Economics

Fiscal Decentralization and Intergovernmental Relations in Developing Countries: Navigating a Viable Path to Reform

Fiscal Decentralization and Intergovernmental Relations in Developing Countries: Navigating a Viable Path to Reform
G. Shabbir Cheema and Dennis Rondinelli (eds) Decentralized Governance: Emerging Concepts and Practice, Washington, DC: Brookings,

Smoke, P.
06/01/2007

The trend toward greater decentralization of governance activities, now accepted as commonplace in the West, has become a worldwide movement. Today s world demands flexibility, adaptability, and the autonomy to bring those qualities to bear. In this thought-provoking book, the first in a new series on Innovations in Governance, experts in government and public management trace the evolution and performance of decentralization concepts, from the transfer of authority within government to the sharing of power, authority, and responsibilities among broader governance institutions.

The contributors to Decentralizing Governance assess emerging concepts such as devolution and capacity building; they also detail factors driving the decentralization movement such as the ascendance of democracy, economic globalization, and technological progress. Their analyses range across many regions of the world and a variety of contexts, but each specific case explores the objectives of decentralization and the benefits and difficulties that will likely result.

 

Welfare Program Performance

Welfare Program Performance
American Review of Public Administration, March, Vol. 37 Issue 1, p65-90, 26p.

Ratcliffe, C. & Nightingale, D.S. & Sharkey, P.
03/01/2007

Public agencies are increasingly expected to track their performance according to established criteria--to be held accountable for the expenditure of public funds and show that funds are being used to achieve intended outcomes. This analysis of South Carolina's Family Independence welfare program examines counties' performance on five employment-related outcomes: employment rate, employment entry rate, employment retention rate. earnings gain rate, and earned income closure rate. Counties' performance is statistically analyzed, adjusting for variation in external factors (e.g., labor market conditions and caseload characteristics) that influence program performance but that are outside the control of county program staff. This analysis shows that external factors influence employment-related performance, suggesting that states may want to vary counties' goals based on external factors, rather than expecting all counties to meet the same performance level. This analysis provides an example of how agencies can apply statistical analysis to measure, track, and analyze program performance.

Financial Performance and Outreach: A Global Analysis of Leading Microbanks

Financial Performance and Outreach: A Global Analysis of Leading Microbanks
Economic Journal, February 2007, Vol. 117, Issue 517, pp. F107-F133

Morduch, J., Cull, R. & Demirguc-Kunt, A.
02/01/2007

Microfinance promises to reduce poverty by employing profit-making banking practices in low-income communities. Many microfinance institutions have secured high loan repayment rates but, so far, relatively few earn profits. We examine why this promise remains unmet. We explore patterns of profitability, loan repayment, and cost reduction with unusually high-quality data on 124 institutions in 49 countries. The evidence shows the possibility of earning profits while serving the poor, but a trade-off emerges between profitability and serving the poorest. Raising fees to very high levels does not ensure greater profitability and the benefits of cost-cutting diminish when serving better-off customers.

Does Federally Subsidized Rental Housing Depress Neighborhood Property Values?

Does Federally Subsidized Rental Housing Depress Neighborhood Property Values?
Journal of Policy Analysis & Management, Spring 2007, Vol. 26 Issue 2, p257-280, 24p.

Ellen, I.G., Schwartz, A.E., Voicu, I. & Schill, M.H.
01/01/2007

Few communities welcome federally subsidized rental housing, with one of the most commonly voiced fears being reductions in property values. Yet there is little empirical evidence that subsidized housing depresses neighborhood property values. This paper estimates and compares the neighborhood impacts of a broad range of federally subsidized rental housing programs, using rich data for New York City and a difference-in-difference specification of a hedonic regression model. We find that federally subsidized developments have not typically led to reductions in property values and have, in fact, led to increases in some cases. Impacts are highly sensitive to scale, though patterns vary across programs.

Financial development and pathways of growth: State branching and deposit insurance laws in the United States from 1900 to 1940

Financial development and pathways of growth: State branching and deposit insurance laws in the United States from 1900 to 1940
Journal of Law and Economics 50 (2007) 239-272.

Dehejia, R.H. & Lleras-Muney, A.
01/01/2007

This paper studies the effect of state-level banking regulation on financial development and on components of state-level growth in the United States from 1900 to 1940. We use these banking laws to assess the findings of a large recent literature that has argued that financial development contributes to economic growth. We contend that the institutional mechanism leading to financial development is important in determining its consequences and that some types of financial development can even retard economic growth.

For the United States from 1900 to 1940, we argue that the financial expansion induced by expanded bank branching accelerated the mechanization of agriculture and spurred growth in manufacturing. In contrast, financial expansions induced by state deposit insurance had negative consequences for both the agricultural and manufacturing sectors.

Two Wrongs Do Not Make a Right

Two Wrongs Do Not Make a Right
National Tax Journal, Sep 2006, Vol. 59 Issue 3, p491-508, 18p.

Furman, J.
09/01/2006

This paper analyzes proposals to remedy tax-induced distortions in health care by using new tax incentives and retaining all of the existing distortionary tax incentives. In the process of remedying some distortions, this approach magnifies others--most notably increasing the total tax preference for health care. The paper considers two examples--the Bush administration's FY 2007 budget proposal and a plan by Cogan, Hubbard and Kessler (2005)--and shows that both could result in higher health spending and reduced welfare. Finally, the paper discusses the circumstances in which tax incentives could be warranted to remedy market failures in health insurance.

Gasoline Prices, Interest Rates, and the 2008 Election

Gasoline Prices, Interest Rates, and the 2008 Election
The New York Observer June

Moss, M.
06/01/2006

Forget immigration, global warning, Donald Rumsfeld and abortion rights.

The hot issues of today will quickly fade away if the current surge in gasoline prices and home-mortgage rates continues unabated. And all indications are that both the price of gas and the cost of borrowing are moving in one direction only: north.

 

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