Appropriate Incentives (appropriate + incentive)

Distribution by Scientific Domains


Selected Abstracts


A case of constitutional apples and oranges: a functional comparison of pension priority and benefit guarantees in U.S., U.K. and Canadian insolvency and pension law regimes

INTERNATIONAL INSOLVENCY REVIEW, Issue 2 2009
Ronald B. Davis
Canada's insolvency law reform increased the priority granted to employer-sponsored pension claims. The article compares the treatment of such claims in the U.S., the U.K. and Canada. A comparison of the legislative provisions concerning pension funding shortfalls from contribution arrears or economic underperformance in relation to the assumptions used for investment income or liability valuations finds that insolvency law has been used to address contribution arrears, but risks from economic underperformance have been addressed by pension benefit insurance. Post-insolvency priority for contribution arrears provides appropriate incentives to discourage pre-insolvency preferences for payments to other creditors, while shortfalls from economic underperformance do not involve issues of preference between creditors. The absence of any insolvency rationale for changing priority for shortfalls from economic underperformance and the likely disparity between the assets available to satisfy clams and the much larger amounts of such shortfalls makes the use of insolvency law to address this risk much less effective than insurance. Canada, however, has not adopted the insurance policy instrument used in the U.S. and U.K. to mitigate the impact of pension funding shortfalls. The constitutional inability of Canada to legislate in respect of matters of pension regulation that would allow it to control the well-known insurance problems of moral hazard and adverse selection may explain why it has only chosen to adopt an insolvency policy instrument. However, a change in priorities in insolvency may generate incentives for secured creditors that either undermine or reinforce this policy choice. Secured creditors could attempt to circumvent the new priority scheme through private arrangements with the debtor or to increase their monitoring activities to ensure the debtor is current in its pension contributions. Secured creditors choices will be influenced by the bankruptcy courts' interpretation of the preference provisions in the insolvency legislation. Copyright © 2009 John Wiley & Sons, Ltd. [source]


Smallholders, institutional services, and commercial transformation in Ethiopia

AGRICULTURAL ECONOMICS, Issue 2009
Berhanu Gebremedhin
Smallholders; Institutions; Commercial transformation Abstract This article examines the role of institutional services of credit, input supply, and extension in the overall commercial transformation process of smallholder agriculture in Ethiopia. Survey data collected in 2006 from 309 sample households in three districts of Ethiopia are used for the analyses. Tobit regression models are used to measure the effect of access to services on the intensity of inputs use for fertilizer and agrochemicals. A probit model is used to measure these effects on the adoption of improved seeds. Intensity of use of seeds is analyzed using an ordinary least squares model. Logarithmic Cobb,Douglass functions are estimated to analyze the effect of access to services on crop productivity. Heckman's two-stage estimation is used to examine determinants of household market participation and the extents of participation. Results show that access to institutional support services plays a significant role in enhancing smallholder productivity and market orientation. Our results imply that expanding and strengthening the institutional services is critical for the intensification and market orientation of smallholder agriculture in Ethiopia. In particular, appropriate incentives and regulatory systems are urgently needed to encourage the involvement of the private sector in the provision of agricultural services. [source]


Approaches to landcare,a century of soil conservation in Iceland

LAND DEGRADATION AND DEVELOPMENT, Issue 2 2005
A. Arnalds
Abstract Organized soil conservation in Iceland began in 1907, as a response to severe land degradation and desertification that was threatening the existence of several communities. During the first 75 years, many of the most threatening areas of accelerated soil erosion were fenced and seeded with sand stabilizers. These projects had a high success rate, halting the advancement of sand dunes and other forms of highly accelerated erosion. However, they were limited in scope, and often concentrated on the symptoms of the problems rather than the underlying causes, such as improper grazing management. On a national scale, not enough was being achieved in mitigating the extensive ecosystem degradation. This period of soil conservation in Iceland was characterized by single-issue, top-down approaches, a lack of appropriate incentives for soil conservation and weak laws for protection of the rangelands. During the last two decades there has been a gradual shift to more participatory strategies, community involvement, and ecosystem management for multiple benefits. These changes have greatly increased community involvement in projects, stimulated conservation awareness and improved land use. The ties between agricultural policy and soil-conservation issues are also being strengthened, especially by linking part of governmental subsidies for sheep production to land-use factors. Copyright © 2005 John Wiley & Sons, Ltd. [source]


Co-ordination Failure, Moral Hazard and Sovereign Bankruptcy Procedures*

THE ECONOMIC JOURNAL, Issue 487 2003
Sayantan Ghosal
We study a model of sovereign debt crisis that combines problems of creditor co-ordination and debtor moral hazard. In the face of sovereign default, the need to give appropriate incentives to the debtor leads to excessive ,rollover failure' by creditors. We discuss how the incidence of crises might be reduced by international sovereign bankruptcy procedures , involving increased ,contractibility' of sovereign debtor's payoffs, suspension of convertibility in a ,discovery' phase and penalties in case of malfeasance. In relation to the current debate, this is more akin to the IMF's Sovereign Debt Restructuring Mechanism than the Collective Action Clauses promoted by others. [source]


Levy-funded research choices by producers and society

AUSTRALIAN JOURNAL OF AGRICULTURAL & RESOURCE ECONOMICS, Issue 1 2004
Julian M. Alston
Commodity levies are used increasingly to fund producer collective goods such as research and promotion. In the present paper we examine theoretical relationships between producer and national benefits from levy-funded research, and consider the implications for the appropriate rates of matching government grants, applied with a view to achieving a closer match between producer and national interests. In many cases the producer and national optima coincide. First, regardless of the form of the supply shift, when product demand is perfectly elastic, or all the product is exported, domestic benefits and costs of levy-funded research all go to producers and they have appropriate incentives. Second, if research causes a parallel supply shift, the producer share of research benefits is the same as their share of costs of a levy, and their incentives are compatible with national interests. In such cases, a matching grant would cause an over-investment in research from a national perspective. However, if demand is less than perfectly elastic, and research causes a pivotal supply shift, the producer share of benefits is smaller than their share of costs of the levy, and they will under-invest in research from a national point of view. A matching grant can be justified in such cases, however the magnitude of the optimal grant is sensitive to market conditions. [source]