22 Aug 2015
by Jim Rose
in applied price theory, applied welfare economics, economics of bureaucracy, economics of regulation, financial economics, income redistribution, industrial organisation, politics - Australia, politics - New Zealand, politics - USA, Public Choice, rentseeking, survivor principle
Tags: Australia, billionaires, Russia, top 0.1%, top 1%
…Bagchi and Svejnar carefully went through the lists of all the Forbes billionaires, and divided them into those who had acquired their wealth due to political connections, and those who had not. This is kind of a slippery slope — almost all billionaires have probably benefited from government connections at one time or another.
But the researchers used a very conservative standard for classifying people as politically connected, only assigning billionaires to this group when it was clear that their wealth was a product of government connections. Just benefiting from a government that was pro-business, like those in Singapore and Hong Kong, wasn’t enough.
Rather, the researchers were looking for a situation like Indonesia under Suharto, where political connections were usually needed to secure import licenses, or Russia in the mid-1990s, when some state employees made fortunes overnight as the state privatized assets.
…The negative effects of wealth inequality are largely being driven by politically connected wealth inequality. That seems to be the primary channel that drives this relationship…
a 3.72 percent increase in the level of wealth inequality would cost a country about half a percent of real GDP per capita growth. That’s a big impact, given that average GDP growth is in the neighbourhood of two percent per year
05 Jul 2015
by Jim Rose
in applied price theory, applied welfare economics, comparative institutional analysis, economics of regulation, entrepreneurship, industrial organisation, international economics, law and economics, property rights, survivor principle
Tags: doing business, Eurosclerosis, Italy, rule of law, Russia, transitional economies
Figure 1: Doing Business rankings, Russia and Italy, 2014
Source: World Bank Doing Business 2015.
It is rather disturbing that it is a lot easier to register property and enforce contracts in Russia than in Italy and far harder to pay your taxes in Italy. Once again, Italy’s saving grace is the ability to trade across borders Because of its membership of the European Union.
05 Jul 2015
by Jim Rose
in applied price theory, applied welfare economics, comparative institutional analysis, constitutional political economy, development economics, economics of crime, economics of regulation, growth disasters, industrial organisation, law and economics, property rights
Tags: capitalism and freedom, Greece, rule of law, Russia
Figure 1: Index of Economic Freedom rankings for legal systems and property rights, Greece, Russia and USA, 2012
Source: Economic Freedom of the World – Annual Report 2014 | www.freetheworld.com.
Overall, there are not that many differences between Greece and Russia in the quality of their legal systems and property rights. Don’t go to the police in Russia and good luck trying to enforce contracts in Greece.
29 Jun 2015
by Jim Rose
in economics of bureaucracy, economics of crime, economics of regulation, industrial organisation, labour economics, law and economics, property rights, Public Choice, rentseeking
Tags: cost of doing business, Euroland, Greece, Russia, sovereign defaults, transitional economies, World Bank
Figure 1: Greek and Russian Doing Business sub-rankings, 2015
Source: World Bank Doing Business 2015.
As long as you’re not in a construction or export business, and don’t mind waiting for your electricity, it’s better to do business in Russia than in Greece! The main difference between Russia and Greece is its membership of the European Union makes it easy to export?
In Russia, it’s easier to start a business, register property and enforce contracts than it is in Greece!
03 Jun 2015
by Jim Rose
in comparative institutional analysis, constitutional political economy, development economics, economics of bureaucracy, growth disasters, growth miracles, Marxist economics, Public Choice, rentseeking
Tags: collapse of communism, economics of socialism, economics of transition, former USSR, Russia
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