Paolo Melindi-Ghidi

Faculty ,  Aix-Marseille Université , Faculté des arts, lettres, langues, sciences humaines (ALLSH)

Macro, labor and international economics
Melindi-Ghidi
Status
Assistant professor
Research domain(s)
Environmental economics, Public economics
Thesis
2012, Université Catholique de Louvain
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Contact
paolo.melindi-ghidi[at]univ-amu.fr
Address

AMU - AMSE
5-9 Boulevard Maurice Bourdet, CS 50498
​13205 Marseille Cedex 1

Website
https://sites.google.com/site/pmelindighidiecon/
Abstract This article analyzes the impact of income inequality on environmental policy in the presence of green consumers. We first perform an empirical analysis using a panel of European countries over the period 1995–2021. The results show a negative relationship between inequality and public environmental expenditure, which is weaker with higher inequality. We also find a negative correlation between environmental expenditure and green consumption, that highlights the substitutable nature of the relationship between the two variables. We next develop a model with two main ingredients: citizens with different income capacities have access to two commodities that differ in terms of environmental impact, and they vote on the environmental policy. In equilibrium, the population is divided into two groups, conventional vs green consumers. An increase in inequality raises the marginal cost of policy through size and composition effects. The higher the equilibrium tax, the larger the overall effect. This provides us with an explanation of the main empirical result.
Keywords Green consumption, Environmental public expenditure, Inequality, Income distribution
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Abstract This paper revisits the question of whether fixed and mobile Internet expenditures are substitutable or complementary. We estimate a demand system using French household expenditure data to compute price elasticities for different categories of goods. The results indicate that fixed and mobile Internet expenditures are complementary in France. This complementarity effect increases with income level. We then develop a simple theoretical model showing that depending on the characteristics of fixed and mobile data tariffs, fixed and mobile Internet expenditures can exhibit non-substitutability or even complementarity.
Keywords QUAIDS demand system, Household behavior, Internet expenditure
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Abstract Recent data from US States reveal a negative correlation between environmental degradation and environmental concerns, which in turn seem inversely linked to fertility rates. We introduce a dynamic model to examine explicitly this interplay and explain the observed positive correlation between the carbon intensity of the economy and fertility in data from US States. The key ingredient of our model is that preferences for the number of children and environmental concerns may be complementary or substitutable. Interesting results occur when environmental concerns and the number of children are substitutable. At a stable steady state, a stronger effect of environmental concerns on household preferences reduces the number of children, as stressed by recent literature. The dynamics show that lower fertility rates are associated with lower environmental impacts from economic production, such as reduced carbon intensity.
Keywords Carbon intensity Fertility Environmental concerns Environmental degradation Transitional dynamics
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Abstract Recent data from US states reveal a negative correlation between environmental degradation and environmental concerns, which in turn seem inversely linked to fertility rates. We introduce a dynamic model to examine explicitly this interplay and explain the observed positive correlation between the carbon intensity of the economy and fertility in data from US states. The key ingredient of our model is that preferences for the number of children and environmental concerns may be complementary or substitutable. Interesting results occur when environmental concerns and the number of children are substitutable. At a stable steady state, a stronger effect of environmental concerns on household preferences reduces the number of children, as stressed by recent literature. The dynamics show that lower fertility rates are associated with lower environmental impacts from economic production, such as reduced carbon intensity.
Keywords Environmental concerns, Environmental degradation, Transitional dynamics, Fertility, Carbon intensity
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Abstract The modernisation theory of regime change is often perceived to be a murky paradigm, lacking theoretical or empirical foundations. In response, we clarify the links between education and regime change.More specifically, we propose that education contributes indirectly to the collapse of autocratic regimes because educated people engage in non-violent (civil) resistance that reduces the effectiveness of the security apparatus. We empirically test the validity of this 'defanging effect' of education. We indeed find that the combination of high autocracy and high education levels tends to trigger non-violent campaigns, which in turn increases the likelihood of a regime change, likely to be associated with political liberalisation.
Keywords Regime change, Modernisation, Education, Democratisation, Civil resistance, Autocracy
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Abstract What is the role of income polarization for explaining differentials in public funding of education? To answer this question, we provide a new theoretical modelling for the income distribution that can directly monitor income polarization. It leads to a new income polarization index where the middle class is represented by an interval. We implement this distribution in a political economy model with endogenous fertility and public/private educational choices. We show that when households vote on public schooling expenditures, polarization matters for explaining disparities in public education funding across communities. Using micro-data covering two groups of school districts, we find that both income polarization and income inequality affect public school funding with opposite signs whether there exist a Tax Limitation Expenditure (TLE) or not.
Keywords Education politics, Schooling choice, Income polarization, Probabilistic voting, Bayesian inference
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Abstract Les îles seront-elles bientôt rayées de la carte, englouties par la montée des eaux ? Les plages de sable fin, les cocotiers, des Caraïbes au Pacifique glissent lentement sous la mer. Bientôt, ces paysages paradisiaques ne seront que de lointains souvenirs. Pour ceux qui y vivent, c’est toute leur vie qui prend l’eau. Selon les économistes L. Cassin, P. Melindi-Ghidi et F. Prieur, ces populations n’auront guère d’autres solutions que la migration.
Keywords Changement climatique, Ile
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Abstract In this paper, we study the gains and losses incurred during the COVID-19 pandemic. We distinguish between the effects of the pandemic and those of the health measures implemented to reduce the death toll, notably "the lockdown." Our theoretical model is focused on within-sector firm heterogeneity and involves imperfect competition in a partial equilibrium setting. A comparison between the gains and losses triggered by both the pandemic and the lockdown indicates that an excess profits tax imposed on the "winners" could partly compensate the "losers" of the same sector.
Keywords Pandemic Covid-19
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Abstract This paper examines the adaptation policy of Small Island Developing States (SIDS) facing climate change. We consider a dynamic economy with the following ingredients: (i) natural capital is an input in local production that is degraded as a result of climate change; (ii) the government has two instruments to cope with climate-related damages: it can adjust the population size thanks to migration policies and/or it can undertake adaptation measures in order to slow the degradation of natural assets; (iii) expatriates send remittances back home. We identify two critical conditions on the fundamentals of the economy that helps understand the features of the optimal policy. We especially show that in most situations, the migration policy is a valuable instrument. Calibrating the model for Caribbean SIDS, we find that the optimal policy of the Caribbean region displays heterogeneity, that is explained by the different degradation rate, population size, and endowment in natural capital. We also highlight that the higher the climate damages, the higher the incentives to conduct an active adaptation policy, combining conventional adaptation actions and migration..
Keywords SIDS, Climate change, Adaptation, Migration, Natural capital, Optimal policy-mix
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Abstract Elite-biased democracies are those democracies in which former political incumbents and their allies coordinate to impose part of the autocratic institutional rules in the new political regime. We document that this type of democratic transition is much more prevalent than the emergence of pure (popular) democracies in which the majority decides the new institutional rules. We then develop a theoretical model explaining how an elite-biased democracy may arise in an initially autocratic country. To this end, we extend the benchmark political transition model of Acemoglu and Robinson (2005) along two essential directions. First, population is split into majority versus minority groups under the initial autocratic regime. Second, the minority is an insider as it benefits from a more favourable redistribution by the autocrat. We derive conditions under which elite-biased democracies emerge and characterise them, in particular with respect to pure democracies. https://doi.org/10.1016/j.mathsocsci.2021.03.007
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Abstract As illustrated by some French departments, how can we explain the existence of equilibria with different fertility and growth rates in economies with the same fundamentals , preferences, technologies and initial conditions? To answer this question we develop an endogenous growth model with altruism and love for children. We show that independently from the type of altruism, a multiplicity of equilibria might emerge if the degree of love for children is high enough. We refer to this condition as the love for children hypothesis. Then, the fertility rate is determined by expectations on the future growth rate and the dynamics are not path-dependent. Our model is able to reproduce different fertility behaviours in a context of completed demographic transition independently from fundamentals, preferences, technologies and initial conditions.
Keywords Bal- anced Growth Path, Endogenous growth, Expectations, Love for Children, Fertility
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Abstract In this paper, we study the production and dissemination of public knowledge goods, such as technological knowledge, generated by a network of voluntarily cooperating innovators. We develop a private-collective model of public knowledge production in networked innovation systems, where group-based social preferences have an impact on the coalition formation of developers. Our model builds on the large empirical literature on voluntary production of pooled public knowledge goods, including source code in communities of software developers or data provided to open access data repositories. Our analysis shows under which conditions social preferences, such as ‘group belonging’ or ‘peer approval’, influence the stable coalition size, as such rationalising several stylized facts emerging from large-scale surveys of open-source software developers, previously unaccounted for. Furthermore, heterogeneity of social preferences is added to the model to study the formation of stable but mixed coalitions.
Keywords Coalition formation, Networked innovation, Open-source software OSS, Public knowledge goods, Private-collective model, Social preferences
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Abstract This paper aims to get a better understanding of the motivational and transaction cost features of building global scientific research commons, with a view to contributing to the debate on the design of appropriate policy measures under the recently adopted Nagoya Protocol. For this purpose, the paper analyses the results of a world-wide survey of managers and users of microbial culture collections, which focused on the role of social and internalized motivations, organizational networks and external incentives in promoting the public availability of upstream research assets. Overall, the study confirms the hypotheses of the social production model of information and shareable goods, but it also shows the need to complete this model. For the sharing of materials, the underlying collaborative economy in excess capacity plays a key role in addition to the social production, while for data, competitive pressures amongst scientists tend to play a bigger role.
Keywords Biodiversity research, Culture collections, Access and benefit sharing, Open access policies, Collaborative economy
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Abstract Compensation payments to farmers for the provision of agri-environmental services are a well-established policy scheme under the EU Common Agricultural Policy. However, in spite of the success in most EU countries in the uptake of the programme by farmers, the impact of the scheme on the long term commitment of farmers to change their practices remains poorly documented. To explore this issue, this paper presents the results of structured field interviews and a quantitative survey in the Walloon Region of Belgium. The main finding of this study is that farmers who have periodic contacts with network bridging organisations that foster cooperation and social learning in the agri-environmental landscapes show a higher commitment to change. This effect is observed both for farmers with high and low concern for biodiversity depletion. Support for network bridging organisations is foreseen under the EU Leader programme and the EU regulation 1306/2013, which could open-up interesting opportunities for enhancing the effectiveness of the current payment scheme for agri-environmental services.
Keywords Bridging organisations, EU Common Agricultural Policy, Network, Payments for environmental services
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Abstract The transition towards a sustainable food system requires comprehensive changes in food production and consumption, shaped by the interplay of public policy, market forces, and cultural norms. We develop a model to analyse the role of sustainable food culture in shaping consumption choices, particularly in terms of purchasing from short food supply chains. The model accounts not only for the heterogeneity of preferences and their evolution but also for the heterogeneity of incomes. This allows for a discussion of the effectiveness of policies fostering sustainable food consumption choices, considering their varying impacts across income levels. The results suggest that if policy makers seek to promote a sustainable food system, public policies must be carefully designed, as their effects can be uncertain and may impact low-income households.
Keywords Culture, Sustainable food, Short food supply chain, Income distribution
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Abstract The modernisation theory of regime change is often perceived to be a murky paradigm, lacking theoretical or empirical foundations. In response, we clarify the links between education and regime change. More specifically, we propose that education contributes indirectly to the collapse of autocratic regimes because educated people engage in non-violent (civil) resistance that reduces the effectiveness of the security apparatus. We empirically test the validity of this ‘defanging effect’ of education. We indeed find that the combination of high autocracy and high education levels tends to trigger non-violent campaigns, which in turn increases the likelihood of a regime change, often associated with political liberalisation and, to a lesser degree, democratisation.
Keywords Autocracy, Civil resistance, Democratisation, Education, Modernisation, Regime change
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Abstract This paper develops an overlapping generations model that links a public health system to a pay-as-you-go (PAYG) pension system. It relies on two assumptions. First, the health system directly finances curative health spending on the elderly. Second, public pensions partially depend on health status by introducing a component indexed to society's average level of old-age disability. Reducing the average disability rate in the economy then lowers pension benefits as the need to finance long-term care services also drops. We study the effects of introducing such a 'comprehensive' Social Security system on individual decisions, capital accumulation, and welfare. We first show that health investments can boost savings and capital accumulation under certain conditions. Second, if individuals are sufficiently concerned with their health when old, it is optimal to introduce a health-dependent pension system, as this will raise social welfare compared to a system where pensions are not tied to the society's average level of old-age disability. Our analysis thus highlights an important policy recommendation: making PAYG pension schemes partially health-dependent can be beneficial to society.
Keywords PAYG Pension System, Disability, Overlapping generations, Long-term care, Curative Health Investments
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Abstract This paper contributes to the literature interested in the new factors that may determine fertility behaviors. Many studies underlay that environmental concerns have a direct effect on households' fertility decisions. We present a dynamic model that explicitly examines this interplay, considering whether the number of children and environmental concerns may be complementary or substitutable. Interesting results occur when environmental concerns and the number of children are substitutable. At a stable steady state, a stronger effect of environmental concerns on household's preferences reduces the number of children, as also stressed by a recent literature. The dynamics can be described by an inversely Ushaped relationship between fertility and environmental indicators reflecting the impact of economic production, such as the carbon intensity, as we illustrate using data on US States. The dynamics also explain that regions with lower carbon intensity are those with lower fertility.
Keywords Fertility, Environmental concerns, Quantity-quality trade-off, Transitional dynamics
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Abstract Revolutions are often perceived as the key event triggering the fall of an autocratic regime. They are believed to be driven by the people with the purpose of establishing a democratic regime for the people. However, the historical record does not agree with this picture: revolutions are rare, elite-driven, and often non-democratising. We first develop a new set of stylised facts summarising and deepening the latter features. Second, to explain these facts, we develop a theory of elite-driven non-democratising institutional changes triggered by popular uprisings. Our model includes four key ingredients: (i) a minority/majority split in the population; (ii) the persistence of fiscal particularism post-revolution; (iii) the presence of windfall resources; (iv) a distinction between labour income and resource windfalls as well as endogeneity of the labour supply. We show that revolutions are initiated by the elite and only when fractionalisation is moderate. Resource windfalls and labour market repression can also play a role in triggering this 'alliance' between the majority and the elite. If a revolution happens, redistribution in the subsequent regime still favours the elite, although the masses are better off.
Keywords Dominant minorities, Elite-led revolutions, Social structures, Particularism, Resources
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Abstract What is the role of income polarisation for explaining differentials in public funding of education? To answer this question, we provide a new theoretical modelling for the income distribution that can directly monitor income polarisation. It leads to a new income polarisation index where the middle class is represented by an interval. We implement this distribution in a political economy model with endogenous fertility and public/private educational choices. We show that when households vote on public schooling expenditures, polarisation matters for explaining disparities in public education funding across communities. Using micro-data covering two groups of school districts, we find that both income polarisation and income inequality affect public school funding with opposite signs whether there exist a Tax Limitation Expenditure (TLE) or not.
Keywords Education politics, Schooling choice, Income polarisation, Probabilistic voting, Bayesian inference
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Abstract Elite-biased democracies are those democracies in which former political incumbents and their allies coordinate to impose part of the autocratic institutional rules in the new political regime. We document that this type of democratic transition is much more prevalent than the emergence of pure (popular) democracies in which the majority decides the new political rules. We then develop a theoretical model explaining how an elitebiased democracy may arise in an initially autocratic country. To this end, we extend the benchmark political transition model of Acemoglu and Robinson (2006) along two essential directions. First, population is split into majority versus minority groups under the initial autocratic regime. Second, the minority is an insider as it benefits from a more favourable redistribution by the autocrat. We derive conditions under which elite-biased democracies emerge and characterise them, in particular with respect to pure democracies.
Keywords Elite-biased democracy, Institutional change, Minority/majority, Economic favouritism, Inequality, Revolution
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Abstract The occurrence of some revolutionary episodes seems initially puzzling. For example, before the 'Arab Spring', macroeconomic conditions were improving, the political leaders had been in power for a long time, and the autocrats had shown an apparent interest in the welfare of their population by investing in human capital. We argue that such a paradox can be solved by considering that high education levels are incompatible with the features characterising strong neopatrimonial states. We develop this intuition in a simple theoretical model and we test our prediction in a sequential empirical study of regime changes and regime breakdowns in a large panel of countries. We indeed find that a regime change is more likely in countries combining high neopatrimonialism and high education levels. Moreover, when a regime change happens under these circumstances, a revolution is the most likely type of regime breakdown. These results help to understand the 'Arab Spring' but are not specific to the Arab world.
Keywords Education, Neopatrimonialism, Regime breakdown, Regime change, Revolution
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Abstract We develop a theory of institutional transition from dictatorship to minority dominant-based regimes. We depart from the standard political transition framework à la Acemoglu-Robinson in four essential ways: (i) population is heterogeneous, there is a minority/majority split, heterogeneity being generic, simply reflecting subgroup size; (ii) there is no median voter in the post-dictatorship period, political and economic competition is favorable to the minority (fiscal particularism); (iii) (windfall) resources are introduced, and (iv) we distinguish between labor income and resources, and labor supply is endogenous. We first document empirically fiscal particularism, its connection with resource endowment, and the impact of both on revolutionary bursts. Second, we construct a full-fledged model incorporating the four characteristics outlined above. We show, among others, that polarization is a sufficient condition for revolutions, while resource rents are not: they do matter though when polarization is low. In agreement with our empirical facts, countries engaging in revolutions tend to be slightly less resource-rich than other countries. We also outline the interplay between resource rents, polarization and labor market conditions at the dawn of institutional change. Our theory is appropriate to understand the institutional dynamics in highly homogeneous resource-rich countries, which after post-independence autocratic regimes, turn to be dominated by minorities, Algeria being the paradigmatic case.
Keywords Political transition, Minority/majority, Fiscal particularism, Dominant minority, Resources, Labor Market
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Abstract Somehow paradoxically, it is common for research on the determinants of civil wars to conclude that social factors matter much less, if at all, than economic factors. We contribute to this debate by conducting an original empirical analysis in which we investigate whether the deliberate unequal treatment of groups of people by a government can give rise to movements opposing the current political system. In doing so, we significantly innovate on the existing literature exploring the links between grievances and civil war. We look at all forms of social conflict, violent and non-violent, high and low intensity. Our index of social divisiveness captures multiple dimensions of observed unequal group treatments and is not restricted to latent ethnic divisions. We control for time-invariant factors in a large sample of countries over a long period of time. We take into account measurement uncertainty, dynamics, cross-region heterogeneity, localised spatial effects, non-linearity of effects, and a potential endogeneity bias. Our results show that social divisiveness has a large, positive, and statistically significant robust effect on anti-system opposition. It also appears to be the main channel through which long-lasting ethnic polarisation influences the onset of civil wars.
Keywords Civil resistance, Civil war, Grievances, Social conflict, Social divisiveness
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Abstract Do communities with the same level of inequality but a different level of income polarisation perform differently in terms of public schooling? To answer this question, we extend the theoretical model of schooling choice and voting developed by de la Croix and Doepke (2009), introducing a more general income distribution characterised by a three-member mixture instead of a single uniform distribution. We show that not only income inequality, but also income polarisation, matters in explaining disparities in public education quality across communities. Public schooling is an important issue for the middle class, which is more inclined to pay higher taxes in return for better public schools. Contrastingly, poorer households may be less concerned about public education, while rich parents are more willing to opt-out of the public system, sending their children to private schools. Using micro-data covering 724 school districts of California and introducing a new measure of income polarisation, we find that school quality in low-income districts depends mainly on income polarisation, while in richer districts it depends mainly on income inequality.
Keywords Schooling choice, Income polarisation, Probabilistic voting, Education politics, Bayesian inference
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Abstract Why, in some urban communities, do rich and poor households cohabit while, in others, we observe sorting by income? To answer this question I develop a two-community general equilibrium framework of school quality, residential choice and tax decision with probabilistic voting. The model predicts that in highly unequal societies in which households segregate by schooling, low- and high-income households choose to live in the same community. When there is less inequality, we observe the typical sorting by income across communities. The theoretical model suggests that the effect of inequality on the quality of public schooling is ambiguous and depends on the relative endowments of housing in the two communities. When inequality increases, if housing in the community where rich and poor households cohabit is affordable, then an inflow of high-income middle class households towards this community emerges. As a consequence, inequality negatively impacts the quality of public schooling due to an ends-against-the-middle coalition that pushes tax rates down.
Keywords Inequality, Probabilistic voting, Segregation, Income mixing equilibrium
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Abstract In this paper we develop a private-collective model of voluntary public knowledge production, where group-based social preferences have an impact on coalition formation. Our theoretical model builds on the large empirical literature on voluntary production of pooled public knowledge goods, including source code in communities of software developers or data provided to open access data repositories. Our analysis shows under which conditions social preferences such as 'group belonging' or 'peer approval' influence stable coalition size, as such rationalising several stylized facts emerging from large scale surveys of Free/Libre/Open-Source software developers (David and Shapiro, 2008), previously unaccounted for. Furthermore, heterogeneity of social preferences is added to the model to study the formation of stable, but mixed coalitions.
Keywords Public knowledge goods, Coalition formation, Private-collective model, Group belonging, Peer approval, Open source software
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Abstract Better health not only boosts longevity in itself, it also postpones the initial onset of disability and chronic inrmity to a later age. In this paper we examine the potential eects of such compression of morbidity' on pensions, and introduce a health-dependent dimension to the standard pay-as-you-go (PAYG) pension scheme. Studying the long-term implications of such a system in a simple overlapping generations framework, we nd that an increase in public health investment can augment capital accumulation in the long run. Because of this, the combination of health investment with a partially health-dependent PAYG scheme may in fact outperform a purely PAYG system in terms of lifetime welfare.
Keywords Health investment, Disability pension, Long-term care, PAYG Pension System, OLG model
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