Search

Copyright of Contemporary Accounting Research is the property of Canadian Academic Accounting Association and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The paper presents a model to study reverse auctions for conservation contracts. A buyer elicits bids from multiple rent seeking and risk averse farmers. Conservation activities have ex post cost risk such that farmers only learn the true value of conservation contracts after the auction. The paper derives the optimal bidding function and shows that farmers have conflicting incentives when facing multiple sources of risk. Specifically, we show that farmers exhibit a form of precautionary bidding, that is, they increase their bids in response to an increase in valuation risk. We propose an approach to take the model to the data and recover structural risk parameters. The suitability of the approach to real‐world data is demonstrated through a Monte Carlo experiment. [ABSTRACT FROM AUTHOR]

One of the biggest issues with public accountability in most federal systems is the payment of pensions to former public officeholders such as governors, which is arguably undermining ethical standards in the public sector and impeding socio-economic development. This is because of the arbitrariness of the policy, the huge financial burdens it imposes on subnational governments, and the fact that such practice is often uncorrelated with the fiscal realities of the federating states. The problem is more challenging in developing countries that are weighed by weak institutions and poor governance. Using the Nigerian case, the study shows how public officeholders' pensions are shaped by corruption-prone defective legislative processes configured to birth ex post facto laws that widen rather than narrow corruption and inequalities. Adopting a descriptive exploratory research design and document analysis technique, this study offers valuable insights into addressing the ethical and legal challenges surrounding public pension administration. It advocates for adopting a standardised model for regulating and administering pensions for public officeholders in developing federal systems. By advancing legal and ethical arguments against the prevailing ex-governors' pension practice in Nigeria, this paper contributes to the extant discourse on improving accountability and governance in the public sector. [ABSTRACT FROM AUTHOR]

This study provides a microeconomic foundation for the bipolar stability hypothesis in international politics. It extends the well-designed conflict model of Esteban and Ray (Am Econ Rev 101(4):1345–1374, 2011) to include monetary compensation arrangements between the winning and losing groups, presenting a new conflict-related indicator called the balance of power index. The main finding of this study is that societal polarization serves to alleviate rather than exacerbate conflict intensity, which is elucidated by the balance of power index. This new characteristic of polarization is associated with the founding of the bipolar stability hypothesis by Waltz (J Int Affairs 21(2):215–231, 1967), Waltz (Theory of international politics. Addison-Wesley Publishing Company, Reading, 1979) under the economic behavioral model. [ABSTRACT FROM AUTHOR]

This paper presents and solves a model of third-party intervention in rent-seeking contests. Two players are engaged in a rent-seeking contest, while each of the two players can be supported by a third party. In return, the third party receives a share of the prize if the supported player wins. I use this model to discuss how equilibrium behavior depends on the sharing rule between the third party and the supported player. Among others, I find that a third party may have an incentive to increase support despite a reduction of his share of the prize. [ABSTRACT FROM AUTHOR]

Related Articles This study investigates how governance and infrastructure moderate the effect of natural resource rents on economic growth using a sample of 110 countries from 2000 to 2018. The empirical evidence is based on panel smooth transition regressions (PSTR). The nexus between economic growth and natural resources is not linear and the underlying non‐linearity is contingent on existing infrastructural and governance levels. Evidence of a “natural resource curse” is apparent in countries with extremely low levels of governance and infrastructural development. The favorable effect of natural resources on economic growth requires a governance threshold of −1.210 and an infrastructure threshold of 2.583, indicating that countries with governance and infrastructure levels higher than these values tend to benefit much more from the wealth of natural resources. Countries identified below the established thresholds are mainly from Africa. Policy implications are discussed with specific emphasis on African countries.Ali, Hamid E., and Shahjahan Bhuiyan. 2022. “Governance, Natural Resources Rent, and Infrastructure Development: Evidence from the Middle East and North Africa.” Politics & Policy 50(2): 408–40. https://doi.org/10.1111/polp.12451.Asiegbu, Martin F., Okey Marcellus Ikeanyibe, Pius Otu Abang, Okwudili Chukwuma Nwosu, and Chuka Eugene Ugwu. 2024. “Natural Resource Fund Governance and the Institutionalization of Rent Seeking in Nigeria's Oil Sector.” Politics & Policy 52(1): 169–95. https://doi.org/10.1111/polp.12579.Ikeanyibe, Okechukwu M. 2018. “Bureaucratic Politics and the Implementation of Liberalization Reforms in Nigeria: A Study of the Unbundling and Reorganization of the Nigerian National Petroleum Corporation.” Politics & Policy 46(2): 263–94. https://doi.org/10.1111/polp.12249. [ABSTRACT FROM AUTHOR]

This paper finds new evidence of using public housing upgrading programs for political rent-seeking motives. We merged datasets comprising public housing upgrading programs, resale public housing transactions, electoral division boundaries, and general election events in Singapore from 2010 to 2016. We find evidence of significant increases in public housing upgrading programs in the ruling party constituencies one quarter before general elections. Due to resource constraints, the probability of blocks being selected for future upgrading programs diminishes with the upgrading announcements in neighboring housing blocks. The negative externality is felt more by residents of affected housing blocks in the opposition constituencies, causing price declines of 1.9 % more than housing blocks in the ruling party constituencies. The preferential treatment in the upgrading program selection process for the ruling party constituencies over the opposition constituencies widens the housing price gap between the two constituencies. [ABSTRACT FROM AUTHOR]

Revenue sharing is a pervasive policy in professional sports leagues. While it is usually justified as promoting competitive balance, previous work has shown that it actually worsens balance in models where equilibrium outcomes are determined by contest success functions and when the league's goal is to maximize aggregate revenue. This paper offers an alternative justification for revenue sharing in such settings--namely, to balance two offsetting externalities: the "rent-seeking externality" and the "spillover externality." The first reflects the "race" to be first, and the second captures the value fans attach to overall league quality. [ABSTRACT FROM AUTHOR]

To address the complexities of national park management within China, this study investigated the evolutionary game between central and local governments in the context of Sanjiangyuan National Park, to explore strategic behavior and goal displacement issues. This research dissected the interplay and strategy evolution between governmental levels, considering the diverse interests, policy interpretations, and resource allocations that often lead to strategic misalignments. Employing an evolutionary game theory framework, we integrated a literature review and numerical simulations to delineate the dynamics of central–local governmental interactions. Our results underscore the pivotal role of strategic alignment in ensuring ecological conservation and socioeconomic development. The findings reveal that under certain conditions, characterized by minimization of rent-seeking behavior, cost-effective management, and risk mitigation, an evolutionarily stable strategy promoting optimal park management can emerge. This study concludes that a cooperative framework, underpinned by aligned incentives and strategic coherence between governmental levels, is critical for sustainable management of national parks. It contributes to understanding of governance models in national parks, offers insights into policy formulation and implementation within the ongoing environmental reform initiatives in China, reveals the behavioral strategies within national park management systems, and supports policy recommendations for enhancing governance quality and management efficiency. [ABSTRACT FROM AUTHOR]

We study the rent‐seeking phenomenon using a simple, static general equilibrium model. The economy consists of two sectors, both employing a constant returns‐to‐scale technology with labor as its sole input. One of the sectors is a monopoly, where a continuum of agents compete for a share of monopoly profits (i.e. rent). Agents are heterogeneous in labor productivity and rent‐seeking ability: they face a choice between engaging in (productive) work or vying for a share of the rent (i.e., a contest against other rent‐seekers). At the aggregate level, rent‐seeking reduces the available amount of labor in the economy and thereby lowers output and welfare (rent‐seeking is inefficient). At the individual level, rent‐seeking shifts income towards rent‐seekers. Consequently, an economy with few rent‐seekers tends to have high income inequality: an effect that is exacerbated by the fact that rent is decreasing in the number of rent‐seekers (low levels of rent‐seeking increase inequity). This tradeoff between efficiency and equity is the primary focus of this paper. We investigate how the distribution of rent‐seeking ability and the correlation between labor productivity and rent‐seeking ability shape this tradeoff. [ABSTRACT FROM AUTHOR]

The article focuses on questioning the value of donating money to academic philosophy departments, arguing that such donations may not be a wise use of finite financial resources. It explores the notion that funding academic philosophy could potentially support marginal philosophers producing low-quality work or draw away high-quality philosophers from more productive endeavors, raising concerns about the overall impact and effectiveness of such donations.

Water reforms fail mainly because stubborn contextual constraints are not effectively considered. This study proposes a context-sensitive water governance assessment by designing a comparative approach within a case study and making inductive analytic generalizations. The framework is applied empirically to the Zayandeh Rud basin in the rentier state of Iran. The results indicate that the rentier-weak state context has led to centralized rent-seeking governance and limited implementation capacity – characteristics of the entire country, not just the water sector. Water issues will, therefore, require context-sensitive, problem-driven analysis beyond addressing water governance challenges. [ABSTRACT FROM AUTHOR]

We study a contest where there are two active players in equilibrium when three players expend effort simultaneously to win a prize. We look at how endogenous timing of effort exertion affects the players' behavior. The players play the following game. First, they announce simultaneously whether they each will expend effort in period 1 or in period 2. Then, after knowing when they expend effort, each player expends effort in the period which he announced. We find interesting results, focusing on the players' decisions on when to expend effort, the identities of active players, and the effort levels in a subgame‐perfect equilibrium. [ABSTRACT FROM AUTHOR]

Copyright of TESAM Academy Journal is the property of Tesam Academy and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This essay uses a dialogue as a way of articulating complicated ideas on Li's (2014) paper to relate the notion of materiality of land-to-land grabbing and other dimensions of "materiality" invested by various lines of research on land. The work of Li is used as it mentions the idea of "inscription" and the use "title deed" that are "material" in a physical sense that conveniently articulates with the argument that the cadastral boundary is the "form" of land as real property rather than an open access resource, a situation which does not exist in most real-world situations. The treatment of a land boundary in terms of property rights in neo-institutional economics is discussed. The significance of land boundary re-delineation in global development, as a subject for those who employ the concept of "materiality", is highlighted by itemizing specialisms in the professional division of labour in the land market. [ABSTRACT FROM AUTHOR]

Prior research has argued that companies in transition economies engage in corporate social responsibility (CSR) activities to achieve political goals, such as building connections with the government. However, it is unclear why chief executive officers (CEOs) agree to make these politically driven CSR decisions that mainly benefit the controlling shareholders. We show that controlling shareholders may "bribe" the CEOs with greater compensation or perks—a form of economic rents extracted by the CEOs—to make CSR decisions, and such a pattern is more salient in local government-owned companies. We reason that these CSR activities reflect implicit contracting between the controlling shareholders and the CEOs. Through cross-section analyses, we find that the CEO's economic rents vary with local government fiscal needs, the firm's governance structure, and CEO power. Furthermore, we demonstrate that increases in CSR-linked compensation lead to a decline in shareholder value. Data Availability: All data are available from public databases identified in the paper. JEL Classifications: D72; M12; P26. [ABSTRACT FROM AUTHOR]

In recent years, the outbreak of mass loan suspension by homebuyers in China has triggered widespread concern about the regulation of presale deposits for commercial real estate. To optimize the supervision mechanism of presale deposits, the regulatory role of third-party institutions is being considered by local governments. However, the efficacy of third-party regulatory mechanisms is not guaranteed, and rent-seeking behaviors driven by substantial profits may lead to mechanism failures. By constructing evolutionary game models and analyzing system equilibriums under both administrative and third-party regulatory modes, this study investigates the effectiveness of introducing third-party institutions into the regulation of presale deposits for commercial real estate, proposes suggestions to mitigate developer speculative behavior and addresses the design challenges of local government optimal incentive contracts. Findings indicate that under the administrative regulatory mode, overly strict government regulation may inadvertently enhance the covert nature of developer speculation. The introduction of third parties effectively substitutes for government regulation and better suppresses developer speculative motives. In the setting of incentive mechanisms, the intensities of rewards and penalties need to satisfy different optimal solution relationships based on varying initial conditions. When establishing performance evaluation standards, governments should consider the magnitude of reward and penalty intensities to enhance the quality of third-party regulation. Specifically, when reward intensity exceeds penalty intensity, lowering performance evaluation standards is more conducive to achieving the ideal equilibrium of the system. Conversely, raising performance evaluation standards yields superior results. This study provides a comprehensive theoretical analysis and practical recommendations for the regulation of presale deposits in commercial real estate. Practical Applications: In construction and engineering projects, the regulation of presale deposits is crucial to ensure the orderly progress and timely delivery of projects. Comparing the evolutionary paths of administrative and third-party regulatory modes, this study reveals the feasibility of introducing third-party involvement in presale deposit regulation and the design of incentive contracts for local governments under the third-party regulatory model. First, third-party supervision serves as a clear substitute for administrative regulatory mode, and authorities can strategically replace certain aspects of government supervision with a carefully designed third-party mechanism to enhance the effectiveness of regulatory measures. Second, when introducing third-party involvement in supervision, the government should strike a balance based on factors such as compliance costs, rent-seeking benefits, and benchmark performance standards to ensure that third-party institutions have the incentive for positive compliance without imposing excessive burdens on them. Finally, in setting benchmark performance standards, if the intensity of rewards exceeds the intensity of penalties, it is recommended that the performance evaluation standards be lowered, and conversely, that the performance evaluation standards be raised. The research has a significant theoretical and practical significance for improving regulatory efficiency, ensuring the delivery of projects on schedule, protecting the rights and interests of homebuyers, and promoting the sustainable development of the construction project management industry. [ABSTRACT FROM AUTHOR]

While the Porter hypothesis posits that well-functioning markets and government regulations can promote enterprise innovation, it remains less clear in developing and transition economies. To address this gap, we utilize enterprise data from China’s A-share market between 2005 and 2017 to empirically examine whether implementing more stringent environmental regulation will prompt regulated enterprises to engage in rent-seeking or innovative behavior. Our findings reveal that regulated enterprises increase both their rent-seeking and innovation efforts in response to environmental regulation. Importantly, enterprises exhibiting lower levels of rent-seeking demonstrate more substantial increases in rent-seeking expenditure when confronting environmental regulation. Furthermore, we discover that state-owned enterprises are more inclined to implement innovative behaviors, while foreign enterprises significantly reduce their innovative activities. This study highlights the complex relationship between environmental regulation and enterprise behavior in developing or transition economies. [ABSTRACT FROM AUTHOR]

What are the historical origins of political fragmentation and unification? This study develops a Malthusian growth model with multiple states to explore interstate competition and the endogenous emergence of political fragmentation versus a unified empire. Our model features an agricultural society with citizens and rulers in a Malthusian environment in which the expansion of one state may come at the expense of another state, depending on the intensity of interstate competition captured by the elasticity of the land ratio with respect to the population ratio between states. If this elasticity is less than unity, then multiple states coexist. However, if this elasticity is equal to unity, then a unified empire emerges. Which state becomes the unified empire depends on its military power, agricultural productivity, and its rulers' preference for rent-seeking Leviathan taxation. We also discuss the historical relevance of these theoretical predictions in the Warring States period of ancient China. [ABSTRACT FROM AUTHOR]

The issue of corporate rent-seeking, which stems from the misuse of authority, remains a critical concern for the international community. Drawing on agency theory and resource dependence theory, this study explores the relationship between corporate digitalization strategies (DSs) and corporate rent-seeking. We test our theoretical hypotheses by utilizing panel data encompassing Chinese A-share listed companies from 2004 to 2021. Our findings suggest that corporate DSs have a significant negative influence on rent-seeking. Several robustness tests support this conclusion. Moreover, our analysis indicates that a DS is particularly effective in curtailing rent-seeking behaviors within state-owned enterprises (SOEs) compared with their non-state-owned counterparts. However, contrary to our hypothesis, a DS is less effective in suppressing corporate rent-seeking among firms where the executive team has legal backgrounds. These findings suggest that top managers, especially within SOEs, should prioritize the early formulation of digital transformation strategies to reduce rent-seeking behavior. Additionally, when implementing digital transformation, firms should carefully integrate members with legal backgrounds into their executive teams and strengthen ethical education and supervision for executives with legal expertise. [ABSTRACT FROM AUTHOR]

This article explores the reasons why mission-oriented innovation policies often fail. It identifies seven key factors, including the complexity of the problems being addressed, self-interest of politicians and government agencies, lack of sufficient information, rent-seeking and regulatory capture, distortion of competition and incentives, moral hazard caused by government support, and ignorance of opportunity costs. The article provides case studies and empirical evidence to support these findings, emphasizing the challenges of solving complex problems and implementing top-down projects. It also acknowledges the influence of interest groups and the limitations of policymakers' knowledge and skills. The article discusses potential drawbacks and limitations of mission-oriented innovation policies, such as corruption and rent-seeking, distortion of competition, and moral hazard. The authors suggest that alternative approaches, based on decentralized processes and experimentation, may be more effective in addressing societal challenges. [Extracted from the article]

The rule of law is a process whereby the citizens—society—are in a race with the state—government—to thread the needle between anarchy and despotism, or to live in "the narrow corridor," as Acemoglu and Robinson (2019, Penguin Books) call it. In the narrow corridor, private and collective institutions balance the coercive power of the state necessary to prevent citizens from taking from one another with private control of resources and exchange that create gains from trade. We argue that pre-contact Native Americans, as residual claimants of rents created by rules of law embedded in cultural practices that achieved this balance, were able to build healthy economies based on clear property rights and exchange. During the early period of European contact, American Indians and Europeans continued to abide by rules of law that encouraged trading rather than raiding. By the nineteenth century, however, rules imposed by the federal government declared Indians to be "wards" of the state and replaced productive trading rules of law with predatory rent-seeking rules. Settler governments justified rent seeking on the grounds that tribal customs and cultures were lawless and inefficient, but a deeper understanding suggests that those more local institutions represented a rule of law that balanced collective action and private action in ways that encouraged investment and exchange. Ironically, federal laws have suppressed Indian liberties, caused abject poverty, and left jurisdictional gaps in the rule of law that have enabled disorder. We conclude that the path back to the narrow corridor requires granting American Indians the sovereignty that will make tribes residual claimants of rents created by productive rules of law of their own making. [ABSTRACT FROM AUTHOR]

Iran's economy is founded on three main sectors: cooperative, private, and governmental. Various key documents outline objectives for each sector, highlighting certain industries with unique advantages and capacities. These industries not only have strong interconnections with other sectors but also drive demand and contribute to economic growth. This study aims to analyze and present various potential futures for Iran's economy, adopting a holistic and comprehensive perspective. It explores the key factors shaping the economy, including constructive economic drivers, significant uncertainties, and potential future scenarios, considering various influential dimensions. The research employs a qualitative scenario-based approach, structured in eight stages. Data is gathered through interviews, expert panels, and the Delphi survey method, with analysis supported by Mac and Scenario software and a wizard tool. The study identifies primary economic drivers for Iran, including economic growth, oil dependency, the impact of economic sanctions, fundamental challenges, and the level of economic openness. While other factors like high unemployment, a small capital market, rent-seeking, weak infrastructure, and corruption significantly influence the economic landscape, they are not classified as primary drivers in this study. However, these elements will be considered in developing future economic scenarios. Also, in order to prioritize solutions to deal with economic threats, it should be said that using short-term methods in the programs and executive plans of the country's institutions will be the first step to deal with threats. At the same time, planning and using solutions of higher levels, respectively, can move the country step by step in terms of structure and institutions in the direction of resilience, invulnerability and regeneration. [ABSTRACT FROM AUTHOR]

Agribusiness corporations primarily involved in providing livestock feed—colloquially known as the "ABCD" (Archer Daniels Midland (ADM), Bunge, Cargill, and the Louis Dreyfus Company)—have begun to enter the fishing industry around the world. I argue that this recent entry of agribusiness multinationals in aquaculture, focusing particularly on Cargill, arises to take advantage of strategic opportunities to proliferate, or create links with respect to feed production and development within value chains. Concerning such opportunities, as I document, Cargill first leveraged its access to cheap, overproduced grains in the 1990s, developing ways to insert corn and soy into what it calls "aquafeed." Next, the multinational firm began proliferating links within fishing industry value chains in the form of introducing new technical assistance services, as well as creating feed supplements and additives. As I explain, these efforts to proliferate links in the supply chain exist as opportunities to charge rents, or surplus profits, which is possible because Cargill retains the right to control the new products and services. An additional link in the chain includes how the corporation has expanded its role in the global food system from its past as an intermediary, to engaging consumers in direct ways by attempting to create their preferences. I conduct my analysis of Cargill's corporate strategy by focusing on reporting from the fishing industry publication, Aquafeed News, detailing developments from 2000 through 2023. [ABSTRACT FROM AUTHOR]

The present study delves into the complex interplay of decentralization, patronage, and rent seeking within the context of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA, Act) in Uttar Pradesh (UP). It addresses some pertinent questions: How does decentralization promote corruption? What tactics and strategies does the local implementer (pradhan) adopt to manipulate this Act? Have these manipulations benefited the pradhan? How have these strategies affected poor households? Drawing on data collected through household surveys, and semi-structured interviews with bureaucrats, sitting pradhans, and local power holders, I investigate whether decentralization has enabled marginalized communities to access employment opportunities or has facilitated patronage and rent seeking practices. The findings suggest that political actors and power brokers exploit decentralized structures for personal gains, manipulating resource allocation and beneficiary selection. Such practices of rent seeking can dilute the demand-driven principles of the Act and defeat the objective of equitable development. [ABSTRACT FROM AUTHOR]

The article discusses the development of general equilibrium models with oligopolistic product markets in macroeconomics. It explores the relationship between market power and wage inequality in the United States, specifically focusing on the growing skill premium, stagnant average wages, and the rise in wage inequality between firms. The authors develop a structural model that incorporates shifts in technology, rising monopsony power, and rising monopoly power to explain changes in the wage structure. The study finds that market power explains a modest portion of the skill premium expansion and a significant portion of the between-firm component of wage inequality growth. The article suggests that further research is needed to understand the causes of market power and its implications for welfare and policy interventions. [Extracted from the article]

While there are a relatively large number of studies on the relationship between firm formality and bribery, little is known about how a dynamic business environment affects this relationship. Using longitudinal data collected from biennial surveys of small- and medium-sized firms in Vietnam, this study shows that formal firms are more likely to pay bribes, which are proxied by greasing and rent-seeking bribes, than informal firms in provinces with poor business environments. Nevertheless, when the quality of the local business environment is improved, the formal firms are less likely to commit bribery. They also pay less bribes and have an expectation of paying less bribes in the future. These findings suggest that the focus of anti-corruption strategies should be on improving the quality of the local business environment to support the formal small- and medium-sized firms. [ABSTRACT FROM AUTHOR]

This paper extends the traditional rent-seeking model to consider contests in which the effects of the contestants' efforts are externally unproductive (i.e., redistributive) but internally productive (i.e., with positive spillover effects on other contestants). Our results show that when players act sequentially, the presence of positive spillovers on other contestants may reduce, or even reverse, the first-mover's advantage. A second-mover advantage is very likely to arise. Notably, in contests with multiple players, the second-mover advantage does not unravel into a last-mover advantage. Players want to be second, but not last. The comparative statics analysis shows how the strength of positive spillovers affects contestants' equilibrium expenditures and payoffs, and aggregate rent dissipation. [ABSTRACT FROM AUTHOR]

The implementation effect of Inherent Defects Insurance (IDI), which is currently being vigorously promoted in China, requires urgent improvement. A game model of the insurance company, contractor, and risk management institution in the performance stage is constructed from the perspective of the insurance company, and a simulation is carried out using system dynamics to address project quality problems caused by rent-seeking behaviors. The values of cooperation loss, reputation loss, and supervision cost were altered to explore the evolution process of each agent's behavior and the influence of each factor on the change of the agent's strategy. The findings indicate that the active supervision of insurance companies is positively influenced by the rent-seeking strategies of contractors and the intentional rent-seeking strategies of risk management institutions. In the context of long-term cooperation, it can be observed that there will be no rent-seeking behavior, and that the supervision cost is the main factor affecting the insurance company's strategy. The verification results are based on scientific evidence and provide a theoretical foundation for the implementation and application of IDI in the market. [ABSTRACT FROM AUTHOR]

Using a dataset of institutional bids for IPOs, we study how relationships with lead underwriters impact institutional investors' bidding strategy in the auctioned IPOs. Our paper finds that strong business ties lead to higher bid prices. The effect is more pronounced among IPO firms that receive less market attention, and is attenuated for IPOs certified by reputable intermediaries. We propose that rent-seeking incentives may be the potential mechanism for this relationship-based bidding. Our study highlights that the business connection between underwriters and institutional investors has effect on the IPO pricing. [ABSTRACT FROM AUTHOR]

This article explores the impact of the COVID-19 pandemic on society, including its devastating effects on human lives, livelihoods, and the global economy. It questions why the world was unprepared for the pandemic and discusses the importance of proactive planning and mitigation. The article also highlights the detrimental effects of neoliberal policies and inequality on pandemic response and calls for a more equitable and democratic approach. It discusses the desire for change and reduction in inequality during the crisis, but notes that the wealthy actually became wealthier. The article suggests alternative approaches to the economy and society, emphasizing ethical capitalism, fair contributions, open public discourse, and a sustainable future. It also mentions the importance of prioritizing health creation in urban planning to address wider inequalities. The text concludes by emphasizing the need for major social progress and a shift in corporate and political culture to create a more sustainable and equitable world. [Extracted from the article]

The article focuses on critiquing Ryan Murphy's stance on the developmental state in Singapore, emphasizing the importance of understanding the concept of developmental state capitalism and its broader implications in academic literature and policy practice. It argues that Murphy's response overlooks the essence of the earlier argument and demonstrates a lack of comprehension regarding the nature of developmental state capitalism.

The article focuses on the escalating defense costs in the U.S. over several decades, which have outpaced overall economic inflation. It examines how public choice theory can explain the incentives within the military-industrial complex (MIC) that drive defense spending increases, highlighting how political institutions incentivize politicians, bureaucrats, and contractors to pursue policies that benefit them personally, leading to higher costs for national security provision.

The aim of this paper is to study whether politicians manipulate tax policy to extract private rents. We focus on the local personal income tax in the setting of Italian cities, which is a progressive instrument that allows mayors to set different rates to distinct wage groups. We exploit discontinuities in mayors' salaries, that are based on population thresholds, to study whether mayors apply lower rates to their own tax bracket, thereby distorting tax policy. The main results document large rent-seeking activity in tax policy. First, we show that when mayors's salary is exogenously located in the following tax bracket it receives a significantly lower tax rate than the previous one, compared to the control group. Second, we show that this rent-seeking activity is highly detrimental for the public treasury, with a considerable reduction in fiscal revenues. And finally, we document that the individual gain for rent-seeker politicians is rather limited and that there is no evidence of voters' punishment in the next elections. These results suggest that when tax policy is prone to be manipulated politicians do not hesitate to engage in rent-seeking activities even in case of little returns. [ABSTRACT FROM AUTHOR]

This paper delves into the role of political rights in shaping financial inclusion. Despite the acknowledged significance of political institutions in influencing financial systems, there remains limited understanding of the economic origins of the impact of political institutions on financial inclusion. Utilizing data from the 2021 Global Findex database, the study finds that weak political rights significantly reduce the likelihood of individuals possessing financial accounts and using digital financial services. Robustness tests employing an instrumental variable and the difference-in-differences framework confirm that inadequate political rights have a detrimental effect on financial inclusion. By exploring the reasons for financial exclusion and moderating factors, this study provides supportive evidence for the mechanisms of eroded social trust and political rent-seeking as the key constraints that hinder inclusiveness in providing mainstream financial products and services. [ABSTRACT FROM AUTHOR]

How does justice affect individual incentives and efficiency in a political economy? We show that elementary principles of distributive justice guarantee the existence of a self-enforcing contract whereby agents non-cooperatively choose their inputs and derive utility from their pay. Chief among these principles is that your pay should not depend on your name, and a more productive individual should not earn less. We generalize our analysis to incorporate inclusivity, ensuring basic pay to unproductive agents, implemented through progressive taxation and redistribution. Our findings show that without redistribution, any self-enforcing agreement may be inefficient, but a minimal level of redistribution guarantees the existence of an efficient agreement. Our model has several applications and interpretations. In addition to highlighting the structure of economies and organizations in which fairness and efficiency are compatible, we develop an application to the formation of rent-seeking political alliances under the threat of fake news. [ABSTRACT FROM AUTHOR]

For land rent, it is characteristic that it arises as a consequence of capital investment in the purchase of land, which is not a production investment, because capital is not invested for the reason of organizing agricultural production, the main reason of investing capital is to acquire certain ownership of land areas. In this paper, we will present the possibility of solving the problem of rent calculations using the economic application of the definite integral. First, we will show if the integral calcusus is applied in the rent calculation and then in the domain of its calculation. [ABSTRACT FROM AUTHOR]

In studies on the functioning of the public sector there are surveys examining the determinants of corruption, including the level of fiscal decentralisation in the light of economic and social development. However, there is a dearth of survey data presenting the impact of the revenue side of this decentralisation in the context of civil liberties. Thus, the aim of the paper is to examine the influence of tax revenue decentralisation and civil liberties on corruption based on the OECD countries, taking into account the impacts of a country's size, scope of the public sector and public procurements, macroeconomic uncertainty, and interactions between tax revenue decentralisation and civil liberties on the phenomenon under study. The empirical study concerns 38 OECD countries in the period 2012-2022. Therefore, longitudinal data models were estimated, namely the fixed effects model and panel quantile regression with fixed effects using the method of moments. The survey showed that an increase in tax revenue decentralisation causes a decrease in corruption. In addition, civil liberties and their interaction with aforementioned decentralisation may determine corruption; however, this is heterogeneous throughout the distribution of corruption level. In addition, the scope of the public sector and macroeconomic uncertainty stimulate rent-seeking behaviour, which weakens the institutional foundations to counteract corruption. Thus, policymakers should be aware that the growing scope of the public sector, government fragmentation, and the functioning of bottlenecks in the performance of official duties at sub-national level might lead to a decrease in the efficiency of anti-corruption policy or programmes. Based on the findings, it is crucial to ensure price stability to reduce the analysed dysfunction. [ABSTRACT FROM AUTHOR]

ABSTRACTA large body of literature studies the relationship between corruption and economic outcomes, including government revenue mobilization, but there is little evidence on how this relationship changes during times of crisis. Using a comprehensive panel dataset covering up to 194 countries in the period 1996 to 2020, we find evidence of a negative link between corruption and revenue that is amplified in times of crisis. The amplification appears to be driven by countries with lower average income levels, non-democratic governments, and higher natural resource dependency. Our findings are helpful in assessing different views of corruption offered in the literature. Overall, we find our results to be more consistent with a rent seeking view of corruption whereby, in times of crisis, corruption becomes more pervasive and government revenue declines. In contrast, we find no empirical support for the view that crises represent times of social improvement associated with increases in revenues.

This paper contributes to the literature on EU trade policy by introducing insights from the political economy literature on development to the study of how EU trade liberalisation affects development in trading partners. Drawing on a comparison of EU trade liberalisation with Moldova and Georgia, we argue that the type of coalition between public and private actors in partner countries' top export sectors determines which firms benefit from better market access to the EU, as indicated by their ability to increase their exports. We show that liberalised trade with the EU tends to contribute to achieving the EU's declared objective of inclusive development if the presence of inclusionary development coalitions ensures that a broad range of firms is enabled to increase their export capacities through a mechanism that we call 'inclusive empowerment'. Otherwise, trade liberalisation contributes to exclusive development, benefitting big, mostly foreign firms, or, at worse, consolidating rent-seeking practices. [ABSTRACT FROM AUTHOR]

Governmental fiscal transfers can be important tools for redistributing resources and enhancing public services in areas with limited local resources. Meanwhile, politicians can use fiscal transfers to build patronage networks, weaken opposition candidates, or engage in rent-seeking. An understudied feature of governmental transfers is that local governments can become fiscally dependent on higher-level government. This dependence might lead local officials to favor the priorities of higher-level government while compromising responsiveness to local residents. Using panel data from Chinese villages, I demonstrate that when villages become more dependent on fiscal transfers from townships, they provide fewer public goods to villagers, pay more wages to village elites, and have stronger incentives to enforce the policies favored by higher-level governments. The results also suggest that fiscal transfers will not undermine local representation when electoral competition for village leadership positions exists. [ABSTRACT FROM AUTHOR]

The survival of the tourism industry is closely linked to the environment, but the rapid development of the tourism industry has led to greater pressure on the ecological environment. China's tourism development has been under the influence of government-led strategy and it is more closely connected with the government and has a greater impact on the environmental investment decisions of tourism enterprises. Based on rent-seeking theories and externality theories, tourism-related listed companies in China are selected as empirical research samples to study the relationship between political connection and environmental protection investment of tourism-related listed companies. The results show that the degree of political connection of listed companies involved in tourism has a significant negative influence on environmental protection investment. This study enriches the related contents of political connection and environmental protection investment in theory, and also provides practical significance in the environmental protection investment of tourism-related listed companies. [ABSTRACT FROM AUTHOR]

There is a large literature examining the macroeconomic effects of state economic development incentives on employment, income, tax revenue, and growth. At best, these incentives are found to be weakly effective at job creation, but inefficient due to the distortions, secondary effects, and increased rent‐seeking they encourage, with little public accountability. Given the evidence on their inefficiency, what explains their continued popularity? We find that large development incentives create substantial benefits for incumbent politicians in the form of both higher campaign contributions (particularly from business, labor, and construction sectors) and higher margins of victory at election time. Thus, political rent extraction may be the best explanation for the continued existence and popularity of these relatively ineffective incentive programs in states. [ABSTRACT FROM AUTHOR]

This paper adopts a novel institutional perspective—environmental centralisation—to examine its impact on firm productivity in developing countries. In 2008, China's State Environmental Protection Administration was upgraded to the Ministry of Environmental Protection (MEP). This administrative reform strengthened the central government's ability to protect the environment, enabling it to address more environmental affairs and concentrate on environmental rights. Based on the quasi‐natural experiment of the establishment of the MEP, this study takes a new perspective on the impact of environmental centralisation on productivity. The difference‐in‐difference‐in‐difference approach is used for the first time to estimate the impact of environmental centralisation on productivity. We find that environmental centralisation caused by the establishment of the MEP significantly increased the productivity of heavily polluting companies, and a series of robustness tests confirm that the results are credible. We identify three possible mechanisms, namely, facilitating innovation, curbing rent‐seeking behaviour and inhibiting over‐investments. The policy implication of this study is that the effectiveness of environmental policy depends not only on the policy itself but also on the allocation of environmental rights among different levels of government. [ABSTRACT FROM AUTHOR]

It is investigated under what conditions rents can be won through interference in the market through price subsidies. It is shown that owners of factors of production have an interest in price subsidies in the product market (which they can motivate with reference to "consumer interests") only if the factor supply is not perfectly price elastic, the incentive for rent-seeking increasing as the price elasticity of supply decreases. It is further demonstrated that this can occur in the case of differential rents. Since differential rents are found primarily in the use of land, land owners, i.e. farmers, should have especially high incentives to engage in rent-seeking activities. [ABSTRACT FROM AUTHOR]

The concept of resource curse is widely accepted in the extant literature. However, the burden of proof remains high as some resource‐rich countries experience rapid economic growth. This study examines how Nigeria's strategy for governance and management of revenue proceeds from petroleum resources has helped sustain rent‐seeking behavior, the resource curse phenomenon, and under‐development of the country. Using the theory of new institutionalism and a process‐tracing method, the article argues that political and historical dynamics in establishing legislation for governance and management of oil and gas revenues engendered path‐dependent rent‐seeking practices sustained by selfish political elites. The resource curse is not universal or inevitable in resource‐rich countries, but largely a product of institutionalization and sustenance of initial unhealthy practices. We recommend that recognizing the need for savings, stabilization, and investment, and setting clear fiscal rules to check excessive political discretion will reduce rent seeking and the resource curse in Nigeria and elsewhere. Related Articles: Ali, Hamid E., and Shahjahan Bhuiyan. 2022. "Governance, Natural Resources Rent, and Infrastructure Development: Evidence from the Middle East and North Africa." Politics & Policy 50(2): 408–40. https://doi.org/10.1111/polp.12451. Ikeanyibe, Okechukwu M. 2018. "Bureaucratic Politics and the Implementation of Liberalization Reforms in Nigeria: A Study of the Unbundling and Reorganization of the Nigerian National Petroleum Corporation." Politics & Policy 46(2): 263–94. https://doi.org/10.1111/polp.12249. Mähler, Annegret. 2011. "Oil in Venezuela: Triggering Conflicts or Ensuring Stability? A Historical Comparative Analysis." Politics & Policy 39(4): 583–611. https://doi.org/10.1111/j.1747‐1346.2011.00305.x. [ABSTRACT FROM AUTHOR]

Entrepreneurship is a productive force of innovation and economic development. However, in post-conflict regions, there is a greater challenge in allocating entrepreneurial talent to productive entrepreneurship. In this study, we examine the entrepreneurship ecosystem, which is built on the "bottom-up" principles to understand whether its pillars can facilitate productive entrepreneurship in two Ukrainian regions shaken by multiple revolutions and regime change. We introduce a model that puts entrepreneurial conditions in cities and formal institutional changes to a competitive test. Building on the regional entrepreneurship literature, we perform an empirical study in a developing country to reveal what drives productive entrepreneurship in post-conflict regions with entrepreneurship culture, formal networks, debt and equity financing emerging as important determinants of productive entrepreneurship. The effect of formal institutions is significant but highly correlated with rent-seeking behavior of government and corruption. Our analysis suggests that the entrepreneurial conditions in regions focusing on the bottom-up processes of supporting entrepreneurship should work better to enhance productive entrepreneurship activity in a post-conflict region. [ABSTRACT FROM AUTHOR]