Three Essays on the Formation and Impact of Economic Policy

Introduction In my thesis I argue that economic policy is all about economics and politics. Consequently, analysing and understanding economic policy ideally has at least two parts. The economics part, which is centered around the expected impact of a specific policy on the real economy both in terms of efficiency and equity. The insights of this part point into which direction the fine-tuning of economic policies should go. However, fine-tuning of economic policies will be most likely subject to political constraints. That is why, in the politics part, a much better understanding can be gained by taking into account how the incentives of politicians and special interest groups as well as the role played by different institutional features affect the formation of economic policies. The first part and chapter of my thesis concentrates on the efficiency-related impact of economic policies: how does corporate income taxation in general, and corporate income tax progressivity in specific, affect the creation of new firms? Reduced progressivity and flat-rate taxes are in vogue. By 2009, 22 countries are operating flat-rate income tax systems, as do 7 US states and 14 Swiss cantons (for corporate income only). Tax reform proposals in the spirit of the "flat tax" model typically aim to reduce three parameters: the average tax burden, the progressivity of the tax schedule, and the complexity of the tax code. In joint work, Marius Brülhart and I explore the implications of changes in these three parameters on entrepreneurial activity, measured by counts of firm births in a panel of Swiss municipalities. Our results show that lower average tax rates and reduced complexity of the tax code promote firm births. Controlling for these effects, reduced progressivity inhibits firm births. Our reading of these results is that tax progressivity has an insurance effect that facilitates entrepreneurial risk taking. The positive effects of lower tax levels and reduced complexity are estimated to be significantly stronger than the negative effect of reduced progressivity. To the extent that firm births reflect desirable entrepreneurial dynamism, it is not the flattening of tax schedules that is key to successful tax reforms, but the lowering of average tax burdens and the simplification of tax codes. Flatness per se is of secondary importance and even appears to be detrimental to firm births. The second part of my thesis, which corresponds to the second and third chapter, concentrates on how economic policies are formed. By the nature of the analysis, these two chapters draw on a broader literature than the first chapter. Both economists and political scientists have done extensive research on how economic policies are formed. Thereby, researchers in both disciplines have recognised the importance of special interest groups trying to influence policy-making through various channels. In general, economists base their analysis on a formal and microeconomically founded approach, while abstracting from institutional details. In contrast, political scientists' frameworks are generally richer in terms of institutional features but lack the theoretical rigour of economists' approaches. I start from the economist's point of view. However, I try to borrow as much as possible from the findings of political science to gain a better understanding of how economic policies are formed in reality. In the second chapter, I take a theoretical approach and focus on the institutional policy framework to explore how interactions between different political institutions affect the outcome of trade policy in presence of special interest groups' lobbying. Standard political economy theory treats the government as a single institutional actor which sets tariffs by trading off social welfare against contributions from special interest groups seeking industry-specific protection from imports. However, these models lack important (institutional) features of reality. That is why, in my model, I split up the government into a legislative and executive branch which can both be lobbied by special interest groups. Furthermore, the legislative has the option to delegate its trade policy authority to the executive. I allow the executive to compensate the legislative in exchange for delegation. Despite ample anecdotal evidence, bargaining over delegation of trade policy authority has not yet been formally modelled in the literature. I show that delegation has an impact on policy formation in that it leads to lower equilibrium tariffs compared to a standard model without delegation. I also show that delegation will only take place if the lobby is not strong enough to prevent it. Furthermore, the option to delegate increases the bargaining power of the legislative at the expense of the lobbies. Therefore, the findings of this model can shed a light on why the U.S. Congress often practices delegation to the executive. In the final chapter of my thesis, my coauthor, Antonio Fidalgo, and I take a narrower approach and focus on the individual politician level of policy-making to explore how connections to private firms and networks within parliament affect individual politicians' decision-making. Theories in the spirit of the model of the second chapter show how campaign contributions from lobbies to politicians can influence economic policies. There exists an abundant empirical literature that analyses ties between firms and politicians based on campaign contributions. However, the evidence on the impact of campaign contributions is mixed, at best. In our paper, we analyse an alternative channel of influence in the shape of personal connections between politicians and firms through board membership. We identify a direct effect of board membership on individual politicians' voting behaviour and an indirect leverage effect when politicians with board connections influence non-connected peers. We assess the importance of these two effects using a vote in the Swiss parliament on a government bailout of the national airline, Swissair, in 2001, which serves as a natural experiment. We find that both the direct effect of connections to firms and the indirect leverage effect had a strong and positive impact on the probability that a politician supported the government bailout.

Triassic stratigraphic evolution of the Arabian-Greater India embayment of the southern Tethys margin

An exceptional, tectonically remarkably unaffected, nearly 200 m-thick continuous section of hemipelagic and turbiditic sediments, covering most of the Triassic is described from the Batain Complex of north-eastern Oman. According to conodont and radiolarian data the sequence spans the late Scythian to the early Norian, a time period of nearly 30 M. Coupled with a high resolution stratigraphy, the lithostratigraphy, sedimentology, as well as sequence and isotope stratigraphy of the section are documented. For the Triassic of the Batain Plain we propose the new name Sal Formation, which replaces the formerly used Matbat Formation, and subdivide it into three new members. The Sal Formation was deposited on the proximal continental margin of northeastern Arabia and records various depositional environments. The lower member is interpreted as the distal part of a homoclinal ramp which evolves to a distally steepened ramp during time of deposition of the middle member. The upper member displays a toe of slope position which is indicated by an increase of proximal turbidites. These sediments form part of a segment of the Neo-Tethyan embayment between Arabia and India. The stratigraphic analysis indicates highly varying sedimentation rates from a minimum of 2 m/M gamma around the Anisian/Ladinian boundary up to 15 m/M gamma during the Lower and Upper Triassic. Sequence-stratigraphically, the Sal section is subdivided into six third order cycles which are biochronologically well integrated into the global Triassic cycle chart. The mixed siliciclastic-calcareous upper member of the Sal Formation typically shows highstand related carbonate shedding. It is, therefore, an important test case for sequence-stratigraphic controlled carbonate export to mixed basin fills. The well developed sequence stratigraphic cycles are mirrored in the isotope patterns. Additionally, the carbon and oxygen isotope data from the Sal Formation record the same chemostratigraphic marker at the Spathian/Anisian boundary known from other Tethyan sections.

Mechanisms of formation and function of eosinophil lipid bodies: inducible intracellular sites involved in arachidonic acid metabolism

Lipid bodies, inducible lipid-rich cytoplasmic inclusions, are characteristically abundant in cells associated with inflammation, including eosinophils. Here we reviewed the formation and function of lipid bodies in human eosinophils. We now have evidence that the formation of lipid bodies is not attributable to adverse mechanisms, but is centrally mediated by specific signal transduction pathways. Arachidonic acid and other cis fatty acids by an NSAID-inhibitable process, diglycerides, and PAF by a 5-lipoxygenase dependent pathway are potent stimulators of lipid body induction. Lipid body formation develops rapidly by processes that involve PKC, PLC, and de novo mRNA and protein synthesis. These structures clearly serve as repositoires of arachidonyl-phospholipids and are more than inert depots. Specific enzymes, including cytosolic phospholipase A2, MAP kinases, lipoxygenases and cyclooxygenases, associate with lipid bodies. Lipid bodies appear to be dynamic, organelle-like structures involved in intracellular pathways of lipid mobilization and metabolism. Indeed, increases in lipid body numbers correlated with enhanced production of both lipoxygenase- and cyclooxygenase-derived eicosanoids. We hypothesize that lipid bodies are distinct inducible sites for generating eicosanoids as paracrine mediators with varied activities in inflammation. The capacity of lipid body formation to be specifically and rapidly induced in leukocytes enhances eicosanoid mediator formation, and conversely pharmacologic inhibition of lipid body induction represents a potential novel and specific target for anti-inflammatory therapy.

THE USE OF SIMULATIONS IN EVOLUTIONARY POPULATION GENETICS: APPLICATIONS ON HUMANS, OWLS AND VIRTUAL ORGANISMS

Summary (in English) Computer simulations provide a practical way to address scientific questions that would be otherwise intractable. In evolutionary biology, and in population genetics in particular, the investigation of evolutionary processes frequently involves the implementation of complex models, making simulations a particularly valuable tool in the area. In this thesis work, I explored three questions involving the geographical range expansion of populations, taking advantage of spatially explicit simulations coupled with approximate Bayesian computation. First, the neutral evolutionary history of the human spread around the world was investigated, leading to a surprisingly simple model: A straightforward diffusion process of migrations from east Africa throughout a world map with homogeneous landmasses replicated to very large extent the complex patterns observed in real human populations, suggesting a more continuous (as opposed to structured) view of the distribution of modern human genetic diversity, which may play a better role as a base model for further studies. Second, the postglacial evolution of the European barn owl, with the formation of a remarkable coat-color cline, was inspected with two rounds of simulations: (i) determine the demographic background history and (ii) test the probability of a phenotypic cline, like the one observed in the natural populations, to appear without natural selection. We verified that the modern barn owl population originated from a single Iberian refugium and that they formed their color cline, not due to neutral evolution, but with the necessary participation of selection. The third and last part of this thesis refers to a simulation-only study inspired by the barn owl case above. In this chapter, we showed that selection is, indeed, effective during range expansions and that it leaves a distinguished signature, which can then be used to detect and measure natural selection in range-expanding populations. Résumé (en français) Les simulations fournissent un moyen pratique pour répondre à des questions scientifiques qui seraient inabordable autrement. En génétique des populations, l'étude des processus évolutifs implique souvent la mise en oeuvre de modèles complexes, et les simulations sont un outil particulièrement précieux dans ce domaine. Dans cette thèse, j'ai exploré trois questions en utilisant des simulations spatialement explicites dans un cadre de calculs Bayésiens approximés (approximate Bayesian computation : ABC). Tout d'abord, l'histoire de la colonisation humaine mondiale et de l'évolution de parties neutres du génome a été étudiée grâce à un modèle étonnement simple. Un processus de diffusion des migrants de l'Afrique orientale à travers un monde avec des masses terrestres homogènes a reproduit, dans une très large mesure, les signatures génétiques complexes observées dans les populations humaines réelles. Un tel modèle continu (opposé à un modèle structuré en populations) pourrait être très utile comme modèle de base dans l'étude de génétique humaine à l'avenir. Deuxièmement, l'évolution postglaciaire d'un gradient de couleur chez l'Effraie des clocher (Tyto alba) Européenne, a été examiné avec deux séries de simulations pour : (i) déterminer l'histoire démographique de base et (ii) tester la probabilité qu'un gradient phénotypique, tel qu'observé dans les populations naturelles puisse apparaître sans sélection naturelle. Nous avons montré que la population actuelle des chouettes est sortie d'un unique refuge ibérique et que le gradient de couleur ne peux pas s'être formé de manière neutre (sans l'action de la sélection naturelle). La troisième partie de cette thèse se réfère à une étude par simulations inspirée par l'étude de l'Effraie. Dans ce dernier chapitre, nous avons montré que la sélection est, en effet, aussi efficace dans les cas d'expansion d'aire de distribution et qu'elle laisse une signature unique, qui peut être utilisée pour la détecter et estimer sa force.