Discriminatory Subsidy Research Articles

Chapitre 4. Subventions discriminatoires de soins medicaux à l’épreuve du principe éthique de la justice : cas d’un service d’orl au burkina faso

A legal exception to the principle of equal health rights, discriminatory subsidies often pose an ethical dilemma in the field of application. To analyze discriminatory subsidies for healthcare in the light of the ethical principle of justice and to propose alternatives to any inherent legal and ethical conflicts. This was a qualitative, descriptive and analytical study based on semi-structured interviews with caregivers. Participants felt that the application of discriminatory subsidies has a negative impact on substantial distributive justice. The infringements of the award conditions were exclusively for the benefit of the patients concerned. Their impact was considered positive on distributive justice and negative on formal justice. Discriminatory care subsidies generally stem from a legal requirement whose application should not be ambiguous. It is apparent that the infringements of the conditions for attribution were in favour of substantial distributive justice. This opposition is a potential source of decision-making difficulties for caregivers who often choose to violate conditions for the benefit of their indigent patients. There are therefore violations of ethically understandable standards, which must be admitted. This could be done through the provision of exceptions for the application of standards for ”noble causes” and conscientious objection clauses in health policy texts. The legitimacy of health policy norms is essential for their effective application, hence the interest of taking distributive justice into account in the genesis of formal norms.

Post privatization of high-speed rail with corporate social responsibility (CSR) in an international transportation market: Mandatory CSR versus voluntary CSR

This study considers an international transportation market wherein a high-speed rail (HSR) firm engaging in corporate social responsibility (CSR) competes with both domestic and foreign airlines with differentiated services. We investigate and compare two CSR types, mandatory CSR, imposed by the government, and voluntary CSR, chosen by the HSR operator, and show that mandatory CSR can be lower or higher than voluntary CSR, depending on the transportation subsidy types offered. With uniform subsidies, mandatory CSR together with a higher subsidy is lower than voluntary CSR, which yields higher profits for domestic firms and higher social welfare, while the opposite result can be found with discriminatory subsidies. We further explore the welfare effect of HSR privatization policies with CSR activities. We find that irrespective of the CSR types and subsidy types, privatization with subsidies always improves social welfare; however, privatization with mandatory (voluntary) CSR improves (reduces) social welfare in the absence of subsidies. These findings suggest that post-privatization with CSR activities may be harmful to society without an appropriately designed subsidy policy and should be monitored by antitrust agencies.

Discriminatory subsidies for energy-efficient technologies and the role of envy

Discriminatory subsidies, that is, subsidies for which only a subset of the population is eligible, are widespread. However, research on social preferences suggests that non-eligible households may negatively respond to these subsidies. We investigate both eligible and non-eligible households’ response to discriminatory subsidies for smart thermostats using a discrete choice experiment with 3071 owner-occupiers from France and Romania. Households are randomly exposed to discriminatory subsidies through a between-subject design that manipulates two factors: type of discrimination (positive or negative) and eligibility criteria (based on geographical location or on household characteristics). A control condition (uniform subsidy) is also included. In addition, we elicit envy via an incentivized game in the sample from France. Our results show that eligible households are more likely to adopt a smart thermostat, regardless of whether the subsidy is uniform or discriminatory. By contrast, non-eligible households are less likely to adopt it, especially when eligibility criteria are based on household characteristics. We find no evidence for a moderating effect of envy.

When More Equal Consumptions Improve Efficiency: Optimal Intervention Policies for Anti-Pandemic Resources

There are two general challenges for social planners in the combat against a pandemic. The first is how to improve private incentives for anti-pandemic consumptions that exhibit widespread externality, and the second is how to trade off between efficiency and ethical values such as equality and fairness. However, we show that these conventional beliefs and concerns need not always be valid. We consider a market for anti-pandemic resources, where the marginal utilities of two heterogenous groups of people are diminishing and the suppliers are competitive with increasing marginal costs. Our basic result is that socially efficient consumption is higher for the low type, but can be lower for the high type, in comparison to the competitive equilibrium. This is because the high type's consumption is crowded out by that of low type who turns out to be marginally more productive in generating social benefits. Therefore, more equal consumptions can be efficient. We also investigate how subsidies and quantity restraints can improve or restore efficiency. Discriminatory subsidies in favor of the low type can maximize social welfare while yielding more equal consumptions. In addition, quantity forcing or rationing can increase everyone's welfare (i.e., Pareto improvement) as well as equality. Moreover, policy portfolios combining uniform subsidy with quantity forcing or rationing can achieve full efficiency.

Corporate Profit Tax and Strategic Corporate Social Responsibility Under Foreign Acquisition

Abstract This study investigates government public policies facing competing firms’ strategic corporate social responsibility (CSR) activities and finds that the choice of CSR crucially depends on corporate profit tax. We demonstrate that strategic CSR decreases while social welfare increases with corporate tax. When the government grants uniform output subsidies, we show that bilateral CSR leads to a lower CSR level than under unilateral CSR but bilateral CSR is always beneficial to society. However, when the government grants discriminatory output subsidies which yield different levels of unilateral CSR, we show that domestic CSR leads to a lower CSR level than under foreign CSR. In an endogenous CSR choice game, domestic CSR (no CSR) is a Nash equilibrium when corporate tax is low (high) under the uniform subsidy, while foreign CSR could be a Nash equilibrium when corporate tax is low under the discriminatory subsidy.

Amicus Brief in Wayfair v. South Dakota

The passage of time and changing circumstances have rendered the physical-presence requirement articulated in National Bellas Hess, Inc. v. Department of Revenue, 386 U.S. 753, 758 (1967), and Quill Corporation v. North Dakota, 504 U.S. 298, 324-15 (1992), a harmful anachronism. Standard tools of economic analysis that the Court considered in Comptroller of the Treasury v. Wynne reveal that South Dakota’s sales and use tax regime,3 as amended by S.B. 106, promotes neutral treatment of in-state and interstate commerce. By contrast, the bright-line physical-presence requirement set forth in Bellas Hess and Quill forces states to extend what is in practice a discriminatory subsidy in favor of a specific class of out-of-state sellers, namely, those sellers who lack a physical presence within the state. On the facts of the challenged statute, there is no valid economic reason to mandate such a discriminatory subsidy. While there once may have been sufficient concerns as to whether sales tax compliance costs would impose an undue burden on out-of-state sellers so as to justify a bright-line physical-presence rule, such concerns no longer exist here. Given the specific features of South Dakota’s sales and use tax regime and the state’s adherence to the Streamlined Sales and Use Tax Agreement (“SSUTA”), there is no credible argument that the South Dakota tax regime is excessively burdensome on remote sellers. From an economic standpoint, a bright-line physical-presence requirement prohibiting S.B. 106 makes no sense. The Court has, in analogous circumstances, utilized the flexible balancing test articulated in Pike v. Bruce Church, Inc., 397 U.S. 137, 142 (1970), to assess whether a given state law imposes an undue burden on interstate commerce. Such an approach is warranted here. Under the balancing test, South Dakota’s important state interest in collecting sales taxes outweighs the minimal tax compliance burden on out-of- state sellers. S.B. 106 should therefore be upheld.

The role of subsidy policies in achieving grain self-sufficiency in China: a partial equilibrium approach

Food security is a critically important issue in China and can be enhanced by implementing subsidy policies. This paper employs a partial equilibrium model which takes into account the impact mechanism of subsidy policies to simulate the impact of current subsidy policies on grain supply and demand and on enhancing grain self-sufficiency in China. The simulation results suggest that subsidies can generally promote grain production, reduce consumption, increase imports, reduce exports and increase ending stocks. Subsidies may also result in increases in grain self-sufficiency rate and stock-to-use ratio, but the increases are relatively small, indicating that the subsidies lack efficiency. Given that subsidies constitutes only a very small share of farmers’ total income, and that significant scope remains for increasing subsidy levels in China, employing subsidy policies can help to enhance or at least maintain China’s grain self-sufficiency at a high level. Various measures should be implemented to improve the inefficiency of the current subsidy system, such as (1) combining different types of subsidies; (2) providing discriminatory subsidies to poor/rich farmers or developing/developed areas; and (3) increasing subsidy rates for wheat and corn.

Renewable energy, subsidies, and the WTO: Where has the ‘green’ gone?

Faced with the energy transition imperative, governments have to decide about public policies to promote renewable electrical energy production and to protect domestic power generation equipment industries. These policies can generate trade frictions. For example, in the Canadian renewable energy dispute the EU and Japan claimed that Feed in Tariff (FIT) programs in Ontario constitute discriminatory subsidies because of a local content requirement (LCR) clause that is incompatible with World Trade Organization obligations. This paper investigates this issue using an international quality differentiated duopoly model in which power generation equipment producers compete on price. FIT programs including those with a LCR are compared for their impacts on trade, profits, amount of renewable electricity produced, and welfare. When sales are taken into account, the results confirm discrimination. However, introducing a difference in the quality of the power generation equipment produced on both sides of the border has a moderating effect on the results. Finally, the results enable discussion of the question of whether environmental protection can be a reason for subsidizing renewable energy producers in light of the SCM Agreement.

Renewable Energy, Subsidies, and the WTO: Where Has the 'Green' Gone?

Faced with the energy transition imperative, governments have to decide about public policies to promote renewable electrical energy production and to protect domestic power generation equipment industries. These policies can generate trade frictions. For example, in the Canadian renewable energy dispute the EU and Japan claimed that Feed in Tariff (FIT) programs in Ontario constitute discriminatory subsidies because of a local content requirement (LCR) clause that is incompatible with World Trade Organization obligations. This paper investigates this issue using an international quality differentiated duopoly model in which power generation equipment producers compete on price. FIT programs including those with a LCR are compared for their impacts on trade, profits, amount of renewable electricity produced, and welfare. When sales are taken into account, the results confirm discrimination. However, introducing a difference in the quality of the power generation equipment produced on both sides of the border has a moderating effect on the results. Finally, the results enable discussion of the question of whether environmental protection can be a reason for subsidizing renewable energy producers in light of the SCM Agreement.

Domestic lobbying and foreign direct investment. The role of policy instruments

Following the Common Agency approach to political equilibrium, we examine how domestic interest groups can influence national policies toward FDI and how the choice of instrument by the government can affect lobbying activities. Domestic firms lobby for lower subsidies when a discriminatory subsidy on FDI is applied. However, when a subsidy is applied uniformly to both groups, they may lobby for higher subsidies. The nature of lobbying is also different for proportional and lump-sum profit subsidies when uniformly applied. The qualitative effect of the number of domestic firms or the degree of corruption on the equilibrium depends on the choice of instruments. Finally, with the help of numerical simulation, we examine whether there is any potential conflict between the government and the lobby groups on the choice of the instrument.

Tax/subsidy policies in the presence of environmentally aware consumers

We study policy measures to improve environmental quality in the presence of environmentally aware consumers. We consider two sets of policy instruments—uniform policies for the firms and policies that discriminate between the firms based on their environmental quality. For the latter set, either the better performer is rewarded with a subsidy or, the worse performer is punished with a tax. We find that while a uniform subsidy policy improves average environmental quality, a uniform tax policy worsens it. Further while a discriminatory subsidy policy reduces total pollution and enhances aggregate welfare, a discriminatory tax policy may increase total pollution and may reduce aggregate welfare.

Foreign direct investment and the relative wage in a developing economy

This paper examines the issue of the effect of foreign direct investment on the relative wage in the context of a developing economy. Recognizing that competing domestic entrepreneurs are potentially skilled workers, foreign investment in skilled-labor intensive sectors is shown to lower the relative wage. Moreover, a general lump sum subsidy to foreign and domestic firms is shown to lower aggregate welfare, whereas a discriminatory subsidy only to foreign firms may raise welfare.

Subsidized sacrifice: State support of religion in Israel

This paper offers three economic arguments for ending discriminatory religious law in Israel. First, current subsidies have created massive poverty and welfare dependence in the Israeli Haredi community. With men remaining in Yeshiva till an average age of forty and the Haredi population doubling each 16 years, that community is dangerously dependent on subsidies and charity, which are unlikely to increase fast enough to support it. Previous work developed a model to explain why fathers with families in poverty choose Yeshiva over work. This paper explores policy implications of that analysis, stressing the extremely inefficient economic incentives in subsidizing membership in a community that requires personal sacrifice. Subsidies are largely dissipated by the induced increase in sacrifice. A second argument for ending discriminatory religious law is that monopoly status granted to a religious denomination limits competition in the religious services market, resulting in low quality services for the remainder of the Jewish population. Finally, by allowing discriminatory subsidies, the State encourages political-religious parties to organize. These have destabilized Israeli politics. The paper proposes equitable reforms which compensate the Haredi community for lost subsidies and religious monopoly status by expanding needs-based social programs. These reforms would foster a self-sufficient Haredi community, benefit a wider disadvantaged population, help restore a functioning political system and encourage a healthy relationship between branches of Jewish tradition within Israel.