Search

Begin New Search Political Geography Global Focus Publishing Institution The Cato Institute Publication Year within 25 Years Publication Year within 3 Years Publication Year within 5 Years

1. The Political Economy of Anti‐​bribery Enforcement

Author:
Lauren Cohen and Bo Li
Publication Date:
02-2023
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
A level playing field for firm competition is a fundamental requirement for any market to maximize its potential and achieve productive efficiency. When government favors a set of firms or individuals over others, distortions arise that reverberate throughout entire industries, affecting sales, production, innovation, and more. This is not to say that barriers to firms may not sometimes naturally arise, but if a finger is placed on the scale by government to allow certain firms to gain some unerodable advantage, this can have large implications on allocation and overall economic development.
Topic:
Corruption, Political Economy, Law Enforcement, Accountability, and Bribery
Political Geography:
Global Focus

2. Disease Mix and How Economic Freedom Matters for Health Outcomes

Author:
Vincent Geloso, Kelly Hyde, and Ilia Murtazashvili
Publication Date:
03-2023
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
We investigate the institutional foundations of public health. We argue that a key distinction in analysis of disease is between diseases of commerce (diseases associated with movement of people and with affluence) and diseases of poverty (primarily noncommunicable diseases that depend on wealth and income). We show that the mix of disease – the ratio of communicable diseases and those associated with longevity to diseases of poverty – increases in economically free countries. We argue that increasing burdens of diseases of commerce reflects the quality of institutions, as those diseases are better than living shorter, brutish lives where diseases of poverty claim many lives. This analysis also highlights an institutional trade‐​off: economically free institutions reduce certain types of disease while contributing to others.
Topic:
Health, Infectious Diseases, Economy, Institutions, and Public Health
Political Geography:
Global Focus

3. The Impact of Regulation on Innovation

Author:
Philippe Aghion, Antonin Bergeaud, and John Van Reenen
Publication Date:
04-2023
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
There is considerable research on the economic impacts of regulations but relatively few studies about their impact on technological innovation. Moreover, most analyses focus on the costs and benefits of regulation at a point in time, rather than on its effects over time. Yet potential effects on economic growth are likely to be much more pronounced in the long run. Many scholars have been concerned that slower growth in countries with heavy labor regulations could be due to firms’ reluctance to innovate given the burden of red tape. For example, the slower growth of Southern European countries and parts of Latin America have often been blamed on onerous labor laws.
Topic:
Labor Issues, Regulation, Economic Growth, and Innovation
Political Geography:
Global Focus

4. The Future of the WTO: Multilateral or Plurilateral?

Author:
James Bacchus
Publication Date:
05-2023
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
Since its 1947 inception as the General Agreement on Tariffs and Trade, the World Trade Organization (WTO) has generally practiced an all‐​or‐​nothing approach to multilateral negotiations in which the consensus of all WTO members was for trade liberalization. Although this approach worked throughout the second half of the 20th century, its shortcomings were laid bare by the failure of the Doha Development Agenda and the inability of WTO members to achieve further broad, multilateral trade liberalization. Today, amid heightened animosity toward additional trade liberalization, prospects for the traditional consensus‐​based approach seem dimmer than ever.
Topic:
Treaties and Agreements, World Trade Organization, Multilateralism, and Trade
Political Geography:
Global Focus

5. Global Inequality in Well‐​Being Has Decreased across Many Dimensions: Introducing the Inequality of Human Progress Index

Author:
Chelsea Follett and Vincent Geloso
Publication Date:
06-2023
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
The world has seen dramatic, global human progress across a broad range of indicators in recent decades, but have those gains been widely shared? The Inequality of Human Progress Index (IHPI) measures relative gaps in global development. It surveys international inequality across a greater number of dimensions than any prior index. By analyzing inequality in a multidimensional way, the IHPI takes inequality more seriously than those indexes that focus on income inequality alone. The IHPI considers material well‐​being and seven additional metrics: lifespan, infant mortality, adequate nutrition, environmental safety, access to opportunity (as measured by education), access to information (as measured by internet access), and political freedom. Across all but two of those dimensions, the world has become more equal since 1990. Globalization and market liberalization over the past few decades have not only raised absolute living standards but also reduced overall inequality.
Topic:
Development, Inequality, Economy, and Well-Being
Political Geography:
Global Focus

6. Skilled Immigration, Task Allocation, and the Innovation of Firms

Author:
Anna Maria Mayda, Gianluca Orefice, and Gianluca Santoni
Publication Date:
06-2023
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
Immigration continues to be a hotly debated topic in several destination countries. Policy and academic discussions have focused on different types of immigration, depending on the host country. While research is voluminous on the United States and countries with skill‐​points‐​based immigration systems, the discussion in Europe has mostly centered on lesser‐​skilled migrants and political refugees, as they represent the largest proportion of arrivals. However, Europe has been receiving skilled migrants in increasing numbers. For example, in France, the share of college‐​educated immigrants is 23 percent— lower than in the United States, Canada, or the UK—but it increased by 11 percentage points between 1995 and 2010.
Topic:
Immigration, Economy, Innovation, and Skills
Political Geography:
Global Focus

7. Self‐​Service Bans and Gasoline Prices: The Effect of Allowing Consumers to Pump Their Own Gas

Author:
Vitor Melo
Publication Date:
01-2023
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
Billions of people live in countries that ban self‐​service fueling at gasoline stations, including some of the world’s largest countries by population, including China, India, and Brazil, among many others. The impact of these bans is largely understudied despite their prevalence presumably because this policy is often implemented at the national level and because there have been no policy changes in these countries that allow for an assessment of these bans on gasoline prices.
Topic:
Gas, Regulation, Economy, and Consumer Behavior
Political Geography:
North America, Global Focus, and United States of America

8. Real Effects of Climate Policy: Financial Constraints and Spillovers

Author:
Söhnke M. Bartram
Publication Date:
04-2022
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
Climate change is among the most intensely debated socioeconomic issues of current times. As a response to potential catastrophic risks from climate change, governments around the world are pushing for various regulations to curb greenhouse gas emissions. However, there is far from a consensus on optimal policy approaches, and as a result, climate policies are highly fragmented across the jurisdictions in which they are designed and implemented. More importantly, it is unknown whether such localized yet uncoordinated policies are able to internalize potential externalities that may impede efforts to address climate change as a global phenomenon or simply distort allocations in the economy. For example, at the beginning of 2013, California became the first and only state to put a comprehensive mandatory carbon regulation in place in the form of a cap‐​and‐​trade system that applies universally to all industrial greenhouse gas emissions. Exploiting the introduction of the California cap‐​and‐​trade rule, we investigate the internal resource‐​allocation responses by firms and the real but unintended spillover effects of localized climate policies that arise from the importance of financial constraints. Our study analyzes the interplay between climate policy and firm behavior, and it informs policymakers regarding the effectiveness of climate regulation.
Topic:
Climate Change, Regulation, Economy, Business, and Carbon Emissions
Political Geography:
Global Focus

9. Slippery Fish: Enforcing Regulation under Subversive Adaptation

Author:
Andres Gonzalez-Lira
Publication Date:
04-2022
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
Correcting market failures and improving economic efficiency often require curbing undesirable behaviors of market agents who act to maximize their private benefits. Examples include actions that affect ecosystems, such as deforestation, pollution, and overexploitation of natural resources; actions that affect community health, such as drunk driving and open defecation; or actions that undermine government performance, such as corruption and tax evasion. Enacting and enforcing regulations is the most direct strategy to deter such behaviors. Implementing this strategy requires strong institutions to enforce laws, plus sophisticated policing to track agents’ reactions to enforcement so that rules are robust enough to curb the undesirable behavior even when regulated agents try to game the new system.
Topic:
Environment, Government, Markets, Regulation, and Adaptation
Political Geography:
Global Focus

10. The Welfare Effects of Time Reallocation: Evidence from Daylight Saving Time

Author:
Joan Costa-i-Font, Sarah Fleche, and Ricardo Pagan
Publication Date:
07-2022
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
More than 70 countries around the world currently observe daylight saving time (DST) to reduce energy demand. However, recent studies have shown that DST does not save energy and may actually increase electricity consumption. Furthermore, opponents of DST argue that even a one‐​hour time change can have long‐​term consequences for individuals. DST transition has been linked to increased risks of car accidents, heart attacks, and depressive symptoms in studies. According to our findings, the spring DST transition has a negative impact on individuals’ welfare, specifically a decrease in life satisfaction. Investigating a broad range of outcomes, we show that this decline in life satisfaction can be explained by a decrease in sleep following the transition and an increase in time pressure, which significantly affect individuals’ physical and emotional health in subsequent days.
Topic:
Economic Policy, Time, Well-Being, and Daylight Saving Time
Political Geography:
Global Focus

11. Jawboning against Speech: How Government Bullying Shapes the Rules of Social Media

Author:
Will Duffield
Publication Date:
09-2022
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
Over the past two decades, social media has drastically reduced the cost of speaking, allowing users the world over to publish with the push of a button. This amazing capability is limited by the fact that speakers do not own the platforms they increasingly rely on. If access to the platforms is withdrawn, speakers lose the reach that social media grants. In America, government censorship is limited by the First Amendment. Nevertheless, seizing upon the relationship between platforms and speakers, government officials increasingly demand that platforms refrain from publishing disfavored speech. They threaten platforms with punitive legislation, antitrust investigations, and prosecution. Government officials can use informal pressure — bullying, threatening, and cajoling — to sway the decisions of private platforms and limit the publication of disfavored speech. The use of this informal pressure, known as jawboning, is growing. Left unchecked, it threatens to become normalized as an extraconstitutional method of speech regulation. While courts have censured jawboning in other contexts, existing judicial remedies struggle to address social media jawboning. Amid the opacity and scale of social media moderation, government influence is difficult to detect or prevent. Ultimately, congressional rulemaking and the people’s selection of liberal, temperate officials remain the only reliable checks on this novel threat to free speech.
Topic:
Government, Regulation, Social Media, Censorship, and Free Speech
Political Geography:
Global Focus and United States of America

12. The Black Hole of National Security: Striking the Right Balance for the National Security Exception in International Trade

Author:
James Bacchus
Publication Date:
11-2022
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
Article XXI of the General Agreement on Tariffs and Trade (GATT) reserves for members of the World Trade Organization (WTO) the legal authority to restrict trade in goods to protect members’ “essential” security interests. Similar exceptions to WTO trade obligations exist in other WTO agreements. For more than seven decades, WTO members exercised self‐​restraint in invoking these exceptions, doing so only for narrow purposes and in truly exceptional circumstances to avoid pushing the boundaries of the law too far and thereby upending the delicate balance between members’ legitimate pursuit of their security interests and their obligations to reduce barriers to trade. Yet, trade restrictions justified on national security grounds have proliferated in recent years and are increasingly subject to litigation in WTO dispute settlement. As a result, the national security provisions contained within the WTO agreements, as well as fundamental questions about the nexus between trade and national security, are set to be tested and clarified by WTO jurists—a less than ideal outcome that could lead to the further undermining of WTO dispute settlement and the rules‐​based international trading system more broadly. This paper explains the origins of the national security exceptions in the GATT and the WTO agreements and the history of their invocation, summarizes recent litigation that has clarified these exceptions, discusses current developments and upcoming litigation that could prove pivotal to our understanding of the trade‐​security nexus and the future of the world trading system, and offers some concluding thoughts on the options available to WTO members for striking a balance between trade liberalization and the defense of national security.
Topic:
International Trade and Finance, National Security, World Trade Organization, and Tariffs
Political Geography:
Global Focus

13. Practical Legislation to Support Cryptocurrency Innovation

Author:
Jack Solowey and Jennifer J. Schulp
Publication Date:
08-2022
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
In bull and bear cycles alike, cryptocurrencies have commanded the attention of markets and policymakers. The 117th Congress has introduced dozens of bills addressing the crypto ecosystem.1 In addition, multiple regulators have been outspoken about their readiness to be the “cop on the beat” when it comes to overseeing crypto markets.2 Nonetheless, key questions remain about how best to regulate the crypto ecosystem and the extent to which current laws and regulations apply. This briefing paper proposes a cryptocurrency regulatory framework with the goals of dispelling uncertainty, unencumbering entrepreneurship, and providing practical consumer protections.3 The framework recognizes the unique risks and benefits of cryptocurrencies, proposing a clear‐​cut test for whether crypto projects trigger securities laws and a common‐​sense registration and disclosure option for those that do.
Topic:
Entrepreneurship, Legislation, Innovation, and Cryptocurrencies
Political Geography:
Global Focus

14. The Economic Impact of Tax Changes, 1920–1939

Author:
Alan Reynolds
Publication Date:
01-2021
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
Estimates of the elasticity of taxable income (ETI) investigate how high‐​income taxpayers faced with changes in marginal tax rates respond in ways that reduce expected revenue from higher tax rates, or raise more than expected from lower tax rates. Diamond and Saez (2011) pioneered the use of a statistical formula, which Saez developed, to convert an ETI estimate into a revenue‐​maximizing (“socially optimal”) top tax rate. For the United States, they found that the optimal top rate was about 73 percent when combining the marginal tax rates on income, payrolls, and sales at the federal, state, and local levels. A related paper by Piketty, Saez, and Stantcheva (2014) concluded that, at the highest income levels, the ETI was so small that comparable top tax rates as high as 83 percent could maximize short‐​term revenues, supposedly without suppressing long‐​term economic growth. Such studies could be viewed as part of a larger effort to minimize any efficiency costs of distortive taxation while maximizing assumed revenue gains and redistributive benefits.
Topic:
Economics, History, Tax Systems, and High-Income People
Political Geography:
North America, Global Focus, and United States of America

15. Impact of Institutions in the Aftermath of Natural Disasters

Author:
Diego A. Diaz and Cristian Larroulet
Publication Date:
01-2021
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
The number and impact of natural disasters are increasing because of climate change and more people living in urban areas (Sanderson and Sharma 2016). The mechanism is simple, at least when considering climatic events: higher temperatures lead to higher rates of water evaporation, which increases the chance of flooding events (Wallace et al. 2014; IPCC 2001). The number of hot days has increased and the number of cold days has decreased in land areas, with model projections indicating that extreme precipitation events will continue to increase, resulting in more floods and landslides. At the same time, mid‐​continental areas will get dryer, which will increase the chance of droughts and wildfires (Van Aalst 2006). The course of action taken by humanity in the next decades will likely play a pivotal role since extreme differences in projections are expected if global temperatures rise 2°C in comparison to 1.5 °C above preindustrial levels (Allen et al. 2019). What are the economic impacts of natural disasters? This question has been addressed to a large extent in the literature, but it still does not have a conclusive response. The seemingly natural reasoning that destruction cannot lead to a net benefit for society was explained almost two centuries ago by Bastiat (1850) in his famous broken window fallacy. A shopkeeper’s son, Bastiat relates, breaks a pane of glass in his father’s store. The father, angry due to the boy’s careless action, is offered consolation by the spectators, who claim that the event is positive for the economy since it provides labor to glaziers. While Bastiat acknowledges that the accident brings trade to the glazier since the shopkeeper has to replace the window, regarding the event as wealth‐​increasing conveys a narrow perspective. The shopkeeper ends up poorer since he cannot spend the same money elsewhere, and if the boy had not broken the window, then the labor and other materials that were used to repair the damage would have been used elsewhere, potentially making the tangible wealth of the community grow.
Topic:
Climate Change, Natural Disasters, Crisis Management, Institutions, and Urban
Political Geography:
Global Focus

16. Which Type of Digital Currency for Financial Inclusion?

Author:
Diego Zuluaga
Publication Date:
06-2021
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
When the Libra Association first announced its plan to launch a private digital currency for domestic and cross‐​border payments — then consisting of a single token backed by a mix of stable fiat currencies — financial inclusion was a big part of its business case. With 1.7 billion people globally lacking a bank or mobile money account, Libra thought it was imperative for some of the world’s largest companies, including the leading social media platform, to join forces and bring cheap payments to the world’s “unbanked.” And while this project has faced a rocky reception from central bankers and regulators — for reasons good and bad — even they often frame the case for their own, public digital currencies (CBDCs) in terms of bringing cheap and fast electronic payments to the greatest possible number of people, as cash use and cash acceptance decline.
Topic:
Finance, Banks, Inclusion, and Digital Currency
Political Geography:
Global Focus

17. Chartering the Fintech Future

Author:
Charles W. Calomiris
Publication Date:
06-2021
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
What we use as our medium of exchange is subject to dramatic change over time, and sometimes bank regulation has accelerated such changes. The national banking system, founded in 1863, envisioned the creation of a uniform medium of exchange in the form of national bank notes, which replaced the preexisting system of state bank note issuance. But the creation of the national banking system soon resulted in the diminished importance of bank notes as a medium of exchange. Under the new system, state banks faced a prohibitive tax of 10 percent per year on any notes they issued, and national banks had to maintain collateral at the Treasury for their outstanding national bank notes equal to 111 percent of their outstanding notes, and also had to maintain an additional 5 percent in required government‐​currency (“greenback”) cash reserves on hand. That meant that if a bank wanted to make loans, it had to find an alternative to bank notes as a funding source for those loans. Deposits had been growing in importance leading up to the National Banking Act of 1863, but the act accelerated the growth of deposits markedly, and they became the primary funding vehicle for loans. As Comptroller Eckels remarked in 1896: “And thus it has come about that deposit taking is now the feature, and the issuing of circulating notes but the incident, in national banking, instead of, as in the early history of the system, the note‐​issuing function being the feature and deposit banking but the incident” (Eckels 1896: 565; emphasis added).
Topic:
Science and Technology, Finance, Banks, and Loans
Political Geography:
Global Focus

18. Monetary Effects of Global Stablecoins

Author:
Dong He
Publication Date:
06-2021
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
The globalized economy now moves at the speed of electrons — and the future of money is inexorably going digital, too. New forms of digital money, such as central bank digital currencies (CBDCs) and so‐​called global stablecoins, are shaping the future of money and payments. CBDCs are a digital form of fiat currency issued by a central bank. Some central banks started exploring CBDCs a few years ago, and those explorations have gathered momentum since Facebook and its partners announced their intention to launch the Libra stablecoin in June 2019. Because the stablecoins issued by large technological companies or platforms (Big Techs) have the potential to be adopted by businesses and households everywhere, they are called “global stablecoins,” or GSCs, in shorthand.
Topic:
Geopolitics, Global Political Economy, Money, Currency, and Trade
Political Geography:
Global Focus

19. Some Thoughts on Central Bank Digital Currency

Author:
David Andolfatto
Publication Date:
06-2021
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
The literature examining the question of central bank digital currency (CBDC) has grown immensely in a very short time. Much progress has been made since I first learned of the idea in a blogpost authored by J. P. Koning in 2014. That modest article soon led me to openly speculate on the merits of a central bank cryptocurrency in a talk I delivered at the International Workshop on P2P Financial Systems in Frankfurt (Andolfatto 2015). My audience, which consisted mainly of entrepreneurs, seemed to receive my talk with a polite mixture of bemusement and anxiety. Surely, I couldn’t be serious? To be honest, I’m not sure that I was. But then the threat of Facebook’s Libra came along, and central bankers around the world suddenly began to take the idea very seriously indeed.
Topic:
Finance, Social Media, Central Bank, Currency, and Digital Currency
Political Geography:
Global Focus

20. Central Bank Digital Currency as a Potential Source of Financial Instability

Author:
George Selgin
Publication Date:
06-2021
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
Various proposals for a central bank digital currency (CBDC) involve different technical solutions to as many distinct problems. My concern is with the monetary policy implications of those (e.g., Bordo and Levin 2019; Ricks 2020) that would allow anyone to place deposits in a Fed Master Account, directly or using ordinary banks as brokers.
Topic:
Monetary Policy, Banks, Central Bank, Financial Stability, and Digital Currency
Political Geography:
Global Focus