This dissertation investigates the impacts of constraints on
optimal government policy. The first two chapters provide a
general introduction and review of the literature. Chapters three
and four analyze education spending and institutional structure in
an economy with informational asymmetries and employment matching
frictions. The fifth investigates the impact of politics on
government decisions over taxation and spending programs more
generally.
Chapter three analyzes the situation where governments can target
education funds to specific observable groups (referred to as low
and high productivity neighbourhoods/regions). The results suggest
that it may be optimal to employ educational transfers, rather than cash transfers amongst individuals, to achieve social welfare objectives. This is becasue the former can reduce
distortions created by the tax system. However, the value of educational spending
in mitigating these information frictions may not be that large,
and may in fact exacerbate such distortions. This suggests that an optimal education policy may be more regressive when there is a distortionary tax system in place. Further, we showt
that even if ``equalizing opportunities'' is deemed optimal in the
static problem, it may not be a reasonable policy goal when we
extend the analysis to include dynamics.
Chapter four is joint work with Afrasiab Mirza. We analyze an
economy where heterogeneous individuals are uncertain about their
endowments. The education system trades off the desire to
capitalize on talent through specific skills training with the
need to provide individuals with opportunities to learn about
their career preferences through a broader education. The results
consider the implications of various educational institutions for
the income distribution and consequently welfare.
Chapter five analyzes the dynamics of public spending, taxation
and debt in a political agency model. Choices are made by
short-lived politicians who can be only partially controlled
through the electoral process. The main focus is to consider the
impacts of binding limits on the public budget. The value of
imposing this additional friction depends both on the extent to
which politicians' goals deviate from their constituencies and how
effectively the electoral process disciplines them when they
misbehave. The results also suggest that the value of such a
restriction depends on the fiscal position at the time in which it
is imposed. / Thesis (Ph.D, Economics) -- Queen's University, 2009-11-25 20:25:29.12
| Identifer | oai:union.ndltd.org:LACETR/oai:collectionscanada.gc.ca:OKQ.1974/5333 |
| Date | 26 November 2009 |
| Creators | Stephens, Eric |
| Contributors | Queen's University (Kingston, Ont.). Theses (Queen's University (Kingston, Ont.)) |
| Source Sets | Library and Archives Canada ETDs Repository / Centre d'archives des thèses électroniques de Bibliothèque et Archives Canada |
| Language | English, English |
| Detected Language | English |
| Type | Thesis |
| Format | 931744 bytes, application/pdf |
| Rights | This publication is made available by the authority of the copyright owner solely for the purpose of private study and research and may not be copied or reproduced except as permitted by the copyright laws without written authority from the copyright owner. |
| Relation | Canadian theses |
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