Burden Of Payments Research Articles

Durables, nondurables, down payments and consumption excesses

We examine a model that generalizes the standard buffer-stock model of saving to accommodate durables, nondurables, down payment requirements, and adjustment costs in the durables market. We find that nondurable consumption becomes more volatile relative to income as down payments decrease at the individual and at the aggregate level. Moreover, for plausible parameter values, the model can explain the excess smoothness and excess sensitivity observed in U.S. aggregate data. The result follows from a gradual adjustment of consumption to permanent income shocks when agents attempt to spread out the burden of down payments over time, compounded by slow adjustment due to transaction costs.

The economic impact of visceral leishmaniasis on households in Bangladesh

To explore current patterns of diagnosis and treatment, quantify household economic impact and identify household strategies to cover the costs of visceral leishmaniasis (VL) care in rural Bangladesh. Structured interviews with 113 VL patients from 87 households documenting all provider visits and expenditures for health care for VL, and the ways in which the expenditures were covered. Patients paid a median of 7 visits to six different providers before beginning VL treatment. All visited the subdistrict government hospital at least once. While health care, including antileishmanial drug therapy, is officially available free of charge at government facilities, 79% of patients reported making informal payments for provider access, diagnostics and drug administration; only 14% of patients received their full drug course from this source. For the 58% of patients who purchased the full treatment course, drug cost constituted 34% of direct expenditure. Median direct expenditure for one VL patient was US$87 and median income lost was $40; median total expenditure was 1.2 times annual per capita income of our study population. Households employed multiple coping strategies to cover expenditures, most commonly sale or rental of assets (62%) and taking out loans (64%). Visceral leishmaniasis treatment causes a major economic burden in affected families. Control strategies for VL should facilitate timely, affordable diagnosis and treatment of patients to decrease the infection reservoir and to alleviate the economic burden of VL on households.

The inequity of informal payments for health care: The case of Hungary

As in most countries of Central and Eastern Europe, informal payments have been a characteristic feature of the Hungarian health care system both during and since the demise of Soviet type socialist rule. Although informal payments continue to be so characteristic in the region, little empirical evidence exists on their scope or working. As far as equity is concerned, it has sometimes been suggested that physicians play a ‘Robin Hood’ role and subsidise the poor at the expense of the rich. With the aid of an interview survey of a representative sample of the Hungarian population, we examine the distribution of the burden of informal payments across income groups. Results indicate that informal payments are a highly regressive way of funding health care, with Kakwani progressivity indices of −0.38, −0.39, −0.35 and −0.36 for GP, outpatient specialist, hospital, and total care, respectively. The finding that people with lower income pay proportionally more for public health care through informal payments underlines the emptiness of the ‘Robin Hood’ claims and the need for reform.

Free health care provision and its financial implications in Gondar town, northwest Ethiopia

Background: In Ethiopia based on government regulation; there is provision of free health service for the poor. However users' characteristics and the financial burden on health care provision has not been well investigated. Objective: To find out if free health care provision really protects the poorest from the burden of payment and to estimate the service cost and financial impact of the above on Gondar College of Medical Sciences (GCMS) referral hospital. Methods: Records of patients who received free health service at the GCMS hospital between December 1996 and December 2000 were retrieved from the hospital register book. Using a pre-tested uniform questionnaire, data were collected on 1021 patients whose address could be traced in Gondar town. Results: Among the respondents, 836 (81.9%) were in the economically active age group (15-64 years) and more than half, 646 (63.3%) were females. Outpatients were 642 (62.9%) with an average cost of birr 34.60 per patient/year, while 379 (37.1%) were inpatients with average hospitalization duration of 28.7 days and average cost of birr 86.10 per patient/year. A significant number of respondents, 631 (61.8%) were real poor. The majority, 999 (97.8%) think poverty certificate to be an appropriate means to help the poor and 728 (70.2%) had no problem of acquiring one. More than half of the respondents, 642 (63.3%) were also satisfied with the service given free of charge. Conclusion: Poverty certificate from Kebele does not exclude those who can afford to pay and creates unnecessary burden on government health service financing. Therefore, more effective screening technique by the concerned authorities is recommended. [Ethiop.J.Health Dev. 2004;18(2):125-129]

Lyndon Johnson and Europe: In the Shadow of Vietnam. By Thomas Alan Schwartz. (Cambridge: Harvard University Press, 2003. x, 339 pp. $29.95, ISBN 0-674-01074-4.)

Thomas Alan Schwartz succeeds admirably in demonstrating his thesis. He argues convincingly that Lyndon B. Johnson's European policies were not fatally undermined by the quagmire of the Vietnam War. Despite the Kennedyites' sneering about “‘Ol' Cornpone’” (p. 3) and despite Johnson's suspicion of people whose backgrounds differed from his, he developed into “an astute and able practitioner of alliance politics” (p. 7). Johnson reached out to the Soviets to reduce the risks of nuclear war. He wanted a treaty to stem the antiballistic missile race, and he sought bridges to Eastern Europe, although both these efforts were stalled by the Soviet invasion of Czechoslovakia as the clock ran down on Johnson's term. The president ran herd on conflicting advisers. His administration blunted French independence, nudged the Germans toward accepting the Oder-Neisse border with Poland and a nonnuclear status, and postponed Great Britain's devaluation of sterling and its retreat from east of the Suez Canal. With the domestic and foreign policies of North Atlantic nations increasingly interpenetrated, lbj wielded the politicking and coalition-building skills that he had mastered in the Senate. His administration pursued the Kennedy round of tariff reductions, pressured Bonn to offset more of the payments burden of United States troops in West Germany, tried to rein in the balance of payments deficit, and contained the gold crisis of March 1968 by loosening the Bretton Woods requirement of redeeming dollars with gold at thirty-five dollars to the ounce.

Twelve years after the Bamako initiative: facts and political implications for equity in health services accessibility for indigent Africans

Launched in 1988, the Bamako Initiative was considered as a policy aimed at revitalizing the primary health care strategy while strengthening equity in access to health care. A decade later, two research initiatives conducted in Mali and Uganda, and later in Burkina Faso, concluded that a) this policy did very little to improve or increase access to health care among the most deprived and excluded vulnerable population groups, b) this policy only served to marginalize certain population groups already disenfranchised due to the emphasis on financial sustainability and viability of health care organisations, and c) the exemption mechanisms for alleviating the burden of payment and financial barriers for the poorest represent a technically feasible solution, while one not socially advocated. The current state of affairs requires that in order to give impetus to the principles of equity and the initial goals of the Bamako Initiative, African states should implement incentives, NGOs should consider planning as a tool for social change and donors need to ensure investments which are centred upon and prioritize principles of equity.

Immigration and income redistribution in welfare states

This paper sets out a political economy model where median voters who benefit from local income redistribution are affected by the fiscal burden of welfare payments to immigrants. The median voters also have cultural preferences. Immigrants are influenced in their relocation decision by welfare benefits in host countries. Uncoordinated, coordinated and leader–follower domestic welfare policies are compared. In the last case, the median voter in the follower country is better off than the median voter in the leader country because of a less generous welfare system and hence fewer immigrants.

DEBT PROBLEMS: The Real Feel of Mortgage Payments

The author points out that home buyers today no longer have the advantage of inflation as they pay back their mortgages over time. Thus their incomes will not rise as rapidly as their debt service. Moreover, the ratios of income to debt we rely on were developed in a time of higher inflation. He produces a "real feel" indicator that gives a more realistic idea about the future burden of mortgage payments.

Contributing to the Delinquency of Borrowers

What contributes most to borrower delinquency—“excessive”borrowing that results in greater financial stress or unforeseen negative income and wealth shocks? Using data from the 1998 Survey of Consumer Finances, this paper provides evidence that consumer delinquency problems are mainly the result of unexpected negative events that neither the lender nor the borrower could have anticipated at the time the credit request was evaluated. The size of the household payments burden has an insignificant effect on delinquency risk and very little effect on default risk. Finally, household financial assets that can be used as a buffer against negative shocks also serve as a very important predictor of delinquency risk.

Informal payments for health care in transition economies

There is considerable evidence that unofficial payments are deeply embedded in the markets for health care in transition countries. Numerous surveys indicate that these payments provide a significant but possibly distorting contribution to health care financing. Unofficial payments can be characterised into three groups: cost contributions, including supplies and salaries, misuse of market position and payments for additional services. There is evidence from across the region on the presence of payment in each category although it is often difficult to distinguish between payment types. Regulatory policy must address a number of issues. Imposing penalties may help to reduce some payments but if the system is simply unable to provide services, such sanctions will drive workers into the private sector. There appears to be some support for formalising payments in order to reduce unofficial charges although the impact must be monitored and the danger is that formal fees add to the burden of payment. Regulation might also attempt to increase the amount of competition, provide information on good performing facilities and develop the legal basis of patient rights. Ultimately, unless governments address the endemic nature of payments across all sectors, policy interventions are unlikely to be fully effective.

Strategies for promoting equity: experience with community financing in three African countries

Although the need for a pro-poor health reform agenda in low and middle income countries is increasingly clear, implementing such policy change is always difficult. This paper seeks to contribute to thinking about how to take forward such an agenda by reflection on the community financing activities of the UNICEF/WHO Bamako Initiative. It presents findings from a three-country study, undertaken in Benin, Kenya and Zambia in 1994/95, which was initiated in order to better understand the nature of the equity impact of community financing activities as well as the factors underlying this impact. The sustained relative affordability gains achieved in Benin emphasise the importance of ensuring that financing change is used as a policy lever for strengthening health service management in support of quality of care improvements. All countries, however, failed in protecting the most poor from the burden of payment, benefiting this group preferentially and ensuring that their views were heard in decision-making. Tackling these problems requires, amongst other things, an appropriate balance between central and local-level decision-making as well as the creation of local decision-making structures which have representation from civil society groups that can voice the needs of the most poor. Leadership, strategy and tactics are also always important in securing any kind of equity gain—such as establishing equity goals to drive implementation. In the experiences examined, the dominance of the goal of financial sustainability contributed to their equity failures. Further research is required to understand what equity goals communities themselves would prefer to guide financing policy.

Beyond Judicial Sanctions: The Negative Impact of Conviction for Environmental Offences

This article examines the extent to which the criminal sanctioning mechanism of prosecution can be relied upon to provide a sufficient deterrent in environmental regulation. The implications of criminal law enforcement of pollution controls currently extend beyond the immediate financial burden of payment of fines and legal costs. Some of the dimensions of the adverse publicity attracted by enforcement action against non-compliant operators will be assessed (such as unfavourable entries on pollution control registers and loss of patronage) in order to determine whether they live up to the need for a real and substantial deterrent. Arguably, these publicity-based aspects of deterrence lack reliability: they operate only in exceptional cases and their impact is often sporadic. While the solution to inadequate deterrents is often thought to lie in increased levels of prosecution, this article highlights the disadvantages of such an approach and explores the Agency's more sophisticated practice of strategic litigation.

How I Spent My Summer Vacation

My students last summer had never heard of Jim Crow. U.S. Government is not an area in which can claim expertise, but when applied for a summer job with Duke University's Talent Identification Program--a camp for academically gifted middle- and high-school students--someone in hiring thought my few years' study of American history and religion qualified me to serve as a teaching assistant for American Government: Practical Politics. A few weeks after receiving my college diploma, arrived in Durham, armed with notebooks, The Federalist Papers, and all the youthful optimism and energy we twenty-year-olds are supposed to possess. At the faculty and staff get-to-know-you barbecue, three days before the students arrived, was munching on a hot dog when a young black woman grabbed my arm and introduced herself as Sarah,(1) the instructor for the government course. I'm so glad you're here, Sarah said. I have a syllabus for you, and I've just received the student roster. think we need to pray about what to do with this bunch? Twelve of our fifteen students were boys. All hailed from the South: Florida, North Carolina, Georgia, and Texas. All sharp as a whip. All white. (Not coincidentally, it is a minimum score on the SAT, taken in the seventh grade, that identifies participants for the Talent Identification Program.) An admixture of private and public school kids. All from privileged backgrounds. In fact, we began the class by discussing what power and privilege are, concluding that power is something that must be accessed, while privilege can be enjoyed unawares. We drew up a list of different privileges in American society-gender privilege, class privilege, race privilege, age privilege. Sarah said that in the black community, she, very fair-skinned, enjoyed complexion privilege, and that she and her boyfriend also enjoyed heterosexual privilege. James and can walk down the street, all lovey-dovey, holding hands and kissing, and people croon, `Oh, how cute, two folks in love,' but if two men tried to do that, people would say, `How disgusting.' Our students grasped age privilege and volunteered myriad examples of being followed in stores because proprietors suspected all teens of shoplifting. However, Sarah and realized we had failed to communicate something essential when a thirteen-year-old from Texas raised his hand and asked, Is welfare a class privilege? Only people from one class can get it. mean, my mom can't just walk down to the welfare office and pick up a check. That was the first clue that something was wrong. Our class spent a portion of its six-hour day covering current events. Each student read a newspaper and selected one story to write about in his journal; then we discussed the events of the day as a group. Once, Brad wrote about an article that described various congressional approaches to tax reform. In discussion that evening, we deliberated the proposal to abolish income taxes in favor of a national sales tax. How would this affect taxpayers? asked, and was gratified when Walter immediately shot up his hand and explained how substituting sales tax for income tax would shift the burden of payment onto people in a low-income tax bracket. But fourteen of my fifteen students said that would be fine with them. saw the opportunity for a brief history lesson (I was squeezing them in wherever could), and burst into an impromptu lecture on the Populists and the development of graduated income taxes in America. In five minutes we surveyed inheritance taxes and the lottery, too. Save my tenth-grader from Atlanta, who explained that paying a flat 30 percent income tax would mean nothing to Bill Gates but that for a family earning $10,000 a year, that 30 percent might mean the difference between homelessness and survival, all of my students erupted into calls for a flat tax and abolishment of inheritance taxes. No random poor person is gonna get my father's money when he dies, said the son of a Florida factory owner. …

THE LOOMING U.S. EXTERNAL DEBT: HOW SERIOUS IS IT?

This article examines the state of U.S. external debt accumulation, especially the rising burden of interest payments. It points out that the favorable yield differential between U.S. external assets and liabilities may be declining at the same time the United States has become the world's largest international debtor. The favorable yield differential has enabled the United States, which became a net debtor in 1987, to avoid making net interest payments on its international debt until 1994. However, servicing the increasing U.S. net international debt is likely to be a much greater burden in the future as the favorable yield gap wanes while net debt continues to grow.

On real exchange rate targeting and debt servicing

The real exchange rate is a key relative price in an open economy and Calvo et al. [JDE, 47, 1995, p.98] view it as "probably the most popular real target." What motivates policymakers to peg the real exchange rate? One of the most common reasons is to prevent losses in international competitiveness in times of inflation. If this is the chief concern, the targeted level will be the one which balances the trade account or the one that gives an undervalued real currency with a view to boosting export. Calvo et al. and several others analyze the inflationary consequences of the latter case, presuming the desirability of an over-depreciated real exchange rate target. This note shows that it is not optimal for policymakers to peg the real exchange rate solely for the purpose of preserving competitiveness, though export promotion is no doubt a legitimate concern. It highlights the incentive for a stronger real currency when debt servicing comes into play and provides a justification on how the targeted level is set. While a weaker real currency may encourage exports, it entails more domestic resources to pay for a given amount of foreign debt. It is precisely this tradeoff between export promotion and increased burden of interest payment that makes an over-depreciated real exchange rate target less attractive to policymakers, if not infeasible. The following loss-minimizing problem will make this point more apparent. Suppose a small open economy has a fixed amount of foreign debt and faces an exogenous international real interest rate r. If b is the debt-to-GNP ratio, the domestic resource cost for debt servicing will be ebr , where e is the real exchange rate, defined as the relative price of traded goods in terms of nontraded goods. Let the policymaker have a loss function as follows:

Austria in the European Union: Dynamic Gains from Integration and Distributional Implications

Austria in the European Union Dynamic gains from integration and distributional implications This article proposes to measure the welfare effects of Austria's membership of the EU. In addition to the traditional sectoral reallocation effects of open trade, our computations take into account a number of effects not usually measured: expected capital accumulation, saving, and income redistribution across generations. EU membership involves trade integration (lower trade costs, a common external tariff), adopting the common agricultural policy, and membership contributions to the EU. The gains from trade integration and the adoption of the common agricultural policy are partly offset by the burden of contribution payments. The net welfare gain, measured in terms of an equivalent permanent income stream, is 1.24% of GDP. This aggregate figure masks sizeable distribution effects. As expected, agriculture is particularly hard hit. Moreover, membership has a tendency to favour the old as well as future generations at the expense of those entering economic life at the time of accession. We conclude that the ultimate gains from EU membership will depend on how these distribution issues are solved and how the budgetary cost is financed. —Christian Keuschnigg and Wilhelm Kohler

Interest rates, official lending, and the debt crisis: A reassessment

Highly indebted LDCs paid very different interest rates on their external debt in 1973–1989. Countries such as Indonesia and Turkey paid rates substantially below LIBOR, while Mexico and Chile paid positive spreads. Most of the variation is explained by differences in the share of highly-subsidized official loans. Debt at floating rates was not more expensive than debt at fixed rates on average. Also, differences in the currency composition of debt did not matter much. The results suggest that evaluations of HICs policy response to the debt crisis should place more emphasis on the different burden of interest payment that countries had to bear.

Database on clinical negligence

EDITOR, - Little interest has been shown in the steps that the Department of Health is taking to set up a central fund to spread the burden of indemnity payments and legal costs borne by trusts in connection with damage done by clinical negligence. Eventually, as the availability of legal aid becomes increasingly restricted, only the very poor and the very rich …

Paying for PREP.

From next year personal professional profiles will be dispatched to registered nurses, midwives and health visitors courtesy of the UK Central Council. The Council's decision is welcome. While it may add to the costs of implementing its Post Registration Education and Practice (PREP) reforms, it is right that the UKCC should carry the burden of payment.

Cheap money versus cheaper money: a reply to Professor Wood

and misinterpretations of the intentions and arguments of my paper. With respect to the alleged deficiency in economic analysis, the article was intended to investigate the origins of Dalton's cheaper money policy by examining the advice he had received on monetary policy before or during I945-6, rather than to analyse or estimate empirically its effects on the British economy in the late I940s. The 'economic analysis' provided by Wood, namely the outline of the consequences of monetary expansion, was, I thought, accepted by all monetary economists nowadays. More importantly, it is this generally accepted analysis which provides the puzzle investigated in my article, namely why did Dalton adopt an inflationary monetary policy in an already inflationary situation? My account showed that some awareness of the inflationary risks of the policy existed and that the Chancellor of the Exchequer and his advisers relied upon price controls to repress inflation. I indicated the extent of the monetary expansion of I946 as the 'most immediate consequence' of Dalton's policy, but concluded that the extent of the resulting price inflation was difficult to measure, partly because of controls and partly because the monetary expansion was soon stopped. Turning to the reasons for the adoption of the cheaper money policy, they were more complex-and less naive, even if fundamentally misguided-than Wood appears to realize. One confusion that permeates Wood's comments is that between Dalton's reasons for a cheaper money policy and the official reasons (in the White Paper on Employment policy and in the first report of the National Debt Enquiry) for a postwar cheap money policy. There was a similar difference between Dalton's policy and the postwar monetary policy recommended by the Labour Party in its White Paper on Full--employment and financial policy adopted by the I944 party conference. I shall therefore provide some of the more detailed exposition of source material called for in Wood's comment. The two I944 documents advocated a continuation of the wartime monetary policy, involving a 3 per cent (nominal) rate of interest for long-term government bonds, for three (not two) reasons': to keep down the cost of reconstruction in the immediate postwar transition; to help to prevent unemployment after the transitional period, when the feared postwar slump came; and to reduce the budgetary burden of interest payments on the national debt. Wood points out that for the last of these low nominal rates of interest would suffice. (The fact that monetary expansion can only