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on Regulation |
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Issue of 2006‒09‒30
eighteen papers chosen by Christian Calmes Universite du Quebec en Outaouais, Canada |
| By: | Lea Zicchino |
| Abstract: | The revised framework for capital regulation of internationally active banks (known as Basel II) introduces risk-based capital requirements. This paper analyses the relationship between bank capital, lending and macroeconomic activity under the new capital adequacy regime. It extends a model of the bank-capital channel of monetary policy - developed by Chami and Cosimano - by introducing capital constraints . la Basel II. The results suggest that bank capital is likely to be less variable under the new capital adequacy regime than under the current one, which is characterised by invariant asset risk-weights. However, bank lending is likely to be more responsive to macroeconomic shocks. |
| URL: | http://d.repec.org/n?u=RePEc:boe:boeewp:270&r=reg |
| By: | Martin Partington; Alex Marsh; Robert Lee; Frank Stephen; Dave Cowan; Helen Carr; Caroline Hunter; Tony Crook |
| Keywords: | regulation, law and economics, governance, compliance, renting |
| JEL: | K10 |
| Date: | 2006–03 |
| URL: | http://d.repec.org/n?u=RePEc:bri:cmpowp:05/148&r=reg |
| By: | Leandro Prados de la Escosura; Isabel Sanz Villarroya |
| Abstract: | Argentina has slipped from being among the ten richest countries in the world by the eve of World War I to its current position close to developing countries. Why did Argentina fall behind? In this paper we employ a structural model to investigate the extent to which contract enforcement, as captured by Clague, Keefer, Knack, and Olson’s “Contract Intensive Money”, conditioned broad capital accumulation and economic growth in Argentina and, consequently, the country’s relative international position. Our results suggest that poor contract enforcement played a major role in Argentina’s unique experience of long-run economic decline. |
| Date: | 2006–09 |
| URL: | http://d.repec.org/n?u=RePEc:cte:whrepe:wp06-06&r=reg |
| By: | James Albrecht; Lucas Navarro; Susan Vroman (Department of Economics, Georgetown University) |
| Abstract: | In many economies, there is substantial economic activity in the informal labor market, beyond the reach of government policy. Labor market policies, which by definition apply only to the formal-sector can have important spillover effects on the informal sector. The relative sizes of the informal and formal sectors adjust, the skill composition of the workforce in the two sectors changes, etc. In this paper, we build an equilibrium search and matching model to analyze the effects of labor market policies in an economy with an informal sector. Our model extends Mortensen and Pissarides (1994) by allowing for ex ante worker heterogeneity with respect to formal-sector productivity. We analyze the effects of labor market policy on informal- and formal-sector output, on the division of the workforce into unemployment, informal-sector employment and formal-sector employment, and on wages. Finally, our model allows us to examine the distributional implications of labor market policy; specifically, we analyze how labor market policy affects the distributions of wages and productivities across formal-sector matches. Classification-JEL Codes: E26, J64, J65, O17 |
| Keywords: | search, matching, informal sector |
| URL: | http://d.repec.org/n?u=RePEc:geo:guwopa:gueconwpa~06-06-06&r=reg |
| By: | Willison, Robert (Department of Informatics, Copenhagen Business School) |
| Abstract: | There is currently a paucity of literature focusing on the relationship between the actions of staff members, who perpetrate some form of computer abuse, and the organisational environment in which such actions take place. A greater understanding of such a relationship may complement existing security practices by possibly highlighting new areas for safeguard implementation. To help facilitate a greater understanding of the offender/environment dynamic, this paper assesses the feasibility of applying criminological theory to the IS security context. More specifically, three theories are advanced, which focus on the offender’s behaviour in a criminal setting. Drawing on an account of the Barings Bank collapse, events highlighted in the case study are used to assess whether concepts central to the theories are supported by the data. It is noted that while one of the theories is to be found wanting in terms of conceptual sophistication, the case can be made for the further exploration of applying all three in the IS security context. |
| Keywords: | None |
| JEL: | O30 |
| Date: | 2005–09–19 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cbsinf:2005_004&r=reg |
| By: | Willison , Robert (Department of Informatics, Copenhagen Business School) |
| Abstract: | While hackers and viruses fuel the IS security concerns for organisations, the problems posed by employee computer crime should not be underestimated. Indeed, a growing number of IS security researchers have turned their attention to the ‘insider’ threat. However, to date, there has been a lack of insight into the relationship between the actual behaviour of offenders during the perpetration of computer crime, and the organisational context in which the behaviour takes place. To address this deficiency, this paper advances two criminological theories, which it is argued can be used to examine the stages an offender must go through in order for a crime to be committed. In addition, this paper illustrates how the two theories, entitled the Rational Choice Perspective and Situational Crime Prevention, can be applied to the IS domain, thereby offering a theoretical basis on which to analyse the offender/context relationship during the perpetration of computer crime. By so doing, practitioners may use these insights to inform and enhance the selection of safeguards in a bid to improve prevention programmes. |
| Keywords: | None |
| JEL: | H00 |
| Date: | 2006–09–18 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cbsinf:2006_004&r=reg |
| By: | CRÉMER, Jacques; CREMER, Helmuth; DE DONDER, Philippe |
| Date: | 2006–07 |
| URL: | http://d.repec.org/n?u=RePEc:ide:wpaper:5853&r=reg |
| By: | CREMER, Helmuth; DE DONDER, Philippe; DUDLEY, Paul; RODRIGUEZ, Frank |
| Date: | 2006–05 |
| URL: | http://d.repec.org/n?u=RePEc:ide:wpaper:6007&r=reg |
| By: | Nauro F. Campos (Brunel University, CEPR and IZA Bonn); Francesco Giovannoni (CMPO, University of Bristol) |
| Abstract: | Conventional wisdom suggests that lobbying is the preferred mean for exerting political influence in rich countries and corruption the preferred one in poor countries. Analyses of their joint effects are understandably rare. This paper provides a theoretical framework that focus on the relationship between lobbying and corruption (that is, it investigates under what conditions they are complements or substitutes). The paper also offers novel econometric evidence on lobbying, corruption and influence using data for about 4000 firms in 25 transition countries. Our results show that (a) lobbying and corruption are substitutes, if anything; (b) firm size, age, ownership, per capita GDP and political stability are important determinants of lobby membership; and (c) lobbying seems to be a much more effective instrument for political influence than corruption, even in poorer, less developed countries. |
| Keywords: | lobbying, corruption, transition, institutions |
| JEL: | E23 D72 H26 O17 P16 |
| Date: | 2006–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2313&r=reg |
| By: | Friedrich Schneider (Johannes Kepler University of Linz and IZA Bonn) |
| Abstract: | Estimations of the size and development of the shadow economy for 145 countries, including developing, transition and highly developed OECD economies over the period 1999 to 2003 are presented. The average size of the shadow economy (as a percent of “official” GDP) in 2002/03 in 96 developing countries is 38.7%, in 25 transition countries 40.1%, in 21 OECD countries 16.3% and in 3 Communist countries 22.3%. An increased burden of taxation and social security contributions, combined with a labor market regulation are the driving forces of the shadow economy. Furthermore, the results show that the shadow economy reduces corruption in high income countries, but increases corruption in low income countries. Finally, the various estimation methods are discussed and critically evaluated. |
| Keywords: | shadow economy of 145 countries, tax burden, tax morale, quality of state institutions, regulation, DYMIMIC and other estimation methods |
| JEL: | O17 O5 D78 H2 H11 H26 |
| Date: | 2006–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2315&r=reg |
| By: | Svetlana Andrianova |
| Abstract: | This paper presents a model of opportunistic behaviour in decentralized economic exchange and considers the impact of inadequate institutional framework of formal contract enforcement on economic performance. It is shown that (i) when the number of cheating traders is sufficiently large, inadequate institutions result in a loss of decentralized trading contracts, (ii) an adequate institutional framework, while being necessary for the attainment of a Pareto optimal outcome, may not be sufficient if traders perceive it as inadequate; and (iii) sufficiently good formal enforcement provisions help deter contractual breach in enviroments with corrupt and powerful enforcers. |
| Keywords: | Formal contract enforcement; perceptions; transition economies |
| JEL: | C70 D82 K42 |
| Date: | 2006–09 |
| URL: | http://d.repec.org/n?u=RePEc:lec:leecon:06/12&r=reg |
| By: | Sara Markowitz |
| Abstract: | Sudden Infant Death Syndrome is a leading cause of mortality among infants and is responsible for thousands of infant deaths every year. Prenatal smoking and postnatal environmental smoke have been identified as strong risk factors for SIDS. Given the link between smoking and SIDS, this paper examines the direct effects of cigarette prices, taxes and clean indoor air laws in explaining changes in the incidence of SIDS over time in the United States. State-level counts of SIDS cases are generated from death certificates for 1973 to 2003. After controlling for some observed and unobserved confounding factors, the results show that higher cigarette prices and taxes are associated with reductions in SIDS cases. Stronger restrictions on smoking in restaurants and child care centers are also effective in reducing SIDS deaths. |
| JEL: | I0 |
| Date: | 2006–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12527&r=reg |
| By: | Pinka Chatterji; Jeffrey DeSimone |
| Abstract: | We estimate the relationship between 10th grade binge drinking in 1990 and labor market outcomes in 2000 among National Educational Longitudinal Survey respondents. For females, adolescent drinking and adult wages are unrelated, and negative employment effects disappear once academic achievement is held constant. For males, negative employment effects and, more strikingly, positive wage effects persist after controlling for achievement as well as background characteristics, educational attainment, and adult binge drinking and family and job characteristics. Accounting for illegal drug use and other problem behaviors in 10th grade eliminates the unemployment effect, but strengthens the wage effect. As the latter is not explicable by the health, income or social capital justifications that are often used for frequently observed positive correlations between adult alcohol use and earnings, we conjecture that binge drinking conveys unobserved social skills that are rewarded by employers. |
| JEL: | I1 J2 J3 |
| Date: | 2006–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12529&r=reg |
| By: | Andrea Buffa; Giovanna Nicodano |
| Abstract: | This paper considers share repurchases as the way long-term shareholders preserve their ability to use corporate information for speculative purposes when insider trading regulation is enforced. This use of corporate information increases the adverse selection losses of short-term shareholders. Thus, buy-back programs reduce their incentive to invest in stocks that back the most productive technology, leading to a socially inefficient equilibrium. It follows that insider trading should not be banned when share repurchases are allowed. |
| Keywords: | insider trading, share repurchase, liquidity, securities regulation, corporate information |
| JEL: | G18 G14 D82 K22 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:cca:wpaper:16&r=reg |
| By: | Torstein Bye, Annegrete Bruvoll and Finn Roar Aune (Statistics Norway) |
| Abstract: | In 2002/2003, the Nordic hydro-dominated power market faced a short-term supply shock. In autumn, precipitation and inflow were unusually low. As a result, there were record high prices in the following winter. Questions were raised whether the deregulated market creates sufficient incentives to invest in new production and transmission capacity to secure supply when overall inflow fails. One fear is that the market could break down when precipitation and inflow fails during the whole year, which is more probable than a short-term extreme inflow failure. We apply a market model to simulate the market effects with two events: i) an overall inflow shortage 25 per cent lower than normal, and ii) a seasonally biased inflow shortage, as happened in 2002/03. The 25 per cent low inflow scenario shows that significantly higher price effects are likely to occur in the Nordic power market in the future than in the past. However, the price effects are less than one would expect when compared to 2002/03, but prices remain higher for a longer period of time. The simulations do not indicate any problems in the functioning of the market within these scenarios. |
| Keywords: | Volatile power markets; deregulated power markets; security of supply |
| JEL: | C61 D41 Q41 |
| Date: | 2006–09 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:472&r=reg |
| By: | Alan E. Woodfield (University of Canterbury) |
| Abstract: | This paper generalizes the two-period model of Watt (2000) who demonstrates the possibility of optimal accommodation of a pirate when the royalty rate applying to a creation is uniform and second-period Cournot competition applies. Admitting nonlinear contracts with period-specific royalty rates that leave total payments unchanged, simulation analysis shows that a producer of originals does better to increase the royalty rate in period 1 and decrease the rate to a negative level in period 2, thereby more than offsetting the usual cost advantage available to a pirate. Watt's illustrative examples regarding piracy accommodation (but not piracy exclusion) are overturned when a nonlinear contract is chosen optimally, although accommodation remains optimal in some other cases. Further, where exclusion is impossible under uniform royalties, cases exist where exclusion is feasible under nonlinear royalties. Even so, accommodation may be a preferable strategy. |
| Keywords: | accommodating copyright piracy; nonlinear royalty contracts |
| JEL: | D43 K11 L13 |
| Date: | 2006–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:cbt:econwp:06/01&r=reg |
| By: | Paul Gordon; Alan E. Woodfield (University of Canterbury) |
| Abstract: | This article argues that it is doubtful that the fivefold increase in maximum fines under New Zealand's Health and Safety in Employment Amendment Act 2002 will be successful in providing suitable precautionary incentives. Expected penalties remain at relatively low levels, with the continued use of capped fines along with substantial margins for deterrence of the most serious cases. On average, fines were initially substantially lower in response to the introduction of the Sentencing Act 2002 for which uncapped (but insurable) reparations take precedence over fines, and must be accounted for in setting fines. The combined effects of the legislation led to average total financial penalties approximately doubling through 2004 rather than increasing at anything like the rate signalled for fines by the amendments. Subsequently, while fines have grown in absolute terms, even more rapid growth in reparations has caused relative crowding-out while total penalties remain well below those signalled by the amendments alone. The case for low caps on fines appears weak, while 'asset-testing' fines is unlikely to be an efficient practice. Absent further significant changes in workplace safety incentives, New Zealand is likely to face an ongoing (if possibly somewhat abated) stream of prosecutions for serious breaches of relatively onerous statutory health and safety duties. |
| Keywords: | health and safety incentives; expected penalties; capped fines; reparations |
| Date: | 2006–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:cbt:econwp:06/03&r=reg |
| By: | Raaj Sah (School of Economics and Social Sciences, Singapore Management University) |
| Abstract: | Large and persistent differences in corruption across comparable countries often are loosely attributed to unarticulated “cultural factors.” Such attributions may indicate a lack of firmer perspectives from social sciences. An even more challenging research issue is the presence of such differences across regions within the same country, because, in comparison to different countries, such regions generally share more socioeconomic and governance characteristics. A principal theme of this paper is that an individual’s perceptions of his or her environment are influenced by the realities that this individual and others have faced in the past, and that these perceptions affect current and future actions of individuals, which in turn exert influences on the current and future realities. A dynamic analysis of this theme yields a number of observations concerning individuals’ behavior and societal outcomes. |
| Date: | 2005–03 |
| URL: | http://d.repec.org/n?u=RePEc:siu:wpaper:10-2005&r=reg |