More for the poor is less for the poor : the politics of targeting

Standard economic analyses suggests that when the budget for redistribution is fixed, transfers should be targeted to (that is, means-tested for) those most in need. But both economists and political scientists have long recognized the possibility that targeting could undermine political support for redistribution, and hence reduce the available budget. The authors formalize this recognition, developing a simple economy in which both nontargeted (universally received) and targeted transfers are available. The policymaker chooses the share of the budget to be spent on each type of transfer while the budget is determined through majority voting. Their results are striking. If the policymaker ignores political feasibility and assumes that the budget is fixed, she will choose full targeting of transfers -in the process minimizing social welfare and the utility of the poor. By contrast, when the policymaker recognizes budgetary endogeneity, she will choose zero targeting, spending theentire budget on the universally received transfer. Social welfare, the budget for redistribution, and the utility of poor agents are all maximized in the resulting equilibrium.Environmental Economics&Policies,Services&Transfers to Poor,Health Economics&Finance,Economic Theory&Research,Poverty Impact Evaluation,Services&Transfers to Poor,Rural Poverty Reduction,Economic Theory&Research,Environmental Economics&Policies,Safety Nets and Transfers

Does more for the poor mean less for the poor? The politics of tagging

Proposals aimed at improving the welfare of the poor often include indicator targeting, in which non-income characteristics (such as race, gender, or land ownership) that are correlated with income are used to target limited funds to groups likely to include a cincentration of the poor. Previous work shows that efficient use of a fixed budget for poverty reduction requires such targeting, either because agents'income cannot be observed or to reduce distortionary incentives arising from redistributive interventions. Inspite of this, the authors question the political viability of targeting. After constructing a model that is basically an extension of Akerlof's 1978 model of"tagging", they derive three main results: 1) Akerlof's result continues to hold: that, ignoring political considerations, not only will targeting be desirable but recipients of the targeted transfer will receive a greater total transfer than they would if targeting were not possible. 2) A classical social-choice analysis-in which agents vote simultaneously about the level of taxation and the degree of targeting-shows that positive levels of targeted transfers will not exist in equilibrium (an unsurprising finding, given Plott's 1968 theorem). It also shows that a voting equilibrium often will exist with no targeting but with non-zero taxation and redistribution. 3) In a game in which the policymaker chooses the degree of targeting while voters choose the level of taxation, the redistributive efficiency gains from tagging may well fail to outweigh the resulting reduction in funds available for redistribution. These results may be extended readily to account for altruistic agents. The authors stress that even when these results hold, the alternative to targeted transfers - a universally received lump-sum grant financed through a proportional tax - will nonetheless be supported politically and will be quite progressive relative to the pretransfer income distribution.Economic Theory&Research,Services&Transfers to Poor,Poverty Impact Evaluation,Environmental Economics&Policies,Poverty Monitoring&Analysis,Services&Transfers to Poor,Rural Poverty Reduction,Environmental Economics&Policies,Poverty Impact Evaluation,Safety Nets and Transfers

Glucose-6-Phosphate Dehydrogenase Regulation in Anoxia Tolerance of the Freshwater Crayfish Orconectes virilis

Glucose-6-phosphate dehydrogenase (G6PDH), the enzyme which catalyzes the rate determining step of the pentose phosphate pathway (PPP), controls the production of nucleotide precursor molecules (R5P) and powerful reducing molecules (NADPH) that support multiple biosynthetic functions, including antioxidant defense. G6PDH from hepatopancreas of the freshwater crayfish (Orconectes virilis) showed distinct kinetic changes in response to 20 h anoxic exposure. Km values for both substrates decreased significantly in anoxic crayfish; Km NADP+ dropped from 0.015 ± 0.008 mM to 0.012 ± 0.008 mM, and Km G6P decreased from 0.13 ± 0.02 mM to 0.08 ± 0.007 mM. Two lines of evidence indicate that the mechanism involved is reversible phosphorylation. In vitro incubations that stimulated protein kinase or protein phosphatase action mimicked the effects on anoxia on Km values, whereas DEAE-Sephadex chromatography showed the presence of two enzyme forms (low- and high-phosphate) whose proportions changed during anoxia. Incubation studies implicated protein kinase A and G in mediating the anoxia-responsive changes in G6PDH kinetic properties. In addition, the amount of G6PDH protein (measured by immunoblotting) increased by ∼60% in anoxic hepatopancreas. Anoxia-induced phosphorylation of G6PDH could contribute to modifying carbon flow through the PPP under anoxic conditions, potentially maintaining NADPH supply for antioxidant defense during prolonged anoxia-induced hypometabolism

Exploration and exploitation in the presence of network externalities

This paper examines the conditions under which exploration of a new, incompatible technologyis conducive to firm growth in the presence of network externalities. In particular, this studyis motivated bythe divergent evolutions of the PC and the workstation markets in response to a new technology: reduced instruction set computing (RISC). In the PC market, Intel has developed new microprocessors bymaintaining compatibilitywith the established architecture, whereas it was radicallyr eplaced byRISC in the workstation market. History indicates that unlike the PC market, the workstation market consisted of a large number of power users, who are less sensitive to compatibilitythan ordinaryusers. Our numerical analysis indicates that the exploration of a new, incompatible technologyis more likelyto increase the chance of firm growth when there are a substantial number of power users or when a new technologyis introduced before an established technologytakes off. (; ; ;

Universities and Pricing on Higher Education Markets

Markets and prices in higher education. When can we speak of markets, and when markets exist, how are prices set

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Glucose-6-phosphate dehydrogenase (G6PDH), the enzyme which catalyzes the rate determining step of the pentose phosphate pathway (PPP), controls the production of nucleotide precursor molecules (R5P) and powerful reducing molecules (NADPH) that support multiple biosynthetic functions, including antioxidant defense. G6PDH from hepatopancreas of the freshwater crayfish (Orconectes virilis) showed distinct kinetic changes in response to 20 h anoxic exposure. K m values for both substrates decreased significantly in anoxic crayfish; K m NADP + dropped from 0.015 ± 0.008 mM to 0.012 ± 0.008 mM, and K m G6P decreased from 0.13 ± 0.02 mM to 0.08 ± 0.007 mM. Two lines of evidence indicate that the mechanism involved is reversible phosphorylation. In vitro incubations that stimulated protein kinase or protein phosphatase action mimicked the effects on anoxia on K m values, whereas DEAE-Sephadex chromatography showed the presence of two enzyme forms (low-and high-phosphate) whose proportions changed during anoxia. Incubation studies implicated protein kinase A and G in mediating the anoxiaresponsive changes in G6PDH kinetic properties. In addition, the amount of G6PDH protein (measured by immunoblotting) increased by ∼60% in anoxic hepatopancreas. Anoxia-induced phosphorylation of G6PDH could contribute to modifying carbon flow through the PPP under anoxic conditions, potentially maintaining NADPH supply for antioxidant defense during prolonged anoxia-induced hypometabolism

Risk propensity in the foreign direct investment location decision of emerging multinationals

A distinguishing feature of emerging economy multinationals is their apparent tolerance for host country institutional risk. Employing behavioral decision theory and quasi-experimental data, we find that managers’ domestic experience satisfaction increases their relative risk propensity regarding controllable risk (legally protectable loss), but decreases their tendency to accept non-controllable risk (e.g., political instability). In contrast, firms’ potential slack reduces relative risk propensity regarding controllable risk, yet amplifies the tendency to take non-controllable risk. We suggest that these counterbalancing effects might help explain observation that risk-taking in FDI location decisions is influenced by firm experience and context. The study provides a new understanding of why firms exhibit heterogeneous responses to host country risks, and the varying effects of institutions