Economic Gain and Loss from Public Infrastructure Investment

ABSTRACT The purpose of this study is to analyze the effects of transportation investment on the Korean economy using the dynamic Computable General Equilibrium model. The result of the counterfactual analysis shows that infrastructure investment policy has the advantage of economic growth, but the disadvantage of price inflation. The elasticities of infrastructure investment with respect to GDP, export, private utility, and inflation depend on institutional restrictions on the domestic inflow of foreign capital and financing alternatives for infrastructure projects. The growth effect of transportation investment would be maximized if regulations on inflow of foreign capital to the private sector were lifted. On the other hand, the effect of transportation investment on inflation would be minimized if transportation investment expenditure were completely financed by tax revenues.     

Efficiency and TFP Growth in the Spanish Regions: The Role of Human and Public Capital

Abstract This paper analyzes the productivity growth of the Spanish regions between 1965 and 1995, decomposing productivity gains into technological progress and efficiency change by means of Malmquist indices. Once estimates of efficiency are obtained, the aim of this paper is to analyze the effects of human and public capital on growth in terms of their impact on Total Factor Productivity (TFP). Public capital is believed to increase the productivity of the private factors of production whereas human capital is thought to contribute to the production process as an additional input and to have a dynamic influence on growth through its impact on technological innovation (shifts in the production frontier) and technological diffusion (movements toward the frontier), which are the components of this TFP measure. Considering inefficiencies will then allow the effects of these variables on TFP growth to be estimated via technological progress and efficiency gains.     

耕地外部效益评估研究进展

城镇化进程中耕地流失的重要原因之一在于耕地外部效益未得到合理的激励,开展耕地外部效益评估研究,既可增强社会公众对耕地及其外部效益重要性的认知,又可为耕地保护经济补偿政策提供决策依据。本文综述了国内外对耕地外部效益的内涵界定与评估案例,旨在为我国耕地外部效益评估深入完善提供帮助,从而促进耕地的有效保护。     

Does Public Infrastructure Affect Regional Performance?

Does public infrastructure affect state output? This paper uses both a Cobb-Douglas and a translog production function to examine the impact of public infrastructure spending on state output. Like labor and private capital, the stock of public capital is considered to be an input into the production process. The data are based on Alicia Munnell's work and were provided by the Federal Reserve Bank of Boston. Unlike many of the earlier studies employing Ordinary Least Squares (OLS) techniques, this analysis employs estimating methods that take advantage of the longitudinal nature of the data set. While these methods lend support to the public capitol hypothesis, there is evidence that studies relying on OLS have reported a coefficient on public capital that is upward biased. This paper, which controls for heterogeneity in the data, finds the coefficient on public capital to be smaller than that presented in previous studies. This finding has important policy implications. It indicates that while investment in public capital may have a positive impact on the private sector, this impact will be much smaller than predicted by previous studies.     

Internet development and the spatial optimization of regional productivity: Evidence from China

The rapid development of the Internet had a profound influence on the spatial distribution of economic output activities. On the basis of theoretical analysis, this study takes China's regions as research samples and construct a spatial econometric model to empirically analyze the impact of Internet development on regional productivity. The analysis reveals that the distribution of regional productivity in China had significant spatial correlation; regional productivity had positive spatial externalities; Internet development had significant promotion effects and positive spatial spillover effects to regional productivity, but the effects are heterogeneous in different subregions. The subregion analysis shows that the optimization effect of the Internet on regional productivity exhibits heterogeneity in different subregions. The threshold effect analysis reveals the increasing marginal effect of Internet development on regional productivity, and economic development and human capital supply are important factors restricting this marginal effect. Altogether, this study provides useful references on the positive effects of the Internet on regional productivity in the spatial dimension, and suggests that the policy makers can optimize the spatial distribution of regional productivity by promoting Internet access in various regions and narrowing the digital divide among regions.     

Ethnic or Political Fractionalisation? A District Level Analysis of the Provision of Public Goods in Sri Lanka

This study investigates the influence of ethnic and political fractionalisation on the provision of public goods at a district level in Sri Lanka. Evidence shows that political fractionalisation has a greater negative impact on the provision of public goods compared with ethnic fractionalisation. Similarly, political polarisation has a greater negative effect on the provision of public goods compared with ethnic polarisation. The interaction between ethnic and political measures suggests that political fractionalisation (political polarisation) exacerbates the negative effects of ethnic fractionalisation (ethnic polarisation) on the provision of public goods. The ethnolinguistic fractionalisation (ELF) index assumes greater statistical significance under fixed effects estimation suggesting greater within district effects in the relationship between ELF and public good provision.     

Regional Economic Activity and Petroleum Industry Incentive Policies: Utah's Uintah Basin

ABSTRACT Proponents of petroleum industry subsidies often assert that such policies will have positive economic implications for rural communities. This paper examines the economic impacts of such a policy in Utah. Specifically, this paper quantifies the direct and indirect economic and fiscal impacts of a tax credit granted for oil and gas well workovers in Utah's Uintah Basin. The analysis is made possible by an input-output model constructed specifically for Utah's oil producing economy. The tax credit policy was found to generate a net fiscal loss for the state. However, it does generate employment in the Uintah Basin. The total per job cost to the state of generating an average of one job per year for 5 years through the tax credit policy is $24,056 (1991 dollars). However, if the public expenditure impacts are taken into account, then the cost per job could be as high as $48,423 (1991 dollars). Whether there are other ways to generate the same employment gains at a lower cost was lost in the political debate surrounding this petroleum industry tax credit.     

农村公共产品供给与减轻农民负担

农民负担实际上是与农民有关的公共产品成本的分摊，而这种分摊存在着体制缺陷，这种缺陷导致了农民的生产效益低下，农民负担逐步加重。要改变这种现状就必须对农村公共产品供给体制进行改革和完善，以期从根本上减轻农民负担。     

Investment in Infrastructure as Determinant of Metropolitan Productivity

Utilizing newly assembled data on per capita metropolitan investments from the Census of Governments - Finance Statistics, this paper assesses the effects of local (i.e., non-state and non-federal) government investments in public capital on metropolitan factor productivity. Differences in productivity across metropolitan areas are modeled as a Hicks-neutral production function shifter, and the analysis covers 261 metropolitan areas of the United States for the period 1977 to 1992. These findings indicate that there is no significant relationship between levels of public capital investments and the levels of metropolitan productivity for the periods 1977, 1982, 1987, and 1992; however, a positive and significant relationship is found between the growth rate of local government investments in public capital and the growth rate of metropolitan productivity for the fifteen-year period.     

The State‐Level Impacts of Enforcing Sales Taxes for E‐retail Purchases

The Marketplace Fairness Act (S. 743) recently passed by the U.S. Senate may portend a national move toward states imposing sales taxes for business‐to‐consumer e‐retail purchases. While much of the policy debate surrounding this question has focused on trade creation versus diversion, there are likely distinct compositional effects at the state level, which will affect both economic activity and tax revenue. Consumers are clearly hurt by an online sales tax. However, such a policy would seemingly benefit state tax coffers, as well as traditional brick‐and‐mortar retailers and their employees. This paper uses a computable general equilibrium model approach to get a better understanding of the state‐level income, employment, and tax revenue effects of such a policy shift, in particular the likely tradeoffs between these three traditional economic targets across reasonable ranges of price elasticities.     

The Economics and Politics of Tax Increment Financing

ABSTRACT Tax Increment Financing (TIF) is a popular yet controversial tool that allows local governments to use property tax revenue to fund the public costs of economic development. Since TIF gives one local government the power to affect the tax bases of the overlapping jurisdictions, there is uncertainty and argument on the part of government officials and taxpayers as to who really finances the program. To evaluate the alternative contentions, this paper presents a general methodology that identifies which taxpayers in which locations fund the TIF's expenditures, and sets forward the conditions under which such a local economic development policy can be beneficial to taxpayers. The paper applies the model to study the TIF program currently active in downtown Des Moines, Iowa. The evidence indicates that the taxpayers in the entire metropolitan area subsidized the downtown activities in the early years, but now pay lower property tax rates due to the city's TIF-financed urban revitalization program.     

Productivity Change in Manufacturing Regions: A Multifactor/Shift-Share Approach

ABSTRACT The traditional shift-share model measures the combined effects of output growth and productivity change on employment. A region with above average employment growth either has a favorable industry mix or enjoys a competitive advantage over other regions. To separate the effects of output and productivity, the shift-share model is extended to decompose the effects of changes in output and productivity on employment. This paper modifies the Rigby-Anderson extension by separating the contribution of labor and capital to productivity growth in the analysis of regional economic performance, and investigates twenty (two-digit SIC) manufacturing sectors in twelve states (six snowbelt, six sunbelt states) to assess whether observed changes in employment were due to changes in output or to productivity.     

Private Government Formation in the DC Metropolitan Area

ABSTRACT This paper examines a variety of quasi-governmental organizations, mandatory homeowners' associations, special service districts, and transportation management associations, recently established in the urban region. Using the Washington, DC metropolitan area as a case study, this paper explores reasons for their development and implications of them for urban governance. It is argued that these organizations marry the concepts of public special districts and public-private partnerships in a process of private government formation. Private governments, it is suggested, are not wholly a private response to the shedding of services by the public sector, the dominant notion of privatization and local state restructuring, but the result of demands emerging in the private sector stimulated by social and spatial change. This signals the need to add to the concept of public-driven privatization the process of private initiated change where the resulting goods and services are more fully shaped by the needs of private interests. The evidence suggests these institutions do not represent a scaling back of the local state as privatization implies, but an extension of state structures in a fundamentally new direction, an extension which could be labeled the parallel state.     

Evolutionary Economic Geography for OFCs: Do Political Ties to the Onshore Reduce Capital Inflow Volatility?

This paper analyses the structural change in small‐island economies—sometimes labeled offshore financial centers (OFCs)—that have seen wealth‐generating activities through offshore financial services decrease in value since 2008. At the same time, OFCs have come under increasing scrutiny from supranational organizations such Organization for Economic Co‐operation and Development and European Union for perceived unfair tax practices and money laundering activities. Some OFCs have proactively adjusted to this sea change by broadening the economic base through development of new offshore business activities such as e‐gaming, film industry, and niche manufacturing. Most have increased co‐operation with onshore regulatory bodies to promote service and product legitimacy. Econometric analysis explores the assertion that OFCs that do not have a political link to the onshore may be exposed to greater capital inflows volatility than OFCs that have such a link. Case study analysis using the theoretical lens of evolutionary economic geography illustrates that a small OFC is creating spatialities of economic novelty by adapting economic development strategies deployed during the successful development of the center prior to the recent recession. Our findings reveal the importance of political links to the onshore to reduce capital inflow volatility and the importance of local public–private interaction to legitimize post‐recession development.     

Rolling Back the Frontiers of the State: Civil Service Reorganization and Relocation in Britain

Urban and regional studies of service location concentrate on private business and financial services. In contrast, this paper uses the example of the central government civil service in Britain to develop understanding of the spatial dynamics of public services. The paper shows how the location of civil service employment has been influenced by changes in government policy over the last thirty years. It also indicates the way in which the over-concentration of the private sector in London and the South East, throughout the period, has encouraged the decentralization of the civil service from the capital to a variety of provincial locations.     

Import–export nexus and China's emerging trade in environmental goods

International trade in environmental goods (EG) provides a market-based solution to balance the development–environment relationship. How can developing economies gain new growth opportunities through trade liberalisation in the EGs? This study investigates the structural features of products and firms during the early development of China's EG trade. This study defines the import–export nexus as the product relatedness between imports and exports at the firm level, which may promote the technology spill overs and firm cooperation. This study combines two nationwide data sets and constructs a data panel covering 334 prefectures and 248 EGs during 2001–2012. The conditional logit model with fixed effects is used for coefficient estimation. Empirical results reveal that the import–export nexus promotes new EGs in domestic sectors and export baskets, primarily supported by domestic private firms. The import–export nexus allows state-owned firms, which only represent a small market share, to enrich export baskets. It also helps foreign firms to develop new EGs in domestic sectors. These findings suggest revisiting the role of state-owned firms in industrial policy and developing a broad list of EGs to make use of the product relatedness. These will make developing economies like China gain new growth opportunities from the EG trade.     

Urban Growth Boundaries and Betterment: Rent‐Seeking by Landowners on Melbourne's Expanding Urban Fringe

Melbourne's Urban Growth Boundary (UGB) was legislated in 2002 and expanded substantially in 2010. Although based on strategic planning goals, UGBs have the capacity to influence land and housing markets. Landowners on the rural–urban fringe are a stakeholder group directly impacted by UGB policy, with multiple interests in containment policies and any land‐value effects. Following the 2010 expansion, substantial windfall profits to “instant millionaire” Melbourne landowners were openly reported. This paper critically interprets claims made by landowners in 264 public submissions responding to the proposed UGB expansion, and to an accompanying new policy instrument, the Growth Areas Infrastructure Contribution (GAIC). The GAIC was, in effect, a hypothecated tax on betterment expected to result from the UGB shift. Landowners commonly expressed fears that the UGB shift would not result in claimed value increases. On this basis, the GAIC was revised such that it is—at least in intention—a system wherein the tax is to be paid by housing developers and passed forward to homebuyers. The paper argues that the series of changes to the UGB and GAIC, including the modified “purchaser pays” system, may be understood as a response to rent‐seeking policy pressures from existing landowners as “insiders.” Although the unpopularity of the GAIC with landowners might have been anticipated, the outcome appears to legitimise their misinterpretation of the premise of development gain. A broader implication is that rent‐seeking behaviour by existing property owners can determine whether and how strategic planning policies are implemented.     

Indirect Regulation Pricing Methods of Public Utility

The author analyses the advantages and disadvantages of common indirect regulation pricing methods of public utility goods. It is pointed out that it results in high trade-cost and A-J effect binging in an excess of investment when capital yield method be used. It is not reasonable enough in setting PRI-X of PRI-X pricing method. An integrated indirect regulation pricing method is put forward which is to form a two-tier incentive mechanics both in expanding producing ability and improving efficiency. In initial stages of new public project, capital yield method should be used in order to activate investment motive. Upper-limit pricing method should be used in anaphase in order to improve the producing efficiency.     

Nash Equilibrium Mechanic of Environmental and Human Capital

The externality of surrounding is introduced into the 2-capital of economical increasing models, which includes human factors, to explore the influences of circumstances contradiction on the human capital formation. The normal and special nash equilibrium of environmental and human capital is presented through a limited boundary model of overlapping generations. The character of equilibrium trail and its economical meaning are examined. The study on the model shows that laissez faire economy will be either stagnant,growing,or collapsing in the long-run,depending on the returns of the learning technology with respect to the two kinds of capital,the initial state of economy,and the relative price of the environmental and consumption goods.     

What drives the labor share of income in South Korea? A regional analysis

This study takes a regional approach to analyzing what drives labor's share of income for South Korea over 2000–2014. First, we document empirically that changes in the labor share within a region are the dominant component of the change in the aggregate labor share of national income. To study the dynamic determinants of the labor share of income at the regional level, a panel vector autoregression (PVAR) model is estimated to examine how the regional labor share responds to innovations in an array of variables suggested by theoretical models. Consistent with theory, we confirm that technology, capital intensity and market concentration are the key variables explaining the labor share dynamics. Furthermore, we analyze the effects of trade openness and R&D expenditures on the regional labor share. Interestingly, we find that the labor share shows a different pattern of responses to the identified shocks depending upon the type of regions, that is, whether it is in the metropolitan or provincial areas. We also discuss the implications of our results for both theory and policy.