Showing papers in "Economic Affairs in 2008"
TL;DR: In this paper, the authors suggest that institutional theorists move from touting simple, optimal solutions to analyzing adaptive, multi-level governance as related to complex, evolving resource systems, and suggest that the focus should be on adaptive, multilevel governance.
Abstract: Scholars have tended to recommend ‘optimal’ solutions for coping with open-access problems related to common-pool resources such as fisheries, forests and water systems. Examples exist of both successful and unsuccessful efforts to rely on private property, government property and community property. After briefly reviewing how the often-recommended solutions have worked in the field, I suggest that institutional theorists move from touting simple, optimal solutions to analysing adaptive, multi-level governance as related to complex, evolving resource systems.
153 citations
88 citations
58 citations
TL;DR: In this article, the authors determine the most adequate institutional variables to introduce into a growth model, depending on the income levels of countries, and show that, for rich countries, the rule of law is fundamental while, for poor countries, it is control of corruption.
Abstract: The aim of this paper is to determine the most adequate institutional variables to introduce into a growth model, depending on the income levels of countries. The results show that, for rich countries, the rule of law is fundamental while, for poor countries, it is control of corruption. This has important implications for any agenda of institutional reform in either type of country.
44 citations
TL;DR: Fair trade may even destroy the banana industry as discussed by the authors, since much of the gain from the price premium goes to the fair-trade bureaucracy rather than to the producer, which results in consumers getting a lower quality product.
Abstract: Fair trade – paying a price premium for commodities based not on quality but on employment and other conditions – is counterproductive and unfair. It results in consumers getting a lower-quality product. Much of the gain from the price premium goes to the fair-trade bureaucracy rather than to the producer. Fair trade may even, if effective, destroy the banana industry. A better solution for consumers and third-world producers is to abolish all remaining trade barriers.
43 citations
TL;DR: The earliest stage of transaction cost economics dates back to the 1920s to the 1970s as discussed by the authors, and it is an interdisciplinary undertaking that combines economics, organisation theory and law.
Abstract: Theories commonly progress through four stages, from informal to pre-formal to semi-formal and fully formal. This paper reports on the earliest stage of transaction cost economics that extended from the 1920s to the 1970s. That the gestation stage lasted so long is partly because transaction cost economics departed significantly from the then-prevailing economic orthodoxy. Also, and related, it is an interdisciplinary undertaking. As reported herein, transaction cost economics selectively combines economics, organisation theory and law and is the product of the contributions of some of the finest minds in those three fields.
42 citations
TL;DR: In this paper, the authors describe the way in which the term "New Institutional Economics" emerged in the literature and became the designation for a new field concerned with the study of various analytical techniques designed for the exploration of institutional phenomena.
Abstract: The initial objective of the paper is to describe the way in which the term ‘New Institutional Economics’ (NIE) emerged in the literature and became the designation for a new field concerned with the study of various analytical techniques designed for the exploration of institutional phenomena. It is then shown how some of the more important of these techniques, transaction-cost economics, property-rights analysis and contract theory, have been applied in two central lines of neoinstitutional thought – the Williamsonian and the Northian. Criticisms of these two disparate theoretical positions on the NIE are considered and assessed. Next, a brief review of some of the empirical literature is undertaken so that the explanatory powers of NIE themes can be gauged. Finally, the paper offers a few general remarks on the present state of the NIE and its possible influence on the further development of economics.
38 citations
TL;DR: In this paper, the authors argue that government intervention in African housing markets may have contributed significantly to the growth of informal settlements, by raising the costs of providing low-income housing, African governments bear much responsibility for driving formal sector entrepreneurs out of the housing market and for driving their citizens into slums.
Abstract: Urbanisation is a growing phenomenon in Africa. Across the continent cities are drawing more and more people in search of economic opportunity. The majority of these people end up living in informal settlements: slums. As Africa's slums expand, international organisations, NGOs, and governments themselves call for strong public-sector action to deal with the problems in these settlements and to limit their expansion. However, government intervention in African housing markets may have contributed significantly to the growth of informal settlements. A maze of regulations and administrative barriers has imposed high transaction costs on formal-sector housing entrepreneurs. By raising the costs of providing low-income housing, African governments bear much responsibility for driving formal-sector entrepreneurs out of the housing market and for driving their citizens into slums.
28 citations
TL;DR: In some countries, negotiated settlements between utilities and users including customer groups provide greater flexibility and innovation and better representation of consumer interests as discussed by the authors, and there is scope for applying such alternative institutional arrangements in the UK.
Abstract: Is it inevitable that monopoly networks should continue to be regulated in their present form? Such regulation has limitations as well as advantages. In some countries, negotiated settlements between utilities and users including customer groups provide greater flexibility and innovation and better representation of consumer interests. There is scope for applying such alternative institutional arrangements in the UK.
27 citations
TL;DR: In this paper, the authors discuss the application of the concept of competition to social housing in Europe and make a distinction between competition amongst social housing suppliers and between social housing organisations and commercial suppliers of housing.
Abstract: This article discusses the application of the concept of competition to social housing in Europe. A distinction is made between competition amongst social housing suppliers and between social housing organisations and commercial suppliers of housing. The competitiveness of social housing is examined using evidence mainly from England and the Netherlands.
19 citations
TL;DR: Selgin explores the differences between these monetary and natural conditions, and proposes solutions of his own as discussed by the authors, concluding that persistent unemployment is a non-monetary or 'natural' economic condition, which no mount of monetary medicine can cure.
Abstract: This book sets out to explain the complexity of why increased production does not that always bring with it lower prices. According to the book, those who look upon monetary expansion as a way to eradicate almost all unemployment fail to appreciate that persistent unemployment is a non-monetary or 'natural' economic condition, which no mount of monetary medicine can cure. Selgin explores the differences between these monetary and natural conditions, and proposes solutions of his own.
TL;DR: In this article, the authors argue that trends in employment and trade patterns mean that existing policies are not as effective as they need to be for older adults working at a more flexible way.
Abstract: Though there is a consensus surrounding the importance of people working at older ages – and in a more flexible way – trends in employment and trade patterns mean that existing policies are not as effective as they need to be.
TL;DR: In this paper, the authors argue that state pension provision must use the contributory principle combined with an accruals system, and that private pension provision would be better than state pension.
Abstract: As populations age, it will become increasingly difficult to reform state pension systems. Reform will not be impossible, but the process of ‘buying off’ interest groups will be expensive. State pension provision must use the contributory principle combined with an accruals system – though private pension provision would be better still. There are serious flaws in the so-called ‘citizens pension’ much promoted by interest groups in the UK.
TL;DR: In this article, a model within the Coasian framework was developed to examine whether smoking bans in public places such as restaurants and pubs in the United Kingdom are beneficial to non-smokers.
Abstract: The United Kingdom has recently enacted smoking bans in public places such as restaurants and pubs. Public health advocates argue that bans are necessary because non-smokers need protection from second-hand smoke. Advocates also claim that bans do not exert harm on owners because of a vast empirical literature showing that restaurants and bars in the United States never suffer harm following bans. This paper examines whether these claims are true by developing a model within the Coasian framework whereby owners of businesses have incentives to deal with smoking disputes between smokers and non-smokers. Our model demonstrates that it is incorrect to argue that smoking bans are necessary because the private market has no method of attempting to solve smoking problems. It also predicts that bans exert different effects on different businesses: some will be unaffected while others will experience losses or gains. Our literature review reveals that predictions of differential effects are consistent with the empirical evidence.
TL;DR: The Irish National Lottery Sports Capital Grant Allocations show a clear bias towards the geographical areas represented by the Ministers for Arts, Sports and Tourism and the Minister for Finance.
Abstract: Irish National Lottery Sports Capital Grant Allocations show a clear bias towards the geographical areas represented by the Minister for Arts, Sports and Tourism and the Minister for Finance. This bias is the result of the procedures by which the funds are allocated.
TL;DR: In this article, the authors examined the IPCC's projections of future climate change and Stern's estimates of its costs from a free-market perspective and found that they are based on flawed methodological assumptions and reflect an excessively optimistic approach to knowledge of the future.
Abstract: The Stern Review and the IPCC believe that anthropogenic climate change is a serious global threat and demands an urgent response. Examining the IPCC's projections of future climate change and Stern's estimates of its costs from a free-market perspective shows that they are based on flawed methodological assumptions and reflect an excessively optimistic approach to knowledge of the future. The foundations of reliable knowledge for a sound policy framework have not been put in place.
TL;DR: The British National Health Service is often held up as a beacon of egalitarian healthcare, funded through general taxation and free at the point of use, but has failed to live up to its founding principles of comprehensive, unlimited healthcare and egalitarianism.
Abstract: The British National Health Service is often held up as a beacon of egalitarian healthcare, funded through general taxation and free at the point of use. Instituted by arguably the most socialist government in British history after World War II, it has manifested all the flaws that might be expected from a state monopoly: waste, inefficiency, under-investment, rationing and constant political interference. The result has been poor health outcomes for British citizens compared with other wealthy countries, and a failure by the NHS to live up to its founding principles of comprehensive, unlimited healthcare and egalitarianism.
TL;DR: The authors argue that mainstream economics is defective by both its self-indulgent over-quantification and its persistence in presuming to formulate meaningful relationships between aggregates and averages, and that those who face up to that challenge are changed by the experience.
Abstract: By the width of his perspective, Hayek presents a challenge. Those who face up to that challenge are changed by the experience. The inevitable conclusion is that mainstream economics is defective by both its self-indulgent over-quantification and its persistence in presuming to formulate meaningful relationships between aggregates and averages.
TL;DR: The latest volume in The Collected Works of F. A. Hayek is the best yet as discussed by the authors, and the Appendix of related documents is fabulous and fascinating, and the long effort to produce the collection has therefore been very worthwhile.
Abstract: The latest volume in The Collected Works of F. A. Hayek is the best yet. The Introduction is a delight and the Appendix of related documents is fabulous and fascinating. The long effort to produce the collection has therefore been very worthwhile.
TL;DR: The concept of "market failure" is often used to justify government intervention as mentioned in this paper, but it is questionable whether the concept is sufficiently meaningful for it to be used to make policy judgments.
Abstract: The concept of ‘market failure’ is often used to justify government intervention. Here, the author asks whether the concept is sufficiently meaningful for it to be used to make policy judgments.
TL;DR: In this paper, the shortcomings of economic sanctions are examined, drawing on Mill's utilitarianism, Kant's categorical imperative and Rawls's theory of justice, the conceptual frameworks of consequentialism, deontology and contractualism are used to demonstrate the unethical nature of these sanctions.
Abstract: This paper is the third in a series of articles that examines the shortcomings of economic sanctions. Drawing on Mill's utilitarianism, Kant's categorical imperative and Rawls's theory of justice, the conceptual frameworks of consequentialism, deontology and contractualism are used to demonstrate the unethical nature of this increasingly popular instrument of foreign policy.
TL;DR: In this paper, the authors focus on the rapid growth of the Chinese economy and its ongoing interaction with the rest of Asia and conclude that rapid growth in both Asia and China has resulted from free-market-oriented neoclassical economic policies and principles.
Abstract: The focus of this article is on the rapid growth of the Chinese economy and its ongoing interaction with the rest of Asia. It concludes that rapid growth in both Asia and China has resulted from free-market-oriented neoclassical economic policies and principles. Owing to its economy's size, its openness and the briskness of its GDP growth, China has influenced economies across the globe as well as the more proximate regional economy.
TL;DR: As the population of an economy ages saving declines and, through that channel, economic growth can decline too as discussed by the authors, making the provision of pensions more and more difficult, which intensifies the problem even further.
Abstract: As the population of an economy ages saving declines and, through that channel, economic growth can decline too. Returns to physical capital fall, making the provision of pensions more and more difficult. The income of the working population deteriorates and they respond by having fewer children. This intensifies the problem even further.
TL;DR: In the USA, states are increasingly adopting school choice policies, and a large body of empirical research using especially high-quality methods has studied their effects as discussed by the authors, which consistently finds that school choice improves academic outcomes for those who use it, improves outcomes at nearby government schools, and has other positive effects.
Abstract: In the USA, states are increasingly adopting school choice policies, and a large body of empirical research using especially high-quality methods has studied their effects. It consistently finds that school choice improves academic outcomes for those who use it, improves outcomes at nearby government schools, and has other positive effects.
TL;DR: In the 2007 Wincott Lecture as mentioned in this paper, the author argued that global current account imbalances are an indication of intertemporal trade and that savings and investment, both private and public, determine the imbalance.
Abstract: In the 2007 Wincott Lecture the author argues that global current account imbalances are an indication of ‘intertemporal trade’. Savings and investment, both private and public, determine the imbalances. He expounds Richard Cooper's argument that it is perfectly natural for the USA to have a big deficit and suggests that the large Chinese surplus may be temporary.
TL;DR: In this paper, the authors discuss barriers to the employment of older workers in Poland, where, due to various structural weaknesses and institutional arrangements, this problem has taken on a particularly acute seriousness.
Abstract: The aim of this paper is to discuss barriers to the employment of older workers in Poland, where, due to various structural weaknesses and institutional arrangements, this problem has taken on a particularly acute seriousness. After analysing the causes of inactivity amongst older workers, the paper concludes by making policy recommendations.