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This paper is devoted to the question of what motivates man in his pursuit of economic activities. Particular attention is given to the notion that economic activities of individuals may not be motivated by their self‐interest alone.

Using literary analysis, the paper first reconsiders the role of self‐interest and non‐selfish motives in the historical schools. Then it is demonstrated that at least some non‐selfish motives were incorporated in the voluntary exchange theory of public economy. Next it is shown that during the evolution of the theory of public goods these non‐selfish motives were lost and that the modern theory of public goods rests entirely on the self‐interest hypothesis. However, over the last two decades results of public goods experiments have cast considerable doubt on the pure self‐interest hypothesis.

A major finding of this paper is that several non‐selfish motives of man that show up in recent public goods experiments were already discussed by representatives of the historical schools.

An agenda for future research on the topic is sketched in the final section.

Practical implications include that the allocation of many goods, not just public goods, may improve if agents pay more attention to non‐selfish motives of man.

The paper adds to the existing body of related writings by linking developments in the evolution of theory of public goods, in particular recent findings from public goods experiments, to a specific aspect already advocated by representatives of the historical schools, that is, the notion that man in his pursuit of economic activities is not motivated by his self‐interest alone. To this extent, the paper is of interest for researchers working on public goods theory, experimental economics and the history of economic thought.

The fundamental problem of designing a wide scope general revenue tax can be reduced to the selection of the base used for administering the tax. Our current personal income tax is a hybrid version of a tax assessed on the basis of a tax unit's annual income receipts. An alternative to an income‐based tax that has received much theoretical treatment but little actual application is an expenditure‐based tax. An expenditure tax (also called a consumption tax or cash flow tax in the context of this paper) differs from an income tax in that it exempts net saving and investment from the tax base. Though the details of a consumption tax design are discussed more fully elsewhere in this paper, the tax base of an expenditure tax is roughly determined by subtracting net savings from gross receipts (including wages, tips, salaries, income from investments, interests, etc.). Withdrawals from savings constitute dissavings and are appropriately included in net savings. The cash flow tax, with wealth transfers deductible to the donor and included in the tax base of the recipient, would be a tax on an individual's standard of living. Similar to the present income tax standard deduction, some universal credit or exemption for a small level of consumption could be allowed.

Discussion of scientific progress in science philosophy texts suggests that aggressiveness and selfishness on the part of scientists is associated with high productivity. It is argued that the behaviour that appears to be the most improper actually facilitates the manifest goals of science. This article shows that the making of the 1930s generation of a sample of eminent economists was shaped by a high sense of co‐operation; continuing collaborative contact in the form of dual authorships of books and articles, joint teaching assignments, and review and support of each other′s writings, but very little of the intensive, relentless competition one finds among natural scientists. The difference stems not so much from the fact that economics is a soft science, but rather from the degree of maturity of the discipline. The 1930s generation of economists was fortunate to enter the field at a time when it was ready for its take off.

Among developing countries, the Republic of China in Taiwan (hereinafter Taiwan) has been experiencing economic growth accompanied by improving income distribution. Between 1964 and 1980, the average annual growth rate of the real gross national product was 9.92 per cent (Council for Economic Planning and Development (CEPD), 1982, p. 23). In the same period, the income ratio between the top 20 per cent and the bottom 20 per cent of families dropped from 5.33 to 4.17 and the Gini coefficient decreased from 0.36 to 0.30 (CEPD, 1982, p. 54; Directorate‐General of Budget Accounting and Statistics, 1980, (DGBAS), p. 44). To put it somewhat dif‐ferently, in 1964 the lowest fifth of households received 7.71 per cent of total personal income, and the highest fifth 41.07 per cent. But in 1980, the income share of the lowest fifth increased to 8.82 per cent while that of the highest fifth decreased to 36.80 per cent. The condition of greater equality in income distribution appears more obvious in the capital city of Taipei. In 1981, for instance, its Gini coefficient was estimated to be only 0.28 (Taipei Bureau of Budget, Accounting and Statistics, 1981, (TBBAS), P. 24).

This article examines the macroeconomic impact of a consumption‐based value‐added tax (VAT) using simulations of a large‐scale model. The VAT is imposed as a structural reform of the tax code rather than as a revenue‐raising device, i.e., the revenues from the VAT are offset by compensatory reductions elsewhere. Three basic scenarios are examined, in which 1) the VAT is offset by individual rate reductions, 2) abolition of the corporate profits tax in conjunction with a small individual rate cut, and 3) an investment tax credit with the balance of the revenues offset by a personal rate cut. Additionally, this paper examines the effects of the microeconomic incidence of the VAT, i.e., whether it is fully passed through to output prices or shifted back onto profits. The finding is that the VAT in general raises the long‐term level of output, but at the cost of initial output losses, which are in evidence even when the associated rise in the price level is accommodated by a corresponding shift in monetary policy. In addition to changes in the intertemporal distribution of growth, there are significant changes in the composition of GNP, which shifts away from consumption, toward business fixed investment and net exports. These changes are particularly pronounced when the VAT is fully passed through. When the tax is partially shifted back, the gains in investment and trade are less marked, while business profits are reduced, and the long‐term increase in output is smaller.

The Prophet Muhammad (pbuh) laid the foundations of the Islamic state in Medina in 622 A.D. The state expanded gradually during the 10‐year rule of the Prophet (pbuh). The Arabian Peninsula and Southern Palestine were conquered during that period. The state expanded enormously during the reign of Umar (RA). Many countries of the Roman and Persian empires comprising an area of more than 2.2 million were annexed. Historians have noted that this framework played a vital role in integrating these people which in turn strengthened the state.

The author in this essay surrounds John Paul II with professional economists from the past and the present, such as Taussig, Keynes, Richard and Peggy Musgrave, and Stiglitz, all of whom have very similar reservations concerning the social beneficence of the “free market”. As with these professionals, John Paul II’s vision of the social economy embraces and transcends Pareto efficiency and optimality. Those who seize selectively on John Paul II’s acceptance in his 1991 encyclical Centesimus Annus of the market mechanism for its efficiency in allocating resources, and those who think that such a one as John Paul II without formal training in economics is a voice crying alone, Nitsch contends, have further reading and more thinking to do.

Nobody concerned with political economy can neglect the history of economic doctrines. Structural changes in the economy and society influence economic thinking and, conversely, innovative thought structures and attitudes have almost always forced economic institutions and modes of behaviour to adjust. We learn from the history of economic doctrines how a particular theory emerged and whether, and in which environment, it could take root. We can see how a school evolves out of a common methodological perception and similar techniques of analysis, and how it has to establish itself. The interaction between unresolved problems on the one hand, and the search for better solutions or explanations on the other, leads to a change in paradigma and to the formation of new lines of reasoning. As long as the real world is subject to progress and change scientific search for explanation must out of necessity continue.

Argues that the debate concerning the growth of public employment has remained largely uninformed in a conceptual sense beyond the economic variables. Suggests that the time is now pertinent to identify the additional parameters affecting the situation if an enriched understanding is to evolve on the future role and management of the public sector in the developing state. Reviews the literature contributions that are significant in this respect, not only with the aim of putting the public sector developments of the last ten years in perspective but also to contribute to the current debate on the emergence of new administrative paradigms for developing States that provide a more balanced view of political, economic and social development.

For the past two decades, economists, political scientists, and other public policy analysts have repeatedly lamented the lack of attention afforded the expenditure side of fiscal policy. Such concern has prompted numerous studies which have examined in great detail budgets of individual countries. Despite this renewed interest, surprisingly little has appeared in the area of comparative expenditure development. Cross‐country comparisons have traditionally employed cross‐section analyses while ignoring, except in rare instances, comparisons of time series data.