Showing papers on "Subsidy published in 1975"

The theory of environmental policy

Abstract: Preface to the second edition Preface to the first edition 1. Introduction: economic and environmental policy Part I. On The Theory of Externalities: 2. Relevance and the theory of externalities 3. Externalities: definition, significant types, and optimal-pricing conditions 4. Externalities: formal analysis 5. Uncertainty and the choice of policy instruments: price or quantity controls? 6. Market imperfections and the number of participants 7. Are competitive outputs with detrimental externalities necessarily excessive? 8. Detrimental externalities and nonconvexities in the production set 9. On optimal pricing of exhaustible resources Part II. On The Design of Environmental Policy: 10. Introduction to Part II 11. Efficiency without optimality: the charges and standards approach 12. Marketable emission permits for protection of the environment 13. Stochastic influences, direct controls, and taxes 14. Taxes versus subsidies: a partial analysis 15. Environmental protection and the distribution of income 16. International environmental issues 17. national or local standards for environmental quality? Index.

The control of migratory labour on the South African gold mines in the era of Kruger and Milner

Abstract: Almost from its infancy the Witwatersrand mining industry grew up under the shelter of substantial government encouragement and support. Although spokesmen for the mines have always attempted to portray their impressive achievements as a triumph of free enterprise capitalism,1 the leaders of the industry themselves have assiduously courted state assistance from the beginning of gold mining in the South African Republic in the 1 880s to the present.2 There is a close parallel with the great transportation companies which built the lines of rail across western North America in the latter part of the nineteenth century, engulfing vast tracts of the public domain and huge government subsidies in the process. American and Canadian governments were drawn to the support of the railways for some of the same reasons which brought South African governments into partnership with the mining houses. Railways in the one case and gold in the other were perceived as the basic instruments of nation building, and this was too important a matter to leave purely to private enterprise. Furthermore, it quickly became apparent that private companies were either unwilling, in the case of such enterprises as the Canadian Pacific Railway, or unable, as with the South African gold mines, to do the job unaided by government. The railway companies took their assistance in the form of direct cash subsidies and in land. While the mining industry did not require cash subsidies until the 1960s (when certain low grade mines were subsidized), what it did require throughout its history was an enormous legislative and administrative effort to organize the black labour supply-a crucial element in mining costs.3

Methods of pollution control and the rate of change in pollution abatement technology

Abstract: This paper analyzes the impact of an improvement in pollution abatement technology on the costs of a firm producing under three alternative methods of pollution control: tax, subsidy, and emission standards. It is shown that the cost reduction to the firm will be greatest if the firm is operating under the pollutant tax method of pollution control, and therefore it is concluded that the incentive to improve pollution abatement technology will be greater if pollutant taxes are used to control pollution. In addition, it is shown that firms operating under emission standards or subsidy may have no economic inducement to produce some innovations in pollution abatement.

Women as Volunteers: the Double Subsidy:

Abstract: A salient feature of the highly bureaucratic society in which we live is a pragmatic, rational orientation which assumes that human beings can control the forces that influence their lives. Tradition is not the most important guideline for action. One has to seek solutions demanded by goals and situations. It means the cultivation of a value for a sense of control over one’s life. To the extent that people recognize that power flows from active participation in society, those who desire to be able to control the influence on their lives will seek a variety of forms of participation in formal and informal organizations. For men in American society, the desirability of full participation in formal organizations and/or the cultivation of professional skills is taken for granted. It is also taken for granted that such participation and activity are geared to yield both monetary and nonmonetary rewards. For women, the desirability of paid activities and technical skill development have been down played through a number of social control mechanisms. Participation has been sanctioned variously, depending upon the woman’s marital and socioeconomic status on the one hand and upon the kind and extent of rewards attached to the organizational position

Health and Taxes: An Assessment of the Medical Deduction.

Abstract: A variety of proposals for national health insurance are now receiving serious consideration in the Congress, the Administration, and public discussion. This paper examines the performance of the one national program which provides partial financing of health expenses for all Americans-the medical deduction under the personal income taxusing the Internal Revenue Service statistics on itemized deductions for 1970. Income tax deductions provide this protection in the form of an indirect subsidy to the purchase of health insurance and medical care ser-

The rail problem

Abstract: Reasons for the failure of the 1968 transport act and the attempt to make BR pay its way with the assistance of a small subsidy are examined Attention is drawn to the board's inaction, the way it ignored warnings and its failure to achieve planned reduction in costs Estimates are made of how much revenue br can hope to earn from freight and passenger traffic in 1981 It is demonstrated that BR has scope for increasing prices Investment and labour forces are scrutinised in order to establish the minimum level of expenditure if br is to cope with anticipated traffic It is found that large savings in manpower are possible A critical review of the case for rail subsidies analyses their effect on the distribution of income, the arguments for maintaining loss-making passenger services are examined and an attempt is made to quantify the costs that lorries impose on the community It is shown how far BR could be made financially self-supporting by 1981 if it were fully efficient and a five year programme of economic and administrative reform is sketched out for tackling the rail problem /TRRL/

Some Questions About the Regional Development Incentives Act

Abstract: The Regional Development Incentives Act empowers the Department of Regional Economic Expansion to subsidize firms for investing in the less developed regions of Canada. Though it does not specify in detail how the recipients of subsidies are to be chosen or how large subsidies are to be, the Act contains the curious clause that 'no development incentive may be authorized ... if ... it is probable that the facility would be established ... without the provision of such an incentive.' This paper is a qualitative study of the probable consequences of the Act with special reference to the implications of that clause. There is some consideration of the effects of the Act upon investment, employment, innovation, the distribution of income, and equity in dealings between government and business in the less developed regions of Canada and in Canada as a whole.

Public Revenue from Canadian Crude Petroleum Production

Abstract: This paper is a discussion of allocation among the oil industry, the provincial governments, and the federal government of revenues arising from crude petroleum production in Canada. It argues that: I) the federal export tax and domestic price ceiling and subsidy on crude oil should be gradually withdrawn, for the sake of efficiency in resource allocation; 2) federal-provincial sharing of oil (and other natural resource) revenues could conveniently be based on the principle that all income should be treated similarly under taxation, or, specifically, that the federal share of provincial resource revenues should be the same as it would be if those revenues accrued to the private sector and were taxed accordingly.

The Effectiveness of DREE's New Location Subsidies

Abstract: This article compares preand post-April 1974 location subsidies offered by DREE and demonstrates that both have favoured capital more than labour expenditures. More specifically, the DREE subsidies are capital biased since they have lowered the cost of machinery and equipment by a greater percentage than the reduction in the cost of labour. Since most firms have at least some flexibility in choosing the value of capital per worker, capital biased subsidies must be inconsistent with the RDIA goal employment in depressed regions. Comparing the preand the post-April 1974 subsidies, the more recent have increased the capital bias for average firms in a majority of industries.

Subsidies in the Use of Revolving Credit

Abstract: This paper deals with the measurement of subsidies in the use of consumer retail revolving credit under current legal and institutional arrangements. The possibility of subsidies among credit users stems from three basic sources: (i) legal restrictions on rates, the size of credit extensions, billing methods; (ii) the demand for this type of credit and the resulting use patterns; (iii) the "production" and pricing aspects of revolving credit. Based upon data from several surveys, estimates of credit costs and revenues based on twelve-month account histories of credit use are calculated for each member of a sample of credit users. These estimates are then employed in a multivariate model to determine the nature and extent of subsidies present. The implications of these findings for public policy in the area of consumer credit are set forth in the final section.

Evaluating fertilizer subsidies in developing countries

Abstract: Recent increase in international fertilizer prices threaten to slow the pace of expansion of agricultural output in the less developed countries (LDC's). Higher prices may limit both the initial adoption of fertilizer and the rate of use by LDC farmers...

The Two Price System in Energy: Subsidies Forgotten

Abstract: A two price system rather than helping Canadians at the expense of foreigners actually redistributes income among Canadians. Some Canadians are made worse off (owners of oil land, shareholders in oil companies); some foreigners are made better off (shareholders in Canadian manufacturing firms, purchasers of Canadian manufactured goods). One portion of the complex redistribution of income is examined. For domestic Canadian consumers, a subsidy on direct energy consumption benefits the poor more than the rich. However, the middle class benefit most in some regions while poor consumers in Quebec generally benefit least.

The Social Profitability of Subsidies for Agricultural Exports: The Case of Ghana

Abstract: A framework is developed to estimate the social profitability of export subsidies. The approach indicates whether a definite gain has been obtained even though the new equilibrium is not a first best. A method is provided for measuring consumer surplus when the demand curve shifts as a consequence of the policy. The technique is applied to selected agricultural exports from Ghana. It is found that while the subsidies would be profitable there would also be a heavy fiscal burden associated with the subsidies even though the subsidy scheme may be partly self-financing.

Air transport growth in under‐developed regions

Abstract: Summary On the basis of existing models of transport network growth a four‐phase model of air network growth is developed and is listed with reference to the growth of air transport in north‐western Australia. Overall the model is successful though certain features and explanations of network growth were unforeseen, particularly the role of government initiatives and subsidies. The impact of the mining boom on network growth is considered and the relationship between air transport and economic development is summarized. Finally a revised form of the model is presented.

Rates of Return and Government Subsidization of the Canadian Pacific Railway: Some Further Remarks

Abstract: In a recent note, Mercer (1973) provides some alternative calculations to mine (George, 1968b) for analysing the perennial question whether 'excessive' subsidies were paid for the construction of the Canadian Pacific Railway. The main thrust of Mercer's argument is that such calculations ought to be based upon 'the economic (internal) rate of return which has a foundation in neoclassical theory' and not upon 'the accounting technique used by George.'1 This note is addressed to three questions. The first concerns Mercer's claims for the superiority of internal rate of return calculations. The second and third are independent of this first issue and concern the different ways in which Mercer and I conceive of the CPR project and the desirability of the incltusion of various cost and subsidy items.

The states and rural rail preservation. alternative strategies

Abstract: This report identifies the problems of rail abandonment and rural development, and presents alternative strategies available to States in coping with abandonment problems. In the overview, there are 16 recommendations to States, 11 to the Federal government and one for the railroad industry. The chapters: Perspectives on Light Density Branch Line Problem; Rail Abandonment and Its Impact on Rural Economies and the Environment; Potential of Future Rural Economic Development; Subsidy and Acquisition as Alternatives; Short Line Railroad as an Alternative; Changing Service Levels and Alternative; Other Possible State Actions and Considerations.

Central Government Subsidies for Regional Development

Abstract: (1975). Central Government Subsidies for Regional Development. Bulletin of Indonesian Economic Studies: Vol. 11, No. 1, pp. 66-75.

Spatial Aspects of Industrial Development in Western Europe: Economic and Political Areas

Abstract: This paper argues that an industrial firm may exist on a regional, national, continental, or world scale. This dimension may be different for market, actual selling space, basic social existence, and plant location.A review of the main industrial sectors in present day Europe shows that most major firms are European-sized for market, circulation of commodities, and plant-location aspects, while they are definitely national for government help and subsidies, and that very often these helps and subsidies are vital for their survival.This contradiction helps to explain the difficulties, hazards, and accidents on the European scene. The internationalization of the economy pushes towards European integration; but the necessities of reproducing the basic conditions of production are dependent on the specific situation in each country: the function of political and ideological reproduction can nowadays be exerted only by national governments. European unification seems to be both necessary and impossible at the ...

Regional distribution of government expenditures in yugoslavia

Abstract: Regional distribution of government expenditures is examined first in relation to other indicators of economic and social development. This shows both the magnitude of regional disparities and the degree of redistribution in the field of government expenditures brought about by the federal subsidy. The static aspect of regional disparities is analysed by decomposing per capita income into demographic, employment and productivity components. The time-dimension of disparities is analysed by introducing the concept of time-distance, which is a dynamic measure of disparity that is complementary rather than competitive with existing static measures. Institutional aspects are explored next, along with some implications of the present system of federal subsidy as an instrument towards regional equalization of the budgetary resources available to lower levels of government. A few alternative technical solutions to improve the present system are discussed and a set of macro-variables is suggested as a framework within which the degree of equalization, which is basically a political decision, could be discussed in an explicit and systematic way. While the question of the appropriate degree of equalization remains a problem with many facets, it can be shown that government expenditures have been distributed much more equally than the corresponding levels of regional economic activity.

The effect of foreign direct investment on the economy of the Irish Republic

Abstract: Since the mid-fifties, Ireland has drastically altered her trade policy in favour of freer trade. This has been accompanied by a massive programme of incentives to attract Foreign Direct Investment (FDI). This thesis documents the magnitude and structural composition of FDI. A detailed analysis is made of the characteristics of foreign owned projects, their impact on the development of the domestic sector and on the external trade of the host country. The share of the foreign firms' value added which remains in Ireland (Retained Value) is calculated. This is supplemented by . two methods of cost benefit analysis 5 Domestic Resource Cost analysis, which values all costs and benefits in international price equivalents and a calculation of the net return on the input of Government funds. The major benefits of FDI are the creation of new employment (over 40,000 jobs up to 1972) and the increase in industrial exports (46% of manufactured exports were from foreign owned firms in 1970). Other secondary benefits have been small but FDI has contributed positively to the Irish balance of payments. Costs have arisen from payment of subsidies and constraints placed on the growth of the domestic sector by the competition for resources. The introduction of a large foreign sector has resulted in dualistic development and the weakness of linkage effects makes this endemic. Policy conclusions are that a more formal and structural system of appraisal, properly valuing benefits should be implemented. The inflow of FDI would be somewhat reduced and resources should be devoted to developing the domestic sector, through both public and private enterprise. FDI should be regarded as a 'bridging loan' for those sectors where mobilising domestic resources is difficult. More effort should be made to exploit the benefits of FDI by increased selectivity and closer integration with the domestic economy.

The Reduced Form Price Elasticity of Housing

Abstract: This paper focusses on the supply side of the housing market. Two new elasticities are introduced. The elasticity of supply of structures on a fixed area of land relates the increase in the average cost of building structures to structural density. The reduced form price elasticity of housing on a fixed area of land characterizes the relationship between the equilibrium price of housing and equilibrium housing density as land price varies. Finally, there is a discussion of the correct modelling strategy to determine the effects of a housing subsidy, an increase in the property tax, on housing prices in a city. A simple, general equilibrium model of the city is required.

The social cost of foreign exchange in an economy with trade distortions and differential rates of domestic taxation

Abstract: The need to calculate the shadow price of foreign exchange for economic project evaluation has been recognized for the same time in the case of developing countries. Most of these countries have large trade distortions, and in addition, often the project being evaluated will have a relatively significant impact on the country’s balance of payments either as a user or supplier of foreign exchange. In estimation the shadow price of foreign exchange, certain assumptions need to be made concerning the trade policies that the country will undertake during the period that the shadow exchange rate will be used. The model developed in this paper begins with the assumption that the present tax, tariff and subsidy distortions which have caused a divergence between the market and economic value of foreign exchange will remain in the future.

Fiscal Barriers to Full Employment

Abstract: The structure of employment and technology is strongly influenced by the incidence of taxes and sub sidies. There are a number of subsidies to capital invest ment in the tax and regulatory systems which encourage the adoption of more capital intensive techniques than would otherwise be employed. Similarly, financing Social Security and health insurance through payroll taxes to which the employer contributes also appears to serve to inflate the cost to the employer of employing low-wage workers. Reorganizing the fiscal system so as to minimize these dis tortions should enhance the effectiveness of any full employ ment program enacted.