A long line of literature argues that income taxes do not tax the return to risk bearing. The conclusion, if correct, has important implications for the choice between an income tax and a consumption tax and for the design of income taxes. The literature, however, on its face seems unrealistic because it models only very simplified tax systems, assumes perfect rationality by individuals, and requires the government to take complex positions in securities markets to hold in equilibrium. This paper examines the extent to which these problems affect the conclusions we draw from the literature. It argues that the criticisms are overstated. Moreover, the criticisms do not detract from the central value of the models, which is to understand ideal income taxes, which are the purported goal of most who support an income tax. Working draft. Please do not cite without permission.

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No degree of substantive law improvement—even world “best practice” substantive law—will bring the Rule of Law to a country without effective enforcement.1 A sound judiciary is key to enforcement. No doubt some technical laws can be enforced by administrative means, but a Rule of Law, in the primary economic sense of protecting property and enforcing contracts, requires a judiciary to resolve disputes between private parties. And protection against the state itself is made easier where the judiciary can resolve a controversy raised by a private party against the state based on constitutional provisions or parliamentary legislation. One conclusion widely agreed upon, not just in the economic literature but also among lawyers and legal scholars, is therefore that the judiciary is a vital factor in the Rule of Law and more broadly in economic development. A number of studies show some of the positive benefits of strong effective judiciaries. The degree of judicial independence is correlated with economic growth.2 Better performing courts have been shown to lead to more developed credit markets. A stronger judiciary is associated with more rapid growth of small firms as well as with larger firms in the economy.3 Economic studies show that within individual countries the

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Abstract. Because risks are on all sides of social situations, it is not possible to be “precautionary ” in general. The availability heuristic ensures that some risks stand out as particularly salient, whatever their actual magnitude. Taken together with intuitive costbenefit balancing, the availability heuristic helps to explain differences across groups, cultures, and even nations in the assessment of precautions to reduce the risks associated with climate change. There are complex links among availability, social processes for the spreading of information, and predispositions. If the United States is to take a stronger stand against climate change, it is likely to be a result of available incidents that seem to show that climate change produces serious and tangible harm. 1.

Abstract. The International Court of Justice has jurisdiction over disputes between nations, and has decided dozens of cases since it began operations in 1946. Its defenders argue that the ICJ decides cases impartially and confers legitimacy on the international legal system. Its critics argue that the members of the ICJ vote the interests of the states that appoint them. Prior empirical scholarship is ambiguous. We test the charge of bias using statistical methods. We find strong evidence that (1) judges favor the states that appoint them, and (2) judges favor states whose wealth level is close to that of the judges ’ own state; and weaker evidence that (3) judges favor states whose political system is similar to that of the judges ’ own state, and (4) (more weakly) judges favor states whose culture (language and religion) is similar to that of the judges ’ own state. We find weak or no evidence that judges are influenced by regional and military alignments. The International Court of Justice is the principal judicial organ of the United Nations, and the only international court that has general subject matter jurisdiction over disputes between all of the members of the United Nations, virtually every state in the world. 2 The ICJ has considerable importance, both political and scholarly. Many of the

This essay explores the extent to which income and consumption taxes can be implemented using parallel designs. The economic differences in the two taxes is thought to be the taxation of pure time value returns under an income tax but not under a consumption tax. In theory, therefore, all differences in implementation methods should be traceable to the measurement of time value returns. To explore the extent to which this is true, the essay examines four major design elements of any tax system: (i) the use of cash flows or basis accounts to measure the base; (ii) remittance of the tax by firms or individuals; (iii) whether the system is open or closed; and (iv) how the system operates across borders.

This paper analyzes the consequences of the findings from research into self-reported well being or happiness for taxation. It primarily considers two findings: that happiness depends on status as well as income, and that individuals may adapt to disability, exhibiting relatively small losses in happiness from disabilities. In each case, it examines how adding these concerns to standard tax models changes the results and then compares the empirical findings of the happiness literature to see whether they provide the type of data needed to parameterize the models. In both cases, the theoretical models ask for different types of data than the happiness studies emphasize. The paper also looks at Robert Frank’s arguments for a progressive consumption tax based on the findings of the happiness research. It finds that these claims are not supported by the current findings. Preliminary Draft. Please do not cite without permission.

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