Shama Gamkhar

Is the Response of State and Local Highway Spending Symmetric to Increases and Decreases in Federal Highway Grants

Do states and localities, when faced with cuts in federal highway grants, attempt to maintain spending on existing highway projects with own sources of funding? Current state and local government highway spending is postulated here to respond to federal highway grants of the current fiscal year and up to 2 previous fiscal years. The results of this study provide some evidence of asymmetry. When current federal highway grants are increased, their immediate effect on state and local government highway spending is negligible; their impact on spending comes in later years. In contrast, cutbacks in current federal highway grants result in a drop in current state and local government highway spending. The response of state and local government highway spending to lagged federal highway grants is statistically significant and symmetric with respect to increases and decreases in these grants.

The Role of Federal Budget and Trust Fund Institutions in Measuring the Effect of Federal Highway Grants on State and Local Government Highway Expenditure

The response of state and local government spending to federal highway aid is largely affected by federal highway financing institutions. Most earlier studies of the spending effects of federal highway grants consider federal highway expenditure as the highway grant variable, disregarding the reimbursement nature of this expenditure and the multiyear availability of highway aid. This article argues that obligations of federal highway aid to states rather than actual federal expenditure should be used in models assessing the spending effects of federal highway grants. Consideration of federal obligations rather than expenditure results in a greater effect of highway grants on spending than reported in prior studies.

Water sharing between India and Pakistan: a critical evaluation of the Indus Water Treaty

For nearly 50 years a relatively stable Indus Water Treaty (IWT) moderated competition for the Indus water between Pakistan and India. Rising demand for water in each nation could unsettle this stable relationship, as foreshadowed by the involvement of a third party during 2005–2007 for the first time in the treatys history. This paper discusses Pakistan and Indias experience in the context of other international shared rivers. For the benefit of their people, Pakistan and India could coordinate unilateral development and resolve issues rather than defer them.

The Impact of Federal Alcohol and Drug Abuse Block Grants on State and Local Government Substance Abuse Program Expenditures: The Role of Federal Oversight

Are the federal Alcohol and Drug Abuse (ADA) block grant funds substituting for or supplementing state and local government spending on substance abuse? Using panel data on state and local government substance abuse programs, this study explores the fiscal effects of the ADA block grant money and the increased enforcement (after 1989) of federal restrictions on state spending of ADA block grants. The findings here reveal that for the current period, the federal ADA grant has no statistically significant effect on state and local government substance abuse spending both before and after 1989, and the increased enforcement of federal restrictions on the ADA grants after 1989 does not change this result. An additional finding is that lagged ADA grants have had a large effect on substance abuse spending both before and after 1989--a feature of the program not considered in previous studies.

A methodology for estimating health benefits of electricity generation using renewable technologies

At Copenhagen, the developed countries agreed to provide up to

Asymmetric responses in economic models

100 bn per year to finance climate change mitigation and adaptation by developing countries. Projects aimed at cutting greenhouse gas (GHG) emissions will need to be evaluated against dual criteria: from the viewpoint of the developed countries they must cut emissions of GHGs at reasonable cost, while host countries will assess their contribution to development, or simply their overall economic benefits. Co-benefits of some types of project will also be of interest to host countries: for example some projects will contribute to reducing air pollution, thus improving the health of the local population. This paper uses a simple damage function methodology to quantify some of the health co-benefits of replacing coal-fired generation with wind or small hydro in China. We estimate the monetary value of these co-benefits and find that it is probably small compared to the added costs. We have not made a full cost-benefit analysis of renewable energy in China as some likely co-benefits are omitted from our calculations. Our results are subject to considerable uncertainty however, after careful consideration of their likely accuracy and comparisons with other studies, we believe that they provide a good first cut estimate of co-benefits and are sufficiently robust to stand as a guide for policy makers. In addition to these empirical results, a key contribution made by the paper is to demonstrate a simple and reasonably accurate methodology for health benefits estimation that applies the most recent academic research in the field to the solution of an increasingly important problem.

Capital Financing of Schools: A Comparison of Lease Purchase Revenue Bonds and General Obligation Bonds

Abstract Prior research on asymmetric responses in economic models has focussed on estimating the magnitude and direction of the asymmetry with real data. In this paper, we use artificial data and a discrete formula to calculate the marginal responses and predictions regarding the dependent variable, overtime, by existing asymmetric response models. We find that all the models examined here have peculiarities, such as discontinuities in marginal responses and counterintuitive predictions, which are not generally observed in economic behavior in the real world. This paper provides insights as to what properties would be useful in an asymmetric response model to make them relevant for policy analysis.

Urban challenges in India: A review of recent policy measures

School building construction is on the rise nationwide and Texas has led the nation in outlays on school construction. We consider key factors that distinguish lease purchase revenue (LPR) bonds and general obligation (GO) bonds as debt instruments for financing school facilities in Texas. Our research shows that LPR bonds typically have a higher interest cost than GO bonds and they do not have any advantages over GO bonds in circumventing state restrictions on school district tax and debt authority. Voter approval requirements implicit in the state aid formulae supporting school bond repayments and the bond election requirements are however both less stringent in the case of LPR bonds than GO bonds.