| 来源类型 | Discussion paper
|
| 规范类型 | 论文
|
| 来源ID | DP13353
|
| DP13353 Pareto-improving structural reforms |
| Gilles Saint-Paul
|
| 发表日期 | 2018-12-02
|
| 出版年 | 2018
|
| 语种 | 英语
|
| 摘要 | Economists recommend to partly redistribute gains to losers from a structural reform, which in many cases may be required for making the reform politically viable. However, taxation is distortionary. Then, it is unclear that compensatory transfers can support a Pareto-improving reform. This paper provides sufficient conditions for this to occur, despite tax distortions. I consider an economy where workers have sector-specific skills and some sectors are regulated by a price floor. Transfers have to be financed by proportional taxation on firm's revenues or, equivalently, labor income. Labor supply is elastic to net post-tax real wages, and hence reduced by taxation. In a setting where preferences are isolelastic, deregulation is implementable in a Pareto-improving way through compensatory lump-sum transfers, despite that these are financed by distortionary taxes. In a more general setting, there always exist Pareto-improving reforms but they may involve tightening regulation for some goods. I provide sufficient conditions for deregulation, i.e. a general reduction in price floors, to be Pareto-improving. They imply that demand cross-price elasticities should not be too large and that the reform should not be too unbalanced. Finally, I consider counter-examples where some people earn rents associated with informational or institutional frictions. In such situations, Pareto improvements are unlikely. If losers have veto power, the reform may only be supported by a minority of people. Broadening reform scope is especially useful to raise its political support when its impact is uneven across consumers. |
| 主题 | Macroeconomics and Growth
|
| 关键词 | Structural reform
Deregulation
Price controls
Pareto optimality
Rent seeking
Taxation
Compensatory transfers
|
| URL | https://cepr.org/publications/dp13353-1
|
| 来源智库 | Centre for Economic Policy Research (United Kingdom)
|
| 资源类型 | 智库出版物
|
| 条目标识符 | http://119.78.100.153/handle/2XGU8XDN/542164
|
推荐引用方式
GB/T 7714 |
Gilles Saint-Paul. DP13353 Pareto-improving structural reforms. 2018.
|
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