Social and Behavioral Sciences Commons^™

Plant Vintages, Grandfathering, And Environmental Policy, Garth Heutel

ECON Publications

Environmental regulations that grandfather existing plants by not holding them to the same strict standards as new plants may have the unintended consequence of retarding new investment. If new plants are cleaner, then this effect may increase pollution in the short run. I develop a dynamic model of a facility's decisions over scrapping and abatement, which depend on capital depreciation, profitability shocks, and environmental policy. Using data from fossil fuel fired boilers at electric power plants, I estimate the structural parameters of the model and assess the impact of grandfathering in the Clean Air Act on sulfur dioxide emissions. Counterfactual …

La Descentralizacion Tributaria En Las Comunidades Autonomas De Regimen Comun: Un Proceso Inacabado. (Tax Decentralization In The Autonomous Communities: An Unfinished Process. With English Summary.).”, Santiago Lago-Peñas, Jorge Martinez-Vazquez

ECON Publications

Aunque el proceso de descentralización fiscal en España ha avanzado de forma muy notable en las tres últimas décadas, existen algunas asignaturas pendientes. Entre las más importantes se encuentra la descentralización del poder tributario a las Comunidades Autónomas de régimen común. Este artículo de panorama se concentra en lo que no se ha hecho del todo bien y por qué razones, al tiempo que se apuntan las direcciones de reforma para el futuro. El trabajo se divide en dos partes. En la primera, nos ocupamos de los fundamentos teóricos de la asignación tributaria en el caso de gobiernos multinivel y …

Financing Subnational Governments / Financiación De Las Haciendas Subcentrales, Roy W. Bahl

ECON Publications

This study deals with the assignment of tax competencies to subcentral governments and with the structure of this assignment of revenues. This review reconsiders the issues raised by Musgrave twenty-five years later. It poses the question of whether the tendency towards internationalization in the assignment of taxes follows the steps prescribed by economists, and it concludes with some reflections on the most probably future of the decentralization of the tax systems. In the course of this discussion, we distinguish between industrialized countries, countries in transition and developing countries.

Conditional Vs. Unconditional Grants: The Case Of Developing Countries, Roy W. Bahl

ECON Publications

Because subnational government taxation is not a viable option in many low-income countries, the financing of decentralized services often comes down to the choice between an unrestricted grant and one with conditions laid down by the higher level government. The central policy question that arises, and is explored in this paper, is how this choice does or does not compromise the success of fiscal decentralization.

We begin with some definitional issues and with empirical evidence about the revenue dependence on transfers in low income vs. OECD countries. Then we discuss the theoretical and practical advantage of conditional grants vs. unconditional …

Analytical General Equilibrium Effects Of Energy Policy On Output And Factor Prices, Garth Heutel, Don Fullerton

ECON Publications

Using an analytical general equilibrium model, we find solutions for the effect of energy policy on factor prices as well as output prices. We calibrate the model to the U.S. economy, and we consider a tax on carbon dioxide. By looking at expenditure and income patterns across household groups, we quantify the uses-side and sources-side incidence of the tax. When households are categorized either by annual income or by total annual consumption as a proxy for permanent income, the uses-side incidence is regressive. This result is robust to sensitivity analysis over various parameter values. The sources-side incidence can be progressive, …

The General Equilibrium Incidence Of Environmental Mandates, Garth Heutel, Don Fullerton

ECON Publications

Pollution regulations affect factor demands, relative returns, production, and output prices. In our model, one sector includes pollution as an input that can be a complement or substitute for labor or capital. For each type of mandate, we find conditions where more burden is on labor or on capital. Stricter regulation does not always place less burden on the better substitute for pollution. Also, restrictions on pollution per unit output create an “output-subsidy effect” on factor prices that can reverse the usual output and substitution effects. We find analogous effects for a restriction on pollution per unit capital.

Trust With Private And Common Property: Effects Of Stronger Property Right Entitlements, James C. Cox, Daniel T. Hall

ECON Publications

Is mutually beneficial cooperation in trust games more prevalent with private property or common property? Does the strength of property right entitlement affect the answer? Cox, Ostrom, Walker, et al. [1] report little difference between cooperation in private and common property trust games. We assign stronger property right entitlements by requiring subjects to meet a performance quota in a real effort task to earn their endowments. We report experiment treatments with sequential choice and strategy responses. We find that cooperation is lower in common property trust games than in private property trust games, which is an idiosyncratic prediction of revealed …

A New Paradigm For Property Taxation In Developing Countries, Roy W. Bahl, Sally Wallace

ECON Publications

The property tax is almost everyone’s choice for the principal local government tax revenue source in developing countries. The focus of public policy on this tax and the interest it has drawn from public finance scholars and practitioners are evidence of its importance.1 Moreover, both external donors and national governments have invested significant money in strengthening its administration. Despite all of the good work that has been done in designing more efficient property tax structures and administrations, property tax revenues still account for less than 1 percent of gross domestic product (GDP) and less than 4 percent of all tax …

Fiscal Decentralization To Rural Local Governments In India: A Case Study Of West Bengal State, Roy W. Bahl, Geeta Sethi, Sally Wallace

ECON Publications

Rural local governments in India provide essential services to over 70 percent of the national population. Yet, little is known about the efficacy of the financing system that supports these local governments, nor is there a fiscal information system that will allow a tracking of rural local government expenditures and revenues. In this article, we describe the role of rural local governments in India's; federal system, and use a database, newly gathered for West Bengal State, to present an analysis of rural local government financing patterns. We find that expenditures are significantly higher in less populated and more backward gram …