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Towards a European R&D incentive? An assessment of R&D provisions under a common corporate tax base
Published in Cristiano Antonelli, Albert N. Link, Assessing Technology and Innovation Policies, 2020
Diego d’Andria, Dimitrios Pontikakis, Agnieszka Skonieczna
One way to reduce the opportunity cost of innovation is by reducing the profitability of alternative investment possibilities, particularly those deemed socially undesirable. This is why the most lasting impact of public policy on business innovation comes from promoting competitive markets. Increased competition, promoted by anti-trust regulation and by lowering entry barriers makes rent seeking activities less profitable and is thus a powerful subsidy to innovation. The opportunity cost of business innovation investments may also be affected by other features of national taxation. The distinct components of a tax system do not work in complete isolation and the possible interactions between them should be considered. The design of direct and indirect taxes affects the set of incentives relative to the quantity and quality of investments partaken. Literature has shown how capital gains taxation (Keuschnigg and Nielsen 2003, 2004) may affect the venture capital market, how subsidies to small companies and new entrepreneurship (Haufler, Norbäck, and Persson 2014) can affect the riskiness (thus, the degree of innovativeness) of new investments and how personal taxation could affect risk-taking (d’Andria 2016b), innovation-related investment (d’Andria 2016a) and the formation of human capital over time (Nielsen and Sørensen 1997; Jacobs and Bovenberg 2010). Given that most of these tax items are outside of the scope of the CCCTB reform and are country-specific, their heterogeneity contributes to widen the gap for the predicted effectiveness of CCCTB R&D provisions.
Mining and Economic Development
Published in John E. Tilton, Juan Ignacio Guzmán, Mineral Economics and Policy, 2016
John E. Tilton, Juan Ignacio Guzmán
The last explanation for the resource curse highlights the use—or misuse—of the rents derived from the production of mineral commodities. Rents flowing to the government, it is argued, mostly benefit the ruling elite. This accentuates the income disparities found between the rich and the poor, which by itself may hinder economic growth. Moreover, the mere presence of large rents may encourage individuals and organizations to devote their talents and resources to capturing a larger share for themselves. Such rent-seeking activities are unproductive; they merely redistribute the existing economic pie rather than increase it.
Cheaper Than Dirt
Published in Terry L. Anderson, Brandon Scarborough, Lawrence R. Watson, Tapping Water Markets, 2012
Terry L. Anderson, Brandon Scarborough, Lawrence R. Watson
The potential for political processes to redistribute wealth from one individual or group to another opens the door for what economists call “rent seeking.”4 The rents referred to are not the payments made to landlords at the beginning of the month, but rather are returns to an asset that exceed the costs of producing the asset. For example, a professional baseball player like Alex Rodriguez earns a very large salary. Part of that is a return on investments he has made in perfecting and maintaining his skills. A much larger part, however, arises from the fact that people are willing to pay a great deal more to watch him play than they are willing to pay to watch others. This extra amount is a rent to the very special talents that Alex has. Such returns motivate entrepreneurs to always be on the lookout for scarce resources for which consumers will pay extra because the resource is so unique.
Rent-seeking behaviour and regulatory capture in the Murray-Darling Basin, Australia
Published in International Journal of Water Resources Development, 2020
R. Quentin Grafton, John Williams
Rent-seeking today is commonly understood to include a wide range of what may be called directly unproductive, profit-seeking activities (Bhagwati, 1982): actions undertaken by non-state actors to influence government decision making, including the disbursements of grants and subsidies and other budgetary assistance (Banks, 2013), for their pecuniary benefit. Rent-seeking may bring financial gain to rent-seekers and special interests (Tullock, 1989) but does not produce any goods or services. Thus, it reduces overall economic welfare. This welfare loss is exacerbated when rent-seeking results in welfare-distorting decisions by state actors (Anam, 1982) or increases inequality by reducing the progressivity of the tax and transfer system (Frijters & Foster, 2014).
Adaptive and sustainable water management: from improved conceptual foundations to transformative change
Published in International Journal of Water Resources Development, 2020
However, an emphasis on the adoption of principles in water policies without taking into account their effectiveness has been heavily criticized (Biswas, 2008; Giordano & Shah, 2014; Shah, 2016). According to these views, IWRM had become an end in itself rather than a means to achieve a goal, namely sustainable water management and greater water security. Indeed, implementation on the ground which would translate principles into management practice and ultimately into a better state of water resources and sustainable use of water services has been slow (Biswas, 2004; Jeffrey & Gearey, 2006; Medema, McIntosh, & Jeffrey, 2008; Schreiner, 2013; UN Environment, 2018). Adopting IWRM principles in laws and policies on paper does not overcome the lack of adherence to good governance principles, in particular low institutional capacity and corruption, in practice (Pahl-Wostl, Lebel, Knieper, & Nikitina, 2012). Large-scale infrastructural development may have become an end in itself, rather than a means to an end, fuelling rent‐seeking by powerful elites and symbolizing state power in what may be called hydraulic bureaucracies (Molle, Mollinga, & Wester, 2009). ‘Rent-seeking’ refers to activities of actors to increase their own wealth without making a contribution to productivity by creating new wealth. One example would be corruption. It has become evident that the implementation of IWRM principles needs to take into account the prevailing conditions and the state of economic and institutional development of a country (Shah, 2016; UN Environment, 2018). The baseline assessment of Indicator 6.5.1 highlighted some implementation challenges (UN Environment, 2018): Efforts need to focus on advancing elements of IWRM implementation at subnational, basin and local levels (p. 20).Effectiveness of implementation of basin organizations needs major improvements. The capacity of these organizations needs to be increased in many countries to ensure they can effectively lead IWRM implementation (p. 37).Cross-sectoral coordination mechanisms are common but coordination in practice is weak (p. 56).