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A fundamental issues in designing any fiscal regime for non-renewable resources is the balance between rent taxes and royalties. This paper reviews the core issues that arise, in terms of both efficient rent extraction and correcting various market failures. Issues of asymmetric information, for instance, can rationalize using both instruments. The paper also shows that, even though they effectively involve the choice of distinct parameters at several dates, rent taxes are not subject to the time consistency problem that is central to the extractive industries, but royalties are (although time consistent royalty policy is efficient conditional on initial resource stocks).

Many things inform a country's choice of tax system, including political considerations, public opinion, bureaucratic complexities, and ideas drawn from theoretical analysis. In this work, Robin Boadway examines the role of optimal tax analysis in informing and influencing tax policy design.

This paper surveys the various forms of market failure that can arise when innovating entrepreneurs consider entering an industry, and outlines possible implications for public policy. Externalities can arise from entrepreneurial activities such as spillover benefits from new innovations and spillover costs on incumbent firms. New entrepreneurs can also face various barriers to entry, either natural ones or those created by incumbent firms or government policy. They may also face problems in obtaining credit at efficient terms if there are information asymmetries in markets for either loan or equity finance. Finally, asymmetric information may also plague new firms in the hiring of workers. These various inefficiencies are of contradictory sign, some calling for an incentive to startup firms and other for the opposite. Thus, public policy is ambiguous and depends on the circumstances at hand.