This paper studies the political economy of pricing and investment for excludable and congestible public goods in a federal state. Currently, we observe a wide variety of practices, ranging from federal gasoline taxes and road investment to the local supply of -- and sometimes free access to -- libraries, parking spaces and public swimming pools. The two-region model we develop allows for spill-overs between regions, it takes into account congestion, and it captures both heterogeneity between and within regions. Regional decisions are taken by majority voting; decisions at the federal level are taken either according to the principle of a minimum winning coalition or through cooperative bargaining. We have the following results. First, when users form the majority in at least one region, decentralized decision making performs certainly better than centralized decision making if spill-overs are not too large. Centralized decisions may yield higher welfare than decentralization only if users have a large majority and the infrastructure in a given region is intensively used by both local and outside users. Second, if non-users form a majority in both regions, centralized and decentralized decision making yield the same socially undesirable outcome, with prices that are much too high. Third, both bargaining and imposing uniform price restrictions across regions improve the performance of centralized decisions. Fourth, the performance of decentralized supply is strongly enhanced by local self-financing rules; it prevents potential exploitation of users within regions. Self-financing rules at the central level are not necessarily welfare-improving. Finally, the results of this paper contribute to a better understanding of actual policy-making.
The Internet and other telecommunications systems have reshaped the means by which markets are accessed, generated, and transformed. Recent innovations in computer science have led to the development of a virtually bound, decentralized, encrypted currency system known as bitcoin. Unlike conventional currency systems, the Bitcoin protocol is cryptologically defined with a virtual structure that allows it to simultaneously operate as currency, commodity, and market shaping socio-political force. Its decentralized design permits it to function as a free-market response to fiat currencies vulnerable to inflation, regulation, and manipulation. Given the cultural significance anthropologists and other social scientists have assigned to various modes and mediums of exchange over the years, the socio-economic impact of this novel currency system warrants particular consideration. This research describes the Bitcoin community that has emerged alongside the currency, including the entrepreneurs, developers, and consumers who are dedicated to bitcoin’s perpetuation and acceptance as an internationally recognized medium of exchange. Ethnographic interviews and participant observation were utilized to collect information from users in the Central Florida area, detailing their experiences and interactions with the Bitcoin protocol and its associated community. This research provides new levels of anthropological insight into currency development, market interaction, and economically embodied social commentary. Moreover, its exploratory nature helps create a viable framework around which qualitative inquiry of virtual crypto-currencies may be designed in future studies.
Online advertising is at the core of today’s Web: it is the main business model, generating large annual revenues expressed in tens of billions of dollars that sponsor most of the online content and services. Online advertising consists of delivering marketing messages, embedded into Web content, to a targeted audience. In this model, entities attract Web traffic by offering the content and services for free and charge advertisers for including advertisements in this traffic (i.e., advertisers pay for users’ attention and interests). Online advertising is a very successful form of advertising as it allows for advertisements (ads) to be targeted to individual users’ interests; especially when advertisements are served on users’ mobile devices, as ads can be targeted to users’ locations and the corresponding context. However, online advertising also introduces a number of problems. Given the high ad revenue at stake, fraudsters have economic incentives to exploit the ad system and generate profit from it. Unfortunately, to achieve this goal, they often compromise users’ online security (e.g., via malware, phishing, etc.). For the purpose of maximizing the revenue by matching ads to users’ interests, a number of techniques are deployed, aimed at tracking and profiling users’ digital footprints, i.e., their behavior in the digital world. These techniques introduce new threats to users’ privacy. Consequently, some users adopt ad-avoidance tools that prevent the download of advertisements and partially thwart user profiling. Such user behavior, as well as exploits of ad systems, have economic implications as they undermine the online advertising business model. Meddling with advertising revenue disrupts the current economic model of the Web, the consequences of which are unclear. Given that today’s Web model relies on online advertising revenue in order for users to have access and consume content and services for “free”, coupled with the fact that there are many threats that could jeopardize this model, in this thesis we address the security, privacy and economic issues stemming from this fundamental element of the Web. In the first part of the thesis, we investigate the vulnerabilities of online advertising systems. We identify how an adversary can exploit the ad system to generate profit for itself, notably by performing inflight modification of ad traffic. We provide a proof-of-concept implementation of the identified threat on Wi-Fi routers. We propose a collaborative approach for securing online advertising and Web browsing against such threats. By investigating how a certificate-based authentication is deployed in practice, we assess the potential of relying on certificate-based authentication as a building block of a solution to protect the ad revenue. We propose a multidisciplinary approach for improving the current state of certificate-based authentication on the Web. In the second part of the thesis, we study the economics of ad systems’ exploits and certain potential countermeasures. We evaluate the potential of different solutions aimed at protecting ad revenue being implemented by the stakeholders (e.g., Internet Service Providers or ad networks) and the conditions under which this is likely to happen. We also study the economic ramifications of ad-avoidance technologies on the monetization of online content. We use game-theory to model the strategic behavior of involved entities and their interactions. In the third part of the thesis, we focus on privacy implications of online advertising. We identify a novel threat to users’ location privacy that enables service providers to geolocate users with high accuracy, which is needed to serve location-targeted ads for local businesses. We draw attention to the large scale of the threat and the potential impact on users’ location privacy.
This article reflects some results of the work undertaken by the expert working group on optimization of public expenditures in the area of governance which contributed to the overall efforts on evaluating efficiency of the federal budget expenditures and forming recommendations on the optimization of such expenditures in 2013. This evaluation was conducted jointly by the Russian Academy for National Economy and Public Administration (RANEPA) and National Research University – Higher School of Economics (NRU-HSE) in cooperation with the Ministry of Finance, Ministry of Economic Development, and other federal authorities. The article is focused on the influence of decentralization policies on the efficiency and effectiveness of public spending both in a broad context and in one, based on the practice of delegating some federal powers to the constituent entities (regions) of the Russian Federation. Analysis of the federal budget execution data as well as some public sectors’ statistics demonstrates that the practice of delegation of the Russian Federation’s powers to the sub-national level which was accompanied by relevant budgetary transfers (subventions) has led to an excessive growth of the federal budget expenditure on the relevant areas (as compared to the GDP growth for the same period and the growth of the federal budget expenditures on the public administration as a whole). At the same time –at least in the selected cases –the efficiency and effectiveness of public spending, including performance outputs have decreased aft er the delegation of powers took place. Decentralization based on the delegation of powers has also resulted in new functions aimed at controlling the effectiveness of the delegated authorities’ performance. As a result, total administrative costs have increased. Given these conclusions it is recommended to switch from the practice of delegating authority to the practice of reallocating certain powers among the levels of government with a parallel reallocation of the budget revenue sources. Such a reallocation should be based on a detailed profound review of the efficiency and effectiveness of decentralization in each particularsector, with both the options of further devolution and recentralization being considered.
This manuscript builds on my existing research program that (a) broadly seeks to analyze laws, regulations, instruments, and policy levers that inhibit a market’s ability to recognize an asset’s intrinsic value, whether in terms of financial, social, or human capital, and (b) explores and advances interdisciplinary corporate governance theories by employing a heterodox economic analytic to derive its proposal to the paradox of an unregulated virtual currency market (Bitcoins) and an overly regulated crowdfunding market (Kickstarter). The manuscript functions not only as an homage to Charles MacKay’s legendary 1841 book, Extraordinary Popular Delusions and the Madness of Crowds, which described the human, social, and economic psychology of financial bubbles — particularly the Dutch tulip bulb bubble — but also as an offering of problems and proposals that crowdfunded and Kickstarted entrepreneurial businesses, including those funded by Bitcoin currencies, present for a wide swath of societal stakeholders. To describe the problem, this manuscript (i) describes behavioral finance, (ii) details the new entrepreneurial business possibilities that virtual currencies and crowdfunded entities can explore, (iii) describes how current rules and regulations represent unnecessary constraints to traditional equity-based funding models and concerning governance models of entrepreneurial enterprises, and (iv) questions why one form of capital deployment (currencies) may provide equity-like returns and unique governance, while the other form of investing (crowdfunding), provides only soft-dollar-like returns and no governance for middle-class investors. While both virtual currencies and crowdfunding represent risks, including economic bubble risk, this Article believes that a heterodox economic analysis demonstrates unnecessary constraints on entrepreneurial businesses imposed by extant regulation, regulators, and law and policymakers. To assuage these paradoxic problems for emerging business enterprises, this Article proposes a minarchist heterodox solution of modest statutory language that requires market-based solutions that employ needed risk reduction strategies while redeploying necessary capital to private startup business enterprises. This proposal thus benefits the middle class entrepreneurs, suppliers of capital, and job seekers harmed by the current regulatory regime, while permitting for an expansion of the U.S. and global economies.
This paper shows that the inefficiency of fiscal decentralization in the presence of spillovers, a main tenet of the decentralization literature, is overturned in a particular transportation context. In a monocentric city where road (bridge) capacity is financed by budget-balancing user fees, decentralized capacity choices (made by individual zones within the city) generate the social optimum despite the presence of spillovers. This conclusion is closely tied to the famous self-financing theorem of transporation economics.
The human innovation in the field of monetary freedom takes shape in the virtual communities. Developed and implemented through a decentralized algorithm, the bitcoin project has so far proved itself a success in the field of virtual currency. Beyond the technical part of operation, in this paper we will analyse the theoretical principles underlying the bitcoin. This study shows that the bitcoin largely meets the role of natural money of gold and silver, in compliance to the free market’s behaviour. This allows us to observe the fact that people are aware of the negative implications the state’s intervention has in the monetary filed, thus deciding to create and use their own currency in online transactions.
In the last decade, gay men and other men who have sex with men (MSM) have come to the fore of policy debates about AIDS prevention. In stark contrast to global AIDS policy during the first two decades of the epidemic which excluded MSM from policy outside the West, UNAIDS now identifies MSM as "marginalized but not marginal" to the global AIDS epidemic. This dissertation provides an account of this controversial reversal of global AIDS policy and uses it as a point of departure for understanding the role of intergovernmental organizations (IGOs) like UNAIDS in the formation of global health priorities.In contrast to the emergence of other health and social policy issues, various studies observe that efforts to establish a global agenda for addressing HIV and AIDS have been highly concentrated within intergovernmental organizations. How and in whose interests do new priorities emerge within AIDS IGOs? Health policy researchers argue that IGOs have considerable influence in the formation and dissemination of health policies around the world. However, there is a particularly rich debate among sociologists and political scientists about whether and how IGOs can act autonomously and pursue policy priorities that are not supported by states. Because these organizations generally lack enforcement power and are dependent on states for financial resources and legitimacy, IGOs have traditionally been conceived as lacking autonomy to pursue their own policy interests independent of the interests of states. Yet, recent interventions by sociologists have shown how IGOs strategically navigate the demands of states and even attempt to reconfigure the external environment to promote alignment with the policy interests of the IGO. Nonetheless, concerns about resources continue to plague IGOs and often constrain their agency. In this dissertation I argue that a key limitation of existing studies on the autonomy and influence of IGOs is their narrow focus on the decision-making and agenda-setting stages of policy making. I extend sociological research on the influence and autonomy of IGOs by addressing how concerns about implementation shape the particular structures and strategies that AIDS IGOs adopt in order to pursue their own policy interests. Many of these strategies are not easily understood by existing theories of IGO behavior which argue that as bureaucracies, IGOs will seek to expand their autonomy and influence in a sector. In contrast, I argue that IGOs with limited power to enforce policy implementation by states are highly sensitive to an implementation-autonomy trade off and may actually give up some autonomy in decision-making in order to facilitate broader implementation by states. IGOs also face additional barriers to implementation due to decentralization of the organization at the regional- and country-level and competition from other IGOs, nongovernmental organizations, and bilateral and private donors. Using archival data from World Health Organization's Global Programme on AIDS and its successor, the Joint United Nations Programme on HIV/AIDS (UNAIDS), two IGOs mandated by the United Nations to coordinate a global response to AIDS epidemic, I show in Chapter 1 how concerns about implementation have shaped decisions about the organizational structure of these IGOs. In addition, I show how implementation concerns have promoted the adoption of particular strategies - organizational inreach, interorganizational cooperation, evidence-based advocacy, and bidirectional pressure - to align policy preferences among states, other organizations, and even their own staff. The use of these strategies by AIDS IGOs has had consequences beyond the decision-making phase of policy development. Drawing on a novel dataset compiled from five waves of UN Country Progress Reports on HIV/AIDS (2003, 2006, 2008, 2010, and 2012), I show in Chapter 2 that the use of these strategies has promoted the alignment of national AIDS programs with UNAIDS policies on MSM over time. On the ground, IGO interest in HIV among MSM has also provided new technologies for seeing MSM in hostile political contexts. As I show in a country-case study presented in Chapter 3, claims for the recognition of same-sex sexualities in Malawi have had the most institutional success within the national AIDS programs which increasingly identifies MSM as a key target for public health intervention. Additionally, links between Malawian organizations and transnational research and advocacy networks have provided a context in which (male) same-sex sexualities have become statistically visible and institutionalized, providing a basis for future grassroots mobilization. At the same time, however, IGO interest in MSM has reinvigorated opposition to homosexuality among Malawian political elites and ordinary citizens. In Chapter 4 I introduce original household survey data collected in Malawi in 2012 (N=1491). Building on qualitative findings from Chapter 3, I use these data to quantitatively examine the effects of variation in aid allocations across Malawi's administrative districts on attitudes toward homosexuality. Results show that in districts with higher levels of annual aid per capita, individuals hold more negative views of homosexuality. Thus while IGOs have had a substantial effect on state-level and donor-level adoption of policy priorities, they have had much less success in changing public views toward homosexuality on the ground. These results suggest that models of global diffusion that utilize policy change as an indicator for cultural change may be greatly overestimating cultural change on contentious issues like homosexuality.In sum, IGOs have become central actors in the formation, diffusion, and implementation of AIDS policy concerning same-sex sexualities. They develop new policy ideas and set priorities that may diverge substantially from the interests of member states, both rich and poor. However, IGOs also face considerable barriers to implementing their policy priorities: from reluctant states to the decentralization of staff across dozens of country offices to competition from other organizations and private donors. In this dissertation I show how barriers to implementation shape the structures and strategies of IGOs. As such, this work contends that IGOs are not simply disinterested forums in which states pursue their own interests or passive collections of rules and norms, but autonomous, influential, and self-interested actors that shape the policymaking process and the world around them, sometimes in unexpected and undesirable ways.
Torsten O. Paulussen, Armin Heinzl, Christian Becker
The health sector is a central domain in every economy. It is challenged by progressing costs and funding issues. Hospitals play a major role for the examination and treatment of patients. The sequence how patients are assigned to hospital units determines the quality of treatment, the resource utilization, as well as the patients’ overall treatment time. Thus, efficient scheduling of patients in hospitals is crucial. Current approaches disregard the decentral organization in hospitals and neglect the varying pathway of patients since they often focus on one single unit solely. We propose an agent-based coordination mechanism that overcomes these limitations. Patients and hospital resources are modeled as autonomous software agents which follow their own objectives. This reflects the decentralized structure in hospitals. Agents are coordinated by a distributed mechanism where software agents improve their situation through negotiations which moves towards an overall pareto-optimum. We show promising evaluations based on experiments.
The notion of zero-knowledge [GMR85] is formalized by requiring that for every malicious efficient verifier V ∗ , there exists an efficient simulator S that can reconstruct the view of V ∗ in a true interaction with the prover, in a way that is indistinguishable to every polynomialtime distinguisher. Weak zero-knowledge weakens this notions by switching the order of the quantifiers and only requires that for every distinguisher D, there exists a (potentially different) simulator SD. In this paper we consider various notions of zero-knowledge, and investigate whether their weak variants are equivalent to their strong variants. Although we show (under complexity assumption) that for the standard notion of zero-knowledge, its weak and strong counterparts are not equivalent, for meaningful variants of the standard notion, the weak and strong counterparts are indeed equivalent. Towards showing these equivalences, we introduce new non-black-box simulation techniques permitting us, for instance, to demonstrate that the classical 2-round graph non-isomorphism protocol of Goldreich-Micali-Wigderson [GMW91] satisfies a “distributional” variant of zero-knowledge. Our equivalence theorem has other applications beyond the notion of zero-knowledge. For instance, it directly implies the dense model theorem of Reingold et al (STOC ’08), and the leakage lemma of Gentry-Wichs (STOC ’11), and provides a modular and arguably simpler proof of these results (while at the same time recasting these result in the language of zeroknowledge). 0 1
Bryan Parno, Jon Howell, Craig Gentry, Mariana Raykova
To instill greater confidence in computations outsourced to the cloud, clients should be able to verify the correctness of the results returned. To this end, we introduce Pinocchio, a built system for efficiently verifying general computations while relying only on cryptographic assumptions. With Pinocchio, the client creates a public evaluation key to describe her computation; this setup is proportional to evaluating the computation once. The worker then evaluates the computation on a particular input and uses the evaluation key to produce a proof of correctness. The proof is only 288 bytes, regardless of the computation performed or the size of the inputs and outputs. Anyone can use a public verification key to check the proof. Crucially, our evaluation on seven applications demonstrates that Pinocchio is efficient in practice too. Pinocchio’s verification time is typically 10ms: 5-7 orders of magnitude less than previous work; indeed Pinocchio is the first general-purpose system to demonstrate verification cheaper than native execution (for some apps). Pinocchio also reduces the worker’s proof effort by an additional 19-60×. As an additional feature, Pinocchio generalizes to zero-knowledge proofs at a negligible cost over the base protocol. Finally, to aid development, Pinocchio provides an end-to-end toolchain that compiles a subset of C into programs that implement the verifiable computation protocol. 1
An innovative software technology known as Bitcoin makes it easier for software to operate with some degree of financial autonomy. In a meaningful sense, it is now possible for software to conduct business on its own account, without using the traditional financial system as an intermediary and without a financial existence tied to an existing natural or legal person. This Essay explores this possibility and suggests that legally autonomous entities, such as a limited liability company (LLC) with no members, are a useful legal structure for factually autonomous systems.
This paper will discuss and evaluate the design features of Bitcoin in relation to the libertarian and metallist philosophies that have shaped the cryptocurrency. Bitcoin has failed to be perfectly decentralized or particularly anonymous. Furthermore, its hyperdeflationary design features have made Bitcoin a currency dependent on outside, more stable currencies (e.g., the U.S. dollar), which serve as units of account. Finally, despite the view of money taken by its creators, this supposedly stateless currency is far from apolitical in nature. Although its creators tend to espouse apolitical accounts of money, Bitcoin has been from the beginning a political project -- an evolving, distributed constitutional project, with many goals, visions, and factions. Furthermore, depending on the shape of these political goals, Bitcoin advocates may or may not have a vested interest in creating mechanisms to stabilize the currency and make it a viable unit of account. This paper was written for Christine Desan's seminar, "The Constitutional Law of Money," at Harvard Law School.
Ingrid Sperre Saunes, Anna Sagan, Ingrid Sperre Saunes
Norways five million inhabitants are spread over nearly four hundred thousand square kilometres, making it one of the most sparsely populated countries in Europe. It has enjoyed several decades of high growth, following the start of oil production in early 1970s, and is now one of the richest countries per head in the world. Overall, Norways population enjoys good health status; life expectancy of 81.53 years is above the EU average of 80.14, and the gap between overall life expectancy and healthy life years is around half the of EU average. The health care system is semi decentralized. The responsibility for specialist care lies with the state (administered by four Regional Health Authorities) and the municipalities are responsible for primary care. Although health care expenditure is only 9.4% of Norways GDP (placing it on the 16th place in the WHO European region), given Norways very high value of GDP per capita, its health expenditure per head is higher than in most countries. Public sources account for over 85% of total health expenditure; the majority of private health financing comes from households out-of-pocket payments.The number of practitioners in most health personnel groups, including physicians and nurses, has been increasing in the last few decades and the number of health care personnel per 100 000 inhabitants is high compared to other EU countries. However, long waiting times for elective care continue to be a problem and are cause of dissatisfaction among the patients. The focus of health care reforms has seen shifts over the past four decades. During the 1970s the focus was on equality and increasing geographical access to health care services; during the 1980s reforms aimed at achieving cost containment and decentralizing health care services; during the 1990s the focus was on efficiency. Since the beginning of the millennium the emphasis has been given to structural changes in the delivery and organization of health care and to policies intended to empower patients and users. The past few years have seen efforts to improve coordination between health care providers, as well as an increased attention towards quality of care and patient safety issues. Overall, comparing mortality rates amenable to medical intervention suggests that Norway is among the better performing European countries. Despite having one of the highest densities of physicians in Europe, though, Norway still struggles to ensure geographical and social equity in access to health care.
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