Front-Loading Agricultural Subsidies: Quantifying Public Savings

Reforms to agricultural policy have been stalling in OECD economies. In this paper, we quantify the potential for public savings from switching to an optimal transfer system in small open economies. Following the insights from the literature on repeated moral hazard, optimal subsidies are front-loaded, which provides stronger incentives for farmers to transition out of agriculture, compared to the existing policies. In our counterfactual experiments, we find government savings of 6% for Chile, 45% for Japan, 24% for Switzerland, and 51% for Turkey. In addition, optimal subsidies more than double the speed of the transition of employment out of agriculture.

On Realizing the Pragmatic Potential of Educational Prescripts

The article analyses the new Federal Educational Standards in Linguistics, the basic regulatory document for higher education which formulates norms and prescriptions with the goal of effective implementation of its objectives and requirements. It is common knowledge that the efficiency of such implementation depends on how accurately these prescripts are worded so that there are no inconsistencies or conflicting interpretations. It means that the authors of these Standards must provide for the optimal transfer, reproduction, and regulation of these prescripts and competencies and thus foresee the pragmatics of the educational discourse. The aim of the study is to identify the extent to which the Educational Standards’ pragmatic potential can be realized. The study is based on the fundamental principles of pragmatics as an instrument for combining ideal formulas with real factors that contribute to their implementation. Using content, discursive, and interpretive analysis, the authors find that there are significant contradictions between the Standards’ prescripts and the feasibility of the required results. One of the reasons for this discrepancy lies in the ambiguity of wording and interpreting of the basic categories and the resulting conflict between overlapping or complementary categories — all of which inevitably leads to differences in how they are perceived. Universities could actualize the educational discourse pragmatic potential much more effectively, if the pragmatic relations and educational objectives were more transparently defined and intercorrelated to finally implement a related pragmatic adaptation regarding types of competencies.

Incentive Contract Design for Supply Chain Enterprise’s Pollution Abatement with Carbon Tax

This paper applies mechanism design to the supply chain enterprise’s pollution abatement problem with carbon tax. To maximize the government’s expected utility, an uncertain contract model is presented in the framework of principal-agent theory, where the government’s assessment of the supply chain enterprise’s carbon emission level is described as an uncertain variable. Afterwards, the equivalent model is provided to obtain the optimal contract for the uncertain pollution abatement problem. The results demonstrate that the supply chain enterprise’s optimal output decreases with the carbon emission level. Furthermore, the government’s optimal transfer payment decreases with the carbon emission level if the carbon tax is low. In contrast, if the carbon tax is high, the optimal transfer payment increases with the carbon emission level. In addition, an increase in the carbon emission level decreases the optimal utilities of both the government and the supply chain enterprise and also leads to the supply chain enterprise’s incremental marginal utility. Finally, we provide a numerical example, which illustrates the effectiveness and practicability of the proposed model.