Essays on Illegal Activities, Institutions and Economic Growth

In public economics, two extremist views on the functions of a government compete: one emphasizes government working for the public interest to provide value for the citizens, while another regards government mainly as a workhorse for private interests. Moreover, as the sole legitimate authority, the government has the right to define the rules and laws as well as to enforce them. With respect to regulation, two extremes arise: from too little regulation to too much of it. If the government does not function or ceases to exist, the state falls into anarchy or chaos (Somalia). If it regulates too much, it will completely suffocate private activities, which might be considered extralegal (the former Soviet Union). In this thesis I scrutinize the government s interventionist policies and evaluate the question of how to best promote economic well-being. The first two essays assume that the government s policies promote illegal activity. The first paper evaluates the interaction between the government and the mafia, and pays attention to the law enforcement of underground production. We show that the revenue-maximizing government will always monitor the shadow economy, as monitoring contributes to the government s revenue. In general, both legal and illegal firms are hurt by the entry of the mafia. It is, however, plausible that legal firms might benefit by the entry of the mafia if it competes with the government. The second paper tackles the issue of the measurement of the size of the shadow economy. To formulate policies it is essential to know what drives illegal economic activity; is it the tax burden, excess regulation, corruption or a weak legal environment? In this paper we propose an additional explanation for tax evasion and shadow production, namely cultural factors as manifested by religion as determinants of tax morality. According to our findings, Catholic and Protestant countries do not differ in their tax morale. The third paper contributes to the literature discussing the role of the government in promoting economic and productivity growth. Our main result is that, given the complex relationship between economic growth and economic freedom, marketization has not necessarily been beneficial in terms of growth. The last paper builds on traditional growth literature and revisits the debate on convergence clubs arising from demographic transition. We provide new evidence against the idea that countries within a club would converge over time. Instead, we propose that since the demographic transition is a dynamic process, one can expect countries to enter the last regime of stable, modern growth in stages.

Traditional Village Governance (Desa Adat) and Inter-ethnic Conflict in Bali : A Study of Conflict between Balinese and Migrants: Cases from Municipality of Denpasar

Regional autonomy in Indonesia was initially introduced as a means of pacifying regional disappointment at the central government. Not only did the Regional Autonomy Law of 1999 give the Balinese a chance to express grievance regarding the centralist policies of the Jakarta government but also provided an opportunity to return to the regional, exclusive, traditional village governance (desa adat). As a result, the problems faced by the island, particularly ethnic conflicts, are increasingly handled by the mechanism of this traditional type of governance. Traditional village governance with regard to ethnic conflicts (occurring) between Balinese and migrants has never been systematically analyzed. Existing analyses emphasized only the social context, but do not explain either the cause of conflicts and the ensuing problems entails or the virtues of traditional village governance mechanisms for mediating in the conflict. While some accounts provide snapshots, they lack both theoretical and conflict study perspective. The primary aim of this dissertation is to explore the expression and the causes of conflict between the Balinese and migrants and to advance the potential of traditional village governance as a means of conflict resolution with particular reference to the municipality of Denpasar. One conclusion of the study is that the conflict between the Balinese and migrants has been expressed on the level of situation/contradiction, attitudes, and behavior. Yet the driving forces behind the conflict itself consist of the following factors: absence of cooperation; incompatible position and perception; inability to communicate effectively; and problem of inequality and injustice, which comes to the surface as a social, cultural, and economic problem. This complex of factors fuels collective fear for the future of both groups. The study concludes that traditional village governance mechanisms as a means of conflict resolution have not yet been able to provide an enduring resolution for the conflict. Analysis shows that the practice of traditional village governance is unable to provide satisfactory mechanisms for the conflict as prescribed by conflict resolution theory. Traditional village governance, which is derived from the exclusive Hindu-Balinese culture, is accepted as more legitimate among the Balinese than the official governance policies. However, it is not generally accepted by most of the Muslim migrants. In addition, traditional village governance lacks access to economic instruments, which weakens its capacity to tackle the economic roots of the conflict. Thus the traditional mechanisms of migrant ordinance , as practiced by the traditional village governance have not yet been successful in penetrating all aspects of the conflict. Finally, one of the main challenges for traditional village governance s legal development is the creation of a regional legal system capable of accommodating rapid changes in line with the national and international legal practices. The framing of the new laws should be responsive to the aspirations of a changing society. It should not only protect the various Balinese communities interests, but also that of other ethnic groups, especially those of the minority. In other words, the main challenge to traditional village governance is its ability to develop flexibility and inclusiveness.

An operational-level multi-stage mine production timetabling model for optimally synchronising drilling, blasting and excavating operations

This paper proposes a new multi-stage mine production timetabling (MMPT) model to optimise open-pit mine production operations including drilling, blasting and excavating under real-time mining constraints. The MMPT problem is formulated as a mixed integer programming model and can be optimally solved for small-size MMPT instances by IBM ILOG-CPLEX. Due to NP-hardness, an improved shifting-bottleneck-procedure algorithm based on the extended disjunctive graph is developed to solve large-size MMPT instances in an effective and efficient way. Extensive computational experiments are presented to validate the proposed algorithm that is able to efficiently obtain the near-optimal operational timetable of mining equipment units. The advantages are indicated by sensitivity analysis under various real-life scenarios. The proposed MMPT methodology is promising to be implemented as a tool for mining industry because it is straightforwardly modelled as a standard scheduling model, efficiently solved by the heuristic algorithm, and flexibly expanded by adopting additional industrial constraints.

Tibetan Market Participation in China

Since the Chinese government began implementing economic reforms in the late 1970s, China has experienced profound economic change and growth. Like other parts of China, Tibetan areas of China have also experienced wide-ranging economic change with growth even higher than the China-wide average in certain years. Though China s strategic policy of developing the West provided many opportunities for economic and business activities, Tibetans have proven poorly equipped to respond to and take advantage of these opportunities. This study is about people, about market participation and specifically about why Tibetans do not effectively participate in the market in the context of China s economic development process. Many political, social, cultural and environmental factors explain the difficulties met by Tibetan communities. However, this study focuses on three factors: the social and culture context, government policy and education. The Buddhistic nature of Tibetan communities, particularly the political and economic system in traditional Tibetan society, explains this, especially after implementation of new national economic policies. An inclusive economic development policy that promotes local people s participation in the market demands serious consideration of local conditions. Unfortunately, such considerations often ignore local Tibetan realities. The economic development policy in Tibetan areas in China is nearly always an attempt to replicate the inland model and open up markets, even though economic and sociopolitical conditions in Tibet are markedly unlike much of China. A consequence of these policies is increasing numbers of non-Tibetan migrants flowing into Tibetan areas with the ensuing marginalization of Tibetans in the marketplace. Poor quality education is another factor contributing to Tibetan inability to effectively participate in the market. Vocational and business education targeting Tibetans is of very low quality and reflective of government failing to consider local circumstances when implementing education policy. The relatively few Tibetans who do receive education are nearly always unable to compete with non-Tibetan migrants in commercial activity. Encouraging and promoting Tibetan participation in business development and access to quality education are crucial for a sustainable and prosperous society in the long term. Particularly, a localized development policy that considers local environmental conditions and production as well as local culture is crucial. Tibet s economic development should be based on local environmental and production conditions, while utilizing Tibetan culture for the benefit of creating a sustainable economy. Such a localized approach best promotes Tibetan market participation. Keywords: Tibet cultural policy education market participation

GDNF family receptors in peripheral target innervation and hormone production

Glial cell line-derived neurotrophic factor (GDNF) family ligands: GDNF, neurturin, persephin and artemin, signal through a receptor tyrosine kinase Ret by binding first to a co-receptor (GFRα1-4) that is attached to the plasma membrane. The GDNF family factors can support the survival of various peripheral and central neuronal populations and have important functions also outside the nervous system, especially in kidney development. Activating mutations in the RET gene cause tumours in neuroendocrine cells, whereas inactivating mutations in RET are found in patients with Hirschsprung s disease (HSCR) characterized by loss of ganglionic cells along the intestine. The aim of this study was to examine the in vivo functions of neurturin receptor GFRα2 and persephin receptor GFRα4 using knockout (KO) mice. Mice lacking GFRα2 grow poorly after weaning and have deficits in parasympathetic and enteric innervation. This study shows that impaired secretion of the salivary glands and exocrine pancreas contribute to growth retardation in GFRα2-KO mice. These mice have a reduced number of intrapancreatic neurons and decreased cholinergic innervation of the exocrine pancreas as well as reduced excitatory fibres in the myenteric plexus of the small intestine. This study also demonstrates that GFRα2-mediated Ret signalling is required for target innervation and maintenance of soma size of sympathetic cholinergic neurons and sensory nociceptive IB4-binding neurons. Furthermore, lack of GFRα2 in mice results in deficient perception of temperatures above and below thermoneutrality and in attenuated inflammatory pain response. GFRα4 is co-expressed with Ret predominantly in calcitonin-producing thyroid C-cells in the mouse. In this study GFRα4-deficient mice were generated. The mice show no gross developmental deficits and have a normal number of C-cells. However, young but not adult mice lacking GFRα4 have a lower production of calcitonin in thyroid tissue and consequently, an increased bone formation rate. Thus, GFRα4/Ret signalling may regulate calcitonin production. In conclusion, this study reveals that GFRα2/Ret signalling is crucial for the development and function of specific components of the peripheral nervous system and that GFRα4-mediated Ret signalling is required for controlling transmitter synthesis in thyroid C-cells.

Pentitol phosphate dehydrogenases: Discovery, characterization and use in D-arabitol and xylitol production by metabolically engineered Bacillus subtilis

The ultimate goal of this study has been to construct metabolically engineered microbial strains capable of fermenting glucose into pentitols D-arabitol and, especially, xylitol. The path that was chosen to achieve this goal required discovery, isolation and sequencing of at least two pentitol phosphate dehydrogenases of different specificity, followed by cloning and expression of their genes and characterization of recombinant arabitol and xylitol phosphate dehydrogenases. An enzyme of a previously unknown specificity, D-arabitol phosphate dehydrogenase (APDH), was discovered in Enterococcus avium. The enzyme was purified to homogenity from E. avium strain ATCC 33665. SDS/PAGE revealed that the enzyme has a molecular mass of 41 ± 2 kDa, whereas a molecular mass of 160 ± 5 kDa was observed under non-denaturing conditions implying that the APDH may exist as a tetramer with identical subunits. Purified APDH was found to have narrow substrate specificity, converting only D-arabitol 1-phosphate and D-arabitol 5-phosphate into D-xylulose 5-phosphate and D-ribulose 5-phosphate, respectively, in the oxidative reaction. Both NAD+ and NADP+ were accepted as co-factors. Based on the partial protein sequences, the gene encoding APDH was cloned. Homology comparisons place APDH within the medium chain dehydrogenase family. Unlike most members of this family, APDH requires Mn2+ but no Zn2+ for enzymatic activity. The DNA sequence surrounding the gene suggests that it belongs to an operon that also contains several components of phosphotransferase system (PTS). The apparent role of the enzyme is to participate in arabitol catabolism via the arabitol phosphate route similar to the ribitol and xylitol catabolic routes described previously. Xylitol phosphate dehydrogenase (XPDH) was isolated from Lactobacillus rhamnosus strain ATCC 15820. The enzyme was partially sequenced. Amino acid sequences were used to isolate the gene encoding the enzyme. The homology comparisons of the deduced amino acid sequence of L. rhamnosus XPDH revealed several similar enzymes in genomes of various species of Gram-positive bacteria. Two enzymes of Clostridium difficile and an enzyme of Bacillus halodurans were cloned and their substrate specificities together with the substrate specificity of L. rhamnosus XPDH were compared. It was found that one of the XPDH enzymes of C. difficile and the XPDH of L. rhamnosus had the highest selectivity towards D-xylulose 5-phosphate. A known transketolase-deficient and D-ribose-producing mutant of Bacillus subtilis (ATCC 31094) was further modified by disrupting its rpi (D-ribose phosphate isomerase) gene to create D-ribulose- and D-xylulose-producing strain. Expression of APDH of E. avium and XPDH of L. rhamnosus and C. difficile in D-ribulose- and D-xylulose-producing strain of B. subtilis resulted in strains capable of converting D-glucose into D-arabitol and xylitol, respectively. The D-arabitol yield on D-glucose was 38 % (w/w). Xylitol production was accompanied by co-production of ribitol limiting xylitol yield to 23 %.

Characterisation, cloning and production of industrially interesting enzymes: gluconolactone oxidase of Penicillium cyaneo-fulvum and gluconate 5-dehydrogenase of Gluconobacter suboxydans

The work covered in this thesis is focused on the development of technology for bioconversion of glucose into D-erythorbic acid (D-EA) and 5-ketogluconic acid (5-KGA). The task was to show on proof-of-concept level the functionality of the enzymatic conversion or one-step bioconversion of glucose to these acids. The feasibility of both studies to be further developed for production processes was also evaluated. The glucose - D-EA bioconversion study was based on the use of a cloned gene encoding a D-EA forming soluble flavoprotein, D-gluconolactone oxidase (GLO). GLO was purified from Penicillium cyaneo-fulvum and partially sequenced. The peptide sequences obtained were used to isolate a cDNA clone encoding the enzyme. The cloned gene (GenBank accession no. AY576053) is homologous to the other known eukaryotic lactone oxidases and also to some putative prokaryotic lactone oxidases. Analysis of the deduced protein sequence of GLO indicated the presence of a typical secretion signal sequence at the N-terminus of the enzyme. No other targeting/anchoring signals were found, suggesting that GLO is the first known lactone oxidase that is secreted rather than targeted to the membranes of the endoplasmic reticulum or mitochondria. Experimental evidence supports this analysis, as near complete secretion of GLO was observed in two different yeast expression systems. Highest expression levels of GLO were obtained using Pichia pastoris as an expression host. Recombinant GLO was characterised and the suitability of purified GLO for the production of D-EA was studied. Immobilised GLO was found to be rapidly inactivated during D-EA production. The feasibility of in vivo glucose - D-EA conversion using a P. pastoris strain co-expressing the genes of GLO and glucose oxidase (GOD, E.C. 1.1.3.4) of A. niger was demonstrated. The glucose - 5-KGA bioconversion study followed a similar strategy to that used in the D-EA production research. The rationale was based on the use of a cloned gene encoding a membrane-bound pyrroloquinoline quinone (PQQ)-dependent gluconate 5-dehydrogenase (GA 5-DH). GA 5-DH was purified to homogeneity from the only source of this enzyme known in literature, Gluconobacter suboxydans, and partially sequenced. Using the amino acid sequence information, the GA 5-DH gene was cloned from a genomic library of G. suboxydans. The cloned gene was sequenced (GenBank accession no. AJ577472) and found to be an operon of two adjacent genes encoding two subunits of GA 5-DH. It turned out that GA 5-DH is a rather close homologue of a sorbitol dehydrogenase from another G. suboxydans strain. It was also found that GA 5-DH has significant polyol dehydrogenase activity. The G. suboxydans GA 5-DH gene was poorly expressed in E. coli. Under optimised conditions maximum expression levels of GA 5-DH did not exceed the levels found in wild-type G. suboxydans. Attempts to increase expression levels resulted in repression of growth and extensive cell lysis. However, the expression levels were sufficient to demonstrate the possibility of bioconversion of glucose and gluconate into 5-KGA using recombinant strains of E. coli. An uncharacterised homologue of GA 5-DH was identified in Xanthomonas campestris using in silico screening. This enzyme encoded by chromosomal locus NP_636946 was found by a sequencing project of X. campestris and named as a hypothetical glucose dehydrogenase. The gene encoding this uncharacterised enzyme was cloned, expressed in E. coli and found to encode a gluconate/polyol dehydrogenase without glucose dehydrogenase activity. Moreover, the X. campestris GA 5-DH gene was expressed in E. coli at nearly 30 times higher levels than the G. suboxydans GA 5-DH gene. Good expressability of the X. campestris GA-5DH gene makes it a valuable tool not only for 5-KGA production in the tartaric acid (TA) bioprocess, but possibly also for other bioprocesses (e.g. oxidation of sorbitol into L-sorbose). In addition to glucose - 5-KGA bioconversion, a preliminary study of the feasibility of enzymatic conversion of 5-KGA into TA was carried out. Here, the efficacy of the first step of a prospective two-step conversion route including a transketolase and a dehydrogenase was confirmed. It was found that transketolase convert 5-KGA into TA semialdehyde. A candidate for the second step was suggested to be succinic dehydrogenase, but this was not tested. The analysis of the two subprojects indicated that bioconversion of glucose to TA using X. campestris GA 5-DH should be prioritised first and the process development efforts in future should be focused on development of more efficient GA 5-DH production strains by screening a more suitable production host and by protein engineering.