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Strong Incentives (strong + incentive)
Selected AbstractsIncreasing Support for Those on Lower Incomes: Is the Saving Gateway the Best Policy Response?FISCAL STUDIES, Issue 2 2003Carl Emmerson Abstract The government is committed to introducing a new savings account for people on lower incomes. This will provide a strong incentive for eligible individuals to save, or at least to hold financial assets, in these accounts. This paper describes possible rationales for this government intervention. It then presents new evidence on the characteristics of people with lower incomes and finds that many already have some financial assets, while those who do not often appear to have good reasons for why they may not want to be currently saving. The result is that the proposed Saving Gateway will be extremely difficult to target at those who might benefit in the way the government hopes. The danger is that the policy will be expensive relative to the number of genuine new savers and savings that it generates. [source] Integrating physiology and life history to improve fisheries management and conservationFISH AND FISHERIES, Issue 4 2006Jeffery L. Young Abstract Knowledge of life-history traits is increasingly recognized as an important criterion for effective management and conservation. Understanding the link between physiology and life history is an important component of this knowledge and in our view is particularly relevant to understanding marine and freshwater fishes. Such linkages (i.e. the life-history/physiology nexus) have been recently advocated for avian systems and here we explore this concept for fish. This paper highlights the gap in fisheries literature with regard to understanding the relationship between physiology and life history, and proposes ways in which this integration could improve fisheries management and conservation. We use three case studies on different fishes (i.e. the Pacific salmon, the grouper complex and tuna) to explore these issues. The physiological structure and function of fish plays a central role in determining stock response to exploitation and changes in the environment. Physiological measures can provide simple indicators necessary for cost-effective monitoring in the evaluation of fisheries sustainability. The declining state of world fisheries and the need to develop and implement restoration strategies, such as hatchery production or protected areas, provides strong incentive to better understand the influence of physiology on population and reproductive dynamics and early life history. Physiology influences key population-level processes, particularly those dealing with reproduction, which must be incorporated into the design and successful implementation of specific and broadscale initiatives (e.g. aquatic protected areas and bycatch reduction). Suggestions are made for how to encourage wider application of the physiology/life-history link, in fisheries management and conservation, as well as more broadly in education and research. [source] Highly Valued Equity and Discretionary AccrualsJOURNAL OF BUSINESS FINANCE & ACCOUNTING, Issue 1-2 2010Robert E. Houmes Abstract:, Overvalued equity provides a strong incentive for managers to report earnings that do not disappoint the market ( Jensen, 2005). We find that this can be extended to highly valued equity more generally. In the year following the classification as highly valued and compared to firms with less extreme valuations, highly valued firms have significantly higher discretionary accruals and exhibit a more pronounced positive association between discretionary accruals and proxies for the likelihood of failing to meet earnings targets. These findings are consistent with the use of discretionary accruals to manage earnings in support of extreme valuation. Because highly valued equity will likely result in CEOs with valuable stock and stock option portfolios, we test whether and show that the overvalued equity incentive is incremental to a CEO's equity portfolio incentive. One implication is that directors and audit committees should be especially on guard for possible earnings management when a firm has extremely high valuation multiples and when the CEO has a lot of equity at risk. [source] A Theoretical Model of the Effects of Public Funding on Saving Decisions by Charitable Nonprofit Service ProvidersANNALS OF PUBLIC AND COOPERATIVE ECONOMICS, Issue 2 2003by Femida Handy Why do charitable nonprofit, service-providing organizations save? What are the tradeoffs between using income to build up cash reserves and serving more clients? Saving may generate income, protect the organization against a drop in donations, and increase the organization's chances of survival. Saving, though, may affect the likelihood that nonprofits receive private and public funding. We model the relationship among private and public income, economic conditions, and nonprofit savings. We find that anticipation of government help during difficult times tends to reduce the amount of saving done by the nonprofit. This effect is strengthened if government officials view unspent donations as indicative of a lack of need. Both these effects provide a strong incentive for nonprofits to spend on current consumption rather than to save for the future, and thus to increase the burden on the public purse. [source] Biological and technical evaluation of the potential of marine and anadromous fish species for cold-water maricultureAQUACULTURE RESEARCH, Issue 2 2002N R Le François Abstract Concern about the overexploitation of wild aquatic resources, the slow recovery of the groundfish fisheries and the need to encourage the diversification of the mariculture industry of the province of Quebec (Canada) all provided strong incentive to explore the potential of a wide selection of marine and anadromous fish species for cold-water mariculture. Starting from a list of over 45 indigenous fish species of potential commercial interest, a biotechnical review was initiated. Technical sheets for each species were produced and aquaculture-based selection criteria covering three aquaculture approaches of development (complete life cycle, on-growing and stock enhancement) were examined. Species were ranked according to their degree of suitability for the given biological parameters. The final classification analysis within the complete life cycle production strategy positioned the Atlantic wolffish as the top candidate species (91%) followed by the spotted wolffish and Arctic charr (87%). Growth rate, optimal growth temperature, duration of the weaning period, minimal lethal temperature, larval size and feed requirements were the determining criteria. The on-growing scenario final results ranked Arctic charr first (84%) followed by Atlantic cod (79%) and Atlantic halibut (74%) mostly owing to their growth rate at low temperature and optimal growth temperature criteria. Stock enhancement programmes should concentrate their efforts on the striped bass (56%), the haddock (54%) and the Atlantic sturgeon (34%) based on their growth rate, fishery status, landing price and the availability of impact studies. [source] Potential Errors in Detecting Earnings Management: Reexamining Studies Investigating the AMT of 1986,CONTEMPORARY ACCOUNTING RESEARCH, Issue 4 2001Won W. Choi Abstract In this paper we seek to document errors that could affect studies of earnings management. The book income adjustment (BIA) of the alternative minimum tax (AMT) created apparently strong incentives to manage book income downward in 1987. Five earlier papers using different methodologies and samples all conclude that earnings were reduced in response to the BIA. This consensus of findings offers an opportunity to investigate our speculation that methodological biases are more likely when there appear to be clear incentives for earnings management. A reexamination of these studies uncovers potential biases related to a variety of factors, including choices of scaling variables, selection of affected and control samples, and measurement error in estimated discretionary accruals. A reexamination of the argument underlying these studies also suggests that the incentives to manage earnings are less powerful than initially predicted, and are partially mitigated by tax and non-tax factors. As a result, we believe that the extent of earnings management that occurred in 1987 in response to the BIA remains an unresolved issue. [source] INSTABILITY AND THE INCENTIVES FOR CORRUPTIONECONOMICS & POLITICS, Issue 1 2009FILIPE R. CAMPANTE We investigate the relationship between corruption and political stability, from both theoretical and empirical perspectives. We propose a model of incumbent behavior that features the interplay of two effects: a horizon effect, whereby greater instability leads the incumbent to embezzle more during his short window of opportunity, and a demand effect, by which the private sector is more willing to bribe stable incumbents. The horizon effect dominates at low levels of stability, because firms are unwilling to pay high bribes and unstable incumbents have strong incentives to embezzle, whereas the demand effect gains salience in more stable regimes. Together, these two effects generate a non-monotonic, U-shaped relationship between total corruption and stability. On the empirical side, we find a robust U-shaped pattern between country indices of corruption perception and various measures of incumbent stability, including historically observed average tenures of chief executives and governing parties: regimes that are very stable or very unstable display higher levels of corruption when compared with those in an intermediate range of stability. These results suggest that minimizing corruption may require an electoral system that features some re-election incentives, but with an eventual term limit. [source] Are lobster fisheries being managed effectively?FISHERIES MANAGEMENT & ECOLOGY, Issue 5 2010Examples from New Zealand, Nova Scotia Abstract, Based on performance, management of the New Zealand and Nova Scotia lobster fisheries can be considered successful, but management can be improved by clearer statements of objectives, more efficient mechanics of governance and quicker response to changes in stocks or fisheries. Principal tactics for lobster fishery management are individual transferable quotas and input controls in New Zealand and Nova Scotia respectively. Decision rules were considered important in both approaches and examples are provided of underperforming fisheries in the absence of decision rules. In Nova Scotia, strong fishers' organisations and fishery scientists were effective agents for change, whereas fisher advisory committees operating by consensus were not. In New Zealand, the quota management system provided strong incentives for fishers to become involved in responsible management, to take longer-term views of their resource and to take major management action on their own. [source] On the Cost of Adverse Selection in Individual Annuity Markets: Evidence From SingaporeJOURNAL OF RISK AND INSURANCE, Issue 2 2002Wai Mun Fong New evidence is presented on the cost of adverse selection in individual annuity markets using Singapore data. The Singapore annuity market is an interesting setting to examine the cost of adverse selection for three reasons. First, unlike many Western countries, the Singapore government provides very limited public financial assistance for retirees. Second, while social security contributions mandated under the Central Provident Fund (CPF) result in a high forced savings rate, a large proportion of CPF savings, are used up for housing. Third, to ensure that retirees have sufficient funds to meet basic needs, individuals who reach age 55 are required to set aside a minimum amount of their CPF savings, which can be withdrawn at age 62. The CPF Board allows various options for investing the minimum sum, but the most attractive option is to purchase an annuity. The institutional setting in Singapore in effect provides insurers with a large captive market for annuities. It is conjectured that this should be reflected in a significantly lower cost of adverse selection for annuities sold in Singapore as compared with other countries. The results herein, using data for CPF-approved insurers, are strongly consistent with this conjecture. On average, money's worth of annuities is higher than annuities sold to a similar age-gender mix in the United States, United Kingdom, and Australia. Adverse selection accounts for less than 13 percent of the cost of longevity insurance compared to 30,50 per- cent documented in many previous studies. These results suggest that one way to resolve the adverse selection problem is to adopt a universal individual defined contribution pension scheme that mandates or provides strong incentives for retirees to purchase annuities. [source] Explaining Institutional Change in Tough Cases of Collaboration: "Ideas" in the Blackfoot WatershedPUBLIC ADMINISTRATION REVIEW, Issue 2 2009Edward P. Weber Current theories of community-based collaborative governance arrangements rely on the presence (or absence) of certain antecedent community conditions as well as incentives for institutional change deriving from the sociopolitical and economic environment. The combination of antecedent conditions and incentives is helpful in understanding why collaboratives emerge and succeed in "easy" cases (strong incentives, conducive antecedent conditions). Yet the combination is of little help in understanding the institutional change puzzle for collaboratives in "tough" cases (strong incentives, poor antecedent conditions). Examination of a "tough" case in the Blackfoot watershed (Montana), which eventually blossomed into a successful collaborative, shows the importance of a particular set of new ideas, or shared norms, around which participants coalesced. These new ideas for understanding public problems, the community itself, and the relationships among stakeholders, became a broad conceptual framework for guiding stakeholder interaction as they attempted to manage the many public problems facing the watershed. [source] Should the Pre-Notification of Mergers Be Compulsory in Australia?THE AUSTRALIAN ECONOMIC REVIEW, Issue 4 2004Chander Shekhar Australia is unusual among the world's antitrust jurisdictions in not making the pre-notification of mergers compulsory. However, if the parties are concerned that the Australian Competition and Consumer Commission (ACCC) is likely to object to the merger, there are strong incentives for them to notify the ACCC as the regulator has developed a strong reputation for imposing heavy costs on parties that fail to notify such mergers. The result is a system of quasi-compulsory notification that creates the strongest incentives for parties to notify the ACCC of those proposals to which it is most likely to object. This study analyses data extracted from the ACCC's merger database and the empirical results are consistent with this characterisation. Mergers reported voluntarily by the parties are found to experience longer delays to completion, and are more likely to be challenged by the ACCC, when compared with a sample of all other mergers assessed by the regulator. The results suggest that non-compulsory notification allows the parties themselves to pre-sort the proposed merger vis-à-vis its interest to the ACCC. [source] Voluntary Association in Public Goods Experiments: Reciprocity, Mimicry and Efficiency,THE ECONOMIC JOURNAL, Issue 506 2005Talbot Page We find that a process of voluntary association where individuals express a preference about whom they want to be associated with can create strong incentives to increase efficiency and contributions in provision of a public good. This process of endogenous group formation perfectly sorted contributions by the order of group formation. Comparison of middle and last period behaviour suggests that a majority of the subject population are conditional cooperators, with a minority of monetary payoff maximisers. The experiment illustrates that under favourable conditions, where the opportunities of entry and exit are symmetrically balanced, a process of voluntary association can mitigate the free-rider problem. [source] Sharing obstetric care: barriers to integrated systems of careAUSTRALIAN AND NEW ZEALAND JOURNAL OF PUBLIC HEALTH, Issue 4 2000WENDY DAWSON Objectives: To map the provision of shared obstetric care in Victoria, and investigate the views of care providers about the ways in which current practice could be improved. Method: All Victorian public hospitals with <300 births per annum and a purposive sample of hospitals with <300 births per annum were mailed a questionnaire seeking information about current practice. Interviews with key informants (n = 32) were conducted at four case study sites. Results: The response rate to the hospital survey was 98% (42/43). Fourteen different models of shared care were identified. Two,thirds of hospitals with <300 births per annum (16/28) had three or more different models of shared care. Six hospitals (15%) had written guidelines for all models of shared care offered; 13 (32%) had written guidelines covering some models. Practice varied considerably in relation to: exclusion criteria, recommended schedule of visits and use of patient,held records. There was little consensus about the content of visits and responsibility fa covering particular aspects of care. Few hospitals (6/42) had written information for women about shared care. Care providers expressed divergent views regarding the question of where ultimate responsibility lies for individual patient care and for the overall management of shared care. Conclusions: Current funding arrangements provide strong incentives to expand enrolment in shared obstetric care. Expansion of shared care has occurred without the development of formal, consultative and agreed arrangements between providers, or adequate provision for monitoring, evaluation and review. The variety, complexity and fluidity of models of shared care and lack of agreed procedures contribute to difficulties experienced by both providers and women participating in shared care. Implications: Detailed evidence,based agreed guidelines developed in consultation with hospital and community providers, and provision of improved information to women about what to expect in shared care arrangements are urgently required. [source] Climate change: a rational choice politics view,AUSTRALIAN JOURNAL OF AGRICULTURAL & RESOURCE ECONOMICS, Issue 3 2009Geoffrey Brennan Reduction in carbon dioxide emissions constitutes a global public good; and hence there will be strong incentives for countries to free ride in the provision of CO2 emission reductions. In the absence of more or less binding international agreements, we would expect carbon emissions to be seriously excessive, and climate change problems to be unsolvable. Against this obvious general point, we observe many countries acting unilaterally to introduce carbon emission policies. That is itself an explanatory puzzle, and a source of possible hope. Both aspects are matters of ,how politics works', i.e. ,public choice' problems are central. The object of this paper is to explain the phenomenon of unilateral policy action and to evaluate the grounds for ,hope'. One aspect of the explanation lies in the construction of policy instruments that redistribute strategically in favour of relevant interests. Another is the ,expressive' nature of voting and the expressive value of environmental concerns. Both elements , elite interests and popular (expressive) opinion , are quasi-constraints on politically viable policy. However, the nature of expressive concerns is such that significant reductions in real GDP are probably not sustainable in the long term , which suggests that much of the CO2 reduction action will be limited to modest reductions of a largely token character. In that sense, the grounds for hope are, although not non-existent, decidedly thin. [source] Political manipulation in a majoritarian democracy: central government targeting of public funds to English subnational government, in space and across timeBRITISH JOURNAL OF POLITICS & INTERNATIONAL RELATIONS, Issue 3 2001Peter John This article argues that it is rational for the executive to target resources in space and through time if it seeks to maximise its chances of electoral success. In majoritarian democracies such as the United Kingdom, there are particularly strong incentives to target resources to marginal legislative constituencies, although similar opportunies exist in other political systems. The benefits of such a practice could be growing, because the costs of forms of temporal targeting predicted by theories of the political business cycle have increased, owing to the effect of the global economy. In the United Kingdom one channel through which resources can be targeted is central grants to local authorities. This model is tested with pooled cross-section data on the central finance of English local government between 1981/1982,1995/1996. The article confirms that central government spatially targeted marginals after 1988/1989 while it continued to allocate greater funds near national elections, conditional on its opinion-poll ratings. Hypotheses from the literature on distributional politics are also tested, finding evidence for the temporal allocation of resources to win local elections. [source] | ||||||||||||||||||||||