Payment Regime Research Articles

Calling Party Pays or Receiving Party Pays? The Diffusion of Mobile Telephony with Endogenous Regulation

This paper analyzes the impact of different payment regimes for mobile-to-mobile off-net calls on the diffusion of mobile telephony, using data on 84 countries from all over the world. Since the decision whether or not countries are likely to switch from RPP to CPP is not independent from penetration rates, a problem of endogenous regulation arises. In order to account for this problem we refer to data on political and democratic stability to instrument endogenous policy decisions. However, positive effects from regime switching seem to vanish when accounting for endogenous regulation. The effects of introducing competition instead seems to be underestimated ignoring endogeneity.

Outcome versus service based payments in health care: lessons from African traditional healers

We compare the more common physician compensation method of fee-for-service to the less common payment-for-outcomes method. This paper combines an investigation of the theoretical properties of both of these payment regimes with a unique data set from rural Cameroon in which patients can choose between outcome and service based payments. We show that consideration of the role of patient effort in the production of health leads to important differences in the performance of these contracts. Theory and empirical evidence show that when illnesses require (or are responsive to) large amounts of both patient and practitioner effort, outcome based payment schemes are superior to effort based schemes. The traditional healer--a practitioner who offers health services on an outcome-contingent basis--is advanced as an important example of how patient effort can be better understood and tapped in health care.

Riskier product portfolio under decoupled payments

The new payment regime for the European Union's Common Agricultural Policy adopted in June 2003 will decouple from production all direct payments made to farmers. The potential implications of this policy change for producers’ land allocation decisions are analysed using a mean-variance portfolio optimisation framework. We demonstrate theoretically how the opportunity set of a farmer, which offers the highest return for a given risk, will be changed by the presence of a decoupled payment. The new policy will induce those farmers who choose to produce to allocate more land to riskier products than previously. As an illustration, we apply the model to the land allocation decisions facing specialist British and Irish grain producers.

Protest responses and willingness to pay: attitude toward paying for stormwater pollution abatement

In contingent valuation (CV) surveys, there is often a proportion of individuals who are not willing to pay to obtain (avoid) an increase (decrease) in some attribute of a particular environmental public good. Some of these respondents might protest an aspect of the CV survey (e.g. payment vehicle) or the behavioral intention (i.e. willingness to pay, WTP) constituting the measure of economic value. Respondents’ attitudes toward the behavior of paying for a particular public good may contribute to the decision to pay independent of other explanatory variables, such as the price of the intervention, household income, and methodological characteristics of the CV survey. Moreover, attitude toward paying for the good may manifest in protest responses as a reaction to higher prices and methodological factors (e.g. the payment vehicle). To the extent that protest beliefs are dependent on such matters of survey design, they may be alleviated through changes in CV methodology. However, to the extent that protest beliefs are a reaction to the act of paying, methodological remedies may not be effective. CV surveys of stormwater pollution abatement were conducted in four Australian state capital cities. The surveys differed with respect to the type of pollution abatement intervention, the payment regime, the vector of prices used in the dichotomous choice question, and the institution responsible for implementing the stormwater pollution intervention. Protest beliefs were measured for all respondents irrespective of their responses to the WTP question. Results indicated that attitude toward paying underpinned protest beliefs regarding the role of government in stormwater management and individual rights to unpolluted waterways. This attitude was present in each city sample despite methodological differences between the CV surveys. Attitude toward paying explained variability in WTP, and was a larger predictor than was price. Household income was significantly associated with attitude toward paying, and this relationship was also invariant over city samples. Protest beliefs were not independent of either the WTP question or demographic factors, such as household income. Rather, these beliefs were related to WTP through attitudes toward the act of paying for stormwater pollution abatement. Censoring protest responses in the present study would bias CV samples toward those individuals who are favorably disposed toward paying for environmental public goods and those from higher income households.

Socio-economic and ecological effects of alternative direct payment regimes on different Swiss Alpine regions

Effets socio-économiques et écologiques de systèmes alternatifs de paiements directs dans deux régions des Alpes suisses D'une région à l'autre, les niveaux de productivité de la terre, les besoins en moyens et techniques de production, ainsi que les coûts à produire diffèrent, ils sont fonction des caractéristiques topographiques, climatiques, environnementales, agronomiques et structurelles de la région et conduisent à des formes d'utilisation de la terre très variées. En outre, l'utilisation des terres offre des exemples évidents d'externalités environnementales et de nouveaux indicateurs couvrant une large diversité d'attributs et d'actifs environnementaux ont dû être élaborés afin de répondre à la demande des responsables régionaux de développement rural. Un modèle spatial de programmation linéaire est présenté dans cet article. Il porte sur deux régions des Alpes suisses et permet d'analyser les effets de différentes options de paiements directs sur l'utilisation de sols, notamment leurs conséquences sur le nombre de sols mis en jachère, selon leur situation topographique. L'étude démontre également que l'efficacité écologique peut être améliorée si les aspects régionaux et spatiaux sont pris en compte lors de l'élaboration des nouvelles mesures de politique agricole, et ce à un moindre coût pour le contribuable. Il apparaît enfin que la suppression des paiements directs actuels, qui visent au maintien du revenu agricole, pourrait être à l'origine d'un effondrement de l'agriculture dans les régions des Alpes suisses.

Law for the poor: The relationship between advice agencies and solicitors in the development of poverty law

Legal aid, governments tell us, is too expensive. As the 1994/5 the budget for England and Wales climbed to over £1.3 billion, lawyers were blamed for stimulating unnecessary demand. The argument that legal aid is a mere 'demand creation' exercise by the legal profession was once confined to radical academics (Bankowski and Mungham, 1976; Abel, 1982). It is now, however, widely accepted within government. When a right-wing think tank, the Social Market Foundation, claimed that increases in the legal aid budget reflected 'supplier-induced demand' (Bevan et al., 1994), the Lord Chancellor replied that he found such an analysis 'compelling' (Mackay, 1995, p. 12). The present structure of the civil legal aid scheme in England and Wales reflects its historical origins, which have, in turn, been shaped by eighty years of debate between the profession, its critics and government. The profession has played a major, and often dominant, role in such debates—and has, naturally, attempted to shape the scheme its own interests. But it is overly simplistic to imagine that the profession has had it all its own way, or that its sole motivation has been to create demand. Much of the responsibility for stimulating demand for legal aid lies with the advice movement, a sector which is all too often overlooked in the history of legal assistance. This article draws on a mass of previously unexplored archive material to retell the story of how civil legal has developed since the First World War. It concentrates on 'poverty law', where legal aid has not only provided a different payment regime for lawyers but has changed the definitions of what lawyers should be doing. It considers the contests over how far lawyers should help the poor in their disputes with landlords, employers, creditors, and state bureaucrats. It argues that the organised profession has never taken the initiative in developing new markets among the poor. Instead, others—social workers, voluntary groups and pressure groups— have lead the way in pointing out problems and offering solutions. As Paterson and

Trade and payments regime and the balance of payments in Ghana

By 1982 the Ghanaian economy was in the doldrums, facing a severe foreign exchange constraint. This state of the economy was attributed partly to the trade and exchange rate policies which had created distorsions and disincentives against exporting in particular and production in general. Since 1983 Ghana, has, for the second time, embarked on a trade and payments liberalization program. This study examines the effect of the changing trade and payments regime on the balance of payments of Ghana. It provides some answers as to why the first liberalization episode was not sustained. It also contrasts the experience of controlled and liberalized trade regime episodes. The paper concludes by providing some lessons from the Ghanaian experience.

The North American free trade area, Mexican debt constraint and structural reform

Mexican policy reform can only be understood in the context of the severe economic conditions following the debt crisis of the 1980s. Faced with long term declines in real per capital incomes, broad based reforms have been taken in the country's trade and payments regime, and structural reforms that have decreased quasi state enterprise by two thirds. These reforms have attracted capital flows back into the country, increased capital investments and substituted private for public external debt.

Balance of Payments and Related Issues in the Uruguay Round of Trade Negotiations

Little attention has been paid to the balance of payments provisions of the General Agreement on Tariffs & Trade (GATT), despite the fact that they directly influence the trade policies of the developing countries. This article suggests that there is a need to reconsider these provisions in the context of the ongoing Uruguay Round of multilateral trade negotiations. The article traces the historical evolution of GATT practices on trade restrictions for balance of payments purposes. With the general introduction of more flexible exchange rate arrangements, the original rationale for temporary barriers to safeguard a country's external financial position appears to have lost its force. Recent theoretical and empirical work has demonstrated that neutral or export promoting trade strategies are more effective for development than the import substitution frequently advocated by economists in the 1950s and 1960s. The current debt problems of developing countries strengthen the argument for a relatively open trade and payments regime to attain balance of payments viability. The article suggests that stronger international discipline over trade restrictions for balance of payments purposes would contribute to and presuppose other necessary improvements in the multilateral trading system which are already on the agenda of the Uruguay Round.

Devaluation and its consequences in developing countries

To analyze the role of the trade and payments regime in economic development the National Bureau of Economic Research undertook a major research project on this issue. In this article a brief report on some of the findings pertaining to the effect of exchange rates, i. e. devaluation under exchange control is provided.

Foreign Trade Regimes and Economic Development: TURKEY. By Anne O. Kneger. New York : Columbia University Press 1975. (Published by the National Bureau of Economic Research, Inc., New York) xxiii + 339 pp. Price $ 17.50 for hard cover ; $ 5.00 for paperback.

The book is the first of a series of studies on Exchange Control, Liberalization and Economic Development sponsored by the National Bureau of Economic Research, New York. The ten-country study, of which the book under review is a part, provides an in-depth analysis of three major areas : The anatomy of exchange control along with its implications, the episode of the liberalization of the payments regime, and the relationship of growth with the exchange control regime. The findings of the individual country-studies have been consolidated in an overall synthesis. However, each study is complete in itself in accordance with the needs of scholars having an interest in only some of the studies. The book under review seeks to analyse Turkey's trade and payments regime and the effect that the latter has had on the country's economic growth. Whereas quite a few other factors are instrumental in development (e.g. agricultural productivity, levels of education, political and social stability, etc.), the focus on foreign trade alone is justified by the author on the grounds of the tremendous amount of government influence in foreign trade. Moreover, the author believes that an intensive study of the trade-growth relationship is more rewarding than: a general survey of all factors related to economic growth.