the windfall consumed grows with age, as would be predicted from the lower life expectancy of older consumers. The most interesting deviation was for people aged 26 to 35, who apparently consumed more that they would if the windfall were annuitised. As these people are at the stage in their lives when they would otherwise be borrowing to cover consumption related to establishing a family, etc., this is however consistent with the permanent income hypothesis, which predicts that individuals who would otherwise borrow money would use the windfall to avoid doing so.