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Having recognised the significant role of natural gas in reducing carbon abatement costs, China is rapidly promoting its growth. However, obvious distortions exist in China’s natural gas market, an...

The Supreme Court’s ruling in Kelo v. New London (2005) justified the use of eminent domain for redevelopment takings based on the anticipated spillover benefits to the community in the form of increased taxes and new jobs. This paper asks whether this is a coherent economic rationale for allowing expropriation of residential land for private development. We show that, in the absence of a market distortion, the answer is generally no. However, when there is a pre-existing imperfection in the land and/or labor market, it is possible, though not guaranteed, that allowing eminent domain will increase social welfare. The reason, however, is not because of the increased tax revenue or employment per se, but rather because eminent domain increases industrial/commercial land use above the inefficiently low level that arises in the presence of the distortions. Thus, setting aside questions about fairness or holdouts, we show that whether using eminent domain for private takings can be justified on the basis of economic efficiency hinges on the existence of market distortions and the relative values of residential vs. industrial/commercial land in that particular market.

We use a large housing transaction data set in Singapore to study whether real estate agents use information advantages to buy houses at bargain prices. Agents bought their own houses at prices that are 2.54% lower than comparable houses bought by other buyers. Consistent with information asymmetries, agent buyers have more information advantages in less informative environments, and agent buyers are more likely to buy houses from agent sellers. Agent discounts are from both “cherry picking” and bargaining power, and bargaining power contributes more to the agent discounts. Agents’ advantage consists in their information of available houses and previous purchase prices.

Harga memiliki peran yang sangat penting bagi kelangsungan hidup perusahaan. Strategi penetapan harga komoditas banyak dibahas dalam ekonomi konvensional, demikian pula penerapannya telah banyak dilakukan baik untuk mempertahankan usahanya maupun untuk bersaing memenangkan pasar. Namun apakah strategi penetapan harga tersebut sudah sesuai dengan aturan hukum Islam. Tujuan penelitian yang ingin penyusun capai adalah untuk mengetahui strategi penetapan harga komoditas dalam perspektif ekonomi syariah, Serta peran pemerintah dalam menangani permasalahan harga dalam pasar. Penelitian ini merupakan penelitian studi pustaka (library research design) dengan menggunakan pendekatan secondary analysis adapun pendekatan ini terbagi menjadi dua tahap yaitu tahap deskriptif dan tahap evaluatif. Instrument dan teknik pengumpulan data yang digunakan adalah metode dokumentasi. Teknik analisis data yang digunakan adalah dengan teknik analisis kualitatif dengan pendekatan kepustakaan yang dilakukan dengan menggunakan tiga komponen produk yaitu data reduction dan pengumpulan data, data display, dan conclusion drawing, yaitu mereduksi dan mengumpulkan berbagai data dan teori yang berhubungan dengan tema sentral dengan berbagai sumber serta mengklasifikasikannya untuk kemudian diuraikan secara sistematis, selanjutnya dilakukan kajian dan pembahasan untuk kemudian diambil kesimpulan atas permasalahan yang diteliti. Hasil penelitian diketahui bahwa strategi penetapan harga komoditas dalam perspektif ekonomi syariah dapat diterapkan dengan cara melihat kondisi pasar, baik permintaan maupun penawaran. Tidak seperti prinsip strategi penetapan harga komoditas dalam ekonomi konvensional yang memiliki tujuan akhir, yaitu maksimalisasi keuntungan dan mencari keuntungan untuk tujuan menghimpun kekayaan. Prinsip ekonomi syariah dalam harga, yaitu untuk meningkatkan kesejahteraan masyarakat dalam hal distribusi pendapatan. Mekanisme pasar tidak selalu dapat berjalan sesuai dengan konsep yang sudah ada, dengan demikian diperlukan peran pemerintah sebagai badan pengawas dalam menangani permasalahan harga di pasar agar terhindarnya dari masalah distorsi pasar. Namun pemerintah dilarang melakukan intervensi apabila pasar sedang berjalan normal. Kata kunci : Harga Komoditas, Kondisi Pasar, Peran Pemerintah, Ekonomi Syariah

The study uses a comparative-historical perspective to examine the practice of state advertising in the Hungarian media by looking at the relevant practices of three governments. Using previous eco...

The ongoing COVID-19 pandemic has presented us with an unprecedented global emergency that severely threatens the lives of millions of people around the world. In response to this existential crisis, state governments have taken drastic containment measures to limit the spread of the coronavirus. The consequential lockdowns have disrupted production and economic activity and had profound impacts on major industries. The heightened financial risk has significantly slowed down new investments while stoking fears of a looming economic recession. Indeed, the pandemic-induced strong reduction in global demand has resulted in sharp falls in energy prices leading to a temporary market distortion that may impede progress in the deployment of new renewable energy projects. Besides, some countries could be at risk of falling short of their 2020 national binding targets given the lack of effective policies required to facilitate new renewable energy investments. Considering the present impacts of the COVID-19 pandemic on the global energy market, there are opportunities to highlight the important role of renewables while making the case for clean energy investments, especially in the electricity sector. This review aims to provide important insights by analyzing the significant impacts of the COVID-19 pandemic on the global energy market. On the other hand, sustainable energy strategies are also discussed in detail. Finally, lessons learned amidst the costly battle against this invisible enemy could help policymakers and government leaders in identifying the appropriate renewable energy paths for their countries in a post-pandemic future.

PurposeThis paper examines risk and risk management in public–private partnership and private finance initiatives (PPP/PFI). Despite growing interest in PPP/PFI, there are knowledge gaps in the literature. The authors’ aim is to analyse these knowledge gaps and define emerging themes to guide future research agendas.Design/methodology/approachThe authors conduct a systematic literature review from 1990 to 2018 using the Scopus database.FindingsThe authors define six emerging themes: risk definition and types of risks; value for money (VFM) and risk; risk sharing, allocation and transfer; financial risk; contractualisation and renegotiation of risk; and risk management and governance. They proposed a conceptualisation of potential development of PPP/PFI research through the three phases of risk management cycle, i.e. prospective, real time and retrospective. This paper revealed some new aspects that could help to analyse better risk and risk management in PPP/PFI to reach value for money (VFM) and to exploit the potential of PPP/PFI.Originality/valueDespite the increasing attention to PPP/PFI, further researches are required in relation to operational and post-operational risk studies, risk management and control, the role of trust. The authors’ analysis underlines the difficulties in how risk is perceived and how to ascertain VFM. In addition, the authors highlight how the increase of contract renegotiation is changing the provisions with reference to risk assignment creating market distortion. Risk should be managed as a cycle; PPP/PFI would benefit by engaging more with the risk management literature.

Part 2: Digital Transformation; International audience; Countries are struggling to develop data exchange infrastructures needed to reap the benefits of e-government. Understanding the development of infrastructures can only be achieved by combining insights from institutional, technical and process perspectives. This paper contributes by analysing data exchange infrastructures in the Netherlands and Estonia from an integral perspective. The institutional design framework of Koppenjan and Groenewegen is used to analyse the developments in both countries. The analysis shows that the starting points, cultures, path dependencies and institutional structure result in different governance models for data exchange infrastructures. Estonia has a single – centrally governed – data-exchange infrastructure that is used by public and private parties for all kinds of data exchanges (including citizen-to-business and business-to-business). In contrast, the institutional structure in the Netherlands demands a strict demarcation between public and private infrastructures, resulting in several data exchange infrastructures. While there are examples of sharing infrastructure components across various levels of the Dutch government, public infrastructures cannot be used for business-to-business or citizen-to-business data exchange due to the potential for market distortion by government. Both the centrally governed Estonian model and the decentrally governed Dutch model have pros and cons on multiple levels.

As from January 2020, the International Maritime Organization (IMO) is implementing a global 0.5% limit on the sulphur content of fuel, commonly known as the global sulphur cap. This limit is the latest policy in the efforts to reduce sulphur emissions from shipping, following the designation of emission control areas (ECAs) and other regional regulations. In this paper, a literature review is conducted of academic studies that have dealt with issues relating to the reduction of maritime sulphur emissions. Various recurring research themes are identified, spanning the areas of operations research, maritime economics and transport policy. The effects and implications of available compliance options are then analyzed from the perspectives of ship operators, shippers and consumers. Using lessons learned from the enforcement of ECA regulations, this is followed by an appraisal of various potential issues related to the enforcement of these new global regulations. It is found that a homogeneous enforcement regime is required to ensure a level playing field amongst ship operators and that the global sulphur cap may lead to serious market distortion, due to the potential short term rise of fuel prices. The paper concludes with a set of recommendations for future research on sulphur emissions from shipping in the aftermath of the global cap and, looking forward, to its relationship to the IMO strategy on the reduction of greenhouse gas (GHG) shipping emissions.

The modern stock market bears little resemblance to its form when the statutes designed to regulate it were first enacted. In the twenty-first century, the market is almost entirely digital—replete with interconnected instruments and exchanges—spanning multiple jurisdictions and products. As recently as 1969, trades could take over a week to clear; now in the era of high-frequency trading, they are effectively instantaneous. With the influx of more exchanges and instruments that trade on those exchanges, transacting at dizzying speed and magnitude, new and more difficult-to-identify forms of market distortion have emerged. Chief among those forms of distortion is open-market manipulation. Open-market manipulation—in which a trader uses facially legitimate trading methods in order to camouflage non-bona fide trades (including manipulations across markets and even in the cryptocurrency sphere)— has frustrated regulators and, in particular, prosecutors. Prosecutors and courts have struggled to fit open-market manipulation into an anachronistic statutory regime and particularly labored to prove the requisite criminal intent to manipulate in schemes comprised of facially valid trades. This failure of the law to match the conduct is exacerbated by the use of complex high-frequency trading algorithms. Since manipulative intent may often be embodied in the design of the trading algorithm itself, it presents a literal and figurative black box in certain cases. These difficulties are especially acute in the context of cross-market manipulation, in which the manipulation is based on the interplay of two different markets. In terms of its negative effects, potential magnitude, and increasing frequency, open-market manipulation, particularly cross-market manipulation, should be considered among the most volatile and dangerous forms of white-collar crime and a priority for the Department of Justice and regulators alike. This Article first identifies where the critical issues in modern manipulation prosecution lie and the split among federal circuits regarding whether open-market manipulation is even a violation of the securities laws at all. This Article then proposes solutions to these issues in the form of principles upon which regulators and judges should rely, as well as a statutory proposal to bring the regulatory landscape up to speed in an increasingly fast, complex, and volatile digital trading world. In that vein, this Article is the first to do several things. It is the first to provide an in-depth analysis of the distinct challenges involved in prosecuting open-market manipulation. It is also the first to demonstrate the particular pronounced difficulties necessarily involved in detecting, regulating, and prosecuting cross-market manipulation. Finally, it is the first to propose a tangible statutory solution to the urgent issues involved in deterring and prosecuting these forms of manipulation.

Renewable Portfolio Standards (RPS), as the strategic requirement effectively fits the top-level institution design of China's low-carbon energy transition, will help to promote China's energy structure optimization and power market reform. The success of its implementation depends on the scientific quasi-parameters design of the system. At present, China's tradeable green certificate (TGC) market is still in the voluntary trading stage. There are differences in natural attributes and transaction prices, resulting in the market segmentation and market distortion of the TGC market. Considering the non-neutral technology, this paper uses system dynamics to construct a long-term trading model under China's RPS, and analyzes the impact of relevant system quasi-parameters on the market trading process. The results show that:(1) The scientific quasi-parameters design of the RPS, such as technical conversion coefficient, TGC valid period, TGC benchmark price and RPS quota, will encourage and guide manufacturers to conduct TGC transactions, which will promote the development of renewable energy. (2) The introduction of the technical conversion coefficient can effectively promote TGC transactions, improve China's social welfare and optimize the power source structure. Therefore, the scientific design of the relevant quasi-parameters and strengthening of the supervision mechanism are conducive to implementing the RPS effectively in China.

Moving assets out of vulnerable areas, known as “retreat,” is a necessary but unpopular option when coastal hazards impact land. Most people prefer protection options. Governments and private land owners tend to adopt a “wait-and-see” approach for retreat. This may be because the time for retreat seems some way off, or because protection has not yet been ruled out, or to avoid unwelcome news. This policy void has allowed people to assume that government will offer to “buyout” property on generous terms after coastal hazards inevitably force the owner to relocate. The problem with that assumption is that (a) it is unaffordable as a solution for all at-risk properties and (b) it acts as an incentive to intensify development in locations vulnerable to coastal hazards. It is, in effect, a form of market distortion which promotes maladaptive behavior. We therefore need to retire that assumption by articulating a standard default arrangement for retreat. This essay suggests that government should establ...

Member States have published National Energy and Climate Plans with challenging variable renewable electricity (VRE) targets. As VRE has a high peak to average output, the Single Electricity Market of the island of Ireland (SEM) will need to consider how best to balance the lost value of curtailment against the extra costs of higher Simultaneous Non-Synchronous Penetration (SNSP), more interconnector capacity and/or more storage. The paper develops a spreadsheet model to explore these options for the 2026 VRE targets in the SEM and her neighbours. Raising SNSP from 75 % to 85 % reduces curtailment from 13.3 % to 8.0 %, saving 1338 GWh/yr of spilled wind. Adding the Celtic Link of 700 MW at SNSP of 75 % reduces curtailment to 12.4 % and saves 235 GWh. Adding 100 MW of batteries saves 19 GWh/yr, but the costs of delivering these savings are high. The marginal spilled wind can be four times the average, creating a potentially significant market distortion and reducing the value of adding further VRE.

Throughout decades, conflicts related to the access and usage of various energy sources have caused political tensions between nations and confederations of states. Thus, partially to decrease the dependence on fossil fuels, a thorough transition towards renewable energies has been promoted by several regional and national governments as well as by multinational institutions such as the European Union. In this context, the automotive industry has particularly been held responsible for the production of negative externalities, such as global greenhouse gas emissions (GHG emissions), noise and air pollution. To a notable extent, these externalities were caused by vehicles running on fossil fuels such as petroleum products, including gasoline, diesel fuel and fuel oil. Accordingly, it is often argued that replacing vehicles run by internal combustion engines (ICEs) with so-called alternative fuel vehicles (AFVs), particularly with plug-in electric vehicles (PEVs), is crucial to increase the sustainability of the transport sector. Moreover, several EU-member states aim to reduce the vehicle-related petrol and diesel demand to decrease their dependence on foreign energy sources. However, one must consider that there are important economic costs related to such a transition process. This paper evaluates the short-term and long-term effects of fiscal policies on the European automotive market in the period from 2010 to 2018, focusing on the impact of mentioned public incentives for AFVs. This public interventionism will be critically evaluated to examine the effectiveness of government incentives in promoting AFVs, particularly for plug-in electric vehicles (PEVs). The author argues that the rather positive sales evolution of AFVs was not caused by corresponding actual customer demand but mainly by governmental policies in an increasingly interventionist market. He acknowledges that the growing variety of available PEV models, the increasing driving range of electric vehicles, as well as their decreasing production costs due to economies of scale, have helped PEVs to become more competitive. However, the concern should be raised that mentioned public interventionism is unsustainable from a macroeconomic perspective, possibly leading to significant market distortion and a new artificial market bubble. The narrowed focus on battery electric vehicles prevents the market from further elaborating on other potentially more sustainable technologies. Moreover, from a geostrategic perspective, the transition of the European automotive industry towards electrification is likely to reduce the EU’s dependency on imported fossil fuels but enables several non-European automotive brands to conquer a significant market with their new competitive plug-in electric vehicle technologies.

Using the MLS and the land registration data from Indiana, this paper identifies and explains price distortions associated with out-of-state sellers and buyers in the housing market. We find that out-of-state buyers pay 20.4% higher prices than local buyers, and the premium is fully explained by the former purchasing larger homes than the latter. On the other hand, out-of-state sellers receive a 21.2% price discount, among which 9.3% is attributable to differences in transactional characteristics, 3.2% is explained by increased motivation and weak bargaining power of out-of-state sellers, and 1.5% is due to differences in agent characteristics and behaviours. The remaining 7.2% discount varies systematically with the informational disadvantage of out-of-state sellers, and with the market condition. Our results are robust to model misspecification.

Credit default swaps (“CDS”) are, once again, making waves. Maligned for their role in the 2008 financial crisis and condemned by the Vatican, investors are once more utilizing CDS to achieve results of questionable market benefit. A CDS is a financial contract that allows investors to “bet” on whether a borrower will default on its loan. However, rather than waiting to see how their bets pan out, some CDS investors are collaborating with financially distressed borrowers to guarantee the profitability of their CDS positions—“engineering” the CDS’ outcome. Under the CDS contract, these collaborations are not prohibited, yet they have roiled the CDS market, leading some market participants to view the collaborations as a sign that CDS are little more than a rigged game. On the other hand, some view “engineered CDS transactions” as an innovative form of financing for distressed companies. As engineered CDS transactions proliferate in the market, it becomes increasingly prudent to look beyond their contractual acceptability to assess whether, from a legal point of view, these transactions are permissible. Engineered CDS transactions demonstrate the challenges that the existing legal and non-legal framework face in effectively responding to new forms of market distortion. This Article examines the costs and benefits of engineered CDS transactions on the market as a precursor to determining whether legal intervention is needed. Assessment of the relative costs and benefits of engineered transactions indicates that despite their innovativeness, engineered CDS transactions are largely detrimental to the markets because they impose costs on actors unaffiliated with the CDS market and, more broadly, destroy public trust in the financial markets. Yet, despite their associated harms, this Article demonstrates that, legally, engineered transactions exist in a gray space. This Article analyzes the phenomenon of engineered CDS transactions, assessing the capacity of applicable legal frameworks, private standards, and market discipline, to address these transactions and finds each to be lacking. Thus, this Article proposes a range of responses, including modernization of the existing anti-manipulation framework, to mitigate against the harm and collateral consequences that stem from engineered CDS transactions.

This article confirms that China’s economic sanction in the form of restricting salmon imports from Norway was in retaliation for the 2010 Nobel Peace Prize awarded to a Chinese dissident. By combining personal accounts of stakeholders interviewed in the Norway–China salmon trade with an examination of trade data, there is strong evidence that links changes in trade patterns of fresh/chilled whole Norwegian salmon to border measures applied in response to the peace prize. While disproportionate border measures targeting Norwegian salmon have distorted China’s market since 2011, private actors appear to have busted the sanction by circumventing these measures, including rerouting, falsifying country-of-origin certification, and smuggling. This could have long-term consequences for trade patterns and quality. Official statistics record a reduced Norwegian market share and decreased Norway–China salmon trade despite an expansion of the volume of Chinese imports. However, official data do not record Norwegian salmon entering illegally, which some stakeholders estimate at between 50 and 70 per cent of the market. Norway’s official refusal to meet the Dalai Lama in May 2014 suggests that China’s sanction has affected foreign policy. The salmon sanction demonstrates that China has become more assertive in its international relations.

In developing economies like India, ‘informal’ sector occupies a large portion of GDP and employment. In the wake of slowdown in investments across countries and ensuing fall in the GDP growth rates, the question that arises is the following. If an economy suffers from growth slowdown, and since investment is often believed to be a driver of growth, should more investments go to the formal sector or to the informal sector? In what ways outcomes are different in terms of composition of output, employment, and wages? The issue may be a particular interest to India where slowdown in investments is believed to be the primary reason behind the recent sluggish growth of the economy. This paper theoretically evaluates the effects of investments on sectoral wage rates, output and employment composition, and growth in a developing economy consisting of a vast informal sector in a general equilibrium framework with endogenous demand and sector specific capital. The model traces, beginning with capital market disequilibrium and labour market distortion, whether investments into the sectors lead to equilibrium in capital and labour markets over time. This approach is distinctly different from the existing literature that is primarily engaged with finding out comparative statics results of a change in policy variables such as tariff rate and subsidy/tax. This paper also brings in endogenous demand that is mostly missing thus far. The model highlights the following results. Investments in the formal sector increase the size of the sector and cause the informal sector to shrink. The labour market distortion goes away as wages are eventually equalized across the sectors, after which the capital market equilibrium is achieved. Equalisation of wages is similar to the ‘turning point’ of the Lewis model of development. On the other hand, investments in the informal sector increase its own size but do not alter the size of the formal sector. Much contrary to the previous case, capital market equilibrium is achieved first, so the labour market distortion stays, leading to the existence of a persistent wage gap in the long run. One way of avoiding the possibility of the informal sector becoming large in size would be to subsidize the short-run capital return in the formal sector. This of course is a ‘second-best’ policy to counteracting the distortion in the labour market.

Affordable housing with fair and transparent land-allocation measures is a challenge for many countries. The Sultanate of Oman solves this issue by means of land-allocation lotteries in which male and female citizens can participate in order to win a parcel of a new housing area. Besides supporting those in financial need the lottery aims to mix the separate tribes of Oman and thus contribute to the nation building of a modern society. In an earlier work, we showed that there must be severe doubts about the economic support aspect as it seems that the current lottery, without additional measures, fuels private land speculation, see Heim et al. (Homo Oecon 35:1–30, 2018). This article studies the emergent phenomenon of clan formation within the specific land-allocation system of Oman with a new mathematical and computational approach of agent-based modelling. This model is used to base the criticism to the system on scientific evidence. Both the method (clan formation exemplified as agent-based model) and findings (simulated agents and real-world behaviour) advance the discussion on how to mitigate some of the negative effects associated with the current land allocation system. To do so, we discuss the current state and criticism around this aspect of urbanisation in Oman. We study the spatial mixing of the tribes and the possibility of clan formation in modern Omani settlements in particular Muscat Capital Area. We see emergent phenomena arising from the agent-based model that matches real world behaviour leading to negative effects such as partial and incomplete land development, tribal clustering and real-estate market distortion. The agent-based model is used to discuss alternative scenarios under which tribal clan formation is used to generate a fairer and more complete settlement process in Oman to ensure the intended outcomes of Oman’s land-allocation lottery system., City, Territory and Architecture, 5, ISSN:2195-2701

The act of speculators distorting the market is quite unsettling. However, the Sharia texts show that this problem can be resolved using moral or akhlāqī . Then the question is whether the present government can overcome it by using qadā'īe imposing sanctions for distortion. Since the nature of Sharia is the universal and eternal, this issue must be answered comprehensively and holistically. For that reason, the maqāsid approach is operated with istislāhiyyah method. This method is also referred to as al-ijtihād al-maqā s} idī which is done in two stages, namely takhrīj al-manāt and tahqīq al-manāt . It is believed that this method is quite relevant to answer two research questions. Firstly, how is maqā s} id al-syar'ah in terms of market distortion? Secondly, does the government in syar'i be authorized to impose sanctions on the perpetrators of market distortion? The theory used to highlight this issue is the theory of al-wāzi' put forward by Ibn ‘Āsyūr. This conclu that the Sharia wants the circulation of goods in the market run smoothly. To that end, the government may impose sanctions if the distortion is done to the basic goods that can affect massively harm.

Negative prices are a correct signal representing the system's scarcity of downward flexibility, but also result from a market distortion caused by renewable support mechanisms. In the worst case, these withhold active market participation, as in Germany, with its feed-in-tariff coupled with a stringent curtailment policy. In the best case, these result in negative bids under their marginal production cost to recover lost subsidies, as in Belgium.

This paper studies the effect of market distortions in the manufacturing sector in Morocco. Recent microdata are used to calculate the extent of resource misallocation associated to these distortions and the potential total factor productivity (TFP) gain resulting from their removal. Market distortions in the manufacturing sector in Morocco are higher compared with developed countries and slightly more important compared with other developing countries, such as China and India. These distortions decreased between 2007 and 2013. Full liberalization would raise TFP by about 84 percent. If distortions are removed to the level of selected developed countries with better resource allocation, the increase in TFP would be of 56 percent. The paper also finds that industries that are more opened to competition (international and domestic) such as machinery and textiles industries present lower levels of market distortions compared with more protected industries with relatively little competition, such as the food industry. Besides, a higher level of TFP can be achieved if more resources are allocated to “young” and “small” firms. The main results of the paper are robust to an alternative estimation that uses a different methodological framework with a less extensive theoretical framework. The paper discusses policies to further limit the extent of product and factor market distortions in Morocco.

Entrepreneurial resilience in spite of the state. Verhoef outlines business activity during the post-independence period in Africa as having to negotiate new market distortion in the form of authoritarian regimes, where political favouritism and different forms of discrimination characterised newly independent states. Formerly, unknown cases of business resilience under conditions of socialist macro-economic policies and a dominant position for state-owned enterprises in the leading economic sectors of the new states are discussed, whereby the state-business relationship since the 1960s emerges. Verhoef describes the Botswana exception as a case of business-state inclusivity, as opposed to statutory ethnic marginalisation and nationalisation that destroyed opportunity and undermined growth in independent states. Verhoef illustrates the inhibiting impact of state power on the development of small entrepreneurs and managerial capabilities in the private sector, as SOE management failed the states.

This paper shows that Investor-State Dispute Settlements (ISDS) makes multinational firms more aggressive by increasing cost-reducing investments with the aim to enlarge the potential compensation an ISDS provision may offer. While a larger investment reduces the market distortion, it will also make potential compensations larger. Consequently, potential compensations to a foreign investor do not imply a zero-sum game. ISDS may decrease domestic welfare, in particular if the investment leads to the establishment of an export platform, and we find that even global welfare may decline.

The trade practices of giving subsidies are normally defined as financial support in cash or in kind, if made in favour of an undertaking by the state. This support can either be direct or indirect in form, for the goods or services that any such industry produces. Trade-subsidy supported by the national government often leads to the distortion of efficient and competitive market system or can either be a protectionist measures, and hence, violates the underlying principles of fair-trade. Fair trade principle although not emphasised as the main trading principles of governing free trade, however is effectuated as a regulatory measure through the SCM Agreement provisions.

Minimum parking standards, which require developers to build a certain amount of off-street parking spaces, are increasingly criticized for leading to excess parking supply and automobile travel in recent years. However, due to the difficulty in identifying the policy effect, few empirical studies have directly and accurately estimated the effects of parking standards on parking supply. The present study examines a parking reform in London, UK, where minimum parking standards for residential developments were replaced with maximum standards in the early 2000s. Using planning application records, we match neighboring pre-reform and post-reform developments to estimate the effect of the parking standard switch and further identify the “binding” and “capping” effects of minimum and maximum parking standards. It is found that the parking reform in London has led to a reduction of approximately 0.76 parking spaces per unit in residential development applications, or 49% of the pre-reform level. Minimum parking standards seem to have a larger impact than maximum ones on parking supply that fell more upon inner city developments, while maximum parking standards have more influenced suburban neighborhoods. Market forces have played a major role in the decline of parking supply. The findings provide strong evidence for the market distortion effect of minimum parking standards.

In this paper we expand the IRSP (integrated resource strategic planning) model by including the external cost of TPPs (traditional power plants) and popularization cost of EPPs (efficiency power plants) with nonlinear functions. Case studies for power planning in China during 2011–2021 are conducted to show the efficacy of the model. Scenarios are compiled to compare the pathways of power planning under different policies. Results show that: 1) wind power will become competitive with technical learning, but its installation is undesirable when the external cost of coal power is not internalized; 2) the existence of popularization cost will hinder EPPs' (efficiency power plants) deployment and pure market mechanism is not enough to deliver EPPs at socially desirable scale; 3) imposition of progressive emission tax on coal power at an average of 0.15–0.20 RMB/KWh can remedy the market distortion and promote the development of wind power by a significant margin; 4) nuclear power will grow stably when its external cost is set no more than 0.187 RMB per KWh, or 87% of its internal cost. The proposed model can serve as a useful tool for decision support in the process of power planning and policy formulation for national government.

This paper examines skill mismatch problems in regional labor markets due to discouraged worker effects in South Korea. In Seoul metropolitan areas (SMAs), supply surplus for highly educated workforce among the youth is evident and causes serious distortion not only in SMA but also in national labor market. On the contrary, the shortage of low-skilled workers in Korea due to overinvestment in human capital forces out establishments to other countries with cheaper labor costs. Proposed regression models in this study specify how the share of discouraged workers in a regional labor market can be determined by various factors such as demographic structures, labor market conditions, and migration pattern with regional and/or temporal fixed effects. The regional-temporal fixed effect model found to be the most important factor in explaining how these factors determine the relative stock of discouraged workers in a region. Among the variables describing regional labor market conditions, only two, labor force participation rate of young cohort (aged between 15 and 29) and that of highly educated population (college graduate or higher), directly influenced regional labor market distortion by determining the regional stock of discouraged workers. With more active participation of these groups in a labor market, the overall discouraged worker effect in a region reduces, leading to enhanced labor market efficiency. Migration pattern does not play any role on regional discouraged workers. This indicates the limited role of interregional migration on factor price equalization among regional labor markets in Korea.

Exports restraints have raised controversies recently due to the importance of the natural resources and the scarcity of them. The core aspect of the export restraints can ultimately lead to the claims and disputes over subsidy issues under the WTO’s Agreement on Subsidies and Countervailing Measures (“SCM Agreement”). Based on prevailing jurisprudence of the subsidy norms, an argument can be made that certain types of export restraints are found to satisfy the elements of a subsidy within the meaning of the SCM Agreement. It can be shown that these export restraints constitute financial contribution by the government that confer benefit on the recipient companies which are specific to certain confined industries. All the unique aspects of the export restraints programs should be put under careful scrutiny of the collective discussions of the international community including the analyses under the SCM Agreement. Export restraints should be adopted and applied in a manner consistent with the applicable WTO Agreements including, most notably, the SCM Agreement.

This is a preliminary investigation of redevelopment performance of three “urban villages”, located at the core of a major Chinese city. It shows that, when land use change occurs at a high rate, rural-urban transition may appear in urban core areas. Social and physical changes take time given building lag and ambiguous property rights. The process may be regarded as a structurally deepening rural-urban transition, in a ‘market distortion’ environment. Land market inefficiency is evident, with physical, institutional, financial and ‘random’ causes, leading to diverse social and economic outcomes. Each village may evolve differently to serve certain social-economic functions in city. “Idle property” clearly indicates pure social cost. Reducing the pure loss (e.g., redevelopment failure) is important. Questions such as “what are the risks and barriers in redeveloping urban villages” deserve further analysis.

Internet users` desire to share shopping experiences has resulted in the appearance of the paradigm shift called social commerce, which combines social media with commerce. However, while foreign market realizes social commerce in a various way, current domestic social commerce market still seems to be highly filled with social shopping sites offering 50 percent discount, thus causing concerns about market distortion from a cutthroat competition. In order to overcome the limitations of social commerce remaining in the early stage, and to enhance the communication among consumers, this study conducted an empirical study on the social-commerce business models design based on context. The results of the study brought the imaginary, optimal combination model by conjoint analysis, using the segmented group through cluster analysis. To overcome the uniformity of social commerce and to enhance communication among consumers, the context-based optimal combination model should be proposed as the alternative social commerce business model in the domestic market which remains as a simple group-purchase function. Furthermore, this study will be used as an informative reference designing customer oriented service model for social commerce business.

The article examines how the competition issues raised by the public service broadcasters? (PSBs) new media engagement have been handled in Germany and the United Kingdom. Private communications interests, and certain political actors, have sought to restrict the scope of public service broadcasting, particularly with regard to their online media operations. EU ?state aid? rules have been called into play by complaints from the private media sector about unfair competition and market distortion. The article looks at how the PSBs and media policy-makers have handled the competition issues raised by the PSBs? online media engagement, and explains how they have met the requirements of EU state aid rules. To be precise, the article examines the development of the Public Value Test in the United Kingdom and its equivalent in Germany, the Three-Step-Test (Drei Stufen Test). The article considers the issues surrounding implementation of these tests and the implications of the new procedures for the future organization, accountability and output of the PSBs.

We consider two mechanisms to procure differentiated goods: a sealed-bid buyer-determined auction and a dynamic-bid price-based auction with bidding credits. The sealed-bid buyer-determined auction is analogous to the “request for quote” procedure commonly used by procurement agencies, and has each seller submit a price and the inherent quality of his good. Then the buyer selects the seller who offers the greatest difference in quality and price. In the dynamic-bid price-based auction with bidding credits, the buyer assigns a bidding credit to each seller conditional upon the quality of the seller's good. Then the sellers compete in an English auction, with the winner receiving the auction price and his bidding credit. Game-theoretic models predict the sealed-bid buyer-determined auction is socially efficient but the dynamic-bid price-based auction with bidding credits is not. The optimal bidding credit assignment undercompensates for quality advantages, creating a market distortion in which the buyer captures surplus at the expense of the seller's profit and social efficiency. In our experiment, the sealed-bid buyer-determined auction is less efficient than the dynamic-bid price-based auction with bidding credits. Moreover, both the buyer and seller receive more surplus in the dynamic-bid price-based auction with bidding credits.

Palm sugar is one of the potential products of Non-Timber Forest Products (NTFPs) that can contribute to increasing farmers' income and welfare, especially for communities around the forest. This study aims to identify marketing system of palm sugar at Community-based Forest in Bulukumba Regency. This research applied interview, observation, and study-literature methods. The samples selected by purposive sampling were the farmers in the Bangkeng HKm Bukit Harapan village and the traders of the palm sugar in Makassar. Then, from these samples, the market margin, the farmer share and the profit of trade agencies were descriptively and quantitative analyses. The results show that there are three marketing channels of the palm sugar trade in Bukit Harapan village i.e farmers directly to costumers, farmers to retailers to customers, and from farmers to the whole seller to customers. In the first channel, farmers to customers, there are the market distortions like monopoly, transaction cost, externalization, and public goods. In the second channel, farmers to retailers to customers, the market distortions found in this path are oligopoly and externalization. In the last channel, the market distortions are monopsony and transaction cost. Based on the analysis, it is found that the highest the market margin and the most profitable lines are the first and the third lines with the profit to 100% because the higher the value of farmer share, the better and more efficient the market performance

In recent years there has been an increased focus on food safety in Europe and elsewhere. Public food safety standards have been enforced through legislation, and firms at different levels of the supply chain have developed various private standards. Within the public arena this has led to profound changes in regulations at national, regional and multilateral levels. Legislations adopted to improve food safety include standards regarding the characteristics of the final product (e.g. maximum residue levels), production practices in the food supply chain, traceability within the supply chain and the legal liability of the supply chain. At the international level, formal and informal discussions have primarily focused on the legitimacy and harmonisation of standards (Henry de Frahan and Vancauteren, 2006). The change in public regulations has been accompanied by an increased use of private standards. These standards, which may include rules on infrastructure, equipment, modes of production, processing and quality management, often stipulate more stringent requirements than required by law. Public and private standards do not only influence how safe the final goods are, but also affect the internal organisation of firms, their strategic behaviour and the organisation of the supply chain. Hence, they affect the market power of actors, the distribution of profits along the supply chain and the welfare of all stakeholders. The literature on Minimum Quality Standards (MQS) shows that imposing a minimum product standard through regulations affects the prices, the quantities and varieties supplied, and the welfare of stakeholders (Scarpa, 1998; Garella, 2006). Hence, standards affect competition, and the success of public policies depends on the firm’s strategic response. Standards are also highly relevant in the trade context and there is an extensive literature concerning to what extent they may work as trade barriers (Korinek et al., 2008). Policy-makers must consider all these aspects when formulating public policies if they are to succeed in assuring that food sold to consumers fulfils the desired requirements with respect to food safety and that this is achieved with the least possible market distortion due to public intervention. European Review of Agricultural Economics Vol 36 (4) (2009) pp. 469–478 doi:10.1093/erae/jbp044

Part 1: Keynote Panel; International audience; Governments have always retained public service data internally in their own systems with only limited information provided to the public and other stakeholders such as the business, charitable and NGO communities. However, the rapid advancement of ICTs coupled with electronic publishing via the Internet in the last decade in particular has enabled governments to exploit the potential of wider distribution and use of such data previously held in internal systems. The panellists will discuss how Big, Open and Linked Data (BOLD) can be utilized to drive innovation and what obstacles and challenges may be encountered. Empowering citizens, potential mis-use in identity theft, policy manipulation or market distortion, and the need to combine open data with closed sources will be discussed.

This paper investigates the channels through which colonial origin affects economic outcomes in sub-Saharan Africa (SSA). It focuses on four key channels of transmission namely, human capital, trade openness, market distortion and selection bias. In contrast with previous studies where only initial conditions at independence were held to influence the subsequent growth path, the methodology that we apply in this paper combines (1) the pre-colonisation initial conditions, (2) the initial conditions at independence and (3) the subsequent post-colonial changes in explaining income differences amongst former SSA colonies. Our sample comprises of 38 SSA countries studied over the period 1960-2000, and we use pooled OLS and Hausman-Taylor estimation techniques in a panel framework. The results suggest that former British colonies have had marginally higher income levels than former French colonies, and this is attributable to the legacy of British colonisation in trade openness and human capital. We do not find robust evidence in support of the market distortion and selection bias channels. Besides highlighting the importance of the trade openness channel, the study is also the first, to the best of our knowledge, to simultaneously examine a range of feasible transmission channels between colonial origin and economic growth performance.

This paper uses a unique data set of panel firms from the World Bank's Enterprise Surveys in 47 economies, to provide estimates of the patterns of firm exit, and analyzes various firm characteristics and conditions under which firms leave the market. Firms' labor productivity and age are robustly associated with a lower likelihood of exit, consistent with conceptions of creative destruction and findings elsewhere in the literature. These findings are robust across several specifications. However, the effects are mitigated by other factors, such as use of bank financing and the presence of limited liability. Although firm size does appear to matter, its effect is lessened after accounting for labor productivity. The paper also provides basic estimates of job loss attributable to firm exit, estimating that on average 3 to 4 percent of private sector employment is lost per annum due to firm exit. Because of the challenges of data collection, the analysis relies on a necessarily conservative definition of exit and provides a framework for future work on utilizing such periodic survey panels to estimate the relative patterns of firm attrition and the associated job loss.

In the last decades, the nature and scope of services offered by public sector entities has changed considerably. More recently, one can also distinguish a rising awareness of the economic potential of public sector information, in turn raising demand for the availability of such information for re-use for both commercial and non-commercial purposes. The expansion of the public sector information available for re-use, however, can lead to collisions with the services offered by private commercial entities. Therefore, the question is raised as to what rules apply to these governmental entities. As governmental entities have access to means and resources often unavailable to private commercial entities, one could find that such governmental entities hold an unfair competitive advantage over their private commercial peers. Therefore, this article will analyze whether or not such governmental entities fairly compete with private commercial entities offering similar services and what rules can apply to such situation.

Bulgarian Abstract:Настоящата статия изследва основните причини, поради които вече близо половин век финансовите услуги биват изключени от облагаемата база на ДДС в рамките на ЕС. В резултат на необлагането на тези услуги се наблюдават редица изкривявания на пазарните механизми, засягащи всички икономически агенти – домакинства и бизнес потребители, финансови посредници, държавни бюджети. Чрез направения анализ се цели да се препоръчат мерки за реформирането на данъчните системи в отговор на тези деформации. English Abstract: This article explores the main reasons due to which nearly a half-century the financial services have been excluded from the taxable base of VAT in the Member States of the EU. As a result of the non-taxation of these services a number of market distortion mechanisms affecting all economic agents has been observed - households and business customers, financial intermediaries, government budgets. The analysis aims to recommend measures for the reform of the tax systems in response to these distortions.

Seaports are recognized for their importance in facilitating trade growth and associated economic development. These attributes often give rise to the notion that seaports, or infrastructure elements of seaports, are public goods. Public goods are regarded as goods or services which a market acting in isolation might have difficulty in providing, or at least providing in sufficient quantity and/or at a competitive price. An important element of a public good relates to its non-rival consumption, the implication being that it is impossible to exclude anyone, whether they pay or not. Key questions this paper seeks to address are, what constitutes public goods in seaports, to what extent is it necessary for the public sector to provide these goods, and can such intervention lead to market distortion in respect of competing ports? The paper describes the more common examples of public goods in seaports. This is followed by discussion of public and private sector investment at major north European seaports. Th...

An analysis of more than 1,300 hotel transactions recorded between 1985 and 1992 revealed a pattern of consistent overpayment by some types of buyers and underselling by certain classes of sellers. Further comparisons of specific hotel-property types with various combinations of buyers and sellers showed that sale prices are frequently affected by certain combinations of property characteristics with the attributes of buyers and sellers. Individual buyers, for example, regularly overpaid for the properties they bought and were particularly influenced by average daily rate. On the other hand, the Resolution Trust Corporation created considerable market distortion by regularly discounting hotels it sold, because it undervalued its properties' proximity to city centers and their ADRs.

In this paper, we consider the methodology of benefit measurement of transportation improvement under the core-periphery model, which has market distortion and multi-equilibrium. The result shows that when the transportation improvement takes a discontinuous path; i. e., it involves a jump from an equilibrium to another equilibrium, the traditional methodology cannot be applied. In that case, the method shown in this paper is useful. In addition, we examine how to use project evaluation under the existence of multik-equilibdum.

The paper tries to analyze China's regional disparity in a framework of convergence in neoclassical theory of growth. We employ comparative productivity of agricultural labor as an index of labor market distortion to see the impact of difference of labor market maturity among regions on regional growth performance, controlling for a set of variables determining growth rate. The finding is that (1) there is an evidence of conditional convergence in China's growth, namely, per capita GDP in the initiative year is negatively related to growth rates in following years, (2) labor market distortion negatively impacts regional growth rates, and (3) many other variables used at previous studies impact growth performance, as is expected by neoclassical theory of growth.

EU state-aid rules center on all government measures that affect public budgets while granting a selective advantage to a company or sector with market distortion as a consequence. Throughout the first decade of the 21st century, state-aid became the focal point for debate over PSB. As these traditional media institutions ventured into new media platforms, such as the web, the debate amplified further and new stakeholders — representing mainly the online news industry — entered the ring. Moreover, the centrality of these issues is illustrated by the oppositional and heated discussions about the so-called public value test that foresees an ex-ante evaluation of the public value and market impact of public broadcasters’ new services. Such a test originated in the UK but was due to EC pressures exported to several other member states of the EU (for an overview, see Donders & Moe, 2011).

After a third of a century of extensive investment in vocational education in less developed countries, return on investment has been disappointing and the future of vocational education seems uncertain. Yet, in Gulf Cooperation Countries, vocational education is emerging as the cornerstone of the national human resource development strategy. This article examines the key factors inhibiting the effectiveness of vocational education in Saudi Arabia and takes colleges of technology as a case study. Evidence generated from the research leads to the conclusion that social values and labour market distortion are the main impediments which could severely hamper Saudi Arabia's human resource development strategy.

Auctions play a crucial role in the United Kingdom economy, a vast array of goods (and land) being bought and sold through this form of transaction. Whilst sales of paintings and antiques, some of which may individually fetch astronomically high prices, may catch the public attention and imagination, there are more mundane but economically not less significant markets which centre on the auction sale. These range from the wholesale livestock and produce markets conducted daily across the country to the regular largely retail sales of second-hand motor vehicles.' In addition, one finds several specialist markets where the auction is commonly employed, such as plant and machinery and postage stamps; in the latter, postal auctions2 are often, appropriately enough, resorted to. At the more esoteric end of the scale, one finds auction sales of prospective property held monthly in London.3 Finally, the Bank of England regularly launches new Government securities by auction. These 'gilts auctions' provide a useful barometer of the investment market's view of the United Kingdom economy.4 Where some commodities are concerned, a choice can be made as to the mode of sale to be adopted that is, the vendor can decide whether he is likely to be better served by a private treaty sale or an auction. A prime example is land, whether residential or business premises bought for occupation or investment.5 On the other hand, some trades, such as the wholesale livestock market, are particularly suited to sales by auction and, indeed, it is difficult to see how such commodity markets could operate without the auction.6 Whether the auction is selected because it is the only viable, or in the circumstances the preferred, method of bringing buyers and sellers together, the reason for its appropriateness is the same: the fixing of a proper price on the spot by the direct action of competition between prospective buyers.7 Thus, the auction is not merely a method of effecting a sale, it is a mechanism for valuing and fixing

Agriculture and the environment are linked by a mutual reliance on scarce resources and prevalent market distortions. In this paper we examine the efficiency costs of policies that correct distortions in one sector while ignoring those in another. The dual distortions of an environmental externality and water subsidies are studied in the context of irrigated agriculture in California. The welfare costs associated with independent action by either a water agency or an environmental authority when that policy maker attempts to correct the respective market distortion without consideration of the distortion in the other market are estimated. Policies to correct the two distortions are found to be complementary. Under these conditions, the independent correction of either distortion improves welfare by at least $118 per acre. In most cases, the simultaneous adoption of various second-best policies further reduces welfare losses associated with these distortions. Copyright 1996, Oxford University Press.