Tim Besley delivers the Richard Ely Distinguished Lecture Series 2008

Tim Besley has been invited to give 3 lectures in the prestigious Richard Ely Distinguished Lecture Series during the week of 14th April 2008 at Johns Hopkins University. More details can be found at www.econ.jhu.edu.

Status Incentives by Timothy Besley and Maitreesh Ghatak

"Status Incentives" by Tim Besley and Maitreesh Ghatak will be published in the American Economic Review, Papers and Proceedings, in May 2008.

Abstract: When economists study incentives in organizations, the main focus has been on using monetary payments in exchange for performance on specific measurable dimensions. But organizations use a wide variety of means to motivate their workers. One such method which has not been studied much to date, is the explicit creation of status rewards attached to good performance. In this paper, the authors consider the role of such status awards as an incentive device.

Lord Stern's Maiden Speech in the House of Lords

The text and video link to Lord Stern of Brentford's Maiden Speech last Thursday, 6 March is now available.

• Full text of speech
  
  
• Video

Polarisation and Conflict Conference at LSE

The final meeting of the Polarisation and Conflict (PAC) Project, sponsored by the Community Sixth Framework was held at STICERD on 7 and 8 March 2008. Participants include Gerald Schneider, Eliana La Ferrara, Oeindrila Dube, Timothy Besley, James Fearon, Marta Reynal-Querol, Saumitra Jha, Benjamin Olken, Edward Miguel, Kalle Moene.

In addition there was a presentation of PAC findings by Joan Esteban and Gerald Schneider and a Roundtable with James Fearon, Anke Hoeffler and Edward Miguel.

Robin Burgess (joint with Philippe Aghion, Stephen Redding et al): ''The Unequal Effects of Liberalization: Evidence from Dismantling the License Raj"

A paper by Robin Burgess (joint with Philippe Aghion, Stephen Redding and Fabrizio Zilibotti) "The Unequal Effects of Liberalization: Evidence from Dismantling the License Raj in India," has recently been accepted for publication in the American Economic Review 2008

The authors study whether the effects on registered manufacturing output of disman- tling the License Raj - a system of central controls regulating entry and production activity in this sector - vary across Indian states with different labor market reg- ulations. The effects are found to be unequal across Indian states with different labor market regulations. In particular, following delicensing, industries located in states with pro-employer labor market institutions grew more quickly than those in pro-worker environments.

Henrik Kleven: 'Evaluation of Four Tax Reforms in the United States: Labour Supply and Welfare Effects for Mothers', Journal of Public Economics

A paper by Henrik Kleven, (joint with Nada Eissa and Claus Thustrup Kreiner) "Evaluation of Four Tax Reforms in the United States: Labour Supply and Welfare Effects for Mothers," has recently been published in the Journal of Public Economics,92, 2008, pp.795-816.

An emerging consensus is that labor force participation is more responsive to taxes and transfers than hours worked. To understand the implications of participation responses for the welfare analysis of tax reform, this paper embeds this margin of labor supply in an explicit welfare theoretic framework. The authors apply the framework to examine the welfare effects on single mothers in the United States following four tax acts passed in 1986, 1990, 1993, and 2001. They propose a simulation method combining features of fully structural microsimulation studies and simple deadweight loss calculations. Their approach accounts for the observed heterogeneity in the microdata, but is simple to implement because we do not need to specify utility functions and estimate utility parameters. They find that each of the four tax acts created substantial welfare gains, and that the gains were concentrated almost exclusively on the participation margin. Their results imply that standard approaches not modeling the participation decision can make large errors.

Gerard Padro-i-Miquel: The Control of Politicians in Divided Societies: The Politics of Fear, Review of Economic Studies, October 2007

A paper by Gerard Padró-i-Miquel, "The Control of Politicians in Divided Societies: The Politics of Fear," has recently been published in The Review of Economic Studies, October 2007

Autocrats in many developing countries have extracted enormous personal rents from power. In addition, they have imposed ineficient policies including pervasive patronage spending. The author presents a model in which the presence of ethnic identities and the absence of institutionalized succession processes allow the ruler to elicit support from a sizeable share of the population despite large reductions in welfare. The fear of falling under an equally ineficient and venal ruler that favors another group is enough to discipline supporters. The model predicts extensive use of patron- age, ethnic bias in taxation and spending patterns and unveils a new mechanism through which economic frictions translate into increased rent extraction by the leader. These predictions are consistent with the experiences of bad governance, ethnic bias, wasteful policies and kleptocracy in post-colonial Africa.