Rethinking Competitiveness

Description

Few politicians can make a speech concerning economic policy without using the term “competitiveness.” Yet, despite its frequent and casual use, there is little if any agreement on its meaning. Scholars have been slow to embrace the term, holding a healthy skepticism toward such political utterances. The American Enterprise Institute (AEI) brought together experts from a variety of fields to discuss the issue of competitiveness and how it may influence their disciplines. This volume is composed of nine prominent scholars' interpretations of and answers to the question: “If ‘competitiveness’ were to have a rigorous and relevant meaning in your field, what might that be?” The conclusions these papers reach enrich the debate on what competitiveness is and how policymakers should strive to support it in the realms of tax policy, education policy, immigration, health care, international trade and much more.

Sujets

• Economic Policy
• Public Policy
• Strategic Planning
• Free Enterprise
• POLITICAL SCIENCE
• Economics
• Capitalism
• Business

Informations

• Publié par: AEI Press
• Date de parution: 19 décembre 2012
• Nombre de lectures: 0
• EAN13: 9780844772523
• Langue: English

Extrait

Rethinking Competitiveness
Rethinking Competitiveness
Kevin A. Hassett, Editor
The AEI Press
Publisher for the American Enterprise Institute
WASHINGTON, D.C.
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Library of Congress Cataloging-in-Publication Data
Rethinking competitiveness / Kevin A. Hassett, Editor.
pages cm
Includes bibliographical references and index. ISBN 978-0-8447-7250-9 (hbk.) — ISBN 0-8447-7250-X (hbk.) — ISBN
978-0-8447-7251-6 (pbk.) — ISBN 0-8447-7251-8 (pbk.) — ISBN (invalid) 978-0-8447-7252-3 (ebook) — ISBN (invalid) 0-8447-7252-6 (ebook)
1. Competition. I. Hassett, Kevin A. HF1414.R48 2012 338.6’048—dc23
2012031415
© 2012 by the American Enterprise Institute for Public Policy Research, Washington, D.C. All rights reserved. No part of this publication may be used or reproduced in any manner whatsoever without permission in writing from the American Enterprise Institute except in the case of brief quotations embodied in news articles, critical articles, or reviews. The views expressed in the publications of the American Enterprise Institute are those of the authors and do not necessarily reflect the views of the staff, advisory panels, officers, or trustees of AEI.
Printed in the United States of America
Contents
L IST OF I LLUSTRATIONS
P REFACE
1. T IEBOUT AND C OMPETITIVENESS , Kevin A. Hassett, R. Glenn Hubbard, and Matthew H. Jensen
Charles Tiebout, Foot Voting, and Competition among Localities
Tiebout and a New View of “Competitiveness”
Conclusion
Notes
References
2. C OMPETITIVE T AX P OLICY , Joel Slemrod
What Exactly Is Competitiveness?
How Can Competitiveness Be Measured?
Taxation and Competitiveness
A Short Digression on Unpersuasive Economic Arguments
Business Taxation
International Considerations
The Corporate Tax and Prosperity: Facts and Evidence
Summary
Notes
References
3. E DUCATION AND G LOBAL C OMPETITIVENESS : L ESSONS FOR THE U NITED S TATES FROM I NTERNATIONAL E VIDENCE , Martin West
Ranking the U.S. Education System: Quality and Quantity Indicators
The Economic Costs of Low-Quality Education
Policy Lessons
Notes
References
4. I MMIGRATION , P RODUCTIVITY , AND C OMPETITIVENESS IN A MERICAN I NDUSTRY , Gordon H. Hanson
Immigration and Competitiveness in Theory
Empirical Evidence on Immigration and Competitiveness
U.S. Immigration Policy and American Competitiveness
Notes
References
5. T HE R OLE OF I NNOVATION AND I NTELLECTUAL P ROPERTY IN E CONOMIC C OMPETITION , Robert J. Shapiro
The Economic Value of Innovation
The Value of Intellectual Property Rights
How Innovations Diffuse across Economies
Competition: Efficiency versus Innovation
Conclusions
Notes
References
6. A MERICAN C OMPETITIVENESS AND THE H EALTH C ARE S YSTEM , Michael E. Chernew and Philip I. Levy
Productivity versus Competitiveness
The Health System’s Effect on the Economy
Comparing International Health Approaches
Conclusions
Notes
References
7. I S THE U NITED S TATES “C OMPETITIVE ” I NTERNATIONALLY IN H EALTH C ARE ? Benjamin Zycher
Some Conventional Wisdom on the U.S. Health Care System
Some International Evidence on Prices and Services
The Comparative Performance of the U.S. Health Care System
Concluding Observations
Notes
References
8. G LOBAL V ALUE C HAINS AND THE C ONTINUING C ASE FOR F REE T RADE : T RADE T HEORY AND I LLUSTRATIONS FROM THE U NITED S TATES AND E AST A SIA , Claude Barfield and Matthew H. Jensen
Two Unbundlings of Trade and Shifting Policy Implications
The First Unbundling and the Big Ideas of Trade Theory
The Second Great Unbundling
East Asian Fragmentation and Supply Chains: The Impact on Trade Data and Analysis
The United States and Global Supply Chains
Observations and Conclusions for Policy
Notes
References
9. I NTERNATIONAL C OMPETITIVENESS , Phillip Swagel
Uses and Meanings of “Competitiveness”
Capital Markets Competitiveness
Policy Appeals to Competitiveness
International Competitiveness in the Modern Vernacular
Notes
References
A BOUT THE A UTHORS
List of Illustrations
Figures
1-1 Consensus Bidding and Sorting
1-2 Distribution of Top Statutory Corporate Tax Rates in the OECD
1-3 Distribution of Effective Average Corporate Tax Rates in the OECD
3-1 Math and Science Achievement in OECD Countries
3-2 Math Achievement vs. Educational Expenditure across OECD Countries
3-3 Science Achievement vs. Educational Expenditure across OECD Countries
3-4 Share of Adults in 2008 with Postsecondary Degree in Select OECD Countries, by Age Range
4-1 Share of U.S. Employment by Education Group
4-2 Immigrant Share of U.S. Employment by Education and Experience
4-3 Immigrant Share of U.S. Employment for Highly Educated Workers
4-4 Student Visas Issued by the U.S. Government
4-5 Foreign Graduate Students in U.S. Universities
4-6 Annual Cap on New H-1B Visas for Skilled Labor
4-7 Distribution of Legal Permanent Resident Visas, 1999–2008
4-8 Composition of U.S. Foreign-Born Population by Legal Status, 2007
4-9 Percent of Foreign Born in the National Population
4-10 Percent of Immigrant Population with 13-Plus Years of Education, 2000
4-11 Change in Working-Age Population 2005–2020 with Zero Immigration
8-1 U.S./UK Export and Productivity Ratios by Industry, 1950–1951
8-2 Trade Types, 1989–2002
8-3 Components of a Supply Chain
8-4 Share of Parts and Components in Total Exports
8-5 Complex Network for Hard Disk Drive
8-6 Proportion of Processing Trade in China’s Total Trade, 1988–2007
8-7 The Dominant Role of Foreign-Invested Enterprises in China’s ATP Surplus
8-8 Value Added Percentages for iPhone 4
8-9 Apparel Global Supply-Chain Process
8-10 Share of U.S. Multinational Parents in Employment, Output, Capital Investment, and R&D
Tables
1-1 Empirically Supported Implications of the Tiebout Model
2-1 Tax Rates and Growth Rates, Selected OECD Countries
7-1 Public Health Expenditures as a Percent of Total Health Expenditures, 2009
7-2 Fees for Physician Office Visits, 2008
7-3 Fees for Orthopedic Surgery, 2008
7-4 Relative Prices for Hospital Services, 2007
7-5 Health Care Resources, 2009
7-6 Life Expectancies at Age 80, 1987
7-7 Annual Compound Growth Rates in Real per Capita GDP, 1970–2010
7-8 Five-Year Survival Rates for Cancer of Different Sites, 2000–2002
7-9 OECD Five-Year Survival Rates, 2004–2009
7-10 CONCORD Study Rankings
8-1 Parts and Components (P&C) in Manufacturing Trade
8-2 Domestic and Foreign Values Added: Normal vs. Processing Exports
8-3 Share of China’s Processing Imports by Country of Origin, 2007
8-4 Share of China’s Exports by Destination Country, 2007
8-5 Chinese ATP Exports to the United States by Trade Regime, 1996–2006
8-6 Most Expensive Inputs in the 30GB Third-Generation iPod, 2005
8-7 Country or Regional Sources of Value Added in U.S. Imports, Selected Sectors, 2004
8-8 Country or Regional Sources of Value Added in U.S. Exports, Selected Sectors, 2004
Preface
Kevin A. Hassett
It is an unwritten law that no politician shall give an economic policy speech without mentioning the word “competitiveness” at least once. Yet, despite the ubiquity of the term, there is little if any agreement concerning its meaning. In particular, academics have been appropriately slow to embrace it, tending to evince a healthy skepticism regarding political utterances that are often reminiscent of the most objectionable assertions of the mercantilists. A politician might hold a treatise on competitiveness aloft, while an economist might prefer to disguise it in a brown paper bag.
While scholarship on competitiveness has stagnated, the world has continued to evolve into a flatter, more intertwined marketplace, and vast literatures have emerged that document that competitions between nations, be they over the location of people or machines, have heightened in their ferocity. Against this backdrop, the American Enterprise Institute (AEI) brought together experts from a variety of fields to breathe new life into the competitiveness debate. The experts were asked to think creatively about the extent to which competition between nations may influence outcomes in their area of expertise, with a focus on a simple question: If “competitiveness” were to have a rigorous and relevant meaning in your field, what might that be?
The authors presented their findings at a series of three conferences hosted at AEI’s headquarters in Washington, D.C.: “Is Competitiveness Worth Defending?” on September 29, 2011; “Nation vs. Nation: Do Countries Compete in Trade and Health Care?” on January 18, 2012; and “Competing for Talent: The United States and High-Skilled Immigration” on January 31, 2012. Nine papers presented at those conferences comprise this volume.
The first chapter of the volume intends to frame the discussion. Glenn Hubbard, Matthew Jensen, and I set out to capture the question underlying this project and summarize the debate surrounding competitiveness. Once we set up the framework for the discussion, we describe a well-known theory of public finance called the “Tiebout model” and extend it to the international stage. Under the Tiebout model, individuals “vote with their feet,” choosing to live in localities with their preferred bundle of public goods and taxes, which creates competition among localities. This model has been well developed and researched; therefore, it is fairly simple to extend its application. We assert that since the world has become “flatter” and more interconnected, the lessons from this model can be applied to the international competitiveness debate. Competitions among nations in this flat world l