Poverty, competition, democracy, and ownership: A general equilibrium model with vertical preferences

Kahloul, Amani; Lahmandi-Ayed, Rim; Lasram, Hejer

doi:10.1111/jpet.12413

Cited by 5 publications

(12 citation statements)

References 49 publications

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“…Finally, the model adopted in this note may be easily adapted to deal with development economics issues such as poverty. It has been done by Kahloul, Lahmandi-Ayed and Lasram (2019) who established results on the effect of more competition on poverty, considering two extreme ownership structures. One may try to extend their results to the more general property structure adopted here.…”

Section: Discussionmentioning

confidence: 99%

Note on Democracy and Competition: The Role of Ownership Structure in a General Equilibrium Model with Vertical Preferences

Ghazzai¹,

Hemissi²,

Lahmandi-Ayed³

et al. 2021

Revue d'Économie Politique

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This note considers a general equilibrium model where individuals are potentially consumers, workers, and shareholders. It extends the results obtained previously by Kahloul et al. (2017) with extreme ownership structures on the majority vote between Monopoly and Duopoly, to the case of any proportion of shareholders in the population.We prove that Duopoly is preferred when non-shareholders constitute a majority of the population. Otherwise, the majority vote depends on the proportion of shareholders and the dispersion of the individuals with respect to their intensity of preference for quality relative to their sensitivity to effort.

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Section: Discussionmentioning

confidence: 99%

Note on Democracy and Competition: The Role of Ownership Structure in a General Equilibrium Model with Vertical Preferences

Ghazzai¹,

Hemissi²,

Lahmandi-Ayed³

et al. 2021

Revue d'Économie Politique

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“…One may consider the higher education sector within a general equilibrium model as in Kahloul et al (2017), since each individual may be at the same time a consumer, a student/worker and a shareholder (of the productive firm or of the University). Finally, the consequences in terms of development, in particular poverty, of the existence and privatization of a university be it public or private, may be evaluated as in Kahloul et al (2019).…”

Section: Discussionmentioning

confidence: 99%

Is partial privatization of universities a solution for higher education?

Lahmandi-Ayed

Lasram

Laussel

2021

J Public Economic Theory

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This paper accounts simply for the link between higher education and the productive economy through educated workers. We study a model of vertical successive monopolies where students/workers acquire qualification from a University then “sell” skilled labor to a monopoly which itself sells its final product to consumers, linking through quality the education sector to the labor and output markets. We determine the optimal share the State should keep in the University to compensate for the market imperfections, while taking into account the inefficiencies of public management. The resulting partially privatized University fixes the tuition fees so as to maximize a weighted sum of profits and social welfare. We derive the optimal public share under the hypothesis that the State may subsidize the tuition fees/University losses, then under the constraint that the University should make a nonnegative profit. We prove that in both cases, the State should keep a substantial share (higher under the first hypothesis) in the University, unless public management is too inefficient in which case the University's management should be completely private.

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“…22 For each level of headcount ratio, we run two separate regressions on each subsample to detect the nature (positive, negative, or nonsignificant) of the effect of competition on poverty, while choosing the best subsample cutoff. Contrary to Kahloul et al (2019) who divided the whole sample arbitrarily, we experiment different sub-sample cutoffs and choose the best fit for each level of headcount ratio, that is, the cutoff providing the highest correlation between the observed and the fitted values of poverty for both subsamples. Results showing the best cutoffs are reported in the row "Number of countries" of each Tables 7-9.…”

Section: Market Capitalization Mcapmentioning

confidence: 99%

“…However, all the above mentioned literature on competition and poverty completely ignores the ownership structure. The only exceptions in this respect are Rodriguez‐Castelan (2015) and Kahloul et al (2019). We use the same model as Ghazzai et al (2021); Kahloul et al (2019, 2017); Lahmandi‐Ayed and Laussel (2018, 2022) and Amir et al (2022).…”

Section: Introductionmentioning

confidence: 99%

“…The only exceptions in this respect are Rodriguez‐Castelan (2015) and Kahloul et al (2019). We use the same model as Ghazzai et al (2021); Kahloul et al (2019, 2017); Lahmandi‐Ayed and Laussel (2018, 2022) and Amir et al (2022). In particular, Kahloul et al (2019) consider only two extreme ownership structures: concentrated where the owners of the firms are negligible; and egalitarian where the firms are equally owned by the population.…”

Section: Introductionmentioning

confidence: 99%

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More competition to alleviate poverty? A general equilibrium model and an empirical study

Ghazzai

Hemissi

Lahmandi-Ayed

et al. 2023

J Public Economic Theory

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In this paper, we theoretically and empirically analyze the impact of competition on poverty. We consider a general equilibrium framework with vertical preferences and compare poverty in a Monopoly setting versus a Duopoly setting considering explicitly the ownership structure. Poverty is measured by the size of the population living below an absolute poverty line. Theoretical results show that the impact of competition on poverty is contingent to the ownership structure, the poverty line and the relative dispersion of the individuals with respect to their intensity of preference for quality and sensitivity to effort: competition can improve or worsen poverty depending on the model's parameters. Empirical findings for the three existing poverty lines ($1.9, $3.2, and $5.5) are consistent to a large extent with our theoretical results.

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Poverty, competition, democracy, and ownership: A general equilibrium model with vertical preferences

Abstract: If a free society cannot help the many who are poor, it cannot save the few who are rich.

Cited by 5 publications

References 49 publications

Note on Democracy and Competition: The Role of Ownership Structure in a General Equilibrium Model with Vertical Preferences

Note on Democracy and Competition: The Role of Ownership Structure in a General Equilibrium Model with Vertical Preferences

Is partial privatization of universities a solution for higher education?

More competition to alleviate poverty? A general equilibrium model and an empirical study

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