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1st T&D World Conference
Boulder, September 25-26th, 2006

The T&D First World Conference was held in the University Memorial Center at Colorado University, in Boulder. In a two-day conference were discussed 17 unpublished papers of young researchers from a variety of countries, including Brazil, Russia, India, US, UK, Latvia, Canada, Vanatu, Nigeria, Ethiopia and others.

Keynote Speaker: Lee Alston (Colorado University)


Abstracts

Trade Liberalization for Brazilian Sugar Exporters: North or South?
By Omid Rowhani, Aya Suzuki, Karen Thome and David Zetland

Abstract: We measure the gains to Brazilian sugar producers when either the United States or India remove trade barriers to their domestic markets. Our simulation model makes a number of simplifying assumptions to derive supply and demand functions for refined sugar under current policies before relaxing the trade barriers of either the US or India to find new equilibria. Under four US liberalization scenarios, we find that Brazilian producers sell 0.4 to 1.1 million metric tons (1.5 to 4.2 percent) more sugar, increasing their total revenue by 196 to 575 million dollars (3.3 to 9.8 percent). When India liberalizes, Brazilian producers sell 0.8 mmt (3 percent) more sugar and increase total revenue by 416 million dollars (7.1 percent). Post-liberalization world refined sugar prices rise by 1.7 to 5.4 percent. Results are fairly robust to sensitivity analysis. From a benefit-cost perspective, developing countries might consider putting more effort into South-South trade liberalization.

Keywords: South-South Trade, Trade Liberalization, Sugar, Brazil, Doha Round.


A Case Study of Participation and Social Control in the Third Party Smallholder Group Organic Certification System
By Paulo Roberto Borges de Brito and Yara Maria Chagas de Carvalho

Abstract: The paper tackles the importance of participation and social control methods to work with organic family farmers. It assessed if the participatory methodology introduced in the Aprove (a family farmer group) certified by the AAOcert (certifier) increases the participation and social control processes for the family farmers in the São Paulo State Brazil. The main hypothesis is the IFOAM Basic Standards, for the Internal Control System ICS's crafting of the smallholder group certification increases the participatory processes, with social control developed as a pedagogical process from the Risk Assessment System RAS. The research was done in three different moments assessed by indicators based mainly on the concepts of institutional change and empowerment. The methodology of the Intervention was based on the ZOPP Method. Finally, the intervention showed the introduction of the RAS in the group increased the participation, social control and the understanding to craft their ICS in a collective way.

Keywords: Organic Agriculture, Family Farmer, Smallholder Group Organic Certification, Social Control, Risk Assessment System.


Competition Law and Inter-Firm Cooperation Building Cooperative Networks of Smaller Firms for Industrialization and Local Competitiveness
Alberto Salazar Valle, PhD

Abstract: Not available.

Keywords: Not available.


The impact of employment contract laws on private sector employers in Port Vila, Vanuatu
By Anita Jowitt

Abstract: Vanuatu is an underdeveloped country with a rapidly growing population and a limited private sector labour market. It has the highest indirect labour costs of any Pacific Island nation, a factor which may act as a disincentive to private sector expansion. This paper examines the question of the extent to which employment contract laws act as a disincentive to private sector employment growth. The analysis first examines the positivist legal assumption that employment contract law does affect employers' decisions and the related hypothesis that if labour costs are pushed too high by regulation then employers will hire fewer employees. This is rejected as being too simplistic as it does not explain the non-use of law or employers support for various laws which increase indirect wage costs. Alternative reasons for the lack of use of state law by employers are then explored.

JEL Classification: J08; K31; K40

Keywords: Employment Law, Legal Pluralism, Law and Economics, Vanuatu


Telecommunications in Small Economies: The Impact of Liberalisation and Mobile Telephony on the Universal Service Objective
By Pavlos C. Symeou

Abstract: Previous research on telecommunications has concentrated mainly on the context of large developed and developing countries. The literature of small economies lacks of research on the telecommunications industry. This study makes a first attempt to fill this gap. It examines the impact of the development of mobile telephony and the liberalisation in the fixed and mobile telephony markets on the Universal Service Objectives and in parallel, assesses whether these effects differ between small and large economies. For the assessment of these effects, an econometric model is employed using panel data from the International Telecommunications Union. The research findings suggest that currently there is a complementary relationship between the two technologies; albeit, it gradually evolves into a substitution relationship. Liberalisation in the fixed market is negatively related to fixed telephony, whereas liberalisation in the mobile market shows a positive effect. Whilst the relationships in variables are consistent between small and large economies, the magnitude and timing that these effects take place differ. Policy implications are discussed.

Keywords: Small Economies; Universal Service; Mobile Telephony; Liberalisation; Telecommunications


A Cross-Sectional Analysis of the Infant Mortality Rates in Nations Across the World
By Gaurav Tiwari

Abstract: In today's highly technology driven societies, health care systems have evolved to transform lives of millions of people. However, their reach and impact has still been very limited, especially in developing countries across the world. Several reasons can be accounted for the disturbing increases in health related problems. This paper strives to focus on one such problem, of infant mortality rates (IMR), and seeks to examine the relationships between IMR and the various factors affecting it. Using cross country data of 136 nations and utilizing Ordinary Least Squares (OLS) regression estimates, the emphasis of this paper is towards understanding the various present day global crises (such as HIV/AIDS and high levels of illiteracy rates) and their impact on a nation's IMR. The empirical findings of this paper were relevant overall. Only the population variable was found to be statistically insignificant among non-dummy variables. The model as a whole was found to be statistically significant.

Keywords: Not available.


Global Coloniality: A (Sic) Post-Colonial Critique of the World Food Economy
By Mohsen A. Ahmed

Abstract: Not available.

Keywords: Not available.


In Litigation: How Far Do The "Haves" Come Out Ahead?A Game Theoretical Study with Empirical Applications
By Maurits Barendrecht and Jun Zhou

Abstract: In a dispute, access to just solutions can be more costly for one party than for the other one. We study the possible consequences of asymmetric litigation costs caused by difference with respect to disputants' costs in converting legal efforts into quality evidence. To get an impression of their effects, we study three different protocols: static legal process, dynamic legal process with exogenous sequencing and with endogenous sequencing. Solutions are obtained for the litigation efforts and the expected value of lawsuits on each side. Outcomes are evaluated in terms of two normative criteria: (1) achieving `access to justice' (2) minimizing aggregate litigation cost. Two factors collectively and interactively determine the relative success in and the economic efficiency of litigations: the asymmetry in litigation costs and the dynamics of legal process. Empirical applications are discussed.

Keywords: access to justice, asymmetry, endogenous sequencing, haves, have nots, dynamics of litigation process, precommitment, resource dissipation, win rate.


Reciprocity Model
By Angela A. Stanton

Abstract: This paper defines a model that captures team dynamics in organizations by finding what encourages some agents to share knowledge and innovate while others to keep their knowledge secret. Most theory on agent work-behavior focuses on the relationship between a single agent and a single principal. In real life, most interactions are between agents that work in teams; the principal typically neither functions within the team nor negotiates (contracts) with the agent for each task as game theory posits. This paper simulates the dynamic relationship between agents in team environment, which is a relationship that is dependent upon trust and reciprocity. The model expresses an agent's cost of effort for sharing her knowledge and innovation under changing external market and internal team conditions. Varying external markets influence the agents' behavior and are significant contributing factors to whether an agent accepts the values of a team before deciding to participate.

JEL Code: B52, L25, M13, O31

Keywords: trust, principal-agent, teams, reciprocity


The new Institutional Design of The Procuracy in Brazil: Transaction Costs, Multiplicity of Veto Players and Institutional Vulnerability
By Flavianne Fernanda Bitencourt Nóbrega

Abstract: This paper aims to analyze the effect of the new institutional design of Procuracy on policy making. It has undergone a radical redefinition, in 1988, in its institutional design, with a great expansion of its powers. In Brazil, there are unique features in its design. Members of Procuracy are granted unparalleled functional independence. It is hypothesized that the larger the number of veto players personalized in each prosecutor's figure, the weaker the Procuracy gets institutionally, the higher the transactions costs are. The low level of institutionalization of Procuracy opens up the possibility for manipulation of the prosecutors as instruments for the achievement of interest groups. This vulnerability affects its de facto independence. Procuracy's behavior is investigated strategically in relation to other relevant political actors in the Executive and Legislative branches. It is hypothesized that, paradoxically, the 1988's institutional change produced unintended consequences and may have weakened rather than strengthened Procuracy.

Keywords: Procuracy. Veto Players. Institutional Vulnerability.


Economic Growth Sustainability: Do Institutions Matter, And Which One Prevails ?
By Abdoul' Ganiou M?iyawa

Abstract: This paper studies the impact of institutions on economic growth sustainability in a sample of 123 countries, including 85 developing and 38 developed countries, with panel data over the 1960-2003 period. I define sustained economic growth as an episode of positive growth of per capita GDP over five consecutive years. I theoretically show, the respective role of democratic, economic activities regulation, and property rights protection institutions for growth sustainability. I reconcile two economic approaches of institutional analysis. The results indicate that an improvement of the value of an index of politico-economic institutions, positively and significantly affects the probability of growth sustainability. This index is a proxy for the general level of institutional quality and captures the combined effect of political and economic institutions. I also obtain a positive and significant effect of democratic, economic activities regulation, and property rights institutions, by testing the respective effect of each institution on growth sustainability. However, when testing the simultaneous effect of these three various institutions, it appears that only the regulation institutions positively and significantly affect the probability of growth sustainability. This indicates that the regulation institutions seem the most important for economic growth sustainability. My main results -positive and significant effects of regulation institutions and total factor productivity on growth sustainability- remain robust to alternative methods of estimation, to selected samples, to the use of other institutional quality indexes, to the use of a criterion of high economic growth sustainability, and with taking into account the effects of macroeconomic policies.

JEL Classification: 011, 017, 049, E22

Keywords: Institutions, Growth Sustainability, Private Investment, Total Factor Productivity


Institutions and Factor Endowments: Income Taxation in Argentina and Australia
By Andrew Mitchell

Summary: Argentina and Australia shared similar geographic environments for development, and yet took starkly different paths. After rapid convergence in the early twentieth century there was clear divergence in the latter twentieth century. This paper addresses this paradox of similar environments and starkly different outcomes. Divergence emanated from different institutional experiences due to contrasting experiences of state credibility. State credibility is the faith that a society has in its state to act collectively in its interests. Without it the state struggles to erect substantial fiscal institutions, as society is less cooperative. The state is thus limited to indirect and regressive taxation, hindering its solvency and encouraging inflation taxation. Impaired solvency encumbers the state's ability to provide stable money and other public goods necessary for development. State credibility can be measured and compared through fiscal institutions, the provision of public goods, and public credit. Income taxation was a key postwar fiscal experience in Argentina and Australia. Argentina successfully introduced an income tax that became an important foundation of state solvency for at least a quarter century. Yet it began to fail early in the postwar period, becoming insignificant by the 1980s. Australia introduced a federal income tax during World War I that became the postwar foundation of the state. The different income tax trajectories reflected contrasting experiences of state credibility, and were an important cause of divergence. This paper hopes to provide an intellectual foundation for the importance of re-establishing income taxation in Argentina, essential the restoration of more vigorous development.

JEL Classification: E63, N10, N20, O11, N40.


Influence of institutional environment on the choice of optimal structureof the governance and control
By Natalia Liarskaya

Abstract: Necessity of this research is evoked by the absence of proper model of corporate governance applicable in Russia. Existing models of corporate governance showed reversal correlation between level of legal protection and ownership concentration. But: (1) they represent only analysis of empirical data on European countries, (2) they a priori define institutional environment, and consequently (3) don't examine the essence of this dependence. Peculiarity of the model in our research paper it reveals real mechanism of the formation of optimal structure of corporate governance on micro-level (of a representative firm). This model has also a universal character, i.e. can be applied to any country, because it doesn't strictly distinguish the different institutional environments as initial assumptions. Constructed model permits to define firm's structure, knowing the features of legal system in country. Empirical data on the countries with weak shareholders protection confirm our results. As to apply our model, we make recommendations for an emerging Russian system of corporate governance and control.

Keywords: institutional environment, corporate governance, legal system


Active Pension Participation and Household Wealth Accumulation: Evidence of Learning by Doing
By Rana Bose

Abstract: This paper investigates the relationship between household exposure to financial education (including the ability to choose investment) and portfolio choice decisions. We engage six waves of the Health and Retirement Survey to investigate whether household exposure to active management or participation in plan sponsored financial education impact portfolio allocations and wealth. We considered interactions between pension design and investment decisions of savings held outside of the workers DC plan, allow for simultaneous allocation decisions via multivariate probit specifications, and construct a synthetic counterfactual via propensity score matching to test our results. We find repeated evidence that both of the plan features we test improve asset allocations and financial outcomes.

JEL Classification: D14 G11 J26

Keywords: discrete choice, financial education, pension design, savings.


'Appropriate Economy' and African Development
By Cosmas Milton Obote Ochieng

Abstract: This paper posits that underdevelopment in Africa can be attributed to the deleterious predominance of 'inappropriate economy', or a mix of technologies, institutions, capital and policies that are ill-suited to Africa's development needs, conditions and capabilities (factor endowments). It suggests that the typical African economy is undergoing a quiet, but fundamental dynamism characterised by the creative destruction of the 'old economy' and the 'new economy' to create relatively more 'appropriate products and services' for the bulk of the African population, which happens to be poor. It is argued that this raises key questions about whether the core question of development in Africa has been rightly posed. It is posited that the fundamental question of development in Africa, one that precedes questions about how to incorporate the poor into the 'modern economy', is that of creating an 'appropriate economy'.


Corruption, Institutions and Economic Development in Nigeria
By Tochukwu Nwachukwu, Fidelis Ogwumike and Tanyamat SrungBoonmee

Abstract: This paper identifies the following as the major causes of corruption: low civil service pay, low quality of the bureaucracy, absence of transparency and accountability, distortions in the economy, lenient penalties for offenders, natural resource abundance and ethno-linguistic fractionalization. It also identifies the following as the major costs of corruption: reduced private investment, increased public investment, lower spending on operations and maintenance, inferior quality of public infrastructure, lower productivity of public investments and reduced expenditure on education and health. Finally, this paper attempts to unbundled the causal factors of abuse of public office in Nigeria into its constituent parts. It does this by the use of a survey of 2,500 households, 1,500 government officials and 1,000 entrepreneurs. The conclusion is that corruption is a grave problem confronting Nigeria, with the vast majority of respondents indicating that it is the most serious problem undermining their existence.

Keywords: Corruption, Public Institutions, Economic Growth.


Patent Rights Index in Countries in Transition
By Arina Matvejeva

Abstract: How do economic agents react to changes in the institutional environment? How important is the legal framework? As an example, we consider the development of intellectual property law in Eastern Europe. In our paper, we calculate patent rights indices for five former socialist countries over a period of seventeen years. The index represents an economic indicator of a given legal system. It includes five different categories that determine the level of patent protection in a country. The data show big progress made during the 1990s restructuring the old soviet system of intellectual property protection. Patent rights index is a useful tool when trying to link empirically the development of a legal system to economic performances, and the level of innovation (research and development) in particular.

Keywords: intellectual property rights (IPRs), patents, patent rights index, countries in transition


Gift Exchange in Sustaining Bureaucracies
By Dodlova Marina and Yudkevich Maria

Abstract: Some unusual altruistic phenomena in the superior-subordinate relationship in the workplace can be explained within the framework of gift-exchange theory. In this paper we discuss this theory, compare its merits to the standard pay-for-performance approach, and review its fundamental ideas, results and implications. We apply gift-exchange theory to the analysis of interactions in the government sector taking into account both horizontal and vertical connections. This topic proves overwhelmingly important in light of the significant informal and implicit relationships between civil servants. The paper describes some opportunities of employing gift-exchange to increase coordination and contact efficiency in public bureaucracies. We use the market for externalities framework to demonstrate that a gift exchange can provide a Pareto-optimum outcome when two (or more) government agencies interact horizontally.

Keywords: gift exchange, public bureaucracy, intrinsic motivation.


Program

Trade Liberalization for Brazilian Sugar Exporters: North or South?
David J Zetland (University of California, Davis)
1st Comment Andrés Gallo (University of North Florida)
2nd Comment Rana Bose (University of Georgia)
Abstract - Full Article

A case study of participation and social control in the third party smallholder organic certification system
Paulo R. B. de Brito (University of São Paulo)
1st Comment Mauro Mondelli (University of São Paulo) and Ivan Ribeiro
2nd Comment Arina Matvejeva (University of Delaware)
Abstract - Full Article

Competition Law and Inter-Firm Cooperation
Alberto R Salazar (Osgoode Hall Law School York University)
1st Comment TBA
2nd Comment Pavlos C Symeou (Judge Business School University of Cambridge)
Written Comment: Ning Wang (Arizona State University)
Abstract - Full Article

The impact of employment contract laws on private sector employers in Port Vila, Vanuatu
Anita Jowitt (University of the South Pacific)
1st Comment TBA
2nd Comment Natalia Liarskaya (Université Paris-X)
Abstract - Full Article

Telecommunications in Small Economies: the Impact of Liberalisation and Mobile Telephony on the Universal Service Objective
Pavlos C Symeou (Judge Business School University of Cambridge)
1st Comment Rana Bose (University of Georgia)
2nd Comment Alberto R Salazar (Osgoode Hall Law School York University)
Abstract - Full Article

A Cross-Sectional Analysis of the Infant Mortality Rates in Nations Across the World
Gaurav Tiwari (University of Missouri-St. Louis)
1st Comment Ivan Ribeiro (University of São Paulo)
2nd Comment Mohsen A. Ahmed (Osgoode Hall Law School York University)
Abstract - Full Article

Global Coloniality: A (Sic) Post-Colonial Critique Of The World Food Economy
Mohsen A. Ahmed (Osgoode Hall Law School York University)
1st Comment - Zetland, David J. (University of California, Davis)
2nd Comment - Gaurav Tiwari (University of Missouri-St. Louis)
Abstract - Full Article

In Litigation: How Far Do The "Haves" Come Out Ahead? A Game Theoretical Study with Empirical Applications
Jun Zhou (Tilburg University)
1st Comment Ivan Ribeiro
2nd Comment Angela Stanton (Claremont Graduate University)
Written Comment: Nuno Garoupa (New University of Lisbon)
Abstract - Full Article

A Model for Trust and Reciprocity
Angela A. Stanton (Claremont Graduate University)
1st Comment Antonio Nicita (University of Siena)
2nd Comment Marina Dodlova (University of Paris X-Nanterre)
Abstract - Full Article

The new institutional design of the Procuracy in Brazil: transaction costs, multiplicity of veto players and institutional vulnerability
Flavianne F. B. Nóbrega (Federal University of Pernambuco)
1st Comment Ivan Ribeiro (University of São Paulo)
2nd Comment Tanyamat SrungBoonmee (University of Milwaukee)
Abstract - Full Article

Economic growth sustainability: Do institutions matter, and which one prevails?
Abdoul G. Mijiyawa (Centre d'Etudes et de Recherches sur le Développement International)
1st Comment TBA
2nd Comment Cosmas Ochieng (International Food Policy Research Institute)
Written Comment: Ning Wang
Abstract - Full Article

Institutions and Factor Endwoments Income taxation in Argentina and Australia
Andrew H Mitchell
1st Comment - Andrés Gallo (University of North Florida)
2nd Comment - Nketcha N. P. Valere (University of Yaoundé II)
Abstract - Full Article

Influence of institutional environment on the choice of optimal structure of the governance and control
Natalia Liarskaya (Université Paris-X)
1st Comment Angela A. Stanton (Claremont Graduate University)
2nd Comment Anita Jowitt (University of the South Pacific)
Abstract - Full Article

Active Pension Participation and Household Wealth: Evidence of Learning by Doing?
Rana Bose (University of Georgia)
1st Comment Antonio Nicita (University of Siena)
2nd Comment David J Zetland (University of California, Davis)
Abstract - Full Article

'Appropriate Economy' and African Development
Cosmas Ochieng (International Food Policy Research Institute)
1st Comment Hernan Palau (Buenos Aires University)
2nd Comment Abdoul G. Mijiyawa (Centre d'Etudes et de Recherches sur le Développement International)
Abstract - Full Article

Corruption, Institutions and Economic Development in Nigeria
Tochukwu Nwachukwu (University of Milwaukee)
1st Comment Marina Dodlova (University of Paris X-Nanterre)
2nd Comment Flavianne F. B. Nóbrega (Federal University of Pernambuco)
Abstract - Full Article

Patent Rights Index in Countries in Transition
Arina Matvejeva (University of Delaware)
1st Comment TBA
2nd Comment Paulo R. B. de Brito (University of São Paulo)
Abstract - Full Article

Gift-Exchange in Sustaining Bureaucracies
Marina Dodlova (University of Paris X-Nanterre)
1st Comment Ivan Ribeiro (University of São Paulo)
2nd Comment Angela A. Stanton (Claremont Graduate University)
Abstract - Full Article