In this paper we characterize quantitatively the optimal mix of progressive labor income and capital income taxes as well as and education subsidies in a model with endogenous human capital formation, borrowing constraints, income risk. and incomplete financial markets. Progressive labor income taxes provide social insurance against idiosyncratic income risk and redistributes after tax income a...

We evaluate the impact of firm-specific export subsidies on exports in Colombia. Using a two-stage Heckman selection procedure, we obtain firm-specific predicted subsidy amounts that can be explained by the characteristics that determine the firms’ eligibility for the government support and its amount. Drawing on the accounts of the discretionary allocation of subsidies in developing countries,...

This paper evaluates the effects of two subsidy schemes targeted at disadvantaged students in the Netherlands. The first scheme gives schools with at least 70 percent minority students extra funding for personnel. The second scheme gives schools with at least 70 percent students from different disadvantaged groups extra funding for computers and for language materials. The cutoffs at 70 percent...

We show how preferred committee assignments act as an electoral subsidy for members of Congress—empowering representatives’ legislative careers. When holding preferred assignments, legislators are free to focus on legislative activity in Washington, DC. But when the subsidy is removed, legislators are forced to direct attention to the district. To test our theory of legislative subsidy, we expl...

This paper examines how intellectual property rights (IPR) protection affects innovation and foreign direct investment (FDI) using a North–South quality-ladder model incorporating the exogenous and costless imitation of technology and subsidy policies for both R&D and FDI. We show that for the interior steady state to be stable, either R&D or FDI subsidy rates must be positive. Our findings als...

Understanding who benefits from fuel price subsidies and the welfare impact of increasing fuel prices is key to designing, and gaining public support for, subsidy reform. This paper updates evidence for developing countries on the magnitude of the welfare impact of subsidy reform and its distribution across income groups, incorporating more recent studies and expanding the number of countries. ...

Cooperation among automated agents is becoming increasingly important in various artificial intelligence applications. Coalitional (i.e., cooperative) game theory supplies conceptual and mathematical tools useful in the analysis of such interactions, and in particular in the achievement of stable outcomes among self-interested agents. Here, we study the minimal external subsidy required to stab...

We evaluate the impact of firm-specific export subsidies on exports in Colombia. Using a twostage selection correction procedure, we obtain firm-specific predicted subsidy amounts that can be explained by the characteristics that determine the firms’ eligibility for government support and its amount. Drawing on the accounts of the discretionary allocation of subsidies in developing countries, w...