IDEAS home Printed from https://ideas.repec.org/p/nuf/esohwp/_103.html
   My bibliography  Save this paper

The Economy of Obligation: Incomplete Contracts and the Cost of the Welfare State

Author

Listed:
  • Avner Offer

    () (All Souls College, University of Oxford)

Abstract

Western governments typically pay out some 30 percent of GDP for social purposes. This is financed by taxation on a pay-as-you-go (PAYGO) basis. How efficient are these transfers, and can market or other mechanisms do it better? The problem arises since no individual stands alone. During the life cycle there are several periods of unavoidable dependency, in which there is no earning and little to bargain with: motherhood, infancy, childhood, education, illness, disability, unemployment, old age. The problem is how to transfer resources from ‘producers’ to ‘dependants’ over the life cycle. The market solution is for individuals to accumulate financial assets and to transfer them over the life cycle by means of long-term contracts with financial intermediaries.

Suggested Citation

  • Avner Offer, 2012. "The Economy of Obligation: Incomplete Contracts and the Cost of the Welfare State," Oxford University Economic and Social History Series _103, Economics Group, Nuffield College, University of Oxford.
  • Handle: RePEc:nuf:esohwp:_103
    as

    Download full text from publisher

    File URL: http://www.economics.ox.ac.uk/materials/papers/12255/offer103.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Bresnahan, Timothy F. & Trajtenberg, M., 1995. "General purpose technologies 'Engines of growth'?," Journal of Econometrics, Elsevier, pages 83-108.
    2. Voth, Hans-Joachim, 1998. "Time and Work in Eighteenth-Century London," The Journal of Economic History, Cambridge University Press, vol. 58(01), pages 29-58, March.
    3. David M. Engstrom, 1997. "The Economic Determinants of Ethnic Segregation in Post-War Britain," Oxford University Economic and Social History Series _012, Economics Group, Nuffield College, University of Oxford.
    4. David Stead, 1998. "An Arduous and Unprofitable Undertaking: The Enclosure of Stanton Harcourt, Oxfordshire," Economics Series Working Papers 1998-W26, University of Oxford, Department of Economics.
    5. Paul David, 1997. "Path Dependence and the Quest for Historical Economics: One More chorus of Ballad of QWERTY," Economics Series Working Papers 1997-W20, University of Oxford, Department of Economics.
    6. Dan H. Andersen & Hans-Joachim Voth, 1997. "Neutrality and Mediterranean Shipping Under Danish Flag, 1750-1807," Oxford University Economic and Social History Series _018, Economics Group, Nuffield College, University of Oxford.
    7. Claudia Goldin & Lawrence F. Katz, 1998. "The Origins of Technology-Skill Complementarity," The Quarterly Journal of Economics, Oxford University Press, vol. 113(3), pages 693-732.
    8. Feinstein, Charles H. & Temin, Peter & Toniolo, Gianni, 1997. "The European Economy Between the Wars," OUP Catalogue, Oxford University Press, number 9780198774815.
    9. Avner Offer, 1996. "The American Automobile Frenzy of the 1950s," Economics Series Working Papers 1997-W11, University of Oxford, Department of Economics.
    10. Avner Offer, 1998. "Epidemicsof Abundance: Overeating and Slimming in the USA and Britain since the 1950s," Economics Series Working Papers 1998-W25, University of Oxford, Department of Economics.
    11. James Foreman-Peck,, 1996. "'Technological Lock-in' and the Power Source for the Motor Car," Oxford University Economic and Social History Series _007, Economics Group, Nuffield College, University of Oxford.
    12. Tim Leunig, 1998. "New Answers to Old Questions: Transport Costs and the Slow Adoption of Ring Spinning in Lancashire," Oxford University Economic and Social History Series _022, Economics Group, Nuffield College, University of Oxford.
    13. David, P.A., 1989. "Computer And Dynamo: The Modern Productivity Paradox In A Not-Too Distant Mirror," The Warwick Economics Research Paper Series (TWERPS) 339, University of Warwick, Department of Economics.
    14. Ed Butchart, 1997. "Unemployment and Non-Employment in Interwar Britain," Oxford University Economic and Social History Series _016, Economics Group, Nuffield College, University of Oxford.
    15. Broadberry, Stephen N & Wagner, Karin, 1994. "Human Capital and Productivity in Manufacturing during the Twentieth Century: Britain, Germany and the United States," CEPR Discussion Papers 1036, C.E.P.R. Discussion Papers.
    16. Antonia Taddei, 1999. "London Clubs in the Late Nineteenth Century," Economics Series Working Papers 1999-W28, University of Oxford, Department of Economics.
    17. Ed Butchart, 1997. "Unemploymentand Non-Employment in Interwar Britain," Economics Series Working Papers 1997-W16, University of Oxford, Department of Economics.
    18. Antonia Taddei, 1999. "London Clubs in the Late Nineteenth Century," Oxford University Economic and Social History Series _028, Economics Group, Nuffield College, University of Oxford.
    19. Hans-Joachim Voth & Timothy Leunig, 1996. "Did smallpox reduce height? Stature and the standard of living in London, 1770-1873," Economic History Review, Economic History Society, vol. 49(3), pages 541-560, August.
    20. David Stead, 1998. "An Arduous and Unprofitable Undertaking: The Enclosure of Stanton Harcourt, Oxfordshire," Oxford University Economic and Social History Series _026, Economics Group, Nuffield College, University of Oxford.
    21. David M. Engstrom, 1997. "The Economic Determinants of Ethnic Segregation in Post-War Britain," Economics Series Working Papers 1997-W12, University of Oxford, Department of Economics.
    22. Liam Brunt, 1997. "Nature or Nurture? Explaining English Wheat Yields in the Agricultural Revolution," Economics Series Working Papers 1997-W19, University of Oxford, Department of Economics.
    23. Harberger, Arnold C, 1998. "A Vision of the Growth Process," American Economic Review, American Economic Association, vol. 88(1), pages 1-32, March.
    24. Liam Brunt,, 1995. "Turning Water into Wine New Methods of Calculating Farm Output and New Insights into Rising Crop Yields during the Agricultural Revolution," Oxford University Economic and Social History Series _002, Economics Group, Nuffield College, University of Oxford.
    25. Liam Brunt, 1995. "Turning Water into Wine New Methods of Calculating Farm Output and New Insights into Rising Crop Yields during the Agricultural Revolution," Economics Series Working Papers 1995-W02, University of Oxford, Department of Economics.
    26. Liam Brunt, 1997. "Nature or Nurture? Explaining English Wheat Yields in the Agricultural Revolution," Oxford University Economic and Social History Series _019, Economics Group, Nuffield College, University of Oxford.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Avner Offer, 2013. "Narrow banking, real estate, and financial stability in the UK, c.1870-2010," Oxford University Economic and Social History Series _116, Economics Group, Nuffield College, University of Oxford.
    2. Aled Davies, 2012. "The Evolution of British Monetarism: 1968-1979," Economics Series Working Papers Number 104, University of Oxford, Department of Economics.

    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nuf:esohwp:_103. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Maxine Collett). General contact details of provider: https://www.nuffield.ox.ac.uk/economics/ .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.