A Theory of Partial Property Rights and the Illusion of State-Owned Enterprises

China’s State-Owned Enterprises (SOEs) enjoy many special benefits. They do not turn over profits and rents to the state, they pay much less interests than other enterprises in their use of capital, they enjoy monopolistic power in the marketplace, incomes of SOE employees, including managers, are free of policy restrictions. Because these substantial interests are not transferrable to individuals, competition exists for them. Compared with executives of private enterprise, senior managers of SOEs are 94 times more likely of being convicted of a crime. High benefits enjoyed by senior managers of SOEs come with a great risk. Once the illusion of SOEs is punctured, SOE leaders with higher education and long-term visions may become the driving force of SOE reform.

Share Contract Revisited: A New Transaction Cost Approach

The purpose of this paper is to explore how sharecropping contracts are chosen over fixed-rent contracts. There are two concerning issues. First, theoretical explanation has been criticized for not providing a satisfactory answer to the question as to why share contracts are chosen. Second, among the existing empirical studies, there are great controversies about the impact of variance of output. Inspired by the latest insights from (Cheung, S. N. S. 2014. Economic Explanation. Hong Kong: Arcadia Press.), this paper not only provides an explanation for the choice of share contract that is suitable for empirical testing, but also solves the puzzle over variance of output.

On the Observability Requirement in Economics as an Axiomatic Science

This paper points out as the only social science that is axiomatic, economics has the power of predicting beyond interpreting. It then explains that in hypothesis testing, the law of demand is the only indispensable axiom in economics, and that quantity demanded is the only non-observable variable that must be retained. After reviewing his disagreements with his peers and colleagues, and his success in predicting the transformation of China, the author argues that the profession has gone astray with the surge in the use of non-observables.

Can Good Intentions Bring Negative Consequences? The Perceived Positive and the Side Effects of the Law on Alcohol Control

The present study addresses the perceived effects of the implementation of the Law on Alcohol Control passed by the Lithuanian Parliament. The current study provides initial scientific insights into the rationale and the outcomes of that piece of legislation. The results of the research were analyzed from both economic and social perspectives. The study revealed that although the implementation of the Law on Alcohol Control did induce significant positive changes in society’s perception towards consumption of alcohol, it also provoked some side effects in economic and social perspectives.

The Rural Labor Transfer with Respect to the Development of Farmland Leasing Market: Evidence from Rural China

Since relaxing policy control for farmland leasing, rural labor transfer also arises. The paper estimates the relationship between farmland leasing market and rural labor transfer based on a Double Hurdle Model with the survey data collected from 2793 households in rural China. Results show that the farmland leasing-in scale restrains rural labor transfer mainly in the full-time movement by stimulating the behavior of farmers to plant rice, whereas farmland leasing-out scale, compared to farmland leasing-in scale has an opposite effect on labor transfer, and performs this effect by increasing the likelihood of the desired degree for rural households to do urban business. Specifically, we also find the underlying channels such as the farmers’ desire to the agricultural investment and the Dipiao-ticket transaction through which farmland leasing-in or -out scale affects labor transfer separately. We further find a negative effect of farmland leasing-in scale on household savings and a positive effect of farmland leasing-out scale on that mainly evidently in the group of rural labor transfer. Moreover, farmland leasing-out scale has no significantly influence on the urban life worry of farmers, does not let farmers worry about their urban housing, and does worry about their children’s education. Our study has a deep policy implication on social planners in China to strengthen the systems of the farmland leasing and rural labor transfer.

On a Fallacy in the Coase Theorem and the Theorem of Transaction Costs Substitution

This paper first presents a historical account of the origin of the Coase Theorem. It then elaborates its significance in explaining the working of economic institutions. After expounding the concepts of transaction cost and rent dissipation, it points out an error in the Coase Theorem. Lastly, the paper propounds the Theorem of Transaction Costs Substitution as an extended and general version of the Coase Theorem.

On the Economics of Restructuring World Railways, with a Focus on Russia

The lecture opens with a discussion of the modern history of economists’ treatment of network industries: from cost-of-service regulation through incentive regulation to vertical restructuring. This history is then applied to the freight railways sector, followed by a discussion of the current state of the rail restructuring debate – what we term the European versus the American model, or vertical versus horizontal separation – first generally and then in the Russian Federation. Finally, we seek to derive lessons relevant to Russia from both the empirical literature and the results of recent reform policies implemented in the United States and the European Union.