Yvon Rocaboy

Wage dispersion and team performance: A theoretical model and evidence from baseball

We develop a general theoretical model of the effect of wage dispersion on team performance which nests two possibilities: wage inequality may have either negative or positive effects on team performance. A parameter which captures the marginal cost of effort, which we estimate using game-level data from Major League Baseball, determines whether wage dispersion and team performance are negatively or positively related. We find low marginal cost of effort; consequently, wage disparity is negatively related to team performance. Game and season-level regressions also indicate a negative relationship between inequality and performance. We discuss a variety of interpretations of our results.

SDI, NATO, and the Social Composition Function

The strategic defense initiative (SDI) intends to renew the leadership of the USA on the western alliance. The initiative takes place in a period when a summation technology prevails for the aggregation of contributions of NATO allies. We investigate if SDI induces a shift in Hirshleifer’s social composition function. Panel data tests over the period 1970–1990 do not confirm any break toward a best-shot aggregator. SDI does not alter the core of deterrence. It is indeed a public good at the US level but not at the NATO level, where, it is one of the joint products of the alliance. We also investigate the lessons to be drawn for the current debates on ballistic defense.

Fiscal Rules vs. Political Culture as Determinants of Soft Budget Spending Behaviors: Evidence from Italian and French Regions

This paper analyses intergovernmental transfers in France and Italy to assess how soft budget spending behaviors may result from slacks in institutional constraints or from phenomena related to political culture, like administrative practices or implementation of rules. It innovates on the previous literature, which concentrated on single countries, by adopting a comparative perspective. We estimate two separate but identical autoregressive forecasting model on French and Italian data to evaluate the extent to which regional administrators of each country can expect to be bailed out given the fiscal rules and institutions they face. This allows to proxy the bailout expectations in both countries and their role in determining soft budget spending behaviors. A larger impact of expectations is taken as evidence of greater discretion in fiscal decisions over and beyond the formal fiscal rules in place, evincing a more lax political culture. The estimates indicate that soft budget constraints and bailing out expectations are a quantitatively important component of local government spending in both countries, regardless the different degrees of stringency of fiscal rules and the type of grants and expenditures (total, current and capital) examined.