scholarly journals Contract Enforcement and Productive Efficiency: Evidence From the Bidding and Renegotiation of Power Contracts in India

Econometrica ◽  
2020 ◽  
Vol 88 (2) ◽  
pp. 383-424 ◽  
Author(s):  
Nicholas Ryan
Keyword(s):  
Structural Model ◽  
Productive Efficiency ◽  
Production Costs ◽  
Procurement Auctions ◽  
Contract Enforcement ◽  
Bidding Strategies ◽  
Ex Post ◽  
Study Heterogeneity ◽  
Equilibrium Bidding ◽  
The Government

Weak contract enforcement may reduce the efficiency of production in developing countries. I study how contract enforcement affects efficiency in procurement auctions for the largest power projects in India. I gather data on bidding and ex post contract renegotiation and find that the renegotiation of contracts in response to cost shocks is widespread, despite that bidders are allowed to index their bids to future costs like the price of coal. To study heterogeneity in bidding strategies, I construct a new measure of firm connectedness, based on whether a firm has been awarded coal concessions by the Government. Connected firms choose to index less of the value of their bids to coal prices and, through this strategy, expose themselves to cost shocks to induce renegotiation. I use a structural model of bidding in a scoring auction to characterize equilibrium bidding when bidders are heterogeneous both in cost and in the payments they expect after renegotiation. The model estimates show that bidders offer power below cost due to the expected value of later renegotiation. The model is used to simulate bidding and efficiency with strict contract enforcement. Contract enforcement is found to be pro‐competitive. With no renegotiation, equilibrium bids would rise to cover cost, but markups relative to total contract value fall sharply. Production costs decline, due to projects being allocated to lower‐cost bidders over those who expect larger payments in renegotiation.

Auctioning Emission Permits with Market Power

2016 ◽  
Vol 16 (4) ◽  
Author(s):  
Francisco Alvarez ◽  
Francisco J. André
Keyword(s):  
Market Power ◽  
Cost Effective ◽  
Secondary Market ◽  
Interior Solution ◽  
Specific Design ◽  
Dominant Firm ◽  
Bidding Strategies ◽  
Ex Post ◽  
Equilibrium Bidding ◽  
The Cost

Abstract We analyze emission permit auctions in a framework in which a dominant firm enjoys market power both in the auction and in the secondary market while its competitor behaves in a competitive way. We obtain linear equilibrium bidding strategies for both firms and a unique equilibrium of the auction, which is optimal ex-post for the dominant firm. Under specific distributional assumptions we conclude that the auction always awards less permits to the dominant firm than the cost-effective amount. Our results serve as a warning about the properties of auctioning under market power. Under interior solution the auction allocation is dominated by grandfathering in terms of aggregated cost with probability one. As a policy implication, the specific design of the auction turns out to be crucial for cost-effectiveness. The chances of the auction to outperform grandfathering require that the former is capable of diluting the market power that is present in the secondary market.

Graubündens Wald im Fokus | Focus on the Grisons forest

2009 ◽  
Vol 160 (7) ◽  
pp. 195-200
Author(s):  
Reto Hefti
Keyword(s):  
Climate Change ◽  
Global Warming ◽  
Natural Hazards ◽  
Positive Attitude ◽  
Production Costs ◽  
Raw Material ◽  
Intensive Use ◽  
Form Part ◽  
New Challenges ◽  
The Government

In the mountainous canton Grisons, much visited by tourists, the forest has always had an important role to play. New challenges are now presenting themselves. The article goes more closely into two themes on the Grisons forestry agenda dominating in the next few years: the increased use of timber and climate change. With the increased demand for logs and the new sawmill in Domat/Ems new opportunities are offered to the canton for more intensive use of the raw material, wood. This depends on a reduction in production costs and a positive attitude of the population towards the greater use of wood. A series of measures from the Grisons Forestry Department should be of help here. The risk of damage to infrastructure is particularly high in a mountainous canton. The cantonal government of the Grisons has commissioned the Forestry Department to define the situation concerning the possible consequences of global warming on natural hazards and to propose measures which may be taken. The setting up of extensive measurement and information systems, the elaboration of intervention maps, the estimation of the danger potential in exposed areas outside the building zone and the maintenance of existing protective constructions through the creation of a protective constructions register, all form part of the government programme for 2009 to 2012. In the Grisons, forest owners and visitors will have to become accustomed to the fact that their forests must again produce more wood and that, on account of global warming, protective forests will become even more important than they already are today.

scholarly journals Educational Level and Tax Compliance: Empirical Evidence From Nigeria

2020 ◽  
Vol 10 (1) ◽  
pp. 160
Author(s):  
Stanley Ogoun ◽  
Godspower Anthony Ekpulu
Keyword(s):  
Educational Level ◽  
Government Expenditure ◽  
Tax Compliance ◽  
Tax Revenue ◽  
Education Expenditure ◽  
Government Investment ◽  
Ex Post ◽  
National Priority ◽  
Ex Post Facto ◽  
The Government

The study interrogates the relationship between educational level and tax compliance in Nigeria. The study employs the ex post facto research design to ascertain how government investment in education enhances tax compliance. The study covers 17 years (2002-2018) for both tax revenue (a surrogate for tax compliance) and education expenditure (a surrogate for educational level). From the empirical results, the study concludes that there is a positive nexus between government expenditure on education and tax revenue. The study, therefore, recommends that as a matter of necessity, the government should invest more in the overall educational demand of her citizens not only from tax revenues but from other oil and non-oil sources. The governments, from the federal and state levels, should act as a matter national priority endeavour to meet up with the international budgetary benchmark allocation for education, as recommended by the United Nations Educational, Scientific and Cultural Organization (UNESCO) in its Education for All (EFA) document 2000-2015. This will give Nigerians more access to quality education that would result in moving up the global ranking in HDI with its resultant benefits.

scholarly journals Are Policy Analogies Persuasive? The Household Budget Analogy and Public Support for Austerity

2021 ◽  
pp. 1-19
Author(s):  
Lucy Barnes ◽  
Timothy Hicks
Keyword(s):  
Analogical Reasoning ◽  
Public Support ◽  
Case Scenario ◽  
The United Kingdom ◽  
Cognitive Problem ◽  
Government Deficits ◽  
Ex Post ◽  
The Government ◽  
Original Survey ◽  
Household Borrowing

Abstract Public opinion on complex policy questions is shaped by the ways in which elites simplify the issues. Given the prevalence of metaphor and analogy as tools for cognitive problem solving, the deployment of analogies is often proposed as a tool for this kind of influence. For instance, a prominent explanation for the acceptance of austerity is that voters understand government deficits through an analogy to household borrowing. Indeed, there are theoretical reasons to think the household finance analogy represents a most likely case for the causal influence of analogical reasoning on policy preferences. This article examines this best-case scenario using original survey data from the United Kingdom. It reports observational and experimental analyses that find no evidence of causation running from the household analogy to preferences over the government budget. Rather, endorsement of the analogy is invoked ex post to justify support for fiscal consolidation.

scholarly journals The Impact of Environmental Regulation on the Location of Pollution-Intensive Industries in China under Agglomeration Effect

2021 ◽  
Vol 18 (8) ◽  
pp. 4045
Author(s):  
Yinhao Wu ◽  
Shumin Yu ◽  
Xiangdong Duan
Keyword(s):  
Environmental Regulation ◽  
Local Economic Development ◽  
Negative Impact ◽  
Empirical Test ◽  
Mediating Effect ◽  
Production Costs ◽  
Agglomeration Effect ◽  
The Government ◽  
Pollutant Discharge ◽  
The Impact

Pollution-intensive industries (PIIs) have both scale effect and environmental sensitivity. Therefore, this paper studies how environmental regulation (ER) affects the location dynamics of PIIs under the agglomeration effect. Our results show that, ER can increase the production costs of pollution-intensive firms (PIFs) by internalizing the negative impact of pollutant discharge in a region, and thus, directly reduces the region’s attractiveness to PIFs. Meanwhile, ER can indirectly reduce the attractiveness of a region to PIFs by reducing the externality of the regional agglomeration effect. Moreover, these influences are regulated by the level of local economic development. Based on the moderated mediating effect model, we find evidence from the site selection activities of newly built chemical firms in cities across China. The empirical test shows that compared with 2014, the proportion of the direct effect of ER to the total effects significantly decreased in 2018, while the proportion of indirect effects under the agglomeration effect increased significantly. Our findings provide reference for the government to design effective environmental policies to guide the location choice of new PIFs.

scholarly journals The Case for the Stateless Society: Law

2017 ◽  
Vol 3 (2) ◽  
pp. 103-118
Author(s):  
Antón Chamberlin ◽  
Walter E. Block
Keyword(s):  
Sharp Contrast ◽  
Mutual Gain ◽  
Ex Post ◽  
Ex Ante ◽  
Stateless Society ◽  
The Government

AbstractWhat is the argument against government? There are several. For one thing, there is automatic exit for failure: businesses that do not earn a profit go bankrupt, and their resources tend to migrate to other, more effective, managers. For another, entrepreneurs operate with their own funds, or those voluntarily entrusted to them. This does not apply to bureaucrats and politicians, in sharp contrast. Perhaps most important, in the case of each and every commercial interaction in the market, buying, selling, renting, lending, borrowing, there is mutual gain at least in the ex ante sense of anticipations, and usually ex post, after the trade, as well. This rarely occurs under statism, at least not with regard to its source of funds, taxation, since it is not voluntary. An exception would be the relatively unimportant cases in which a consumer purchases something from the government, such as a ticket to cross a bridge, or a producer sells something to this organization, such as an airplane. The present paper is an attempt to elaborate upon this considerations.

The Korean 3T practice: A New Biosurveillance Model utilizing New IT and Digital Tools (Preprint)

2021 ◽  
Author(s):  
HyunJung Kim
Keyword(s):  
Population Control ◽  
Digital Tools ◽  
Big Brother ◽  
Self Help ◽  
Ex Post ◽  
The Social ◽  
Epidemic Intelligence ◽  
Pandemic Response ◽  
The Government ◽  
Event Based

UNSTRUCTURED South Korea COVID-19 pandemic responses, namely the 3T (testing, tracing, and treating) strategy, come to the fore as a new biosurveillance regime utilizing new IT and digital tools actively. The 3T biosurveillance system is a developed version of the traditional biosurveillance systems (indicator-based or event-based systems), which can provide epidemic intelligence capabilities for both ex ante prevention/preparedness or ex post response/recovery missions. Epidemiological investigation efforts exploiting the use of new digital and IT tools are the ground of the Korean 3T system practicing test, trace, and treatment mission, which can be referred to as ‘contact-based biosurveillance system.’ However, critics argue that the Korea’s 3T strategy may violate individuals’ privacy and human rights in addressing that the Korean biosurveillance system would strengthen the social surveillance and population control by the government as a “digital big brother” in the cyber age. However, closer scrutiny reveals that the Korea’s digital-based biosurveillance system for pandemic response has evolved since the experience of the 2015 Middle East Respiratory Syndrome (MERS) outbreak, by citizen’s requests and self-help behaviors

scholarly journals Risk Assessment of Ex-Post Transaction Cost in Construction Projects Using Structural Equation Modeling

2018 ◽  
Vol 10 (11) ◽  
pp. 4017 ◽  
Author(s):  
Zaigham Ali ◽  
Fangwei Zhu ◽  
Shahid Hussain
Keyword(s):  
Structural Equation Modeling ◽  
Life Cycle ◽  
Transaction Cost ◽  
Life Cycle Cost ◽  
Structural Equation ◽  
Construction Projects ◽  
Structural Model ◽  
Equation Modeling ◽  
Ex Post ◽  
Industry Professionals

The transaction cost (TC) escalation is the pervasive problem in the construction industry, which is continuously a threat to maintaining the life cycle cost of projects. Researchers have described the reality of risk for economic transactions. This study has taken the risk as a phenomenon to explore its influence on ex-post TC in construction projects. A questionnaire survey was undertaken from industry professionals to assess the risk of ex-post TC escalation in public-sector construction projects. In total, 475 surveys were conducted in Pakistan and used in the analysis. The data were analyzed using structural equation modeling (SEM) and the measurement and structural model was validated to determine the influence of risk on ex-post TC. The final SEM results show that internal and external risk, including sub hypothesized risks, positively influence TC. The weight of relative importance shows technical risk (23.82%) and environmental risk (22.88%) as significant sub-contributors from internal and external sources, respectively. This study recommends substantial investment in human capacity development to reduce the deficiencies in the ex-ante phase of the projects that help to reduce the risk of ex-post TC escalation. It also suggests the adoption of strict policies on contingency claims, and recommends nontraditional ways of monitoring to overcome the risk of ex-post TC. This study’s results provide valuable information for industry professionals and practitioners to maintain life cycle costs as a contribution to sustainable construction.

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