Announcements

To Our Readers:

The backlog of papers to be announced in this Public Choice & Political Economy Journal has increased dramatically. To ensure that our readers and authors get more rapid access to the current research in this area we are temporarily increasing the number of papers announced in each issue from 8 to 12. We know this puts a bigger burden on our readers to digest the material, but we also believe our readers would rather have the information sooner than later. As the queue of unannounced papers drops back to no more than a one-month lag we will again revert to our limit of no more than 8 papers in each issue.

Sincerely,
Michael C. Jensen
Director, ERN


Table of Contents

Discourses on Violence in Costa Rica, El Salvador, and Nicaragua: Youth, Crime, and the Responses of the State

Peter Peetz, GIGA German Institute of Global and Area Studies

Hamburg Rules United Nations Convention on the Carriage of Goods by Sea, 1978 - An Appraisal

Utsav Mukherjee, National Law University, Jodhpur

Immigration and Integration: The Vicissitudes of Dutch 'Inburgering'

Leonard F. M. Besselink, University of Utrecht - Faculty of Law

Where Have All the Heroes Gone? A Self-Interested, Economic Theory of Heroism

Brock Blomberg, Claremont McKenna College - Robert Day School of Economics and Finance
Gregory D. Hess, Claremont McKenna College - Robert Day School of Economics and Finance, CESifo (Center for Economic Studies and Ifo Institute for Economic Research)
Yaron Raviv, Claremont McKenna College - Robert Day School of Economics and Finance

Comparing Price and Non-Price Approaches to Urban Water Conservation

Sheila M. Olmstead, Yale University - School of Forestry and Environmental Studies
Robert N. Stavins, Harvard University - John F. Kennedy School of Government, Resources for the Future, National Bureau of Economic Research (NBER)

Dispersion of Information and Bureaucratic Equilibrium

Maria Alessandra Antonelli, University "La Sapienza"

Ethnic Diversity, Civil War and Redistribution

Thomas Tangerås, Research Institute of Industrial Economics (IFN)

Democracy, Autocracy and the Likelihood of International Conflict

Thomas Tangerås, Research Institute of Industrial Economics (IFN)

Exploring the Relationship between Military Spending & Income Inequality in South Asia

Krishna Chaitanya Vadlamannati, University of Santiago de Compostela

When Reasons Obligate

William A. Edmundson, Georgia State University

Poverty Policy in the United States: Why Government Programs Fail

Elgie McFayden, Kentucky State University

Governance Matters VII: Aggregate and Individual Governance Indicators, 1996-2007

Daniel Kaufmann, World Bank Institute
Aart Kraay, World Bank - Development Research Group (DECRG)
Massimo Mastruzzi, World Bank Institute


PUBLIC CHOICE & POLITICAL ECONOMY ABSTRACTS

"Discourses on Violence in Costa Rica, El Salvador, and Nicaragua: Youth, Crime, and the Responses of the State" Free Download
GIGA Working Paper No. 80

PETER PEETZ, GIGA German Institute of Global and Area Studies
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The paper analyzes the social construction of youth violence in Nicaragua, Costa Rica, and El Salvador on the one hand, and the related security policies of the three states, on the other. In each country, there is an idiosyncratic way of constructing youth violence and juvenile delinquency. Also, each country has its own manner of reaction to those problems. In El Salvador youths are socially constructed as a threat to security, and the state implements predominantly repressive policies to protect citizens against that threat. In Nicaragua and Costa Rica, where the social discourse on youth violence is less prominent, the state's policies are neither very accentuated nor very coherent, whether in terms of repressive or nonrepressive measures. There are strong relations and mutual influences between the public's fear (or disregard) of youth violence and the state's policies to reduce it.

"Hamburg Rules United Nations Convention on the Carriage of Goods by Sea, 1978 - An Appraisal" Free Download

UTSAV MUKHERJEE, National Law University, Jodhpur
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The Hamburg Rules are a set of rules governing the international shipment of goods, resulting from the United Nations International Convention on the Carriage of Goods by Sea adopted in Hamburg in 1978. They were drafted largely as an answer to the concerns of developing nations that The Hague rules were unfair in some respects. These concerns stemmed mainly from the fact that they were seen to be drawn up by the mainly colonial maritime nations and had the purpose of safeguarding and propagating their interests at the expense of other nations. The United Nations responded to this concern by drafting the Hamburg Rules. The Hamburg rules are far more than a simple amending of the Hague/Visby regime and came up with a completely different approach to liability. This paper explains the definition for each rule and how they affect the liability of maritime shipping carriers and what effects the amendments have on carriers while also examining the limitations placed.

"Immigration and Integration: The Vicissitudes of Dutch 'Inburgering'" Free Download

LEONARD F. M. BESSELINK, University of Utrecht - Faculty of Law
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This paper gives an overview of the legal measures taken in the Netherlands to require immigrants to pass an integration test, and its political background. It illustrates how integration of minorities turned from social policy issue into an immigration issue, from a problem to be addressed with social measures based on soft law to one which is to be tackled with legislation enforced with sanctions. It sketches how this approach to what should have been an inclusionary policy objective ('integration') has turned out to be in effect an exclusionary policy.

The assumption that integration is an issue of citizenship - which is inherent in the Dutch term inburgering - combined with the fact that only certain categories of citizens are to be subjected to the requirement of inburgering, creates previously non-existent distinctions of categories and degrees of citizenship. From the perspective of equal treatment and non-discrimination, these various categorizations have been problematical throughout the legislative itinerary.

By creating categories of citizens, new borders between persons were erected, which are not territorially defined, but depend on personal status. Inherent in the shifts in categories of citizenship seems to be an inversion in the relation between a formal legal status of citizenship and citizenship in a substantive sense. This priority of substantive citizenship prompts the question whether this is a sign of a development towards a more substantive and authentically republican concept of citizenship which thus far was unknown in a country where weak notions of national citizenship prevailed.

"Where Have All the Heroes Gone? A Self-Interested, Economic Theory of Heroism" Free Download
Robert Day School of Economics and Finance Research Paper No. 2008-1

BROCK BLOMBERG, Claremont McKenna College - Robert Day School of Economics and Finance
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GREGORY D. HESS, Claremont McKenna College - Robert Day School of Economics and Finance, CESifo (Center for Economic Studies and Ifo Institute for Economic Research)
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YARON RAVIV, Claremont McKenna College - Robert Day School of Economics and Finance
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Heroism is a valued part of any society, yet its realization depends on the decisions of individual actors and a public reward to individuals who undertake heroic actions. Military combat related activities provide a useful starting point for thinking about the empirical nature of heroism. Interestingly, if we define heroism by those who have been awarded military honors such as the Congressional Medal of Honor, the number of heroes has actually fallen in the past 35 years. We develop a theory to explain heroism in a rational decision-making framework, and we model the case in which individuals respond to danger to themselves and others based on the costs and benefits associated with acts of courage. We also provide insight into how a government may wish to optimally subsidize heroic actions. We then use our model to understand why the observed decline in heroism could, in fact, be both an optimal individual and social response.

"Comparing Price and Non-Price Approaches to Urban Water Conservation" Free Download
FEEM Working Paper No. 66.2008

SHEILA M. OLMSTEAD, Yale University - School of Forestry and Environmental Studies
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ROBERT N. STAVINS, Harvard University - John F. Kennedy School of Government, Resources for the Future, National Bureau of Economic Research (NBER)
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Urban water conservation is typically achieved through prescriptive regulations, including the rationing of water for particular uses and requirements for the installation of particular technologies. A significant shift has occurred in pollution control regulations toward market-based policies in recent decades. We offer an analysis of the relative merits of market-based and prescriptive approaches to water conservation, where prices have rarely been used to allocate scarce supplies. The analysis emphasizes the emerging theoretical and empirical evidence that using prices to manage water demand is more cost-effective than implementing non-price conservation programs, similar to results for pollution control in earlier decades. Price-based approaches also have advantages in terms of monitoring and enforcement. In terms of predictability and equity, neither policy instrument has an inherent advantage over the other. As in any policy context, political considerations are important.

"Dispersion of Information and Bureaucratic Equilibrium" Free Download

MARIA ALESSANDRA ANTONELLI, University "La Sapienza"
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The benefits' valuation of a public good is a complex procedure. Many benefits are external benefits. In other cases the perceived benefits are contingent on the individual condition or they will be perceived in a future time. So, a complete valuation needs a lot of information about the public good's characteristics. Since, in general, information is not full, the marginal valuation for a public good can be different from the true marginal valuation, even without strategic free rider behaviours. We introduce this point in a politicians-bureaucratic framework where, as in the traditional public choice literature, bureaucrats maximize the budget size. In particular, the paper shows the characteristics of the bureaucratic equilibrium when citizens have not full information about the public good. Moreover the paper shows the conditions under which an increase of dispersion of information among citizens is efficient improving.

"Ethnic Diversity, Civil War and Redistribution" Free Download

THOMAS TANGERÅS, Research Institute of Industrial Economics (IFN)
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We analyse in a game-theoretic framework the circumstances under which self-enforcing redistribution and power sharing coalitions can be used to resolve ethnic conflict peacefully. The existence of a pacific equilibrium depends crucially on ethnic diversity (the number of ethnic groups). The risk of civil war is comparatively high at intermediate levels of ethnic diversity. It is low if either society is very homogeneous or very diverse. Predictions of the model are consistent with recent evidence on the incidence of civil war.

"Democracy, Autocracy and the Likelihood of International Conflict" Free Download

THOMAS TANGERÅS, Research Institute of Industrial Economics (IFN)
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This is a game-theoretic analysis of the link between regime type and international conflict. The democratic electorate can credibly punish the leader for bad conflict outcomes, whereas the autocratic selectorate cannot. For the fear of being thrown out of office, democratic leaders are (i) more selective about the wars they initiate and (ii) on average win more of the wars they start. Foreign policy behaviour is found to display strategic complementarities. The likelihood of interstate war, therefore, is lowest in the democratic dyad (pair), highest in the autocratic dyad with the mixed dyad in between. The results are consistent with empirical findings.

"Exploring the Relationship between Military Spending & Income Inequality in South Asia" Free Download
William Davidson Institute Working Paper No. 918

KRISHNA CHAITANYA VADLAMANNATI, University of Santiago de Compostela
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The basic objective of this paper is to examine the effect of military spending on income inequality in four major South Asian economies. In the process, we also control for other possible key determinants of income inequality subject to data availability. Using panel regression fixed effects analysis for the study period 1975 to 2005, we find from our estimates that there is a positive effect of military expenditure on income inequality. Also we find there is a direct relationship between wartime military spending and income inequality and an inverse relationship between peacetime military spending and income inequality. Given the wide range of socio economic and political problems ailing South Asia, these results gain paramount importance, suggesting that reduction in military spending could reduce income inequality, thereby paving way for economic development and progress.

"When Reasons Obligate" Free Download

WILLIAM A. EDMUNDSON, Georgia State University
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This paper explores the isomorphism between two relationships. The first is that between reasons and requirements. Reasons for action (or for belief - but the focus here is action) differ from requirements, in that reasons are typically merely advisory while requirements are mandatory. We are rationally required to do that which there is most reason for us to do (and of course if we have most reason to do nothing, that is what reason requires). This way of understanding the relationship between reasons for action and what reasons require of an actor has been called the maximizing conception.

The second relationship is that between moral reasons (a subset of reasons generally, but not necessarily a proper subset) and moral requirements. It is natural to assume that moral reasons ripen into moral requirements in the same manner that reasons generally ripen into rational requirements: we are morally required to do what we have most reason, morally, to do. This transposition of the maximizing view from the realm of reasons generally to the moral realm can be traced to Moore.

The paper defends a version of Moore's view, despite its perhaps drastic consequences. Part of this defense consists of taking into account the putative incomparability between certain types of moral reasons. The paper argues that incomparability, far from undermining the maximizing view, helps it accommodate the possibility of moral options, and to that extent to avoid what has become commonly known as "the strenuousness objection," typically directed against consequentialistic species of the maximizing conception. But the larger part of this defense consists of criticism of alternative accounts of the relationship between moral reasons and moral requirements. Historically, a number of ideas have been invoked to close the gap between reasons and requirements, or (as the gap could also be described) between goodness and obligation. "Sanction" theories, voluntaristic theories, and rationalistic or universalization theories are examined and found wanting.

The paper concludes that the maximizing conception can be reconciled with whatever is defensible in each of these alternatives: a unary account of morality and rationality is available once moral reasoning is represented as an operation of maximization performed upon a "filtered" or "supplemented" set of reasons bearing upon the actor.

"Poverty Policy in the United States: Why Government Programs Fail" 

ELGIE MCFAYDEN, Kentucky State University
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This article posits the issue of American poverty and governments' inability to significantly alter this adverse social condition. While data suggests there has been a substantial and measurable improvement in poverty rates over the past four decades, the fact remains, poverty is an inherent and permanent factor of the American social, economic and political landscape. The United States government has implemented numerous programs and allocated billions of dollars in an attempt to reduce or eliminate poverty and the problem persists. This review focuses on poverty reduction policy and philosophy in the United States since the 1960's. The primary objective of this review is to better understand data trends, barriers and flaws in the philosophy of policy reduction policy adopted by the United States federal government.

"Governance Matters VII: Aggregate and Individual Governance Indicators, 1996-2007" Free Download
World Bank Policy Research Working Paper No. 4654

DANIEL KAUFMANN, World Bank Institute
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AART KRAAY, World Bank - Development Research Group (DECRG)
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MASSIMO MASTRUZZI, World Bank Institute
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This paper reports on the latest update of the Worldwide Governance Indicators (WGI) research project, covering 212 countries and territories and measuring six dimensions of governance between 1996 and 2007: Voice and Accountability, Political Stability and Absence of Violence/Terrorism, Government Effectiveness, Regulatory Quality, Rule of Law, and Control of Corruption. The latest aggregate indicators are based on hundreds of specific and disaggregated individual variables measuring various dimensions of governance, taken from 35 data sources provided by 32 different organizations. The data reflect the views on governance of public sector, private sector and NGO experts, as well as thousands of citizen and firm survey respondents worldwide. We also explicitly report the margins of error accompanying each country estimate. These reflect the inherent difficulties in measuring governance using any kind of data. We also briefly describe the evolution of the WGI since its inception, and show that the margins of error on the aggregate governance indicators have declined over the years, even though they still remain non-trivial. We find that even after taking margins of error into account, the WGI permit meaningful cross-country comparisons as well as monitoring progress over time. In less than a decade, a substantial number of countries exhibit statistically significant improvements in at least one dimension of governance, while other countries exhibit deterioration in some dimensions.

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