An auction theoretical approach to fiscal wars

I examine a situation where a firm chooses to locate a new factory in one of several jurisdictions. The value of the factory may differ among jurisdictions and it depends on the private information held by each jurisdiction. Jurisdictions compete for the location of the new factory. This competition may take the form of expenditures already incurred on infrastructure, commitments to spend on infrastructure, tax incentives or even cash payments. The model combines two elements that are usually considered separately; competition is desirable because we want the factory to be located in the jurisdiction that values it the most, but competition in itself is wasteful. I show that the expected total amount paid to the firm under a large family of arrangements is the same. Moreover, I show that the ex-ante optimal mechanism that is, the mechanism that guarantees that the firm chooses the jurisdiction with the highest value for the factory, minimizes the total expected payment to the firm, and balances the budget in an ex-ante sense - can be implemented by running a standard auction and subsidizing participation.

Waves of Change Within Civil Society in Latin America: Mexico City and Sao Paulo

For the past half a century, Latin American scholars have been pointing toward the emergence of new social actors as agents of social and political democratization. The first wave of actors was characterized by the emergence of novel agents-mainly, new popular movements-of social transformation. At first, the second wave, epitomized by nongovernmental organizations (NGOs), was celebrated as the upsurge of a new civil society, but later on, it was the target of harsh criticism. The literature often portrays this development in Latin American civil society as a displacement trend of actors of the first wave by the second wave-""NGOization""-""and even denounces new civil society as rootless, depoliticized, and functional to retrenchment. Thus, supposedly, NGOization encumbers social change. The authors argue that NGOization diagnosis is a flawed depiction of change within civil society. Rather than NGOization related to the depoliticization and neoliberalization of civil society, in Mexico City and Sao Paulo, there has been modernization of organizational ecologies, changes in the functional status of civil society, and interestingly, specialization aimed at shaping public agenda. The authors argue that such specialization, instead of encumbering social change, brings about different repertoires of strategies and skills purposively developed for influencing policy and politics. Their argument relies on comparative systematic evidence. Through network analysis, they examine the organizational ecology of civil society in Mexico City and Sao Paulo.