SPECIAL EVENT NGO (Non-Profits, Governments, and Organizations) Workshop to be held May 25th and 26th

To be held

May 25^th and 26^th

Various Speakers

Location: Michio Morishima Room, R505 (5th Floor, LSE Research Laboratory, Lionel Robbins Building, London WC2A 2HD)

This is part of a series of workshops on this theme that Thierry Verdier (Paris School of Economics), Gani Aldashev (Namur), Emmanuelle Auriol (Toulouse School of Economics) and Maitreesh Ghatak (LSE), have been co-organizing for the last two years.

The importance of non-profits in developed countries in the social sectors is well-recognized. At the same time, non-governmental organizations (NGOs) play an ever-increasing and fundamental role in designing and carrying out development projects. Therefore, the formulation of effective policies towards the development NGO sector requires a good understanding about how NGOs function, how they perform their activities, what is the effect of the NGOs on development. Given such knowledge, the optimal regulatory framework of the NGO sector can be designed. Thus, both demand for comprehensive body of knowledge about the functioning and performance of the NGO sector is high, both from the policy-makers, the general public, and the NGOs themselves.

With this in mind, the Economic Organization and Public Policy programme at LSE is hosting the workshop NGO (Non-Profits, Governments, and Organizations) which is being funded by STICERD.

Banco de Portugal - Lisbon Meeting Best Paper Award for Oliver Vanden Eynde

Oliver Vanden Eynde, PhD student at EOPP has won the "Banco de Portugal - Lisbon Meeting Best Paper Award" for his paper titled "Targets of violence: Evidence from India's Naxalite Conflict".

This work was presented at the "Lisbon Meeting on Institutions and Political Economy". This is Oliver's second award, after

winning the "Economic History Society New Researchers' Prize" for his paper "Military Service and Human Capital

Accumulation: Evidence from Colonial Punjab" presented at the "2011 Economic History Society Annual Conference".

You can find more about Oliver's research on his personal website.

Recent Publication by Maitreesh Ghatak: The Land Acquisition Bill: A Critique and a Proposal

The paper is joint work with Parikshit Ghosh and was published in Economic and Political Weekly of India, October 8, 2011, Vol. XLVI, No 41, it is available here. A shorter version can be accessed here.

Abstract: The 2011 Land Acquisition and Rehabilitation and Resettlement Bill on land acquisition recently tabled in Parliament is well-intentioned but seriously flawed. Its principal defect is that it attaches an arbitrary mark-up to the historical market price to determine compensation amounts. This will guarantee neither
social justice nor the efficient use of resources. The Bill also places unnecessary and severe conditions on land acquisition, such as restrictions on the use of multicropped land and insistence on public purpose, all of which are going to stifle the pace of development without promoting the interests of farmers.

We present an alternative approach that will allow farmers to choose compensation in either land or cash, determine their own price instead of leaving it to the government’s discretion, and also reallocate the remaining farmland in the most efficient manner. Our proposed method involves a land auction covering not only the project site but also the surrounding agricultural land.

Recent Publication by Tim Besley, Maitreesh Ghatak and Konrad Burchardi: Incentives and the de Soto Effect

The paper is forthcoming in Quarterly Journal of Economics. The paper can be found here.


Abstract: This paper explores the consequences of improving property rights to facilitate the use of fixed assets as collateral, popularly attributed to the influential policy advocate Hernando de Soto. We use an equilibrium model of a credit market with moral hazard to characterize the theoretical effects, and also develop a quantitative analysis using data from Sri Lanka.
We show that the effects are likely to be non-linear and heterogeneous by wealth group. They also depend on the extent of competition between lenders. There can be significant increases in profts and reductions in interest rates when credit markets are competitive. However, since these are due to reductions in moral hazard, i.e. increased effort, the welfare gains tend to be modest when cost of effort is taken into account. Allowing for an extensive margin where borrowers gain access to the credit market, can make these effects larger depending on the underlying wealth distribution.

Recent Publication by Johannes Spinnewijn: Capital Income Taxes with Heterogeneous Discount Rates

The paper (joint with Peter Diamond) is forthcoming in AEJ: Economic Policy

Abstract: With heterogeneity in both skills and discount factors, the Atkinson-Stiglitz theorem that savings should not be taxed does not hold. In a model with heterogeneity of preferences at each earnings level, introducing a savings tax on high earners or a savings subsidy on low earners increases welfare, regardless of the correlation between ability and discount factor. Extending Saez (2002), a uniform savings tax increases welfare if that correlation is sufficiently high. Key for the results is that types who value future consumption less are more tempted by a lower paid job. Some optimal tax results and empirical evidence are presented.

The paper can be found here

Recent Publication by Tim Besley: The Logic of Political Violence

This paper (joint with Torsten Persson) is forthcoming in The Quarterly Journal of Economics

Abstract
This paper offers a unified approach for studying political violence whether it emerges as repression or civil war. We formulate a model where an incumbent or opposition can use violence to maintain or acquire power to study which political and economic factors drive one-sided or two-sided violence (repression or civil war). The model predicts a hierarchy of violence states from peace via repression to civil war, and suggests a natural empirical approach. Exploiting only within-country variation in the data, we show that violence is associated with shocks that can affect wages and aid. As in the theory, these effects are only present where political institutions are non-cohesive.

The paper can be found here

Recent Publications by Henrik Kleven

A paper by Henrik Kleven entitled 'Unwilling or Unable to Cheat? Evidence from a Tax Audit Experiment in Denmark' is forthcoming in Econometrica


Abstract
This paper analyzes a tax enforcement field experiment in Denmark. In the base year, a stratified and representative sample of over 40,000 individual income tax filers was selected for the experiment. Half of the tax filers were randomly selected to be thoroughly audited, while the rest were deliberately not audited. The following year, threat-of-audit letters were randomly assigned and sent to tax filers in both groups. We present three main empirical findings. First, using baseline audit data, we find that the tax evasion rate is close to zero for income sub ject to third-party reporting, but substantial for self-reported income. Since most income is sub ject to third-party reporting, the overall evasion rate is modest. Second, using quasi-experimental variation created by large kinks in the income tax schedule, we find that marginal tax rates have a positive impact on tax evasion for self-reported income, but that this effect is small in comparison to legal avoidance and behavioral responses. Third, using the randomization of enforcement, we find that prior audits and threat-of-audit letters have significant effects on self-reported income, but no effect on third-party reported income. All these empirical results can be explained by extending the standard model of (rational) tax evasion to allow for the key distinction between self-reported and third-party reported income.

The paper can be found here

A paper by Henrik Kleven entitled 'Transfer Program Complexity and
the Take Up of Social Benefits' is forthcoming in the American Economic Journal: Economic Policy

Abstract
This paper models complexity in social programs as a byproduct of efforts to screen between deserving and undeserving applicants. While a more rigorous screening technology may have desirable effects on targeting efficiency, the associated complexity introduces transaction costs into the application process and may induce incomplete take up. The paper integrates the study of take up with the study of classification errors of type I and type II, and argues that incomplete take up can be seen as a form of type I error. We consider a government interested in ensuring a minimum income level for as many deserving individuals as possible, and characterize optimal programs when policy makers can choose the rigor of screening (and associated complexity) along with a benefit level and an eligibility criterion. It is shown that optimal program parameters reflect a trade-off at the margin between type I errors (including non-takeup) and type II errors. Optimal programs that are not universal always feature a high degree of complexity. Although it is generally possible to eliminate take up by the undeserving (type II errors), policies usually involve eligibility criteria that make them eligible and rely on complexity to restrict their participation. Even though the government is interested only in ensuring a minimum benefit level, the optimal policy may feature benefits that are higher than this target minimum. This is because benefits generically screen better than either eligibility criteria or complexity.

The paper can be found here

Recent Publication by Maitreesh Ghatak: Thanks for Nothing? Not-for-Profits and Motivated Agents.

This paper (joint with Hannes Mueller) has been published in the Journal of Public Economics.

Abstract
We re-examine the labor donation theory of not-for-profits and show that these organizations may exist not necessarily because motivated workers prefer to work in them, or that they dominate for-profits in terms of welfare, but because the excess supply of motivated workers makes the non-profit form more attractive to managers. We show that if Firms had to compete for motivated workers then not-for-profit would be competed out by for-profit Firms. Therefore, in the choice between not-for-profit and for-profit provision, other than incentive problems, the distribution of rents between management and workers, and consequently, the relative scarcity of motivated workers may play an important role.

The paper can be found here

EOPP Special Event: Summer School on Empirical Methods for Economic Development (23-26 June 2010)

Oriana Bandiera is organizing the Second AMID Summer School on Empirical Methods for Economic Development on June 23-26 at the LSE.

The school is intended for PhD students, post-docs and junior faculty members. The aim is to provide young researchers with a detailed overview of the main methods used in empirical development research. Participants will also have the opportunity to discuss their own research projects with leading researchers in a relaxed and open atmosphere.

Lectures will be delivered by Esther Duflo (MIT), Greg Fischer (LSE), Radha Iyengar (LSE), and Eliana La Ferrara (Bocconi) on topics including difference in difference estimators, event studies, instrumental variables, randomised control trials and regression discontinuity approaches. Selected projects by participants will be presented and discussed during the day.

For more details, visit the website at http://econ.lse.ac.uk/staff/bandiera/amid_summerschool_programme.htm

EOPP Special Event: CEPR Public Policy Symposium 2010 (18-19 June 2010)

Oriana Bandiera and Henrik Kleven, along with Thomas Piketty (Paris School of Economics and CEPR) and Emmanuel Saez (University of California, Berkeley and CEPR) are organizing a symposium on public economics to bring together economists in the field from across Europe and key researchers from outside the region.

The symposium will feature a keynote lecture entitled "Public Finance and Development" to be given by Professor Timothy Besley.

The conference hopes to provide a unique opportunity for researchers from different universities and countries to discuss their work in a relaxed atmosphere and to develop long-term collaborative relationships. It also aspires to provide young researchers with the opportunity to meet and discuss their work with senior economists.

For more details on the conference program and other information, visit the website at http://www.cepr.org/meets/wkcn/3/3540/

Conference on The Formation of Family and its Intergenerational Consequences (14-15 June 2010)

The Conference on the Formation of Family and its Intergenerational Consequences was organised by the Departments of Economics and Management and sponsored by STICERD. The key organizers were Leonardo Felli, Ignacio Palacios-Huerta, Maitreesh Ghatak, and Yona Rubinstein. Distinguished speakers included Gary Becker, Pierre-Andre Chiappori, Bernard Salanie, among others.

For further informaiton on the conference programme and to view the papers presented visit the conference page the conference page

Johannes Spinnewijn wins CESifo Affiliate Award

Johannes Spinnewijn has won the Distinguished CESifo Affiliate Award during this year's CESifo Annual Area Conferences.

Each year, the award is presented to a young economist for the " scientific originality, policy relevance and quality of exposition of their paper presented at the conference." in his or her specialist research area.

Johannes Spinnewijn's winning paper for the Employment and Social Protection Research Area was entitled Unemployed but Optimistic: Optimal Insurance Design with Biased Beliefs

Further information about the award can be found on the CESifo website.

EOPP: Recent Publications Gerard Padro-i-Miquel: Conflict and Deterrence under Strategic Risk

A paper by Gerard Padro-i-Miquel (joint with Sylvain Chassang) entitled 'Conflict and Deterrence under Strategic Risk' will be published in Quarterly Journal of Economics.

The authors examine the determinants of cooperation and the effectiveness of deterrence when fear is a motive for conflict. They contrast results obtained in a complete information setting to those obtained in a setting with strategic risk, where players have different information about their environment. These two strategic settings allow them to identify and distinguish the role of predatory and pre-emptive incentives as determinants of cooperation and conflict. In their model, weapons unambiguously facilitate peace under complete information. In contrast, under strategic risk, the authors show that increases in weapon stocks can have a non-monotonic effect on the sustainability of cooperation. They also show that under strategic risk, asymmetry in military strength can facilitate peace, and that anticipated peace-keeping interventions may improve incentives for peaceful behaviour.

EOPP: Recent Publications by Tim Besley, Daniel Sturm, Robin Burgess and Oriana Bandiera

The following papers, by EOPP members, will be published:

Robin Burgess, joint with Dave Donaldson (MIT): Can Openness Mitigate the Effects of Weather Shocks? Evidence from India's Famine Era, is forthcoming in the American Economic Review Papers and Proceedings.

Oriana Bandiera, joint with Valentino Larcinese (LSE) and Imran Rasul (UCL): Heterogeneous Class Size Effects: New Evidence from a Panel of University Students, is forthcoming in the Economic Journal.

Oriana Bandiera, Robin Burgess, Selim Gulesci and Munshi Sulaiman, joint with Markus Goldstein (World Bank) and Imran Rasul (UCL): Participation in Adolescent Training Programs, is forthcoming in the Journal of the European Economic Association, Papers and Proceedings.

Tim Besley, Daniel Sturm and Torsten Persson (IIES): Political Competition, Policy and Growth: Theory and Evidence from the United States, is forthcoming in the Review of Economic Studies.

For further information and to read abstracts see http://sticerd.lse.ac.uk/eopp/_new/publications/recent_publications.asp

Tim Besley receives the John von Neumann Award 2010

The 2010 John von Neumann Award has been given to Prof. Tim Besley for his research on political institutions by the Rajk László College for Advanced Studies at Corvinus University of Budapest. The award was established in 1995 and is presented annually to leading scholars whose influential works have had a substantial impact on the studies and intellectual activity of the students at the College.

Previous award holders include John Harsanyi (UC Berkeley), Hal Varian (University of Michigan), Janos Kornai (Harvard University and Budapest College), Jean Tirole (University of Toulouse), Oliver Williamson (UC Berkeley) Jon Elster (Columbia University), Avinash K. Dixit (Princeton University), Maurice Obstfeld (UC Berkeley), Gary S. Becker (University of Chicago), Glenn C. Loury (Brown University), Matthew Rabin (UC Berkeley), Daron Acemoglu (MIT), Kevin Murphy (University of Chicago) and Philippe Aghion (Harvard University).

Further information on Prof. Besley's research can be found on Tim Besley's website. For more information on the John von Neumann Award see the Rajk László College for Advanced Studies website.

Maitreesh Ghatak: "What crisis has taught economics", The Financial Express, 09 Jan 2010

Maitreesh Ghatak examines the legacy of Paul Samuelson, who pioneered the use of formal models in economics.

Read the full article in The Financial Express at
http://www.financialexpress.com/printer/news/565062/

Tim Besley: State Capacity, Conflict and Development

A paper by Tim Besley entitled "State Capacity, Conflict and Development" (joint with Torsten Persson) will be published in Econometrica.

In this paper, the authors point out that the absence of state capacities to raise revenue and to support markets is a key factor in explaining the persistence of weak states. They report on an on-going project to investigate the incentive to invest in such capacities. The paper sets out a simple analytical structure in which state capacities are modelled as forward looking investments by government. The approach highlights some determinants of state building including the risk of external or internal conflict, the degree of political instability, and dependence on natural resources. Throughout, the authors link these state capacity investments to patterns of development and growth.

Maitreesh Ghatak: "Buying Land and Selling Kidneys", The Financial Express, 09 & 16 Nov 2009

In two articles for the Financial Express Maitreesh Ghatak, looks at the legal and ethical limits of economic transactions by analysing the trade in human organs and finding parallels in coercive land acquisition.

Read the articles:
"Buying land and selling kidneys", published Nov 09, 2009
"Why would you sell your heart?", published Nov 16, 2009

Maitreesh Ghatak: "No Way Out of This Plot" Financial Express, New Delhi, Sep 2009

Maitreesh Ghatak, joint with Sanjay Banerji (Essex), analyses the issues of land transfer from agriculture to industry in the context of industrialization in West Bengal, India in this Financial Express piece entitled "No Way Out of This Plot", published on Sep 30, 2009.

To read the full article, click here.

LSE Teaching Excellence Award: Justin Kueh

Congratulations to Justin Kueh who received the LSE Teaching Excellence Award in June this year for Microeconomic Principles II (EC202)! Justin won another top prize, with nomination as the best class teacher students had ever encountered, partly for his gifts of explanation and intuition in this mathematically rigorous course partly for his evident dedication and contagious enthusiasm for the material. ("He extends the class material by relating it to current research" and "he makes me work hard for the subject because he is very motivating").

For more information, click here.