Do rent-seeking and interregional transfers contribute to urban primacy in Sub-Saharan Africa?
We develop an economic geography model where mobile skilled workers choose to either work in a production sector or to become part of an unproductive elite. The elite sets income tax rates to maximize its own welfare by extracting rents, thereby influencing the spatial structure of the economy and changing the available range of consumption goods. We show that either unskilled labour mobility, or rent-seeking behaviour, or both, are likely to favour the occurence of agglomeration and of urban primacy. In equilibrium, the elite may tax the unskilled workers but does not tax the skilled workers, and there are rural-urban transfers towards the agglomeration. The size of the elite and the magnitude of the tax burden that falls on the unskilled decrease with product differentiation and with the expenditure share for manufacturing goods. All these results are broadly in line with observed patterns of urban primacy and economic development in Sub-Saharan African countries.
According to the Treaty of Frankfurt (1871) France lost Alsace and Lorraine. In the paper I estimate how a new border affected a growth of towns. Applying difference-in-differences methodology to census data for 1831-1911, I obtain paradoxical result. New border stimulates growth of nearby towns. Observed effect is turned to be persistent and robust to specification changes. Obtained results are contradicted to both theory and other empirical studies (Sturm, Redding (2008), Brülhart et al.(2012) and others).
The purpose of the paper is the systematization of new economic geography research, on the analysis of the agglomeration process in region. Priority of the paper is given to the influence of theoretical research. Scientific novelty of the work is to specify the theoretical and methodological foundations of the agglomeration process due to analyzing the new economic geography attitude. As agglomeration forces facilitating the concentration of economic activity is defined: internal economies of scale, the level of transportation cost, the migration of the mobile labor in response to the wage gap, the elasticity of labor supply, forward and backward linkages of different content and other factors. As important condition is considered the trade costs level between regions. This study suggests that the formation of theoretical models system explaining the agglomeration process is under intense development.
We modify Paul Krugman’s (1991, J. Polit. Econ 9(3), 483-99) ‘Core-Periphery’ model by replacing the traditional competitive sector by a monopolistically competitive one. We show that the structure of spatial equilibria remains the same as in the original model. This result continues to hold true under Cournot or Bertrand oligopolistic competition with free entry in the traditional sector. The key factor that explains why the nature of competition in the traditional sector does not matter for the spatial equilibria is constant expenditure shares - due to nested Cobb-Douglas and CES preferences - which imply that trade in the traditional sector is independent from its sectoral characteristics.
The paper examines the structure, governance, and balance sheets of state-controlled banks in Russia, which accounted for over 55 percent of the total assets in the country's banking system in early 2012. The author offers a credible estimate of the size of the country's state banking sector by including banks that are indirectly owned by public organizations. Contrary to some predictions based on the theoretical literature on economic transition, he explains the relatively high profitability and efficiency of Russian state-controlled banks by pointing to their competitive position in such functions as acquisition and disposal of assets on behalf of the government. Also suggested in the paper is a different way of looking at market concentration in Russia (by consolidating the market shares of core state-controlled banks), which produces a picture of a more concentrated market than officially reported. Lastly, one of the author's interesting conclusions is that China provides a better benchmark than the formerly centrally planned economies of Central and Eastern Europe by which to assess the viability of state ownership of banks in Russia and to evaluate the country's banking sector.
The paper examines the principles for the supervision of financial conglomerates proposed by BCBS in the consultative document published in December 2011. Moreover, the article proposes a number of suggestions worked out by the authors within the HSE research team.