The Known Unknowns of Governance.

Empirical researchers interested in how governance shapes various aspects of economic development frequently use the Worldwide Governance indicators (WGI). These variables come in the form of an estimate along with a standard error reflecting the uncertainty of this estimate. Existing empirical work simply uses the estimates as an explanatory variable and discards the information provided by the standard errors. In this paper, we argue that the appropriate practice should be to take into account the uncertainty around the WGI estimates through the use of multiple imputation. We investigate the importance of our proposed approach by revisiting in three applications the results of recently published studies. These applications cover the impact of governance on (i) capital flows; (ii) international trade; (iii) income levels around the world. We generally find that the estimated effects of governance are highly sensitive to the use of multiple imputation. We also show that model misspecification is a concern for the results of our reference studies. We conclude that the effects of governance are hard to establish once we take into account uncertainty around both the WGI estimates and the correct model specification.

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.

Contribution à l'élaboration de mécanismes de détection, de contrôle et de lutte contre le blanchiment d'argent au regard de l'usage des technologies de l'information et de la communication "cas de l'Algérie"

Résumé : Désormais, la lutte contre le blanchiment d'argent constitue une priorité pour les Etats et les gouvernements dans le but, d'une part, de préserver l'économie et l'intégrité des places financières et, d'autre part, de priver les organisations criminelles des ressources financières. Dans ce contexte, la préoccupation majeure des autorités algériennes en charge de la lutte contre ce phénomène est de mettre en place un dispositif capable de détecter les mécanismes de blanchiment, d'en évaluer la menace et sur la base de cette connaissance, de définir et de déployer les moyens de riposte les plus efficaces et efficients. Mais nous constatons que mener des enquêtes de blanchiment en conséquence à un crime sous-jacent a montré ses limites en matière d'établissement de preuves, d'élucidation d'affaires et de recouvrement des avoirs. Par ailleurs, nous pensons qu'il serait plus judicieux de mettre en place en amont un contrôle «systématique» des flux financiers et des opérations inhabituelles et/ou suspectes et de là, identifier d'éventuelles opérations de blanchiment, sans forcément connaître le crime initial, en veillant au maintien de l'équilibre entre le «tout sécuritaire» orienté vers la surveillance accrue des flux et la préservation de la vie privée et des libertés individuelles. Notre thèse apporte un regard critique sur le dispositif actuel de lutte contre le blanchiment existant en Algérie que nous évaluons et sur lequel nous relevons plusieurs lacunes. Pour répondre aux problèmes identifiés nous proposons des solutions stratégiques, organisationnelles, méthodologiques et technologiques intégrées dans un cadre opérationnel cohérent au niveau national et international.

Dynamic Relational Contracts under Complete Information

This paper considers a long-term relationship between two agents who both undertake a costly action or investment that together produces a joint benefit. Agents have an opportunity to expropriate some of the joint benefit for their own use. Two cases are considered: (i) where agents are risk neutral and are subject to limited liability constraints and (ii) where agents are risk averse, have quasi-linear preferences in consumption and actions but where limited liability constraints do not bind. The question asked is how to structure the investments and division of the surplus over time so as to avoid expropriation. In the risk-neutral case, there may be an initial phase in which one agent overinvests and the other underinvests. However, both actions and surplus converge monotonically to a stationary state in which there is no overinvestment and surplus is at its maximum subject to the constraints. In the risk-averse case, there is no overinvestment. For this case, we establish that dynamics may or may not be monotonic depending on whether or not it is possible to sustain a first-best allocation. If the first-best allocation is not sustainable, then there is a trade-off between risk sharing and surplus maximization. In general, surplus will not be at its constrained maximum even in the long run.

Government information transparency

This paper studies a model of announcements by a privately informed government about the future state of the economic activity in an economy subject to recurrent shocks and with distortions due to income taxation. Although transparent communication would ex ante be desirable, we find that even a benevolent government may ex-post be non-informative, in an attempt to countervail the tax distortion with a "second best" compensating distortion in information. This result provides a rationale for independent national statistical offices, committed to truthful communication. We also find that whether inequality in income distribution favors or harms government transparency depends on labor supply elasticity.

Information Design

There are two ways of creating incentives for interacting agents to behave in a desired way. One is by providing appropriate payoff incentives, which is the subject of mechanism design. The other is by choosing the information that agents observe, which we refer to as information design. We consider a model of symmetric information where a designer chooses and announces the information structure about a payoff relevant state. The interacting agents observe the signal realizations and take actions which affect the welfare of both the designer and the agents. We characterize the general finite approach to deriving the optimal information structure for the designer - the one that maximizes the designer's ex ante expected utility subject to agents playing a Bayes Nash equilibrium. We then apply the general approach to a symmetric two state, two agent, and two actions environment in a parameterized underlying game and fully characterize the optimal information structure: it is never strictly optimal for the designer to use conditionally independent private signals; the optimal information structure may be a public signal or may consist of correlated private signals. Finally, we examine how changes in the underlying game affect the designer's maximum payoff. This exercise provides a joint mechanism/information design perspective.

Estimating the Impact on Efficiency of the Adoption of a Voluntary Environmental Standard: An Empirical Study of the Global Copper Mining Industry

This paper uses data on the world's copper mining industry to measure the impact on efficiency of the adoption of the ISO 14001 environmental standard. Anecdotal and case study literature suggests that firms are motivated to adopt this standard so as to achieve greater efficiency through changes in operating procedures and processes. Using plant level panel data from 1992-2007 on most of the world's industrial copper mines, the study uses stochastic frontier methods to investigate the effects of ISO adoption. The variety of models used in this study find that adoption either tends to improve efficiency or has no impact on efficiency, but no evidence is found that ISO adoption decreases efficiency.

The Optimal Degree of Monetary-Discretion in a New Keynesian Model with Private Information

This paper considers the optimal degree of discretion in monetary policy when the central bank conducts policy based on its private information about the state of the economy and is unable to commit. Society seeks to maximize social welfare by imposing restrictions on the central bank's actions over time, and the central bank takes these restrictions and the New Keynesian Phillips curve as constraints. By solving a dynamic mechanism design problem we find that it is optimal to grant "constrained discretion" to the central bank by imposing both upper and lower bounds on permissible inflation, and that these bounds must be set in a history-dependent way. The optimal degree of discretion varies over time with the severity of the time-inconsistency problem, and, although no discretion is optimal when the time-inconsistency problem is very severe, our numerical experiment suggests that no-discretion is a transient phenomenon, and that some discretion is granted eventually.

Testing low-altitude infrared digital photography from a mini-UAV to retrieve information for biological conservation

Satellite remote sensing imagery is used for forestry, conservation and environmental applications, but insufficient spatial resolution, and, in particular, unavailability of images at the precise timing required for a given application, often prevent achieving a fully operational stage. Airborne remote sensing has the advantage of custom-tuned sensors, resolution and timing, but its price prevents using it as a routine technique for the mentioned fields. Some Unmanned Aerial Vehicles might provide a “third way” solution as low-cost techniques for acquiring remotely sensed information, under close control of the end-user, albeit at the expense of lower quality instrumentation and instability. This report evaluates a light remote sensing system based on a remotely-controlled mini-UAV (ATMOS-3) equipped with a color infra-red camera (VEGCAM-1) designed and operated by CATUAV. We conducted a testing mission over a Mediterranean landscape dominated by an evergreen woodland of Aleppo pine (Pinus halepensis) and (Holm) oak (Quercus ilex) in the Montseny National Park (Catalonia, NE Spain). We took advantage of state-of-the-art ortho-rectified digital aerial imagery (acquired by the Institut Cartogràfic de Catalunya over the area during the previous year) and used it as quality reference. In particular, we paid attention to: 1) Operationality of flight and image acquisition according to a previously defined plan; 2) Radiometric and geometric quality of the images; and 3) Operational use of the images in the context of applications. We conclude that the system has achieved an operational stage regarding flight activities, although with meteorological limits set by wind speed and turbulence. Appropriate landing areas can be sometimes limiting also, but the system is able to land on small and relatively rough terrains such as patches of grassland or short matorral, and we have operated the UAV as far as 7 km from the control unit. Radiometric quality is sufficient for interactive analysis, but probably insufficient for automated processing. A forthcoming camera is supposed to greatly improve radiometric quality and consistency. Conventional GPS positioning through time synchronization provides coarse orientation of the images, with no roll information.

EuroDia: a beta-cell gene expression resource.

Type 2 diabetes mellitus (T2DM) is a major disease affecting nearly 280 million people worldwide. Whilst the pathophysiological mechanisms leading to disease are poorly understood, dysfunction of the insulin-producing pancreatic beta-cells is key event for disease development. Monitoring the gene expression profiles of pancreatic beta-cells under several genetic or chemical perturbations has shed light on genes and pathways involved in T2DM. The EuroDia database has been established to build a unique collection of gene expression measurements performed on beta-cells of three organisms, namely human, mouse and rat. The Gene Expression Data Analysis Interface (GEDAI) has been developed to support this database. The quality of each dataset is assessed by a series of quality control procedures to detect putative hybridization outliers. The system integrates a web interface to several standard analysis functions from R/Bioconductor to identify differentially expressed genes and pathways. It also allows the combination of multiple experiments performed on different array platforms of the same technology. The design of this system enables each user to rapidly design a custom analysis pipeline and thus produce their own list of genes and pathways. Raw and normalized data can be downloaded for each experiment. The flexible engine of this database (GEDAI) is currently used to handle gene expression data from several laboratory-run projects dealing with different organisms and platforms. Database URL: http://eurodia.vital-it.ch.

Metallic renal artery MR imaging stent: artifact-free lumen visualization with projection and standard renal MR angiography.

A cardiac-triggered free-breathing three-dimensional (3D) balanced fast field-echo projection renal magnetic resonance (MR) angiographic sequence was investigated for in-stent lumen visualization of a dedicated metallic renal artery stent. Fourteen prototype stents were deployed in the renal arteries of six pigs (in two pigs, three stents were deployed). Projection renal MR angiography was compared with standard contrast material-enhanced 3D breath-hold MR angiography. Artifact-free in-stent lumen visualization was achieved with both projection MR angiography and contrast-enhanced MR angiography. These promising results warrant further studies for visualization of in-stent restenosis.

IQRray, a new method for Affymetrix microarray quality control, and the homologous organ conservation score, a new benchmark method for quality control metrics.

MOTIVATION: Microarray results accumulated in public repositories are widely reused in meta-analytical studies and secondary databases. The quality of the data obtained with this technology varies from experiment to experiment, and an efficient method for quality assessment is necessary to ensure their reliability. RESULTS: The lack of a good benchmark has hampered evaluation of existing methods for quality control. In this study, we propose a new independent quality metric that is based on evolutionary conservation of expression profiles. We show, using 11 large organ-specific datasets, that IQRray, a new quality metrics developed by us, exhibits the highest correlation with this reference metric, among 14 metrics tested. IQRray outperforms other methods in identification of poor quality arrays in datasets composed of arrays from many independent experiments. In contrast, the performance of methods designed for detecting outliers in a single experiment like Normalized Unscaled Standard Error and Relative Log Expression was low because of the inability of these methods to detect datasets containing only low-quality arrays and because the scores cannot be directly compared between experiments. AVAILABILITY AND IMPLEMENTATION: The R implementation of IQRray is available at: ftp://lausanne.isb-sib.ch/pub/databases/Bgee/general/IQRray.R. CONTACT: Marta.Rosikiewicz@unil.ch SUPPLEMENTARY INFORMATION: Supplementary data are available at Bioinformatics online.

Traitement de l'information sensorielle chez la souris HeCo

L'hétérotopie sous-corticale en bandes ou double-cortex est une malformation cérébrale causée par une interruption de la migration des neurones du néocortex pendant sa formation. La souris HeCo est un modèle murin de cette affection, caractérisée par un amas de neurones corticaux dans la substance blanche sous-corticale. Les signes cliniques de cette maladie sont le plus souvent une épilepsie réfractaire, un retard développemental et mental. Chez l'homme, l'hétérotopie se trouve en partie en profondeur du cortex somatotopique moteur et sensitif et semble participer à leurs fonctions. L'IRM fonctionnelle a montré lors d'une tâche motrice (taper des doigts), l'activation en plus du cortex moteur controlatéral du cortex hétérotopique sous-jacent. La pathogenèse des malformations corticales est toujours mal comprise, c'est pourquoi il est important d'avoir plusieurs modèles animaux. Jusqu'il a peu, il n'existait que le rat TISH, découvert en 1997, dont la génétique n'est pas connue à ce jour. La souris HeCo est un nouveau modèle animal de malformation corticale dont le gène muté impliquant une protéine associée aux microtubules a été découvert récemment. Elle partage avec les cas humains un seuil épileptique abaissé et un certain retard développemental. Objectif : Déterminer si le cortex hétérotopique de la souris HeCo est activé lors d'une tâche sensitive (exploration de l'environnement à l'aide des vibrisses du museau). Méthode : Chez la souris, les vibrisses sont des organes sensitifs essentiels dans l'exploration de l'environnement. Pour déterminer si le cortex hétérotopique est actif lors d'une tâche sensitive, on utilisera donc un exercice de découverte d'une cage enrichie en stimulus. Afin de visualiser les régions du cerveau actives, on utilisera plusieurs méthodes: l'autoradiographie ([14C]2- deoxyglucose, 2-DG) et l'immunohistochimie c-Fos. Le 2-DG est un analogue du glucose qui se fixe dans les régions cérébrales métaboliquement actives, ici impliquées dans la sensibilité. Il est injecté dans le péritoine de la souris à jeun avant l'exploration. Le contrôle négatif se fera en coupant les vibrisses d'un côté avant la tâche sensitive. A la fin de la tâche, on prélève des coupes du cerveau pour mesurer l'autoradioactivité. L'immunohistochimie c-Fos est réalisée sur les cerveaux de souris ayant effectué la même tâche sensitive et détecte une protéine d'activation neuronale. Afin de détecter une activation de l'hétérotopie à plus long terme, on utilisera la cytochrome oxydase, une enzyme qui met en évidence les régions contenant beaucoup de mitochondries, donc métaboliquement très actives. Résultats : La cytochrome oxydase a marqué de façon égale le cortex homotopique de la souris HeCo et le cortex des souris contrôle. Par ailleurs, chez le mutant, elle a montré un faible marquage dans la partie médiale de l'hétérotopie et des zones de marquage plus intenses dans sa partie latérale. L'autoradiographie 2-DG a montré un pattern classique d'activation du cortex homotopique du côté stimulé, avec une intensité plus marquée dans la couche IV. Du même côté, l'hétérotopie latérale montre une intensité similaire à celui de la couche IV. Du côté non stimulé, on note une intensité faible, tant dans le cortex homotopique que dans le cortex hétérotopique. L'immunohistochimie c-Fos a montré une nette différence entre l'hémisphère stimulé et l'hémisphère non stimulé dans la couche IV comme dans l'hétérotopie. Il existe, tant du côté stimulé que du côté non stimulé, un gradient dans l'hétérotopie, le marquage latéral étant du même ordre que dans la couche IV alors qu'il est moins intense médialement. Conclusion : l'hétérotopie corticale latérale, située en particulier sous le cortex somatosensoriel, semble traiter l'information périphérique controlatérale dans le même ordre que le cortex homotopique.