DOAJ (DOAJ: Directory of Open Access Journals), Jun 1, 1994
The paper discusses the effects of international capital and labor mobility in a North-South sett... more The paper discusses the effects of international capital and labor mobility in a North-South setting. It shows that the word capital stock and Southern employment in the modern sector expands in proportion to the migration quota imposed by the North. On the other hand, international capital mobility results in a contraction of the word economy under a "reasonable assumption".Este artigo discute os efeitos da mobilidade do capital internacional e da mão de obra em um contexto norte-sul. Demonstra-se que o estoque de capital mundial e o emprego no setor moderno do Sul expandem-se em proporção a quota de imigração imposta pelo norte. Por outro lado, a mobilidade do capital internacional resulta nacontração da economia mundial, sob uma "hipótese razoável"
Many developing economies are characterized by the dominance of a super metropolis. Taking histor... more Many developing economies are characterized by the dominance of a super metropolis. Taking historical Rome as the archetype of a city that centralizes political power to extract resources from the rest of the country, we develop two models of rent-seeking and expropriation which illustrate different mechanisms that relate political competition to economic outcomes. The "voice " model shows that rent-seeking by different interest groups (localized in different specialized cities/regions) will lead to low investment and growth when the number of these groups is small. The "exit " model allows political competition among those with political power (to tax or expropriate from citizens) over a footloose tax base. It shows that when this power is centralized in relatively few urban nodes, tax rates would be higher and growth rates lower. Our empirical work exploits the connection between urban wealth (with the political power it affords) and national soccer championshi...
Though it has been recognized that political institutions and state capacity play an important ro... more Though it has been recognized that political institutions and state capacity play an important role in determining economic outcomes, for most non-Western economies we still do not have granular enough historical knowledge as to how. Here we study a particular historical episode in the case of China, which, after a period of fiscal decentralization that has been credited with leading to historically unprecedented growth rates but significant fiscal decline, recentralized the collection of tax revenues. The economic and political consequences of this new Tax Sharing System (TSS) have been debated extensively given the interest on fiscal decentralization and its interaction with political institutions and economic outcomes. The central question in this debate has been whether the TSS constitutes a significant departure from decentralization with adverse effects on fiscal federalism or whether the recentralization under the TSS corrects for the overshooting in decentralization with ben...
A two-good, two-country intertemporal general equilibrium model of pure exchange is presented, in... more A two-good, two-country intertemporal general equilibrium model of pure exchange is presented, in which whatever causes intertemporal trade also causes intertemporal trade, so that simple textbook separability fails. The framework allows financial market phenomena such as international yield arbitrage, portfolio composition shifts, and capital-flow-financed current account deficits to interact dynamically with the real phenomena of pure exchange.
Many developing economies are characterized by the dominance of a super metropolis. Taking histor... more Many developing economies are characterized by the dominance of a super metropolis. Taking historical Rome as the archetype of a city that centralizes political power to extract resources from the rest of the country, we develop two models of rent-seeking and expropriation which illustrate di¤erent mechanisms that relate political competition to economic outcomes. The "voice" model shows that rent-seeking by di¤erent interest groups (localized in di¤erent specialized cities/regions) will lead to low investment and growth when the number of such groups is small. The "exit" model allows political competition among those with political power (to tax or expropriate from citizens) over a footloose tax base. It shows that when this power is centralized in relatively few urban nodes, tax rates would be higher and growth rates lower. Our empirical work exploits the connection between urban wealth (with the political power it a¤ords) and national soccer championships. By ...
Many developing economies are characterized by the dominance of a super metropolis. Taking histor... more Many developing economies are characterized by the dominance of a super metropolis. Taking historical Rome as the archetype of a city that centralizes political power to extract resources from the rest of the country, we develop two models of rent-seeking and expropriation which illustrate di?erent mechanisms that relate political competition to economic outcomes. The "voice" model shows that rent-seeking by different interest groups (localized in di?erent specialized cities/regions) will lead to low investment and growth when the number of such groups is small. The "exit" model allows political competition among those with political power (to tax or expropriate from citizens) over a footloose tax base. It shows that when this power is centralized in relatively few urban nodes, tax rates would be higher and growth rates lower. Our empirical work exploits the connection between urban wealth (with the political power it affords) and national soccer championships. B...
In the past decade many developing economies started to privatize their state owned enterprises. ... more In the past decade many developing economies started to privatize their state owned enterprises. Recently, however, this process seems to have slowed down in some economies and have completely been stalled in others. Here we formalize the view that this is so because these enterprises are major instruments of income redistribution and, in economies with signiÞcant degrees of income inequality, segments of the population that beneÞt from this redistribution would use whatever political power they may have to oppose its abandonment. We Þnd strong and robust empirical support for this hypothesis using cross-country data on the relative size of the state-owned-enterprise sector and different measures of inequality. We also Þnd support for the propositions that dictatorships as well as democracies use this redistributive tool and that left-wing governments tend to redistribute more than right-wing governments through state owned enterprises. __________________________ ∗We would like to t...
Many developing countries display remarkably high degrees of urban concentration, incommensurate ... more Many developing countries display remarkably high degrees of urban concentration, incommensurate with their levels of urbanization. The cost of excessively high levels of urban concentration can be very high in terms of overpopulation, congestion, and productivity growth. One strand in the theoretical literature suggests that such high levels of concentration may be the result of restrictive trade policies that trigger forces of agglomeration. Another strand in the literature, however, points out that trade liberalization itself may exacerbate urban concentration by favoring the further growth of those large urban centers that have better access to international markets. The empirical basis for judging this question has so far been weak: in the existing literature, trade policies are poorly measured (or not measured as when trade volumes are used spuriously). Here, we use new disaggregated tari measures to empirically test the hypothesis. We also employ a treatmentand-control analys...
Many developing economies are characterized by the dominance of a super metropolis. The coexisten... more Many developing economies are characterized by the dominance of a super metropolis. The coexistence of a primate city with a low level of economic development is not an accident, the former being symptomatic of the causes of the latter. Taking historical Rome as the archetype of a city that centralizes political power to extract resources from the rest of the country, we develop two models of rent-seeking and expropriation which illustrate different mechanisms that relate political competition to economic outcomes. The voice model shows that rent-seeking by different interest groups (localized in different specialized cities/regions) will lead to low investment and growth when the number of these groups is low. Increased political competition in the form of more organized groups engaged in countervailing activity leads to more secure property rights and higher growth. The exit model allows political competition among those with political power (to tax or expropriate from citizen...
The paper sets up a simple model with three sectors to formalize the argument that the state owne... more The paper sets up a simple model with three sectors to formalize the argument that the state owned enterprise sector functions as a distributive mechanism. The formalization rests on the median voter theorem and the two stylized facts concerning the enterprises under consideration, namely that they carry ``surplus labor" and pay wages higher than the marginal productivity of labor they employ.
Many economies have undergone the process of privatizing their state-owned enterprises. Recently,... more Many economies have undergone the process of privatizing their state-owned enterprises. Recently, however, this process has slowed down in some economies and has been completely stalled in others. Here we formalize the view that this is so because these enterprises are major instruments of income redistribution and, in economies with significant degrees of income inequality, segments of the population that benefit from this redistribution would use their political power to oppose its abandonment. We find strong empirical support for this hypothesis using cross-country data on the relative size of the state-owned-enterprise sector. We also find robust evidence that left-wing (vis-a-vis right-wing) governments are associated with greater redistribution in more unequal societies. Further, this effect is non-linear, implying that redistribution becomes more costly at higher levels of inequality. We also find the same result for authoritarian (vis-a-vis democratic) governments.
International Journal of Business and Economics, 2003
Page 1. International Journal of Business and Economics, 2003, Vol. 2, No. 2, 97-108 Trade in Goo... more Page 1. International Journal of Business and Economics, 2003, Vol. 2, No. 2, 97-108 Trade in Goods and Trade in Assets André Burgstaller Department of Economics, Barnard College, Columbia University, U.S.A. Cem Karayalçin ...
Page 1. Divided We Stand, United We Fall: The HumeMWeberMJones Mechanism for the Rise of Europe C... more Page 1. Divided We Stand, United We Fall: The HumeMWeberMJones Mechanism for the Rise of Europe Cem Karayalçin* Department of Economics, Florida International University, Miami, FL 33199; eMmail: karayalc@fiu.edu July 2004 Abstract ...
DOAJ (DOAJ: Directory of Open Access Journals), Jun 1, 1994
The paper discusses the effects of international capital and labor mobility in a North-South sett... more The paper discusses the effects of international capital and labor mobility in a North-South setting. It shows that the word capital stock and Southern employment in the modern sector expands in proportion to the migration quota imposed by the North. On the other hand, international capital mobility results in a contraction of the word economy under a "reasonable assumption".Este artigo discute os efeitos da mobilidade do capital internacional e da mão de obra em um contexto norte-sul. Demonstra-se que o estoque de capital mundial e o emprego no setor moderno do Sul expandem-se em proporção a quota de imigração imposta pelo norte. Por outro lado, a mobilidade do capital internacional resulta nacontração da economia mundial, sob uma "hipótese razoável"
Many developing economies are characterized by the dominance of a super metropolis. Taking histor... more Many developing economies are characterized by the dominance of a super metropolis. Taking historical Rome as the archetype of a city that centralizes political power to extract resources from the rest of the country, we develop two models of rent-seeking and expropriation which illustrate different mechanisms that relate political competition to economic outcomes. The "voice " model shows that rent-seeking by different interest groups (localized in different specialized cities/regions) will lead to low investment and growth when the number of these groups is small. The "exit " model allows political competition among those with political power (to tax or expropriate from citizens) over a footloose tax base. It shows that when this power is centralized in relatively few urban nodes, tax rates would be higher and growth rates lower. Our empirical work exploits the connection between urban wealth (with the political power it affords) and national soccer championshi...
Though it has been recognized that political institutions and state capacity play an important ro... more Though it has been recognized that political institutions and state capacity play an important role in determining economic outcomes, for most non-Western economies we still do not have granular enough historical knowledge as to how. Here we study a particular historical episode in the case of China, which, after a period of fiscal decentralization that has been credited with leading to historically unprecedented growth rates but significant fiscal decline, recentralized the collection of tax revenues. The economic and political consequences of this new Tax Sharing System (TSS) have been debated extensively given the interest on fiscal decentralization and its interaction with political institutions and economic outcomes. The central question in this debate has been whether the TSS constitutes a significant departure from decentralization with adverse effects on fiscal federalism or whether the recentralization under the TSS corrects for the overshooting in decentralization with ben...
A two-good, two-country intertemporal general equilibrium model of pure exchange is presented, in... more A two-good, two-country intertemporal general equilibrium model of pure exchange is presented, in which whatever causes intertemporal trade also causes intertemporal trade, so that simple textbook separability fails. The framework allows financial market phenomena such as international yield arbitrage, portfolio composition shifts, and capital-flow-financed current account deficits to interact dynamically with the real phenomena of pure exchange.
Many developing economies are characterized by the dominance of a super metropolis. Taking histor... more Many developing economies are characterized by the dominance of a super metropolis. Taking historical Rome as the archetype of a city that centralizes political power to extract resources from the rest of the country, we develop two models of rent-seeking and expropriation which illustrate di¤erent mechanisms that relate political competition to economic outcomes. The "voice" model shows that rent-seeking by di¤erent interest groups (localized in di¤erent specialized cities/regions) will lead to low investment and growth when the number of such groups is small. The "exit" model allows political competition among those with political power (to tax or expropriate from citizens) over a footloose tax base. It shows that when this power is centralized in relatively few urban nodes, tax rates would be higher and growth rates lower. Our empirical work exploits the connection between urban wealth (with the political power it a¤ords) and national soccer championships. By ...
Many developing economies are characterized by the dominance of a super metropolis. Taking histor... more Many developing economies are characterized by the dominance of a super metropolis. Taking historical Rome as the archetype of a city that centralizes political power to extract resources from the rest of the country, we develop two models of rent-seeking and expropriation which illustrate di?erent mechanisms that relate political competition to economic outcomes. The "voice" model shows that rent-seeking by different interest groups (localized in di?erent specialized cities/regions) will lead to low investment and growth when the number of such groups is small. The "exit" model allows political competition among those with political power (to tax or expropriate from citizens) over a footloose tax base. It shows that when this power is centralized in relatively few urban nodes, tax rates would be higher and growth rates lower. Our empirical work exploits the connection between urban wealth (with the political power it affords) and national soccer championships. B...
In the past decade many developing economies started to privatize their state owned enterprises. ... more In the past decade many developing economies started to privatize their state owned enterprises. Recently, however, this process seems to have slowed down in some economies and have completely been stalled in others. Here we formalize the view that this is so because these enterprises are major instruments of income redistribution and, in economies with signiÞcant degrees of income inequality, segments of the population that beneÞt from this redistribution would use whatever political power they may have to oppose its abandonment. We Þnd strong and robust empirical support for this hypothesis using cross-country data on the relative size of the state-owned-enterprise sector and different measures of inequality. We also Þnd support for the propositions that dictatorships as well as democracies use this redistributive tool and that left-wing governments tend to redistribute more than right-wing governments through state owned enterprises. __________________________ ∗We would like to t...
Many developing countries display remarkably high degrees of urban concentration, incommensurate ... more Many developing countries display remarkably high degrees of urban concentration, incommensurate with their levels of urbanization. The cost of excessively high levels of urban concentration can be very high in terms of overpopulation, congestion, and productivity growth. One strand in the theoretical literature suggests that such high levels of concentration may be the result of restrictive trade policies that trigger forces of agglomeration. Another strand in the literature, however, points out that trade liberalization itself may exacerbate urban concentration by favoring the further growth of those large urban centers that have better access to international markets. The empirical basis for judging this question has so far been weak: in the existing literature, trade policies are poorly measured (or not measured as when trade volumes are used spuriously). Here, we use new disaggregated tari measures to empirically test the hypothesis. We also employ a treatmentand-control analys...
Many developing economies are characterized by the dominance of a super metropolis. The coexisten... more Many developing economies are characterized by the dominance of a super metropolis. The coexistence of a primate city with a low level of economic development is not an accident, the former being symptomatic of the causes of the latter. Taking historical Rome as the archetype of a city that centralizes political power to extract resources from the rest of the country, we develop two models of rent-seeking and expropriation which illustrate different mechanisms that relate political competition to economic outcomes. The voice model shows that rent-seeking by different interest groups (localized in different specialized cities/regions) will lead to low investment and growth when the number of these groups is low. Increased political competition in the form of more organized groups engaged in countervailing activity leads to more secure property rights and higher growth. The exit model allows political competition among those with political power (to tax or expropriate from citizen...
The paper sets up a simple model with three sectors to formalize the argument that the state owne... more The paper sets up a simple model with three sectors to formalize the argument that the state owned enterprise sector functions as a distributive mechanism. The formalization rests on the median voter theorem and the two stylized facts concerning the enterprises under consideration, namely that they carry ``surplus labor" and pay wages higher than the marginal productivity of labor they employ.
Many economies have undergone the process of privatizing their state-owned enterprises. Recently,... more Many economies have undergone the process of privatizing their state-owned enterprises. Recently, however, this process has slowed down in some economies and has been completely stalled in others. Here we formalize the view that this is so because these enterprises are major instruments of income redistribution and, in economies with significant degrees of income inequality, segments of the population that benefit from this redistribution would use their political power to oppose its abandonment. We find strong empirical support for this hypothesis using cross-country data on the relative size of the state-owned-enterprise sector. We also find robust evidence that left-wing (vis-a-vis right-wing) governments are associated with greater redistribution in more unequal societies. Further, this effect is non-linear, implying that redistribution becomes more costly at higher levels of inequality. We also find the same result for authoritarian (vis-a-vis democratic) governments.
International Journal of Business and Economics, 2003
Page 1. International Journal of Business and Economics, 2003, Vol. 2, No. 2, 97-108 Trade in Goo... more Page 1. International Journal of Business and Economics, 2003, Vol. 2, No. 2, 97-108 Trade in Goods and Trade in Assets André Burgstaller Department of Economics, Barnard College, Columbia University, U.S.A. Cem Karayalçin ...
Page 1. Divided We Stand, United We Fall: The HumeMWeberMJones Mechanism for the Rise of Europe C... more Page 1. Divided We Stand, United We Fall: The HumeMWeberMJones Mechanism for the Rise of Europe Cem Karayalçin* Department of Economics, Florida International University, Miami, FL 33199; eMmail: karayalc@fiu.edu July 2004 Abstract ...
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