In this subtask we survey the literature that estimates the ancillary benefits of greenhouse gas (GHG) abatement in developing countries, and the extent to which its findings can be transferred across countries. Specifically, we focus upon the health benefits from emission reduction in developing nations. In order to evaluate the spillovers and indirect benefits that a country could reap from GHG mitigation policies, it is crucial to account for the differences that exist among nations in the valuation of such benefits. In fact, the monetary loss attached to an illness and the value of a human life may vary across cultures, economies and over time, depending on income, demographics, socio‐economic and political characteristics of a country. There is a rich literature on valuation techniques that spans much of the developed world, whereas there has been far less analysis of developing countries. The goal of this research is to examine the still relatively scarce literature on the developing world and its specific findings. Particular attention will be dedicated to case studies of China.
We study the interactions between global population, technological progress, per capita income, the demand for food, and agricultural land expansion over the period 1960 to 2100.We formulate a two-sector Schumpeterian growth model with a Barro-Becker representation of endogenous fertility. A manufacturing sector provides a consumption good and an agricultural sector provides food to sustain contemporaneous population. Total land area available for agricultural production is finite, and the marginal cost of agricultural land conversion is increasing with the amount of land already converted, creating a potential constraint to population growth. Using 1960 to 2010 data on world population, GDP, total factor productivity growth and crop land area, we structurally estimate the parameters determining the cost of fertility, technological progress and land conversion. The model closely fits observed trajectories, and we employ the model to make projections from 2010 to 2100. Our results suggest a population slightly below 10 billion by 2050, further growing to 12 billion by 2100. As population and per capita income grow, the demand for agricultural output increases by almost 70% in 2050 relative to 2010. However, agricultural land area stabilizes by 2050 at roughly 10 percent above the 2010 level: growth in agricultural output mainly relies on technological progress and capital accumulation.
This paper studies tax competition in an economic geography model that allows for agglomeration economies with trade costs and heterogeneous firms. We find that the Nash equilibrium involves the large country charging a higher tax than the small nation. Lower trade costs lead to an intensification of competition, a drop in Nash tax rates, and a narrowing of the gap. Since large, productive firms are naturally more sensitive to tax differences in our model, large firms are the crux of tax competition in our model. This also means that tax competition has consequences for the average productivity of the big and small nations’ industry by lowering tax rates, the small nation can attract high productivity firms.
We examine the extent to which differences in international tax rates may account for the small correlations of per capita consumption fluctuations across countries. Theory implies a close relationship between relative consumption growth, and consumption and capital income tax rate differentials. We find strong empirical evidence for this relationship. Idiosyncratic output fluctuations account for the majority of cross country consumption growth variability, but trends in tax differentials are informative about the dynamic evolution of international risk sharing. In particular, adjusting for capital taxes reveals an intuitive positive relationship between financial connectedness and risk sharing that is absent in baseline measures.
Barriers to immigration of low-skilled workers from developing countries into the advanced countries prevent many potential migrants from leaving their countries of origin. With very low home-country wages in relation to the cost of undocumented migration, the opportunity to migrate often hinges on becoming indebted to a human smuggling organization or family and friends. This paper examines the conditions under which migration is optimal for an individual who lacks liquid assets, with a focus on alternative options for financing migration costs. One is by accumulating the required amount of savings out of source-country income, with or without financial support from the family or social network. The other is debt-bonded migration, which involves borrowing from a smuggling organization and paying the loan while working in the host country. I find that greater financial support from the family network increases the attractiveness of debt-bonded relative to self-financed migration.
This paper uses detailed information on the latitude and longitude of conflict events in Sub-Saharan African countries to study the impact of external income shocks on the likelihood of violence. We consider a number of external demand shocks faced by the countries or the regions within countries - temporary shocks such as changes in the world demand for agricultural commodities, and longer-lasting events such as financial crises in the partner countries - and combine these with information reflecting the natural level of trade openness of the location. We find that (i) the incidence, intensity and onset of conflicts are generally negatively and significantly correlated with income variations at the local level; (ii) this relationship is significantly weaker for the most remote locations, i.e those located away from the main seaports,(iii) at the country-level, these shocks have an insignificant impact on the overall probability of conflict outbreak, but do affect the probability that conflicts start in the most opened regions. Altogether, our results therefore suggest that external income shocks are important determinants of the intensity and geography of conflicts, and provide support in favor of the opportunity cost theories of war.
This paper develops a model of optimizing behavior of asylum seekers whose objective is to reach an advanced country. Their personal characteristics and the challenges anticipated along the way determine whether they try to reach the ultimate destination with the aid of human smugglers or by applying for resettlement with the United Nations High Commissioner for Refugees (UNHCR). In the current policy environment, individuals who are relatively young, skilled, wealthy, and have access to credit from the family network are found to have a strong incentive to choose the undocumented migration option.
The objective of this paper is to discuss and compare the role that different constituencies play in US and EU procedures for merger control. We describe the main constituencies (both internal and external) involved in merger control in both jurisdictions and discuss how a typical merger case would be handled under these procedures. At each stage, we consider how the procedure unfolds, which parties are involved, and how they can affect the procedure. Our discussion reveals a very different ecology. EU and US procedures differ in terms of their basic design and in terms of the procedures that are naturally associated with these alternative designs. On the one hand, there is a single investigator and decision maker operating under a symmetric mandate in the EU and on the other hand, an investigation and settlement operating under the threat of a court decision in case of challenge only in the US. The EU has developed numerous procedures and has granted extensive rights to the parties in the context of these procedures in order to provide some guarantee that the Commission’s role as investigator and decision maker at first instance is not abused. By contrast, the US procedures appear to be rather informal, the balance in the investigation and evaluation of the merger being provided by the credible threat of a court decision. With a strong federal government that has extensive competences for regulation, merger control on competition grounds is subject to the additional public interest test of regulators in the US. Such additional control is weak in the EU, which has more limited competences for regulation. In addition, both the executive and the legislative powers are more fully developed at the federal level in the US. Both the executive power and the legislative seem to be in position to wield greater influence on enforcement in the US than is the case in the EU.
We use a large sample of export transactions from customs files across six developing countries and several years to explore the extent of pricing to market and volume responses to exchange-rate variations in the East African Community (EAC), a customs union, and a control group of exporters from developing countries outside the region. We find that, relative to the control group, EAC exporters seem to have a stronger ability to price to market on the CU market, suggesting the existence of market power. This market power does not seem to relate to usual proxies for firm size, but is more marked for manufactured products. We also find that the supply (volume) response to exchange-rate variations is more subdued for EAC exporters than for the control group, suggesting the existence of supply constraints.
