Academic literature on the topic 'Public economics - publicly provided goods'

The literature on decentralization has long asserted that decentralized governance increases public sector allocative efficiency. We offer an indirect test of this hypothesis by examining how decentralized governance affects revealed preferences for public goods. Specifically, we examine the relationship between expenditure decentralization and the functional composition of public expenditures. We hypothesize that higher levels of expenditure decentralization induce agents to demand increased production of publicly provided private goods. We test this hypothesis using an unbalanced panel data set of forty-two developed and developing countries over twenty-two years. Using system Generalized Methods of Moments and Quasi-Maximum Likelihood estimators, we find that expenditure decentralization positively, significantly, and robustly influences the share of education expenditures in consolidated government budgets. We also find evidence to suggest that expenditure decentralization positively influences the share of health expenditures in consolidated government budgets. Decentralized governance appears to alter the composition of public expenditures toward publicly provided private goods.

SummaryThis paper deals with the question whether uniform provision of a purely private good should be implemented at the social optimum, in a second best economy where personalised lump-sum transfers are not feasible, but no market failure exists. The answer is that it depends on the balance of private and social gains and losses from public provision: necessary conditions for the optimality of uniform provision are derived and discussed. The sensitivity of these conditions to changing rules for the choice of the user charge is also investigated, and it is suggested that public provision is most likely to be optimal when it is free of charge. Finally, it is emphasized that the assumption that a perfect substitute for the publicly provided good is not available plays a crucial role in obtaining the above results.

Demand measurement for outdoor recreation has developed on a course that reflects trends in both theoretical economics and recreation policy. The early insights of Hotelling and Clawson and Knetsch express a dominant concern with estimating the demand for a single recreation site and the economic value of publicly provided, new recreation sites. Their theoretical framework was consistent with the emerging public goods theory which viewed recreation sites as homogeneous public goods demanded by homothetic consumers. In light of the emphasis on expanding leisure opportunities and public acquisition of recreational parkland in the national recreation policy of this period, their analysis was timely and an important benchmark for further refinements in measuring the economic value of recreation sites (Burt and Brewer; Cicchetti, Fisher and Smith).

Fairytale forests must face reality (essay) Swiss forest enterprises are finding it increasingly difficult to fulfill the demands on the forest economically. The problem is complex. To address it, we analyzed this situation from the points of view of production, industrial and new institutional economics. Swiss forest enterprises are multi-product firms. They are usually publicly owned and aim to provide crucial ecosystem services for the economy in the form of private and public goods that are mostly closely connected with the production of wood. Providing these goods can be made more efficient, especially by adopting organizational measures involving cooperation and information technologies. Another more difficult but necessary measure is to ensure the required public goods are paid for. No incentives, market-like structures or tools for this have yet been introduced. This paper is a plea for providing public goods under private-sector conditions, changing management structures accordingly, even reducing the demands on the forest and developing market-based mechanisms for paying for the public goods.

This article shows that cognitive ability dynamics interact with both individual and local indicators of macroeconomic wellbeing, publicly provided goods and private goods, through 141 localities in Mexico. The link of these various goods with inequity is compared quantitatively using the concentration index decomposition. The set of individual characteristics including paternal and maternal cognitive ability, whether mother works, father’s schooling and household wealth, and the set of local characteristics including local economic activity, local public policy and local marginalization indicators, each have significant connections with the formation of cognitive ability. Living in a rural locality is associated with one fourth of inequities in cognitive ability. This is consistent with a model of human development and economic growth exhibiting aggregate macroeconomic channels through which economic geography and local governance can lead to stratification and divergence in welfare indicators. There is a long-term transition towards higher levels of cognitive ability that will take several generations to converge at the current rate.

This article is a comparative analysis of American and West German consumer policy and its underlying definition of the consumer interest during the decades following the Second World War. It traces diverging government responses to a transatlantic debate among economists, policy makers and a wider public over the proper balance between private and public consumption. Whereas postwar America put an emphasis on unrestrained private purchasing power and limited public spending, West German policy makers were more likely to include the provision of publicly supported and tax-funded goods and services as part of their definition of the consumer's interest. This contributed, the article proposes, to a fundamentally different perspective on government spending and taxation by middle-class consumers in both countries. Drawing on media sources, contemporary scholarly literature and government documents, I want to elaborate on our understanding of what counted as ‘consumption’ and ‘consumer goods’ and thereby encourage scholars in the growing field of consumption studies to look beyond the usual array of private goods. I furthermore question the influential notion of an ‘imperial’ reach of the American consumption model in the postwar era. Approaches to consumption and balancing private/public spending were markedly different in Western Europe, and the German case provides a prominent example of this.

Increasing exposure to trade, foreign direct investment, and liquid capital mobility have not prompted a pervasive policy race to the neoliberal bottom among the OECD countries. One reason is that there are strong political incentives for governments to cushion the dislocations and risk generated by openness. Moreover, countries with large and expanding public economies (when balanced with increased revenues, even from capital taxes) have not suffered from capital flight or higher interest rates. This is because the modern welfare state, comprising income transfer programs and publicly provided social services, generates economically important collective goods that are undersupplied by markets and that actors are interested in productivity value. These range from the accumulation of human and physical capital to social stability under conditions of high market uncertainty to popular support for the market economy itself. As a result, arguments about the demise of national autonomy in the global economy are considerably overdrawn.

Purpose Online ratings and reviews have recently emerged as mechanisms to facilitate accountability and transparency in the provision of goods and services. The purpose of this paper is to examine the nature and outcome of the accountability that online ratings and reviews create in the sharing economy. Design/methodology/approach The study draws on 30 face-to-face and Skype interviews with Airbnb guests and hosts as well as on secondary materials, including content from Airbnb data analytic reports. Findings The authors demonstrate that face-saving practices widely condition user ratings and comments. Face saving occurs when individuals attempt to preserve their own identity and the identity of others during a social interaction. At Airbnb, the authors find that reviewers adopt three distinct face-saving strategies: the use of private reviewing channels, the creation of tactful reviews and refraining from reviewing entirely. The authors also find that users are sceptical of rating metrics and public comments and draw upon a wide range of alternative sources, such as private messaging and other publicly available resources, in their decision making. Originality/value This paper highlights the overwhelmingly positive character of Airbnb ratings and reviews. It proposes the concept of crowdbased accountability as a limited, partial form of assurance for sharing economy users. Guests and hosts alike prioritise face-saving practices over reviewer responsibilities to provide authentic, reliable accounts to the public. Consequently, reviewers effectively remove the risk of sanctions for those in the network who underperform.

This study aims to analyze the effect of income inequality and regional characteristics such as ethnicity and religion on conspicuous consumption for visible and invisible good types of households in the Indonesian regions by dividing regions into regions with low and high-income inequality levels based on the value median Gini index in Indonesia. The data set deployed in this study were pooled data collected from households provided by the Indonesian Central Bureau of Statistics 2017 and 2018. Employing the OLS method, we find that 1) income inequality has a negative effect on visible goods, and positive effect on invisible goods, 2) ethnicity and religion give an effect on visible and invisible goods. The government should pay attention to the phenomena of conspicuous consumption because numerous problems will likely arise if this conspicuous consumption is ignored. High conspicuous consumption would tend to lead to a materialistic lifestyle causing a higher inequality. In addition, the crime rate could equally increase given the high risk of conspicuous consumption in attracting others’ attention to individuals’ wealth.

In many countries, the government provides goods and services that are rival in consumption—essential commodities, such as water, public transportation and basic health care, and merit goods like professional education and tertiary health care. For such goods, the government has to specify allocation rules under which citizens can access them. Affluent citizens often have the incentive and the ability to influence public allocation rules by engaging in allocation contests. This article presents simple models of allocation contests for a divisible essential commodity and an indivisible merit good, and studies contest equilibria and their implications for social outcomes. Given allocation contests over public provision, falling public supply of an essential commodity can have magnified negative impact on social welfare, and raising the reservation quota of a publicly provided merit good for a set of disadvantaged citizens might effectively lower their access to the good. JEL: C72, D61, H42

Thesis (Ph. D.) -- University of Maryland, College Park, 2005.
Thesis research directed by: Economics. Title from t.p. of PDF. Includes bibliographical references. Published by UMI Dissertation Services, Ann Arbor, Mich. Also available in paper.

The main contribution of this thesis is a comprehensive analysis of the influence of changes in the population structure on local communities, in particular with respect to the provision of publicly provided goods. The focus is placed on the consequences of two of the major processes of demographic change, namely aging and shrinking. The three main chapters of this contribution consider the effects at the local level from both a theoretical and an empirical perspective. The first model focuses on the influence of population aging on the provision of local publicly provided goods, when the young population may relocate. When aging advances, gerontocracies and social planners substitute publicly provided goods aimed at the mobile young for publicly provided goods for the elderly. However, due to fiscal competition, gerontocracies will provide even more of the publicly provided good for the young than the social planner. The second model considers in a two-period setting, the interaction of a shrinking population when the investments made by the previous generation are long lived. The laissez-faire and welfare maximizing outcomes are computed for two cases; first with no costs of upkeep and second for the case when costs of upkeep accrue. A comparison of the solutions shows that public provision for the first generation is inefficiently low in laissez-faire when there are no costs of upkeep. However, if costs of upkeep accrue, the laissez-faire outcome for the intergenerational publicly provided good may be too high. Chapter four contains an empirical analysis. In a two-stage analysis the efficiency of the provision of child care services in municipalities is evaluated in the German State of Saxony. First, the results of the Data Envelopment Analysis (DEA) show substantial efficiency differences; the median municipality is up to 28% inefficient. In a second stage bootstrapped truncated regression, determinants of the inefficiency are identified. Explanatory variables such as an uncompensated mayor or a larger share of over 65-year-olds significantly increase inefficiency.

This article explores how a public service broadcasting company, namely ORF in Austria, has dealt with the challenges created by the dual system. An investigation of market requirements, public programming mandate, cost structure and financing needs reveals how economic and political constraints are interrelated. To illustrate this phenomenon, we focus on programming, specifically on the highly successful genre of popular folksy music ('Volkstümliche Musik'). Opinions of decision-makers responsible for programming strategies at the Austrian PSB company are linked with a detailed empirical analysis of one prosperous production within that genre. This enables us to draw a number of conclusions on the strategies pursued by public service broadcasting companies to master the changed market conditions and draw attention to so far unattended topics.
Series: Department of Economics Working Paper Series

The main aim of this paper is to assess the impact of tax competition on the functioning of the public sector in the real economy. In particular it follows up the public finances and the impact of tax competition on the amount and structure of publicly provided goods and services. The paper is based on the economic theory of tax competition and fiscal federalism, taking into account the arguments both against and in favor of tax competition. It examines tax competition in a particular example of Switzerland and shows how tax competition works here. The paper analyzes tax competition in Swiss cantons and shows that the tax burden in the canton is dependent on the tax burden in the neighboring cantons. It also deals with the influence of tax competition on the structure of publicly provided goods in Switzerland and takes into account also the phenomenon of commuting and the consumption of publicly provided goods in cantons different from the canton where the tax is collected. The paper also examines the impact of commuting on the structure and level of public expenditure in Swiss cantons.

Cette thèse traite des mesures à prendre afin d'assurer le succès de projets de développement exécutés par des firmes privées, et plus particulièrement les Organisations Non Gouvernementales (ONGs). Les ONGs sont des firmes à but non lucratif qui sont semblables aux gouvernements dans leur préoccupation pour le bien-être des bénéficiaires et aux firmes privées standard sur le plan organisationnel. Leur participation aux projets de développement soulève la question de savoir si elles sont plus efficaces que ces entités similaires. Malgré la croissance rapide du secteur ONG, surtout des multinationales basées dans les pays riches avec des branches implantées dans les pays pauvres, peu de recherches en économie de développement se sont intéressées à comment la nature d’une organisation peut affecter son comportement dans l’implémentation des projets de développement. Les trois chapitres de cette thèse soulignent des différences entre Les ONG, les firmes privées et les gouvernements et examinent comment la nature même de chaque type d'organisation affecte sa fourniture de services publics. Les deux questions-clés sont donc pourquoi et sous quelles des conditions choisir une ONG comme fournisseur de biens et services dans le cadre d'un projet de développement, et comment s’assurer que les normes culturelles des bénéficiaires n’affectent négativement la réussite desdits projets
This thesis addresses the question of how to ensure the success of development projects executed by private firms, especially Non-Governmental Organizations (NGOs). NGOs are non-profit firms that are similar to governments in their concern about beneficiaries' welfare and to standard private firms in their organizational form. Their involvement in development projects raises the issue of how well they perform in service provision compared to alternative entities. Despite the rapid growth of the non-profit sector, especially international firms based in high-income countries that operate in low-income countries, the existing literature on economic development has hardly investigated the issue of non-profit performance and regulation. The three chapters of this thesis emphasize differences between NGOs and either private for-profit firms or governements, and examine how the very nature of each type of organization affects service provision. The two key questions are why and under which conditions to choose an NGO as goods or services provider in the framework of a development project, and how to ensure beneficiaries' cultural norms do not undermine the success of development projects

The main contribution of this thesis is a comprehensive analysis of the influence of changes in the population structure on local communities, in particular with respect to the provision of publicly provided goods. The focus is placed on the consequences of two of the major processes of demographic change, namely aging and shrinking. The three main chapters of this contribution consider the effects at the local level from both a theoretical and an empirical perspective. The first model focuses on the influence of population aging on the provision of local publicly provided goods, when the young population may relocate. When aging advances, gerontocracies and social planners substitute publicly provided goods aimed at the mobile young for publicly provided goods for the elderly. However, due to fiscal competition, gerontocracies will provide even more of the publicly provided good for the young than the social planner. The second model considers in a two-period setting, the interaction of a shrinking population when the investments made by the previous generation are long lived. The laissez-faire and welfare maximizing outcomes are computed for two cases; first with no costs of upkeep and second for the case when costs of upkeep accrue. A comparison of the solutions shows that public provision for the first generation is inefficiently low in laissez-faire when there are no costs of upkeep. However, if costs of upkeep accrue, the laissez-faire outcome for the intergenerational publicly provided good may be too high. Chapter four contains an empirical analysis. In a two-stage analysis the efficiency of the provision of child care services in municipalities is evaluated in the German State of Saxony. First, the results of the Data Envelopment Analysis (DEA) show substantial efficiency differences; the median municipality is up to 28% inefficient. In a second stage bootstrapped truncated regression, determinants of the inefficiency are identified. Explanatory variables such as an uncompensated mayor or a larger share of over 65-year-olds significantly increase inefficiency.

The monograph provides a comprehensive study of the possibilities of assessing the economic efficiency of public (municipal) procurement in a non-competitive way (from a single supplier). The domestic and foreign experience in this field is being investigated. Using a mathematical model of economic analysis and relying on the concept of quantitative theory of money, the authors attempt to create a formula for calculating the economic efficiency coefficient of state (municipal) procurement from a single supplier. At the same time, the possibilities of using this coefficient in conducting economic examinations, in economic disputes between economic entities, as well as in criminal cases of abuse in the procurement of goods, works, services for state or municipal needs are analyzed. It is intended for contract service employees, contract managers, members of the procurement commission, persons carrying out acceptance of delivered goods, works performed, services rendered, representing the interests of the customer in the field of procurement of goods, works, services for state (municipal needs), as well as for employees of logistics departments, experts, investigators The Investigative Committee, the Federal Security Service, the Ministry of Internal Affairs of the Russian Federation, investigating criminal cases of crimes committed in the field of state (municipal) procurement, for teachers, students of economic and law universities, and other persons interested in the problems of state (municipal) procurement. Recommended for the study of the following disciplines: economics, criminal law of the Russian Federation (special part), criminology

Studies in Public Finance is a book on the nature and effect of public spending and its financing in India, taking into account the advances in theory and best practice approaches. It brings together several disparate pieces of scholarship on Indian public finance. Public finance begins with reasons for government spending—the failure of the markets to provide public goods, goods with externalities, and bring about desired state of distribution. In Indian context, public expenditure policies are dominated by political economy considerations with interest payments, subsidies, and transfers pre-empting resources leaving inadequate allocation to physical and social infrastructure. The ability to provide essential public services is constrained by the low revenue productivity of the tax system. Inability to finance the required level of expenditures through taxes results in large deficits and debt threatening solvency, stability, and sustainability from time to time. The rule-based fiscal policy evolved to follow a disciplined approach to fiscal policy calibration has not met with much success. The book also analyses the complexity of calibrating public finance policies in a large country with multilevel fiscal system. It also evaluates the effectiveness of intergovernmental transfers in a country marked with wide inter-regional disparities in taxable capacity and standards of public services provided. Finally, the book brings out the devastating effects of the COVID-19 pandemic on Indian public finances. The book will be useful to students of economics, scholars working on the subject and the policymakers.

This chapter attempts to relate the pedagogy of public policy to the concept of practice articulated by Alasdair MacIntyre. It first discusses the challenges of establishing public policy as a discipline in India where it has been long assumed that only those employed in government need to acquire skills and knowledge essential for policy formulation, and also, by definition, all policies made by government must be in the public interest. This assumption is being challenged in recent times opening up the possibility of fashioning a pedagogy for public policy. In the quest for a philosophy of public policy as a practice an understanding of external and internal goods, the role of virtues, and limitations of economics, a dominant discipline in public policy schools, are examined. Finally, the importance of public policy practitioners and teachers connecting with the public whose interests and concerns provide the raison d'être for the discipline is underlined.

The recent and growing literature concerning the birth and history of neoliberalism stresses the importance of supranational economic governance and institutions for the neoliberal project. Sometimes this international order is allegedly supposed to be based on a federal structure. The crucial point is that the division of power and competences among different layers of government may be instrumental to decreasing the room for maneuver in the provision of collective goods, basically the core of the welfare state. This is the approach to supranational federalism that has proved successful in the last few decades, defeating the more heterogeneous and pluralistic attitude toward the trade-off between national and supranational public goods of its origins. The aim of this chapter is to enquire into the evolution of neoliberal thought as concerns the use of different layers of government as an instrument to provide relevant public goods for citizens’ welfare.

Chapter 5 describes how economic decline led to an ideological shift in America. Trump was good at promising things that resonated with the public’s discontent. This chapter shows how he did this, particularly insofar as his economic plan is concerned. This is a story about the rise of neoliberalism as the cure for what ailed Americans and the American economy. Neoliberal ideology is a conservative approach to policymaking that touts the virtues of small government, low taxes, less regulation, and reduced welfare spending. It involves a taken-for-granted paradigm—a set of assumptions—about how the economy works, as well as specific policy recommendations derived from it. It also involves a variety of public sentiments or values deeply rooted in American culture about the virtues of small government. These sentiments and others provided raw materials with which Trump effectively fabricated catchy frames to garner public support for his policy ideas.

Abstract Public debts have exploded to levels unprecedented in recent history as governments responded to the COVID-19 pandemic. These rising levels of debt prompted apocalyptic warnings about the dangers of heavy debts—about the drag they will place on economic growth and the burden they impose on future generations. This book adds the other side of the equation: drawing on history, the authors provide a defense of public debt. Their account shows that the ability of governments to borrow has played a critical role in meeting emergencies, from wars and pandemics to economic and financial crises, as well as in funding essential public goods and services such as transportation, education, and healthcare. In these ways, the capacity to issue debt has been integral to state building. Transactions in public debt securities have also contributed to developing private financial markets and, through this channel, to economic growth. None of this is to deny that debt problems, debt crises, and debt defaults occur. But these dramatic events, which attract much attention, are not the entire story. In Defense of Public Debt redresses the balance. The book develops its arguments historically, recounting two millennia of public debt experience. It deploys a comprehensive database to identify the factors behind rising public debts and the circumstances under which high debts are successfully reduced. Finally, it brings the story up to date, describing the role of public debt in managing, from 2020 onward, the COVID-19 pandemic and suggesting a way forward once governments, now more heavily indebted than before, finally emerge from the crisis.

Ever since a democratic system of government was adopted and a strategy of planned economic development was launched in India, the planners were quite conscious of the need for an administrative system different from the colonial one to implement the planned objective of development. Kuldeep Mathur, in this volume, examines these administrative reforms and provides a magisterial account of the changes in the institutional process of public administration. The introduction of neoliberal policies revived the concerns about reform and change, thereby giving rise to a new vocabulary in the discourse of public administration. The conventional world of public administration was now expected to adopt management practices of the private sector and interact with it to achieve public policy goals. New institutions are now being layered on traditional ones, and India is becoming a recipient of managerial ideas whose efficacy has yet to be tested on Indian soil. In light of the aforementioned changes, this volume argues that hybrid architecture for delivering public goods and services has been the most significant transformation to be institutionalized in the current era and critiques the neoliberal transformation from within a mainstream public administration perspective.

The conventional economic approaches to economic growth have focused on macroeconomic aggregates and on neoclassical microeconomic foundations; on flows rather than stocks; and on utility rather than capabilities. This chapter presents an alternative asset-based approach, focused on balance sheets and capital maintenance. The starting point is the assets necessary to provide the capability for consumers and businesses to participate in the economy. Many of these are infrastructures and public goods, and among these natural capital plays a central role. The depletion of natural capital in the twentieth century, notably the atmosphere and biodiversity, has overstated economic growth and left a legacy of capital maintenance and enhancement. The chapter defines the rules for a sustainable economic growth path, incorporating natural capital.

This book arose out of a friendship between a political philosopher and an economic sociologist, and their recognition of an urgent political need to address the extreme inequalities of wealth and power in contemporary societies. The book provides a new analysis of what generates inequalities in rights to income, property and public goods in contemporary societies. It claims to move beyond Marx, both in its analysis of inequality and exploitation, and in its concept of just distribution. In order to do so, it critiques Marx’s foundational Labour Theory of Value and its closed-circuit conception of the economy. It points to the major historical transformations that create educational and knowledge inequalities, inequalities in rights to public goods that combine with those to private wealth. In two historical chapters, it argues that industrial capitalism introduced new forms of coerced labour in the metropolis alongside a huge expansion of slavery and indentured labour in the New World, with forms of bonded labour lasting well into the twentieth century. Only political struggles, rather than any economic logic of capitalism, achieved less punitive forms of employment. It is argued that these were only steps along a long road to challenge asymmetries of economic power and to realise just distribution of the wealth created in society.

Abstract Scientific discoveries can be classified as public goods. Arrow [1] discussed properties of knowledge that make it a public good; highlighting in particular, the fact that it cannot be depleted when shared, and once it is made public others cannot easily be excluded from its use. So, public good is a commodity or service that is provided without profit to all members of a society, either by the government or by a private individual or organization. Thus, a global public good is a public good that goes beyond borders, and CERN scientific output is the perfect example of a global public good.

AbstractThe chapter is focused on collaborative processes through which the functions and spatial hierarchies of public or public use areas are redefined. The field of action is: on the one hand the urban metabolism, interpreted as a study of the life cycle of the city, including wastescapes; on the other, collaborative processes, aimed at defining the uses of tailored, place-based, and collective services. In this sense, the research moves from the analysis of places born for public use, but abandoned over time or never actually completed; disused places waiting to reenter the urban metabolism. Among those, there are also Italian “planning standards,” publicly designed in compliance with the quantities defined by law, and often partially used or not properly managed. The proposal of new uses and services for these contexts is based on criteria of flexibility, not fixed once and for all, not predetermined in time, but in progress in order to overcome the limits of the implementation of policies and programs of the past. These integrated processes can activate a dialogue between public institutions, privates, local associations and citizens’ groups. The research also intends to cross-reference the issue of spatial inequalities in access to spaces and services, with the evolution of the public actor from provider to service enabler, in a wider redefinition of welfare and welfare spaces concept, as an effect of global economic and financial crisis. The question needs non-sectoral responses, which take into account environmental, social, spatial issues. Welfare can no longer be provided as a self-sufficiency device: contextual services, for everyone, can be realized by recapitalizing wastescapes, co-creating “planning standards” through the recovery of degraded local contexts, collectively investing in the use and care of public, and open services. The paper will focus on: (a) the case of the former NATO area in Naples (in Bagnoli neighborhood) which is the subject of a Plan for urban renewal, adopted by the Municipality of Naples in 2020. The area, owned by a public company whose purpose is the assistance of children in the disadvantaged segment (Fondazione Campania Welfare), has been redesigned as a public facility on a metropolitan scale, within a public consultation process between the ownership, the Municipality of Naples and several local stakeholders (third sector organizations, citizens, cultural associations, etc.). As an effect of this collaborative process, the reuse of the area started before the adoption of the Plan; (b) the case of Horizon2020 research REPAiR in which the issue of circular economy applied to the recovery of wastescapes for public purposes has been investigated in living labs, working on waste perception and awareness as key factors for regenerating wastelands. The co-creation process partly resumed a strategy foreseen in 2013 by the Campania Region in the Plan of waste prevention, for the implementation of Integrated Centres for the reuse of durable goods, originally excluded by the Regional Waste Law.

This chapter is an analysis of the forest commons in Romania (in Romanian - „obște”, „composesorat”) as social solidarity economy organisations mainly looking at how the collective production of norms in these new (re-instituted after 50 years) organisations impacts the sustainability concerns in the collective management of natural goods and production of new goods and services of interest to the community. The chapter has four parts: the first part is offering to the readers a conceptual framework of common goods in order to better understand the particular situation of Romanian natural resources (forests, pastures) as common goods and their transition from public management to commons across time; the second part is a brief history of commons in Romania covering evolutions from 1948 to 2012 and including estimates of the size of surfaces they manage; the third part studies the commons as social economy organisations using key social and economic indicators of commons as SSE organisations from the Prometeus research project in which the authors were involved; and the last part assesses the disposition of the commons for a public, community interest mission and sustainable management of forests using survey data analysis. The chapter thus provides an in-depth analysis of commons as social solidarity economy organisations in Romania and of their capacity to provide a viable framework for sustainably managing the common resources under circumstances of significant economic pressure.

Abstract Animal welfare is often claimed to be a 'public good', i.e. requiring government intervention and legislation to ensure that animal welfare is respected. In other words, markets, on their own, cannot be relied on to deliver socially acceptable animal welfare. In fact, the issues surrounding animal welfare are more complex and subtle than this. This chapter first explains the general features of public goods, as defined and recognized in economics (Section 2). It then turns to the specific case of animal welfare (Section 3) and explains that outlawing cruelty to animals is clearly a genuine public good, but improving animal welfare can only be achieved by reflecting consumers' willingness to pay for better animal welfare production. However, there is a clear disconnect between citizens' apparent concerns about animal welfare and their exhibited willingness to pay for better animal welfare. Does this imply a clear market failure? This apparent failure is examined with the aid of a thought experiment, and identifies the nature of the problem - a combination of information and communication deficiencies with peoples' limited availability of time, resources and motivation to attend to all social issues with each and every purchase decision. The underlying problem is one of consumption externality - other peoples' consumption decisions affect my/your assessment of our own welfare - since farmed animal welfare depends on peoples' consumption decisions.

In its theoretical approach, this contribution draws outlines of the conceptual framework of the co-construction of the general interest, and social innovation. It also includes an empirical approach through the results of surveys among concerned social economy associations and public actors in territory of Kabylia (Algeria). It focuses on characterization of social innovation carried by these organizations in relation of public offer, and analysis of its impacts on community and territory. Then, social innovations’ forms of institutionalization were investigated and the institutional predispositions to shared territorial governance that integrates innovations in the economic and social services delivery were identified. Subsequently, we assessed the contributive capacity of the public economy and social economy organizations to the construction of the general interest policies. From there, we were interested in the induced interaction between the various partnerships’ forms what we called “public-community”, “public-social” and “publicinternational” observed in three case studies in the investigated territory. We have characterized social innovation types of the associations that manage community projects in different SSE activities. Their contribution to provide social and economic services for the general interest has been assessed. Finally, we attempted to prove the relevance of forms of governance integrating the co-construction of the general interest in the provision of social services and the forms that the institutionalization of the social innovation takes for the public authorities in the field studied.

Public-Owned Enterprises (POEs) are generally large economic enterprises owned and governed by state institutions. POEs generally are the sole or the main provider of the key public goods and services as water, electricity, transport, telecommunications, and postal services. If administered efficiently, the POEs are important for national development and perspective of natural economic resources. The concern is how accurately these monopolistic enterprises are organized in aspects of administrative and managerial perspectives to function as effectively as possible for the objectives they are created. Therefore an overall summary of the public-owned enterprises is presented through their process of emerging, privatization, and evolution in Albania, southeast Europe. The process was accompanied by shortcomings due to its ad-hoc nature; and associated with negative effects of bad management, governance corruption, and low efficiency of the operational activities and results.

Public-Owned Enterprises (POEs) are generally large economic enterprises owned and governed by state institutions. POEs generally are the sole or the main provider of the key public goods and services as water, electricity, transport, telecommunications, and postal services. If administered efficiently, the POEs are important for national development and perspective of natural economic resources. The concern is how accurately these monopolistic enterprises are organized in aspects of administrative and managerial perspectives to function as effectively as possible for the objectives they are created. Therefore an overall summary of the public-owned enterprises is presented through their process of emerging, privatization, and evolution in Albania, southeast Europe. The process was accompanied by shortcomings due to its ad-hoc nature; and associated with negative effects of bad management, governance corruption, and low efficiency of the operational activities and results.

Public owned enterprises (POEs) are important to the daily lives of citizens. As they provide employment as well as services of general economic interest. Nevertheless, researchers also indicate negative side effects like undermining political control, accountability or public ethics. Fully public or partly privatized POEs have to balance the interests of society for service provision and the economic interests of shareholders. The paper gives an overview about accountability and transparency policies in Austrian Public Owned Enterprises.

Private sector leads the production and distribution process in many countries. However, Public Owned Enterprises (POEs) are also an important element of many developing and developed economies in this context. This analysis examines the main legal organisation forms of public owned enterprises and their financial performance. It also briefly analyses the national legislation and regulation on corruption prevention mechanisms and policy measures and anticorruption practices in public owned enterprises. Almost half of public owned enterprises in North Macedonia are working with losses and have the highest maturity and unpaid liabilities in the last five years. Public owned enterprises can either contribute or obstruct the competitiveness of the economy depending on their efficiency and productivity. This sector needs to be transparent to provide competing enterprises with a fair overview of the fundamental market conditions.

One of the controversial issues among researchers in the field of public finance is estimating the determinants of public expenditures. It’s argued that public expenditure is determined by economic as well as demographic, social and political variables. One of the important element of political variables is bureaucracy. If bureaucracy, as one of the main actors of political decision making process, works in quality, effectiveness and efficiency would occur in publicly provided goods and services. In parallel with the good quality of bureaucracy, the size of state would become smaller. The purpose of this study is to test empirically between efficient bureaucracy and public expenditure, using dynamic panel data analysis of 6 Eurasian Economic Community countries from 1998 to 2011. This study finds evidence that existence of bureaucratic quality reduces the public expenditures.

At present, the most influencing factor on nuclear power’s development in China the public’s attitude and acceptance. This paper studies the public perception of nuclear power risk in China, and provides several feasible methods to improve the quality and effectiveness of public perception level. Therefore, the public acceptance of nuclear power can be ameliorated greatly, which will help the development of nuclear power industry. For decades, the environment pollution has become one of the most serious and urgent problems in China. Since nuclear power has been proved to be a type of low-carbon and environment-friendly energy, striving to develop nuclear power is a good solution to China’s environment issues. However, by the end of 2015, China’s nuclear power’s electricity production share was only 3.03%, which was far below the average level of developed countries. This situation might be partly due to technical and economic reasons, but the essential cause of the restricted development of nuclear power in China is the public perception of nuclear power risk is far from objective and comprehensive, which leads to the public acceptance of nuclear power is not as high as expected. This paper states that public perception process of nuclear power risk is a dynamic, complex and closed system, which consists of the risk, the transformation of the risk and related information (both truth and rumors), the public perception process and public’s acceptance of the risk, and the public’s actions after receiving the information. The public’s actions often react on the risk perception. Nuclear power risk, unfortunately, is usually magnified, and it makes people become more frightened and oppose nuclear power more seriously. In order to solve those issues, in this paper, the public risk perception’s characteristics and external influencing factors are studied, a model describes the public perception process of nuclear power risk is developed and analyzed, and the causes of current acceptance level of nuclear power (which is relatively low) are explained. In addition, based on this model, methods to conduct effective risk communication and public education on nuclear power are provided, the future of nuclear power in China can be much better.

The paper thematizes the problematic relationship between economy and happiness covered by economist Robert Michels (1876-1936) in his book “The Economics of Happiness” written in 1918. In this book Michels, as a true frontier scholar, provides, well in advance of the acquisitions of the modern “science of happiness”, an interdisciplinary reading of the different determinants of happiness and of their interactions, courageously refuting the monistic and reductionist paradigm of neoclassical economy dominant in his epoch. The hedonistic conception of happiness conceived by Michels echoes that formulated by Jeremy Bentham, but Michels, unlike the Utilitarians of the eighteenth and nineteenth centuries, gives it an unexpected twist, by postulating heretically that happiness is the ultimate goal of economy and that wealth is only a means to achieve it. In establishing the primacy of happiness as the main purpose of economic activity, Michels follows in the footsteps of Neapolitan and Milanese Civil Economists of Enlightenment with whom he had other theoretical points of consonance which the paper highlights. However Michels’ conception of happiness differs from Civil Economists’ notion because it is primarily based on individual pleasure and not on relational goods, because it is disconnected from those components of gratuitousness which are immanent to sincere relational goods, because it is detached from the search for Common Good. Finally the paper illustrates the multidimensional and innovative public policies which Michels suggests for the achievement of happiness by invoking a wide range of integrated interventions to be carried out by the State and by the workers’ unions. Keywords: Happiness Economics, Benthamian Utilitarianism, Civil Economy

In the reality of the marketplace, a situation often arises where an economic surplus (rent) achieved by agricultural producers is partly taken over by related non-agricultural sectors. In this sense the category of economic rent embraces market failures related to such factors as price flexibility, and thus represents an effect of the misallocation of resources in the agricultural sector. The question therefore arises of whether there exists a developmental model of agriculture in which such market failures would be reduced. Apparently the only coherent response to this need is action taken under the paradigm of sustainable agriculture. This type of model for the sector’s functioning is supported by the objectives of the European Union’s Common Agricultural Policy (CAP), including through support for the supply of public goods in rural areas. This article addresses the question of whether CAP payments for public goods are a desirable systemic solution serving to reduce market failures. It is hypothesised that the financing of activity relating to the supply of public goods lessens the negative impact of the “market treadmill”, since it reduces the unexpected outflows of economic surplus away from farms, caused by agricultural prices. To verify the hypothesis, a panel regression analysis was performed on three sets: the EU-15 countries, the EU-12 countries, and – within Poland – subsectors of farms from six standard output classes. The analysis covered the years 2004–2012. The results of the computations provided confirmation of the hypothesis. It may be stated that an increase in the level of payments for public goods, as a percentage of total subsidies to agriculture, leads on average to a reduction in the drainage of economic rents through prices. It was also found that the financing of public goods under the CAP is more effective in reducing market failures in the EU-15 countries than in the EU-12.

In the public sector, the optimization of procurement is the most important lever to increase efficiency. The purchase of goods and services make up the bulk of government spending, that is, the optimization of procurement can signifi cantly reduce budget expenditures. The effect of optimizing purchases is not limited to saving money. This tool is able to provide public institutions with a number of intangible advantages, one of which is transparency. Having accurate information about where and how much money is spent, as well as using simple standardized procedures for managing budget expenditures, managers can make more rational decisions. With balanced regulation of purchased goods through government orders, it can have a positive impact on pricing for certain types of products, giving it a certain flexibility. These circumstances determine the relevance of the study of the role of public procurement in the development of economic regulation of the economic system, the problems of forming theoretical, methodological and practical foundations of relevant qualitative changes in the field of public contracts

Economic, social and cultural rights (ESCR) are materialised through public goods and services, which are produced and provided, respectively, through public expenditures. The public expenditures with an impact on respecting ESCR are evaluated through the prism of basic objectives of public financial management, namely the following: maintaining strict financial discipline, allocating public financial resources in conformity with government’s priorities, efficient provision of public services. From the theoretical-scientific perspective, the research has been done in the context of a complex and systematic approach to modern economic and social concepts. The complexity of social, economic and financial phenomena, which have been studied, necessitated the use of statistical methods, in particular the correlation and simple regression analysis. At the same time, the comparative analysis was used for the same purpose. The central public administration and local public administrations from the Republic of Moldova are relatively more successful in consolidating fiscal discipline than in providing the efficient use of public expenditure in conformity with strategic priorities. The research argues a positive effect which can be made by improvement of public expenditure management on respecting ESCR in the Republic of Moldova.

There is no doubt that digitalization processes make positive effects on the development of a company as emphasized and evidenced by many research papers and studies. However, there are a few empirical research studies on digitalization in the public sector, particularly in public administration institutions. Therefore, the present research aims to identify and compare the level of digitalization in four national public administration institutions: the State Revenue Service, the Office of Citizenship and Migration Affairs, the State Social Insurance Agency and the State Employment Agency. In Latvia, very good technical solutions and a broadband mobile Internet network are available, the number of Internet users increases all over the world every year, but are they widely used by public administration institutions to provide consumers with appropriate digital services? The State Revenue Service has reached the highest level of maturity in digitalization, and the institution has also allocated the most funds from its budget to information technologies and the maintenance of their systems. The level of digitalization is low in the State Employment Agency and the Office of Citizenship and Migration Affairs. The public requires public administration services to be available digitally on a 24-hour/7day basis.

There are two main reasons of public interventions in the health market. First, the health care market cannot make efficient production on market conditions because of its attributes such as the unequal distribution of knowledge, being a public good, the presence of positive and negative externalities. Second, the public authority has also the aim to achieve justice. These qualities are also the source of ethical problems in the health sector, whether the service is generated, by the public or the private sector. Almost in all countries the health sector is usually provided by the public sector because of externalities. But because the side effects of the production of health services by the public sector emerged in recent years, the participation of the private sector was ensured to minimize these effects. For developing countries such as Turkey and Eurasian countries, a more effective use of the funds used for the health sector is recommended, and the space these expenditures cover in the budget are said can be scaled down with the opening of some areas for private entrepreneurs. However, the unique characteristics of the health sector seem to cause problems regardless whether it is produced by the public or the private sector. In this study it is attempted to give the attributes of the health sector in detail and to establish a relationship with ethical problems in the light of experiences in Turkey.

Under the background of government purchasing public services (GPPS), the development of NGOs faces new opportunities and challenges. To promote the development of NGOs and optimize the quality of public services. This paper analyzes the internal problems of NGOs undertaking GPPS, such as structural mismatch, low employee autonomy, high mobility and lack of professionalism, and government departments in the GPPS management loopholes, unclear regulatory responsibilities, inadequate supervision and other external factors. With the help of 7S model, this paper puts forward that the government provides a good cooperation environment for NGOs to undertake public service projects by changing management mode, strengthening system construction and training employees. NGOs define their own positioning by formulating strategic planning, matching the demand structure of public services, improving working methods, and updating service concepts. The government and NGOs work together to achieve the win-win goal of optimizing public service quality and promoting the development of NGOs.

The healthy development of higher education cannot be separated from the strong support and guarantee of university logistics. In the face of public health emergencies, if we want to further strengthen the function of logistics support and support in colleges and universities, and enhance the awareness and ability of coping, we should first start with delicacy management. After the baptism of Novel Coronavirus (2019-nCoV) epidemic, it is necessary for the logistics of universities to sum up their experience carefully, make good plans ahead of time, and make full response and preparation for all kinds of public health emergencies that may occur in the future. And this provides Chinese wisdom and Chinese plan for colleges and universities around the world to deal with public health emergencies.

Pioneering firms have the potential to achieve significant social and economic benefits in fragile and conflict‑affected settings. However, these contexts involve higher risks and costs, which dissuades pioneers and investors. In this policy paper, we argue that the public good these firms provide warrants the use of public funds to offset the costs of pioneering in these settings.

We explored some of the questions posed by digitalisation in an accompanying working paper focused on constitutional theory: Digitalisation, the ‘Fourth Industrial Revolution’ and the Constitutional Law of Privacy in South Africa. In that paper, we asked what legal resources are available in the South African legal system to respond to the risk and benefits posed by digitalisation. We argued that this question would be best answered by developing what we have termed a 'South African public law perspective'. In our view, while any particular legal system may often lag behind, the law constitutes an adaptive resource that can and should respond to disruptive technological change by re-examining existing concepts and creating new, more adequate conceptions. Our public law perspective reframes privacy law as both a private and a public good essential to the functioning of a constitutional democracy in the era of digitalisation. In this working paper, we take the analysis one practical step further: we use our public law perspective on digitalisation in the South African health sector. We do so because this sector is significant in its own right – public health is necessary for a healthy society – and also to further explore how and to what extent the South African constitutional framework provides resources at least roughly adequate for the challenges posed by the current 'digitalisation plus' era. The theoretical perspective we have developed is certainly relevant to digitalisation’s impact in the health sector. The social, economic and political progress that took place in the 20th century was strongly correlated with technological change of the first three industrial revolutions. The technological innovations associated with what many are terming ‘the fourth industrial revolution’ are also of undoubted utility in the form of new possibilities for enhanced productivity, business formation and wealth creation, as well as the enhanced efficacy of public action to address basic needs such as education and public health.

The interconnections between countries in a globalizing world continue to deepen and are central to the modern international economy. Yet, governance efforts to build resilience to the adverse risks and impacts of climate change are highly fragmented and have not sufficiently focused on these international dimensions. Relationships between people, ecosystems and economies across borders change the scope and nature of the climate adaptation challenge and generate climate risks that are transboundary (Challinor et al., 2017). Climate impacts in one country can create risks and opportunities – and therefore may require adaptation – in other countries, due to cross-border connectivity within regions and globally (Hedlund et al., 2018). These Transboundary Climate Risks (TCRs) may develop in one location remote from the location of their origin. This dynamic necessitates examining the governance structures for managing climate change adaptation. For example, with regard to trade and international supply chains, climate change impacts in one location can disrupt local economies and vulnerable people’s livelihoods, while also affecting the price, quality and availability of goods and services on international markets (Benzie et al., 2018). Coffee is one of the most traded commodities in the world with an immensely globalized supply chain. The global coffee sector involves more than 100 million people in over 80 countries. Coffee production and the livelihoods of smallholder coffee farmers around the world are at risk due to climate change, threatening to disrupt one of the world’s largest agricultural supply chains. The coffee supply chain represents an important arena for public and private actors to negotiate how resource flows should be governed and climate risks should be managed. Currently, neither governments nor private sector actors are sufficiently addressing TCRs (Benzie & Harris, 2020) and no clear mandates exist for actors to take ownership of this issue. Furthermore, the United Nations Framework Convention on Climate Change (UNFCCC), the main body for climate change policy and governance, does not provide any coherent recommendations on how to manage TCRs. This governance gap raises questions about what methods are likely to effectively reduce climate risk and be taken seriously by coffee market stakeholders. This policy brief explores different ways to govern TCRs, and how public and private actors view their effectiveness and legitimacy. Focusing on the Brazilian-German coffee supply chain, the brief presents a deductive framework of five governance pathways through which TCRs could be managed. It is based on 41 semi-structured interviews with 65 Brazilian and German public and private experts, including roasters, traders, cooperatives, associations and certification schemes, as well as government ministries, international development agencies, international organizations and civil society representatives.

This rapid review focuses on the impact COVID-19 pandemic om poaching and illegal wildlife trafficking. It provides an overview of the recent research and summarises the key themes. This review found that poaching for the purpose of international trafficking of illegal wildlife products, generally decreased. These declines are largely attributed to the disruption of transportation routes used by wildlife traffickers to move illicit goods within Southern Africa and overseas by air, and in some locations to the effects of local lockdown measures. Poaching for subsistence consumption (bushmeat) generally increased across Southern Africa and worldwide during the COVID-19 pandemic, incentivised largely by economic hardship and opportunities presented by a reduction in the capacity for anti-poaching enforcement and reduced numbers of tourists, whose presence tends to deter poachers. In the long term, poaching and trafficking are likely to return to pre-pandemic levels. Commercial poachers and traffickers are likely to adjust their transportation routes and adapt their business models to take advantage of opportunities. More positively, some authors have suggested the possibility that the COVID-19 pandemic could influence public attitudes against wildlife trafficking and in support of conservation. Trends in poaching and illegal wildlife trafficking during the COVID-19 pandemic vary significantly across and within countries. The impacts resulting from the measures put in place to reduce the spread of COVID-19 have varied significantly depending on local contexts. Up-to-date data on recent trends during the pandemic are scarce. Good quality data are available on poaching and trafficking of high-value commodities such as elephant ivory and rhino horn, while data on poaching for subsistence are less rigorous and often anecdotal. Much of the evidence available for both types of poaching is not systematic and comes from news media reports, and suffers from inherent difficulties of collecting data on illegal activities. Data collection during the pandemic has also been hampered by the challenges of working safely during the pandemic, funding for monitoring and research has been reduced in most areas, and some reporting processes have not yet analysed data collected during 2021.

Global migration has been increasing since the 1990s. People are forced to leave their homes in search of safety, a better livelihood, or for more economic opportunities. Environmental drivers of migration, such as land degradation, water pollution, or changing climate, are acting as stronger phenomena with time. As millions of people are exposed to multiple water crises, daily needs related to water quality, lack of provisioning, excess or shortage of water become vital for survival as well for livelihood support. In turn, the crisis can transform into conflict and act as a trigger for migration, both voluntary and forced, depending on the conditions. Current interventions related to migration, including funding to manage migration remain focused on response mechanisms, whereas an understanding of drivers or so-called ‘push factors’ of migration is limited. Accurate and well-documented evidence, as well as quantitative information on these phenomena, are either missing or under-reflected in the literature and policy discourse. The report aims to start unpacking relationships between water and migration. The data used in this Report are collected from available public sources and reviewed in the context of water and climate. A three-dimensional (3D) framework is outlined for water-related migration assessment. The framework may be useful to aggerate water-related causes and consequences of migration and interpret them in various socioecological, socioeconomic, and sociopolitical settings. A case study approach is adopted to illustrate the various applications of the framework to dynamics of migration in various geographic and hydrological scenarios. The case studies reflect on well-known examples of environmental and water degradation, but with a focus on displacement /migration and socioeconomic challenges that apply. The relevance of proxy measures such as the Global Conflict Risk Index, which helps quantify water and migration interconnections, is discussed in relation to geographic, political, environmental, and economic parameters. The narratives presented in the Report also point to the existing governance mechanisms on migration, stating that they are fragmented. The report examines global agreements, institutions, and policies on migration to provide an aggerated outlook as to how international and inter-agency cooperation agreements and policies either reflected or are missing on water and climate crises as direct or indirect triggers to migration. Concerning this, the new directives related to migration governance, i.e., the New York Declaration and the Global Compact for Migration, are discussed. The Report recommends an enhanced focus on migration as an adaptation strategy to maximize the interconnectedness with the Sustainable Development Goals (SDGs). It calls for the migration discourse to look beyond from a preventative and problematic approach to a perspective emphasizing migration as a contributor towards achieving sustainable development, particularly SDGs 5, 6, 13, and 16 that aim strengthening capacities related to water, gender, climate, and institutions. Overall, the synthesis offers a global overview of water and migration for researchers and professionals engaged in migration-related work. For international agencies and government organizations and policymakers dealing with the assessment of and response to migration, the report aims to support the work on migration assessment and the implementation of the SDGs. The Report may serve as a public good towards understanding the drivers, impacts, and challenges of migration, for designing long-term solutions and for advancing migration management capabilities through improved knowledge and a pitch for consensus-building.

1.1 Macroeconomic summary Economic recovery has consistently outperformed the technical staff’s expectations following a steep decline in activity in the second quarter of 2020. At the same time, total and core inflation rates have fallen and remain at low levels, suggesting that a significant element of the reactivation of Colombia’s economy has been related to recovery in potential GDP. This would support the technical staff’s diagnosis of weak aggregate demand and ample excess capacity. The most recently available data on 2020 growth suggests a contraction in economic activity of 6.8%, lower than estimates from January’s Monetary Policy Report (-7.2%). High-frequency indicators suggest that economic performance was significantly more dynamic than expected in January, despite mobility restrictions and quarantine measures. This has also come amid declines in total and core inflation, the latter of which was below January projections if controlling for certain relative price changes. This suggests that the unexpected strength of recent growth contains elements of demand, and that excess capacity, while significant, could be lower than previously estimated. Nevertheless, uncertainty over the measurement of excess capacity continues to be unusually high and marked both by variations in the way different economic sectors and spending components have been affected by the pandemic, and by uneven price behavior. The size of excess capacity, and in particular the evolution of the pandemic in forthcoming quarters, constitute substantial risks to the macroeconomic forecast presented in this report. Despite the unexpected strength of the recovery, the technical staff continues to project ample excess capacity that is expected to remain on the forecast horizon, alongside core inflation that will likely remain below the target. Domestic demand remains below 2019 levels amid unusually significant uncertainty over the size of excess capacity in the economy. High national unemployment (14.6% for February 2021) reflects a loose labor market, while observed total and core inflation continue to be below 2%. Inflationary pressures from the exchange rate are expected to continue to be low, with relatively little pass-through on inflation. This would be compatible with a negative output gap. Excess productive capacity and the expectation of core inflation below the 3% target on the forecast horizon provide a basis for an expansive monetary policy posture. The technical staff’s assessment of certain shocks and their expected effects on the economy, as well as the presence of several sources of uncertainty and related assumptions about their potential macroeconomic impacts, remain a feature of this report. The coronavirus pandemic, in particular, continues to affect the public health environment, and the reopening of Colombia’s economy remains incomplete. The technical staff’s assessment is that the COVID-19 shock has affected both aggregate demand and supply, but that the impact on demand has been deeper and more persistent. Given this persistence, the central forecast accounts for a gradual tightening of the output gap in the absence of new waves of contagion, and as vaccination campaigns progress. The central forecast continues to include an expected increase of total and core inflation rates in the second quarter of 2021, alongside the lapse of the temporary price relief measures put in place in 2020. Additional COVID-19 outbreaks (of uncertain duration and intensity) represent a significant risk factor that could affect these projections. Additionally, the forecast continues to include an upward trend in sovereign risk premiums, reflected by higher levels of public debt that in the wake of the pandemic are likely to persist on the forecast horizon, even in the context of a fiscal adjustment. At the same time, the projection accounts for the shortterm effects on private domestic demand from a fiscal adjustment along the lines of the one currently being proposed by the national government. This would be compatible with a gradual recovery of private domestic demand in 2022. The size and characteristics of the fiscal adjustment that is ultimately implemented, as well as the corresponding market response, represent another source of forecast uncertainty. Newly available information offers evidence of the potential for significant changes to the macroeconomic scenario, though without altering the general diagnosis described above. The most recent data on inflation, growth, fiscal policy, and international financial conditions suggests a more dynamic economy than previously expected. However, a third wave of the pandemic has delayed the re-opening of Colombia’s economy and brought with it a deceleration in economic activity. Detailed descriptions of these considerations and subsequent changes to the macroeconomic forecast are presented below. The expected annual decline in GDP (-0.3%) in the first quarter of 2021 appears to have been less pronounced than projected in January (-4.8%). Partial closures in January to address a second wave of COVID-19 appear to have had a less significant negative impact on the economy than previously estimated. This is reflected in figures related to mobility, energy demand, industry and retail sales, foreign trade, commercial transactions from selected banks, and the national statistics agency’s (DANE) economic tracking indicator (ISE). Output is now expected to have declined annually in the first quarter by 0.3%. Private consumption likely continued to recover, registering levels somewhat above those from the previous year, while public consumption likely increased significantly. While a recovery in investment in both housing and in other buildings and structures is expected, overall investment levels in this case likely continued to be low, and gross fixed capital formation is expected to continue to show significant annual declines. Imports likely recovered to again outpace exports, though both are expected to register significant annual declines. Economic activity that outpaced projections, an increase in oil prices and other export products, and an expected increase in public spending this year account for the upward revision to the 2021 growth forecast (from 4.6% with a range between 2% and 6% in January, to 6.0% with a range between 3% and 7% in April). As a result, the output gap is expected to be smaller and to tighten more rapidly than projected in the previous report, though it is still expected to remain in negative territory on the forecast horizon. Wide forecast intervals reflect the fact that the future evolution of the COVID-19 pandemic remains a significant source of uncertainty on these projections. The delay in the recovery of economic activity as a result of the resurgence of COVID-19 in the first quarter appears to have been less significant than projected in the January report. The central forecast scenario expects this improved performance to continue in 2021 alongside increased consumer and business confidence. Low real interest rates and an active credit supply would also support this dynamic, and the overall conditions would be expected to spur a recovery in consumption and investment. Increased growth in public spending and public works based on the national government’s spending plan (Plan Financiero del Gobierno) are other factors to consider. Additionally, an expected recovery in global demand and higher projected prices for oil and coffee would further contribute to improved external revenues and would favor investment, in particular in the oil sector. Given the above, the technical staff’s 2021 growth forecast has been revised upward from 4.6% in January (range from 2% to 6%) to 6.0% in April (range from 3% to 7%). These projections account for the potential for the third wave of COVID-19 to have a larger and more persistent effect on the economy than the previous wave, while also supposing that there will not be any additional significant waves of the pandemic and that mobility restrictions will be relaxed as a result. Economic growth in 2022 is expected to be 3%, with a range between 1% and 5%. This figure would be lower than projected in the January report (3.6% with a range between 2% and 6%), due to a higher base of comparison given the upward revision to expected GDP in 2021. This forecast also takes into account the likely effects on private demand of a fiscal adjustment of the size currently being proposed by the national government, and which would come into effect in 2022. Excess in productive capacity is now expected to be lower than estimated in January but continues to be significant and affected by high levels of uncertainty, as reflected in the wide forecast intervals. The possibility of new waves of the virus (of uncertain intensity and duration) represents a significant downward risk to projected GDP growth, and is signaled by the lower limits of the ranges provided in this report. Inflation (1.51%) and inflation excluding food and regulated items (0.94%) declined in March compared to December, continuing below the 3% target. The decline in inflation in this period was below projections, explained in large part by unanticipated increases in the costs of certain foods (3.92%) and regulated items (1.52%). An increase in international food and shipping prices, increased foreign demand for beef, and specific upward pressures on perishable food supplies appear to explain a lower-than-expected deceleration in the consumer price index (CPI) for foods. An unexpected increase in regulated items prices came amid unanticipated increases in international fuel prices, on some utilities rates, and for regulated education prices. The decline in annual inflation excluding food and regulated items between December and March was in line with projections from January, though this included downward pressure from a significant reduction in telecommunications rates due to the imminent entry of a new operator. When controlling for the effects of this relative price change, inflation excluding food and regulated items exceeds levels forecast in the previous report. Within this indicator of core inflation, the CPI for goods (1.05%) accelerated due to a reversion of the effects of the VAT-free day in November, which was largely accounted for in February, and possibly by the transmission of a recent depreciation of the peso on domestic prices for certain items (electric and household appliances). For their part, services prices decelerated and showed the lowest rate of annual growth (0.89%) among the large consumer baskets in the CPI. Within the services basket, the annual change in rental prices continued to decline, while those services that continue to experience the most significant restrictions on returning to normal operations (tourism, cinemas, nightlife, etc.) continued to register significant price declines. As previously mentioned, telephone rates also fell significantly due to increased competition in the market. Total inflation is expected to continue to be affected by ample excesses in productive capacity for the remainder of 2021 and 2022, though less so than projected in January. As a result, convergence to the inflation target is now expected to be somewhat faster than estimated in the previous report, assuming the absence of significant additional outbreaks of COVID-19. The technical staff’s year-end inflation projections for 2021 and 2022 have increased, suggesting figures around 3% due largely to variation in food and regulated items prices. The projection for inflation excluding food and regulated items also increased, but remains below 3%. Price relief measures on indirect taxes implemented in 2020 are expected to lapse in the second quarter of 2021, generating a one-off effect on prices and temporarily affecting inflation excluding food and regulated items. However, indexation to low levels of past inflation, weak demand, and ample excess productive capacity are expected to keep core inflation below the target, near 2.3% at the end of 2021 (previously 2.1%). The reversion in 2021 of the effects of some price relief measures on utility rates from 2020 should lead to an increase in the CPI for regulated items in the second half of this year. Annual price changes are now expected to be higher than estimated in the January report due to an increased expected path for fuel prices and unanticipated increases in regulated education prices. The projection for the CPI for foods has increased compared to the previous report, taking into account certain factors that were not anticipated in January (a less favorable agricultural cycle, increased pressure from international prices, and transport costs). Given the above, year-end annual inflation for 2021 and 2022 is now expected to be 3% and 2.8%, respectively, which would be above projections from January (2.3% and 2,7%). For its part, expected inflation based on analyst surveys suggests year-end inflation in 2021 and 2022 of 2.8% and 3.1%, respectively. There remains significant uncertainty surrounding the inflation forecasts included in this report due to several factors: 1) the evolution of the pandemic; 2) the difficulty in evaluating the size and persistence of excess productive capacity; 3) the timing and manner in which price relief measures will lapse; and 4) the future behavior of food prices. Projected 2021 growth in foreign demand (4.4% to 5.2%) and the supposed average oil price (USD 53 to USD 61 per Brent benchmark barrel) were both revised upward. An increase in long-term international interest rates has been reflected in a depreciation of the peso and could result in relatively tighter external financial conditions for emerging market economies, including Colombia. Average growth among Colombia’s trade partners was greater than expected in the fourth quarter of 2020. This, together with a sizable fiscal stimulus approved in the United States and the onset of a massive global vaccination campaign, largely explains the projected increase in foreign demand growth in 2021. The resilience of the goods market in the face of global crisis and an expected normalization in international trade are additional factors. These considerations and the expected continuation of a gradual reduction of mobility restrictions abroad suggest that Colombia’s trade partners could grow on average by 5.2% in 2021 and around 3.4% in 2022. The improved prospects for global economic growth have led to an increase in current and expected oil prices. Production interruptions due to a heavy winter, reduced inventories, and increased supply restrictions instituted by producing countries have also contributed to the increase. Meanwhile, market forecasts and recent Federal Reserve pronouncements suggest that the benchmark interest rate in the U.S. will remain stable for the next two years. Nevertheless, a significant increase in public spending in the country has fostered expectations for greater growth and inflation, as well as increased uncertainty over the moment in which a normalization of monetary policy might begin. This has been reflected in an increase in long-term interest rates. In this context, emerging market economies in the region, including Colombia, have registered increases in sovereign risk premiums and long-term domestic interest rates, and a depreciation of local currencies against the dollar. Recent outbreaks of COVID-19 in several of these economies; limits on vaccine supply and the slow pace of immunization campaigns in some countries; a significant increase in public debt; and tensions between the United States and China, among other factors, all add to a high level of uncertainty surrounding interest rate spreads, external financing conditions, and the future performance of risk premiums. The impact that this environment could have on the exchange rate and on domestic financing conditions represent risks to the macroeconomic and monetary policy forecasts. Domestic financial conditions continue to favor recovery in economic activity. The transmission of reductions to the policy interest rate on credit rates has been significant. The banking portfolio continues to recover amid circumstances that have affected both the supply and demand for loans, and in which some credit risks have materialized. Preferential and ordinary commercial interest rates have fallen to a similar degree as the benchmark interest rate. As is generally the case, this transmission has come at a slower pace for consumer credit rates, and has been further delayed in the case of mortgage rates. Commercial credit levels stabilized above pre-pandemic levels in March, following an increase resulting from significant liquidity requirements for businesses in the second quarter of 2020. The consumer credit portfolio continued to recover and has now surpassed February 2020 levels, though overall growth in the portfolio remains low. At the same time, portfolio projections and default indicators have increased, and credit establishment earnings have come down. Despite this, credit disbursements continue to recover and solvency indicators remain well above regulatory minimums. 1.2 Monetary policy decision In its meetings in March and April the BDBR left the benchmark interest rate unchanged at 1.75%.

The notion of making data ‘open by default’ challenges the deep rooted cultures of national privacy as it calls for data to be treated as a public resource. South Africa embarked on several initiatives to endorse open data, especially government data in order to promote transparency, empower citizens, fight corruption, and harness new technologies to strengthen governance. However, the progress has been very marginal. In light of this, the Academy of Science of South Africa (ASSAf), supported by the Department of Science and Technology (DST) brought together representatives from government, academia and the private sector to look at how open data-driven solutions can create economic and social value, improve service delivery in public services, support more transparent and accountable governments and foster innovation to transform citizens’ well-being, cities, and governments for good. The discussions unveiled that laws on open data need to move parallel to the progress and developments made in open data. It was noted that scientists, governments and policy makers need to approach open data realistically and acknowledge where we are as a country, were we want to go and how to get there. This approach to open data can potentially create economic and social value, improve service delivery in public services, support more transparent and accountable governments and foster innovation to transform citizens’ well-being. The outcome of the discussions aimed to contribute to and advance policy-relevant knowledge, provide a platform for the dissemination of evidence-based knowledge to inform and influence decision-making and identify policy gaps and suggest new research agendas.

Banco de la República provides a comprehensive overview of Colombia’s finan¬cial infrastructure in its Payment Systems Report, which is an important product of the work it does to oversee that infrastructure. The figures published in this edition of the report are for the year 2020, a pandemic period in which the con¬tainment measures designed and adopted to alleviate the strain on the health system led to a sharp reduction in economic activity and consumption in Colom¬bia, as was the case in most countries. At the start of the pandemic, the Board of Directors of Banco de la República adopted decisions that were necessary to supply the market with ample liquid¬ity in pesos and US dollars to guarantee market stability, protect the payment system and preserve the supply of credit. The pronounced growth in mone¬tary aggregates reflected an increased preference for liquidity, which Banco de la República addressed at the right time. These decisions were implemented through operations that were cleared and settled via the financial infrastructure. The second section of this report, following the introduction, offers an analysis of how the various financial infrastructures in Colombia have evolved and per¬formed. One of the highlights is the large-value payment system (CUD), which registered more momentum in 2020 than during the previous year, mainly be¬cause of an increase in average daily remunerated deposits made with Banco de la República by the General Directorate of Public Credit and the National Treasury (DGCPTN), as well as more activity in the sell/buy-back market with sovereign debt. Consequently, with more activity in the CUD, the Central Securi¬ties Depository (DCV) experienced an added impetus sparked by an increase in the money market for bonds and securities placed on the primary market by the national government. The value of operations cleared and settled through the Colombian Central Counterparty (CRCC) continues to grow, propelled largely by peso/dollar non-deliverable forward (NDF) contracts. With respect to the CRCC, it is important to note this clearing house has been in charge of managing risks and clearing and settling operations in the peso/dollar spot market since the end of last year, following its merger with the Foreign Exchange Clearing House of Colombia (CCDC). Since the final quarter of 2020, the CRCC has also been re¬sponsible for clearing and settlement in the equities market, which was former¬ly done by the Colombian Stock Exchange (BVC). The third section of this report provides an all-inclusive view of payments in the market for goods and services; namely, transactions carried out by members of the public and non-financial institutions. During the pandemic, inter- and intra-bank electronic funds transfers, which originate mostly with companies, increased in both the number and value of transactions with respect to 2019. However, debit and credit card payments, which are made largely by private citizens, declined compared to 2019. The incidence of payment by check contin¬ue to drop, exhibiting quite a pronounced downward trend during the past last year. To supplement to the information on electronic funds transfers, section three includes a segment (Box 4) characterizing the population with savings and checking accounts, based on data from a survey by Banco de la República con-cerning the perception of the use of payment instruments in 2019. There also is segment (Box 2) on the growth in transactions with a mobile wallet provided by a company specialized in electronic deposits and payments (Sedpe). It shows the number of users and the value of their transactions have increased since the wallet was introduced in late 2017, particularly during the pandemic. In addition, there is a diagnosis of the effects of the pandemic on the payment patterns of the population, based on data related to the use of cash in circu¬lation, payments with electronic instruments, and consumption and consumer confidence. The conclusion is that the collapse in the consumer confidence in¬dex and the drop in private consumption led to changes in the public’s pay¬ment patterns. Credit and debit card purchases were down, while payments for goods and services through electronic funds transfers increased. These findings, coupled with the considerable increase in cash in circulation, might indicate a possible precautionary cash hoarding by individuals and more use of cash as a payment instrument. There is also a segment (in Focus 3) on the major changes introduced in regulations on the retail-value payment system in Colombia, as provided for in Decree 1692 of December 2020. The fourth section of this report refers to the important innovations and tech¬nological changes that have occurred in the retail-value payment system. Four themes are highlighted in this respect. The first is a key point in building the financial infrastructure for instant payments. It involves of the design and im¬plementation of overlay schemes, a technological development that allows the various participants in the payment chain to communicate openly. The result is a high degree of interoperability among the different payment service providers. The second topic explores developments in the international debate on central bank digital currency (CBDC). The purpose is to understand how it could impact the retail-value payment system and the use of cash if it were to be issued. The third topic is related to new forms of payment initiation, such as QR codes, bio¬metrics or near field communication (NFC) technology. These seemingly small changes can have a major impact on the user’s experience with the retail-value payment system. The fourth theme is the growth in payments via mobile tele¬phone and the internet. The report ends in section five with a review of two papers on applied research done at Banco de la República in 2020. The first analyzes the extent of the CRCC’s capital, acknowledging the relevant role this infrastructure has acquired in pro¬viding clearing and settlement services for various financial markets in Colom¬bia. The capital requirements defined for central counterparties in some jurisdic¬tions are explored, and the risks to be hedged are identified from the standpoint of the service these type of institutions offer to the market and those associated with their corporate activity. The CRCC’s capital levels are analyzed in light of what has been observed in the European Union’s regulations, and the conclusion is that the CRCC has a scheme of security rings very similar to those applied internationally and the extent of its capital exceeds what is stipulated in Colombian regulations, being sufficient to hedge other risks. The second study presents an algorithm used to identify and quantify the liquidity sources that CUD’s participants use under normal conditions to meet their daily obligations in the local financial market. This algorithm can be used as a tool to monitor intraday liquidity. Leonardo Villar Gómez Governor