Showing papers in "International Journal of Social Economics in 2001"

Islamic banking in Brunei Darussalam

Abstract: This paper studies the current realities of the Islamic banking system of Brunei Darussalam from the perspective of the theories of modern financial intermediation and Islamic financial contracting. The limited information on the banking system of Brunei Darussalam reveals that the first phase of the Islamic banking experimentation has been successful, as Islamic banks command roughly 11.5 per cent of the market share. The financial services industry, however, remains extremely competitive and Islamic banks face formidable challenges from conventional banks. Islamic banks can proliferate if they: advance towards the second phase by gradually consolidating retail banking with investment banking; establish vital links with local and foreign institutions; and use ijtihad in modern financial engineering to optimally design loans while simultaneously reducing their risk exposure. An efficient Islamic financial system can allocate limited capital resources to the most profitable ventures and assist in wealth creation. This can foster the growth not only of Negara Brunei Darussalam but also of the regional economies, particularly at this crucial juncture when Asian economies are reeling from the current financial crisis.

The Migration of Knowledge Workers: Second Generation Effects of India’s Brain Drain

Abstract: human factor, this reviewer would like to refer to a Japanese word being used for sudden death due to over work Karoushi. The term itself suggests concern for human factor in management and the challenges being faced by the Jingi-bu (Human Resource Department). In Chapter 11, the author has reflected upon \"Global Human Growth The Vision and Future\". Compelling, readable, and absent of jargon, this book gets tO the core of any organisation's asset, i.e., human factor. For new and seasoned managers alike, the book under review gives food for thought to be a successful manager, and a thoughtful and responsible human being. Many writers have hit upon some of these points/issues but none has explored them as thoroughly as Prof. Rudrabasavaraj, who succeeds in giving an impressively detailed knowledge of contemporary business practices and importance of human factor, has done. The author has provided relatively full bibliographical notes which are designed to serve the twin purposes of acknowledging the sources and suggesting further reading. In sum, globalisation means growing interdepegdence of national economies. Boundaries between domestic and international markets are becoming less relevant with increase in business profiles abroad. Piloting organisations through change demands an understanding of global trends, business principles, and self-awareness. Leaders have to keep their eyes on the horizon and on the bottom line. But leaders alone can't build success. Creating and implementing changes demands all of us to redefine ourselves as leaders, and also accept others as leaders. Shared leadership will enable organisations to preserve their core ideologies and at the same time stimulate progress.

Towards a theory of the entrepreneurial state

Abstract: This paper attempts to develop a model of the “entrepreneurial state” based on Schutz’s theory of human action. It aims to improve the understanding of the nature of state action and of entrepreneurial processes in the public sector. From the subjectivist paradigm, this paper argues that the state, like private enterprises, has purposes and public sector agents engage in conscious actions toward chosen goals which can be attended only in the future. In terms of mental constructs, the public entrepreneur’s opportunity identification activities involve four major stages. Using their imagination, they project, select, elaborate on and eventually implement the opportunity ideas. Given structural uncertainty, public sector agents will unavoidably make errors in trying to plan and implement a new project. Over time, with learning and the growth of knowledge, errors are then eliminated. The revision of plans by state agents – the source of policy change – is thus portrayed as a continuous process of learning and experimentation oriented towards the future. Since entrepreneurship implies strategic planning, and the nation needs to formulate development strategies with the aim of building competitive advantage, the last part of the paper discusses entrepreneurial intervention in association with the state’s resource base and capabilities. By referring to the Asian newly industrialised economies, this paper suggests a new approach to understanding state action and government intervention.

Ethical foundations of the contemporary living wage movement

Abstract: Faith‐based activism in living wage campaigns is on the rise. Summarizes recent campaigns to enact living wage ordinances in US municipalities, underscoring the role of community‐church partnerships such as Clergy and Laity United for Economic Justice, National Interfaith Committee for Worker Justice, and other local organizations in the struggle for wage justice. Explores the theological bases of this activism by tracing the evolution of the concept of a just, living wage in Christian social economic thought. To illustrate the historical and philosophical roots of living wage discourse, provides textual analysis of major Roman Catholic and Episcopal Church documents and briefly considers writings by US social economists in the first half of the twentieth century.

Race, disability and assistive devices: sociodemographics or discrimination

Abstract: This research provides empirically‐based, detailed information on race as a determinant of the relationship between chronic illness/disability and assistive device use by elderly persons. The database is the 1994 wave of the National Long Term Care Survey. The important findings are: whites are more likely to use home modification devices and blacks are more likely to use portable devices; chronic conditions vary in their influence on the use of assistive devices; the joint presence of diabetes, heart conditions or hypertension with ADLs and IADLs motivates greater assistive device use; the relationships between chronic health conditions and assistive device use vary by race; for blacks, income has the largest impact on assistive device purchases; half of the racial differences in the probability of using assistive devices is explained by differences in sociodemographic characteristics and the rest is explained, in part, by discrimination.

The functionality of market‐based discrimination

Abstract: Advances a framework for understanding the mechanisms that maintain unearned or inherited advantage or privilege in a hierarchical world of unequal rewards and differential opportunity. Central in this framework is the presence of a dominant group and a subaltern group in an environment where there is rivalry over social rewards. A dominant group can seek to structure and control access to the credentials required for preferred positions to insure admission of their own and to keep out others. This could involve, for example, deprivation of subaltern group members of schooling, both in quantity and quality. In other words, the dominant group can take steps to influence the “premarket” characteristics of the members of the subaltern group to the disadvantage of the latter. The dominant group emphasizes the cultural, cognitive, or motivational deficiences of the subaltern group significantly by silently rendering them non‐competing, all the while denying any discrimination.

Perceived societal values of Indian managers: Some empirical evidence of responses to economic reform

Abstract: Societal values are emerging as critical variables in providing context relevance to extending international management research. A hallmark of the 1990s was the widespread adoption of market cultures in Asian nations that embraced large‐scale reform and restructuring. These programmes brought about dramatic changes at organisational level, but the links between the societal upheavals of economic transformation and micro level changes have yet to receive sufficient academic attention. For instance, similarity or dissimilarity about held societal values of managerial groups, within an organisation, as identified by gender, age, educational qualification or family upbringing, or even by the size of the company in which they work, requires comprehensive scrutiny if these reform programmes are to succeed. Since 1991 the Indian economy has embraced economic reform to move towards more empowerment for individual organisations in all spheres. The study reported in this paper explores managerial social orientations in the context of micro‐level organisational functioning. The results of this study, with 421 senior Indian managers, demonstrate that in a relatively short time the fundamental attributes of a competitive market economy have subjugated societal qualities reinforced over hundreds of years and thought to be unchangeable.

Lean production and disability

Abstract: Since the early 1980s, Dutch productivity rates have been driven by a shift from traditional mass production firms to lean production. It slightly counteracted the generally acknowledged procyclical productivity rates; instead of working less hard during the recession of the 1980s and 1990s, employed labor had to work harder. Because the combination of mass and craft production makes lean production very demanding on employees, it appears to be more stressful than production in a traditional firm. This possibly influenced the rise of disability in the 1980s and 1990s, when almost one‐third of disabilities were due to “mental disorders”.

Advocacy by environmental nonprofit organisations ‐ An optimal strategy for addressing environmental problems?

Abstract: Several policy alternatives exist to protect environmental quality. Environmental nonprofits advocating for better environmental quality must often choose what policies to advocate and support. This article argues that environmental nonprofits will do best by designing strategies of advocacy contingent on the net costs to the stakeholders and paying attention to the crowding‐out effects of monetary incentives. It investigates the advocacy policies of 50 environmental organizations in Canada. The findings of this survey show that although reduction of net costs is espoused, market‐based policies are not generally advocated, while a greater emphasis is put on regulatory approaches combined with moral suasion through the dissemination of information and educational programs.

Insider trading in financial markets: legality, ethics, efficiency

Abstract: Scrutinises legal, ethical and efficiency standards for and against insider trading. The main arguments supporting insider trading are that it promotes economic efficiency and enterprise. The primary argument against insider trading is that it can be a breach of fiduciary duty; the other arguments of asymmetrical information, in‐principle unequal access to information, and misappropriation seem relatively difficult to accept. On balance, it seems that insider trading may possibly be organised in firms so long as policies are transparent, shareholders accept the practice and certain measures are taken to reduce the incidence of free riders. However, the current state of knowledge on the subject makes it very difficult to come to unequivocal conclusions about whether aspects of it should be illegal or not. Much more theoretical and empirical work is needed on the ethical and social foundations of capitalism, insider trading in general, potential conflict of interest between innovators and shareholders, free riders, possible lack of confidence in the market, and in what ways illegality changes the behaviour of agents.

On the norm of equality

Abstract: Perceiving discrimination and unequal treatment as a problem implies an underlying value of human equality. Argues that such prescriptive equality is more powerful and more persuasive to the extent that it is built on a presumption of descriptive human equality. Explores the philosophical prerequisites for holding the presumption of actual equality. In the last part, surveys critically the general stance of economics regarding an affirmation of descriptive equality.

Economic development and environment in Southeast Asia: an introductory note

Abstract: Economic development in Southeast Asia hasbeen connected with environmental degradation. Its cause is mainly attributed torapid industrialization, coupled with urbanization and export growth, whereas thevicious circle of the poverty and the contamination is a minor case. The environmental damage in those countries will be partly reduced along with the rising income level, as the hypothesis of the “environmental Kuznets curves” argues. However, some of the major problems, CO2 emissions for example, would not be solved automatically on the basis of the market mechanism. The governments have indeed tried to prevent contamination, drawing lessons from experiences in the industrialized countries, but their continued efforts are indispensable for the well‐being of the people.

The new growth theories: a cultural and social addendum

Abstract: To overcome the errors of the exogenous growth theories of the past, the new growth theories, currently in vogue, attempt to incorporate technological change as endogenous to the growth process. While making a commendable effort to see into that black box of technological change, these so‐called new growth theories are also subject to question and critique on a variety of grounds. One of these is that the new growth theories are not really that new. Another area of concern relates to their empirical relevancy. This is especially evident in assessing the practical use of the new growth theories in terms of problem identification and policy resolution. Other problem areas relate to issues of conceptual clarity and underlying assumptions. By assuming the process of economic growth to be synonymous with that of economic development the result is to avoid the prerequisite structural transformation inherent in the dynamics of culture evolution. Culture evolution in turn is predicated upon technological advance conceptualized as both material and social technology. It is argued in this paper that an explanation as to why technology is endogenous to the processes of growth and economic development is best served vis‐a‐vis an analysis of the dynamics of culture evolution.

Family, economics and the information society ‐ How are they affecting each other?

Abstract: In the twentieth century many developed countries moved from an “agricultural‐based industrial society” to an “information society.” The second part of the century saw a deterioration of social conditions in many industrialized countries. The combination of these two factors has posed to countries both serious challenges and economic burdens. There is concern about the effects of the breakdown of the family on economic development and growth. These problems are magnified when considered within the context of developing economies. Recently, some developed countries have chosen to address what is at the heart of both the social deterioration and the economic problems it brings. This paper addresses two questions. First, how can the family be viewed within economic activity? Second, why are the breakdown of the family and policies that encourage this breakdown incompatible with sustainable real economic development?

Transitional economies and economic globalisation

Abstract: As former communist countries have proceeded with market reforms, they have become more enmeshed in the international economy and their involvement in economic globalisation continues to grow. While economic theory suggests that this should bring several economic advantages to transitional economies (such as greater diversity of choice of commodities, lower costs as a result of greater economic specialisation, enhanced economic growth as a result of liberalization of capital and technology transfers), the social and environmental consequences of globalisation have in many cases not been favourable so far. Unemployment is emerging as a major problem in some transitional economies, social safety nets (especially for women, children and the elderly) have been breached, and basic needs are no longer being met across the board as in communist days. In most cases, inequality of income has increased and a bimodal distribution may be emerging in many other economies. Those on the low welfare‐ (income‐) side of the bimodal distribution are casual workers, those in the informal sector, the unemployed and the handicapped, including the elderly. Those on the right‐hand bulge of the income distribution curve seem to be the permanently employed (a declining proportion of population) and rich entrepreneurs and capitalists. The paper suggests that structural adjustment policies may be altering the shape of the Kuznets curve of income distribution from an inverted‐U to a bimodal form in both capitalist and former communist‐counties. Transitional processes have failed to overcome many of the environmental problems experienced by former communist countries. This is particularly so in transitional economies which have experienced negative economic growth, such as Russia. It is partly a consequence of lack of investment in capital stock. Lack of economic growth makes it difficult to implement environmental reforms and maintain social services. It is also noted that economic globalisation in terms of trade and capital inflows (including aid) makes transitional economies more dependent on the rest of the world. They can therefore be more easily subjected to external strategic economic bargaining or threats.

The social costs of media feeding frenzies

Abstract: Concern over the cost of excessive media coverage has increased in recent years. This paper offers an explanation of excessive coverage as an application of the tragedy of the commons, resulting from a lack of property rights over a story. News organizations consider only their private costs in covering a story, not the external costs of lower quality of overall coverage and invasion of privacy. However, restricting access to a story can also facilitate censorship. This paper consider means of limiting access which do not compromise journalistic freedom, specifically examining the parallel to tradeable discharge permits in environmental economics.

Salary compression and inversion in the university workplace

Abstract: There are two grounds in the USA for bringing a claim of race or gender discrimination: discriminatory intent; and discriminatory effect. As to age discrimination, however, a plaintiff is allowed to bring a claim only on grounds of discriminatory intent. Argues that, with regard to age discrimination in the university, discriminatory effect and discriminatory intent are one: discriminatory intent is hidden inside certain employment practices which appear to be “facially neutral” but are not. In other words, stripped of its disguises discriminatory effect which persists is discriminatory intent. Identifies five strategies to disguise disparate treatment as disparate impact: resistance, pretense, evasion, denial and approval. Explains how a specific university employed these five strategies to hide its discriminatory intent behind discriminatory effect.

An empirical investigation of development assistance and growth for the case of Fiji

Abstract: Presents an empirical analysis of the relationship between development assistance and economic growth for the case of Fiji. Foreign aid to the island economies is a major source for foreign exchange and resource needs. A neoclassical production function is applied in this study to estimate the aid‐growth nexus. Components of total aid, such as grant aid, loan aid, technical co‐operation, bilateral and multilateral aid flows are also employed to estimate a disaggregated impact of foreign aid in the short run and in the long run. The results show that bilateral aid, grant aid, and technical co‐operation grant have a significant impact on economic growth in Fiji. On the other hand, domestic resources do not contribute significantly to economic growth in Fiji.

Poverty: a worldwide form of injustice

Abstract: As Bill Gates’ estimated wealth has reached the unimaginable mark of $100 billion, and other billionaires are being created daily, the problem of inequality is becoming more and more visible But, lulled into the commonly stated maxim that “a rising tide lifts all boats”, we may assume that the rest of us are, or will be, benefitted by this general prosperity It comes as a shock, therefore, to realize that even in the USA the income level of the lower echelons of society are actually declining For the less developed countries the burden is even greater, with average income falling throughout much of Africa and in other areas as well The move toward globalization, far from mitigating the problem, is actually adding to the disparities between rich and poor worldwide, while even the rich do not seem to be happier as a result of their wealth

Papua New Guinea: Employment, Wages and Economic Development

Abstract: In this book Levantis aims to explain Papua New Guinea’s failure to achieve economic development. His central thesis is that the labour market policy of the 1970s created a situation of urban drift that exacerbated urban unemployment. This in turn created the foundation for the grave law and order problem that has led to the deterioration of the private sector. He further argues that although reform of the labour market in 1992 has created incentives for private sector development, and therefore for the creation of employment, this in itself will not curb the law and order problem. Until the law and order problem is solved, the full benefit of the 1992 reform will not be felt.

The New Age movement and its societal implications

Abstract: This article examines the essence of the New Age movement: its reservations about the Judaic‐Christian heritage, its pantheistic/monistic orientation, its individualism, its search for the mystical experience, its skepticism of modern science and technology, its openness to androgyny, its ecumenicalism, and its prediction of a new dispensation. The article traces the New Age predecessors and influences: gnosticism, the Catholic potpourri, romanticism, the writings of C.G. Jung, and Theosophy. It speculates that the movement’s influence – given its individualism, skepticism of structure and organization, and hostility toward modern methodology – will be implicit and indirect. Finally, it notes the ambivalence of the core ideology, lending itself to both “progressive” and “non‐progressive” interpretation.

On the simple welfare economics of network externalities

Abstract: Network externalities are analysed in the telecommunications sector and the public good character of the network is stressed. It is examined whether the presence of network externalities justifies a subscribership subsidy usually reflected in a low connection charge. The answer is, in general, positive unless network externalities are infra‐marginal, a case that exists at high penetration rates. In this case the argument for the achievement of universal service by invoking the presence of network externalities fails. This argument becomes even weaker as the expansion of the network through the provision of new goods and services creates externalities that affect all subscribers equally.

Is discrimination disappearing? Residential credit market evidence, 1992‐98

Abstract: Makes three contributions to the ongoing debate over whether racial discrimination is disappearing, and white privilege eroding. First, develops an argument concerning why many economists treat empirical evidence of racial discrimination with skepticism or indifference. Second, presents some new econometric results which provide empirical insight into whether racial inequality is disappearing in residential credit markets. These results suggest that for African Americans and Latinos, racial disadvantage remains statistically significant in most cities, though its magnitude has fallen during the 1990s in many cities. Third, suggests an empirical implementation of “white privilege” in the residential credit market. Consistently finds white advantage in credit markets to be statistically significant in an econometric model of residential loan approval and denial.

Human development and economic systems: a unitary approach

Abstract: The collapse of the Soviet Union and the success of the US economy at the end of the second millennium do not necessarily mean the end of socialism. In fact both capitalism and socialism are beneficial for a unitary human development, which consists of both material and spiritual development. Capitalism, with its emphasis on self‐interest and individual freedom, has been crucial to material development. But socialism, with its preference for other‐interest and collective necessity, is conducive to spiritual development. Thus, what is needed for further development of the human race is a unitary economics that synergizes capitalism and scoialism.

Socio‐political structures as determinants of global success: The case of Enron Corporation

Abstract: Especially over the past decade, there have been numerous changes in the global marketplace which indicate that change is the only constant fact of life. These changes have increased not only opportunities but also uncertainty for organizations. The dynamic environment provides organizations with continuous feedback, to which they need to adapt. Past success masks the multinational corporation’s ability to perceive and respond to these changes. The key to survival in such a setting is culturally sensitive organizational learning. Strategic planning is necessary to cope with different levels of uncertainty encountered in foreign markets and to fully tap the new resources. Organizational effectiveness is directly influenced by the firm’s ability to achieve a “close‐fit” between the internal dynamics and the socio‐political structures. This, in turn, is possible through management practices sensitive to the local core cultural values. The Enron Power Project at Dabhol (Maharashtra, India) brings to light various socio‐political factors that have a direct impact on the organizational effectiveness, its survival and its long‐term success.

Discrimination, inequality and the competitive model of US education

Abstract: US public education is dominated by a win‐lose competitive model. While this model has been relatively successful in educating and training most Americans to function in the type of economic environment that has prevailed since the Second World War, it has almost completely failed to develop a citizenry that can participate fully in the political and social spheres of a capitalist democracy. The relative success in training workers may be on the wane as the US economy evolves toward more knowledge‐intensive work, requiring more critical thinking and worker autonomy. Even worse, the competitive model in US public education is a powerful promoter of the growth of earnings inequality and racial discrimination. Examines the current educational system, the role of standardized testing, and proposes a model of cooperative learning to develop a better‐educated citizenry and workforce.

Microenterprise as a practical alternative to maquiladoras

Abstract: Examines alternative ways to foster microenterprises in developing countries. Microenterprises, in contrast to maquiladoras (assembly or processing plants), contribute to just relationships in the workplace and to human development. In today’s global economy, US corporations have established a number of maquiladoras in Latin America and the Caribbean that have benefitted them as foreign owners but have had some deleterious effects on the workers and economies of the countries. US financial institutions and non‐profit organizations are providing micro‐financing, training and organization to promote microenterprises in developing countries. These enterprises, though small, contribute to self‐sufficient development at the grassroots level.

Trade as if children mattered

Abstract: The use of abusive child labor in developing countries is investigated in terms of its violation of the fundamental human rights of children and its role in international production and trade. Evaluates efforts to eliminate the use of child labor in the knotted carpet and soccer ball industries through the use of corporate codes of conduct and product labeling. Given the limits to these voluntary efforts, explores existing and proposed linkages between international labor standards and trade policy as means to protecting the health and moral wellbeing of children.