{"title":"The Nexus between Financial and Investment developments and State Capacity. The case of G-20","authors":"Sotirios K. Bellos, Petros Golitsis","doi":"10.1016/j.jge.2023.100081","DOIUrl":"https://doi.org/10.1016/j.jge.2023.100081","url":null,"abstract":"<div><p>On this paper we examine the relationships between state capacity, approximated by the Composite Index of National Capabilities, and certain macroeconomic and financial variables. Particularly, we study the nexus of their interactions by focusing on the G-20 economies from 1980 to 2020 by applying a robust GMM panel VAR model. Our results capture a negative and lasting impact of ‘domestic credit to private sector’, a negative short-term impact of market capitalization, along with a positive impact of inward and outward FDIs, and of gross capital formation, on state capacity. State capacity, in its turn, enhances in the short-term market capitalization, consumes credit to private sector, and substantially boosts gross capital formation in the medium-term. Trade openness enhances state capacity and is enhanced by state capacity as well. The presence of financial crises, such as the Asian Financial Crisis or the Global Financial Crisis, affects negatively state capacity. Conversely, the absence of financial crises has a positive impact on state capacity, leading to its amelioration. Furthermore, the specific case of the Second Oil Crisis is found to strengthen state capacity. These findings shed light to the mechanisms that impact national power and provide a framework for policy design and conduct.</p></div>","PeriodicalId":100785,"journal":{"name":"Journal of Government and Economics","volume":"11 ","pages":"Article 100081"},"PeriodicalIF":0.0,"publicationDate":"2023-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"50193778","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"The effect of COVID-19 on local government policy implementation: Declines in police reports of domestic violence during lockdowns","authors":"Jeremy A. Cook , Timothy W. Taylor","doi":"10.1016/j.jge.2023.100087","DOIUrl":"https://doi.org/10.1016/j.jge.2023.100087","url":null,"abstract":"<div><p>We document a reduction in police reporting of domestic violence during shelter-in-place (SIP) orders issued by city governments in March and April of 2020. Using data from 18 large U.S. city police departments, we exploit the unique timing of city-specific SIP orders to identify a decrease as high as 11 percent in police reports of domestic violence. Lockdowns, explicitly designed to reduce contact among civilian populations, may also lead to reduced contact between emergency responders and civilians. Our findings suggest police change their own behaviors in response to government-issued SIP orders leading to a decrease in agency reports of domestic violence. While previous scholarship on domestic violence has found an increase in emergency calls for service from households during SIP, we consistently find a decrease in police reporting of domestic violence. By centering our analysis on the responses of law enforcement agencies, we highlight the divergence in the consequences of SIP orders on household behaviors versus institutional behaviors. We present robust findings using event studies in addition to both staggered treatment and conventional difference-in-differences estimators. The implications of our study extend to city officials who are tasked with assessing the unique repercussions of SIP orders on both households and the responsiveness of local government agencies. This research underscores the multifaceted nature of the effects induced by external shocks such as COVID-19, shedding light on the intricate interplay between societal dynamics and institutional responses.</p></div>","PeriodicalId":100785,"journal":{"name":"Journal of Government and Economics","volume":"11 ","pages":"Article 100087"},"PeriodicalIF":0.0,"publicationDate":"2023-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"50193792","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"A study on the welfare equalization effect of China's housing reform","authors":"Mengyu Ding , Shaojie Zhou","doi":"10.1016/j.jge.2023.100086","DOIUrl":"https://doi.org/10.1016/j.jge.2023.100086","url":null,"abstract":"<div><p>The welfare equalization effect of China's housing reform is examined in this study using data from the China Urban Household Survey (CUHS) between 2002 and 2009. Low-income households who had access to housing reform homes (HRH) profited from the reform more than other low-income households, even though public housing was privatized at a reduced price due to quality restrictions and reselling constraints. We set up a model to demonstrate the mechanism, estimate household housing consumption, and analyze the impact of policy on that consumption. We find that the housing reform significantly increased the rate of homeownership in urban China, that the distribution of public housing and the privatization premium was comparatively equal, and that purchasing HRH significantly increased housing consumption. However, this effect also significantly decreased as household income increased. We refer to this welfare effect as bounded equalization. Additional housing policies should be developed to comprehensively offer low-income families affordable housing that meets their needs.</p></div>","PeriodicalId":100785,"journal":{"name":"Journal of Government and Economics","volume":"11 ","pages":"Article 100086"},"PeriodicalIF":0.0,"publicationDate":"2023-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"50193794","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Explaining China’s housing vacancies: A theory based on the incentives of local government officials","authors":"Tianwang Liu","doi":"10.1016/j.jge.2023.100077","DOIUrl":"https://doi.org/10.1016/j.jge.2023.100077","url":null,"abstract":"<div><p>Why does China have a vast number of unsold and unoccupied homes? This paper proposes a theory based on the incentives of local government officials to explain this puzzle. Specifically, I develop a dynamic, infinite-horizon model that incorporates cities’ economic growth, an evaluation scheme of city managers’ economic performance, as well as city managers’ decision-making of land supply to illustrate the mechanisms. I provide empirical evidence to support the theory and estimate the structural model using manager-city-year level data from 2003 and 2012. Using the parameter estimates from the model, I conduct counterfactual analyses to quantitatively evaluate the impacts of political incentives on the equilibrium land supply. Overall, city managers sell 7.4% more land between 2003 and 2012 relative to the counterfactual in which they have no economic growth incentives. This land oversupply is 12.5% in smaller cities and 3.7% in larger cities. Finally, converting land to housing construction, the estimated impacts explain 23.2% to 27.7% of unsold homes.</p></div>","PeriodicalId":100785,"journal":{"name":"Journal of Government and Economics","volume":"10 ","pages":"Article 100077"},"PeriodicalIF":0.0,"publicationDate":"2023-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"50195183","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Don't blame me: A theory of politicians choosing policy advisors","authors":"Arthur Fishman , Doron Klunover","doi":"10.1016/j.jge.2023.100076","DOIUrl":"https://doi.org/10.1016/j.jge.2023.100076","url":null,"abstract":"<div><p>We present a model in which an imperfectly informed politician chooses between appointing an independent expert, whose advice is revealed to voters, and a loyal expert whose advice can be concealed from voters and who can therefore be blamed for a bad outcome. The politician is privately informed about which expert is more competent while Bayesian voters update beliefs about the expert's competence based on which expert is chosen and the outcome of the policy chosen by the politician. Voters are distributed such that some are biased toward a certain policy while others are not. We show that, under a majority voting rule, in equilibrium, the politician is unable to increase his chances of reelection by choosing the loyal expert and trying to shift the blame for a bad outcome on him.</p></div>","PeriodicalId":100785,"journal":{"name":"Journal of Government and Economics","volume":"10 ","pages":"Article 100076"},"PeriodicalIF":0.0,"publicationDate":"2023-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"50195185","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Only under good governance does public debt improve national income: Evidence from dynamic panel threshold model for Sub-Saharan African countries","authors":"Feissal Assoum , Alastaire Sèna Alinsato","doi":"10.1016/j.jge.2023.100078","DOIUrl":"https://doi.org/10.1016/j.jge.2023.100078","url":null,"abstract":"<div><p>This paper aims to explore the mediating role of governance in the relationship between per capita income and public debt in Sub-Saharan Africa. From a neoclassical production function and a dynamic panel threshold model, the paper estimates a model based on a sample of 39 countries in Sub-Saharan Africa over the period of 2002 to 2019. Our results indicate a non-linear relationship between per capita income and public debt, which is influenced by the quality of governance. In particular, the impact of public debt on per capita income depends on the level of governance quality. A governance threshold is identified, showing a minimum level of good quality of governance from which public debt has a positive effect on income. Moreover, the paper identified the most critical governance dimensions for optimizing the relationship between public debt and per capita income and provided policy suggestions.</p></div>","PeriodicalId":100785,"journal":{"name":"Journal of Government and Economics","volume":"10 ","pages":"Article 100078"},"PeriodicalIF":0.0,"publicationDate":"2023-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"50195186","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Unemployment during the pandemic, taxation reforms, China's housing market, and governance of the African economy: Editors’ note to Volumes 9 and 10 of the Journal of Government and Economics","authors":"Zhangkai Huang, David Daokui Li","doi":"10.1016/j.jge.2023.100079","DOIUrl":"https://doi.org/10.1016/j.jge.2023.100079","url":null,"abstract":"","PeriodicalId":100785,"journal":{"name":"Journal of Government and Economics","volume":"10 ","pages":"Article 100079"},"PeriodicalIF":0.0,"publicationDate":"2023-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"50195187","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Weak states and the commons: Fisheries and economic development in the Gaspé Peninsula circa 1830","authors":"Vincent Geloso , Félix Foucher-Paquin","doi":"10.1016/j.jge.2023.100071","DOIUrl":"https://doi.org/10.1016/j.jge.2023.100071","url":null,"abstract":"<div><p>The inefficiencies of common property fisheries are well-known to economists. To avoid over-exploitation, they propose multiple forms of government solution such as taxes, quotas and the enforcement of property rights regimes designed to avoid over-harvesting. But can efficient arrangements also exist under statelessness, or in the presence of weak states? One such example is the Gaspé Peninsula (in the Canadian province of Quebec) during the first half of the nineteenth century. There, a single firm (the Charles Robin Company) came to dominate the market and was able to restrict entry effectively. In this paper, we explain that it was able to do so by reducing the prices on imported goods that it would give to local fishermen in exchange for a part of their catch. This had the effect of deterring fishermen from contracting with other merchants as well as deterring other merchants from entering the market. It also made the region richer than most regions of Canada at the time, contrary to what historians have depicted. We take this as an example of the ability to deal with commons problems in the presence of weak states.</p></div>","PeriodicalId":100785,"journal":{"name":"Journal of Government and Economics","volume":"10 ","pages":"Article 100071"},"PeriodicalIF":0.0,"publicationDate":"2023-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"50194655","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Tax policy reform and universal basic income effectiveness in a currency union: Implications for long-term growth, inequality, and welfare","authors":"Thierry U. KAME BABILLA","doi":"10.1016/j.jge.2023.100075","DOIUrl":"https://doi.org/10.1016/j.jge.2023.100075","url":null,"abstract":"<div><p>This paper aims to assess tax policy reforms that can sustain universal basic income programs and foster long-term growth and welfare in a currency union that faces fiscal rule constraints and inequality. To address this ongoing government and economics’ debate, we developed a Dynamic Stochastic General Equilibrium Model of universal basic income enriched with three fiscal policy strategies. Results demonstrate that the effectiveness of universal basic income on long-term growth, inequality, and welfare depends on the type of fiscal policy adopted by government to fund it, notably the trade-off between increasing the tax base or reducing public spending. First, under normal circumstances, universal basic income funded by completely eliminating oil subsidies appears to be the best policy for reducing inequality while increasing growth and welfare. Second, when the currency union faces a crisis, a universal basic income funded by increases in different taxes is more effective in combating stagflation and inequality than a universal basic income funded by total oil subsidy elimination. The welfare analysis confirms that, universal basic income funded by the increase in tax on capital gains and the increase in tax on corporate income is successful in reducing income inequality and consumption inequality and improving households’ living standards, its effects lead to higher welfare gains when the economy faces a crisis rather than the economy in normal times.</p></div>","PeriodicalId":100785,"journal":{"name":"Journal of Government and Economics","volume":"10 ","pages":"Article 100075"},"PeriodicalIF":0.0,"publicationDate":"2023-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"50195184","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"A Chinese mayor problem","authors":"Saku Aura , William A. Brock , Shawn Ni","doi":"10.1016/j.jge.2023.100070","DOIUrl":"https://doi.org/10.1016/j.jge.2023.100070","url":null,"abstract":"<div><p>We solve an optimal land sale problem for a mayor who sells public land and uses the land sale revenue to finance infrastructure. Over an infinite horizon the mayor chooses land sale and infrastructure in each period to maximize the market value of the city net of the spending on infrastructure. The infrastructure spending is bounded by the land sale proceeds of the previous period. We show the optimization problem can be solved analytically. If it is profitable to sell land then it is profit-maximizing to sell it as early as the finance constraints permit. Finance constraints reduce the total size of land eventually sold.</p></div>","PeriodicalId":100785,"journal":{"name":"Journal of Government and Economics","volume":"9 ","pages":"Article 100070"},"PeriodicalIF":0.0,"publicationDate":"2023-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"50184149","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}