Social and Behavioral Sciences Commons^™

The Development Of Modern Corporate Governance In China And India, Nicholas Howson, Vikramaditya Khanna

Nicholas Howson

This book chapter (forthcoming, China, India & the International Economic Order) examines the development of corporate governance in the world’s two biggest and fastest growing emerging markets - China and India. Although both countries are different in important ways, they also share significant similarities such as rapid economic development, significant foreign investment, economic, structural and legal reform, and a shared interest in (if not implementation of) essentially Anglo-American corporate law norms. These differences and similarities provide an interesting and rich platform for consideration of popular or contested corporate governance precepts. In particular, after an extensive discussion of corporate governance reforms …

Sovereignty And Democracy In Ethiopia: A Reflection On Gebru Asrat's Book, Asayehgn Desta

Asayehgn Desta

Over the past forty years, we have been hearing and reading a lot about the Tigrai People’s Liberation Front (TPLF) which dismantled the inhuman and atrocious Military dictatorship that ruled Ethiopia from 1974 to 1991. It was not only highly skilled in military operations but was visionary. The impression that was widely circulated was that when the TPLF came to power it would protect Ethiopia’s sovereignty, adhere to the rules of law and ensure that equity and social justice would prevail , and above all democracy would be the norm of Ethiopian society. Contrary to these assertions, Gebru Asrat (hereafter …

The (Non) Effect Of Natural Resource Dependence On Capital Accumulation In Latin America, Luisa Blanco, Robin Grier

Luisa Blanco

In a simultaneous model of human and physical capital accumulation for 17 Latin American countries from 1975 to 2004, we show that overall resource dependence is not significantly related to physical and human capital. Disaggregating the natural resource variable into subcategories, we find that petroleum export dependence is associated with higher physical capital and lower human capital, while agricultural export dependence is often associated with lower levels of physical capital. All of these effects are quantitatively small, however, casting doubt on the idea that natural resource dependence has stifled the accumulation of capital in the region.

Adam Smith And Entangled Political Economy, Maria Paganelli

Maria Pia Paganelli

Entangled Political Economy, the idea that the economy and the polity are a nexus of interrelations often with unplanned outcomes, is close to the concept of economics that Adam Smith presents, a concept which was not shaped by strict discipline barriers. I show that Adam Smith analyzes the nature and causes of the wealth of nations by analyzing the interaction of the economy with politics, ethics, and the law. In particular, Smith presents each of these systems as a network of relations with all the other systems: the economy is entangled not just with the polity, but also with other …

The Causal Effect Of Market Priming On Trust: An Experimental Investigation Using Randomized Control, Omar Al-Ubaydli, Daniel Houser, John Nye, Maria Paganelli, Xiaofei Pan

Maria Pia Paganelli

We report data from laboratory experiments where participants were primed using phrases related to markets and trade. Participants then participated in trust games with anonymous strangers. The decisions of primed participants are compared to those of a control group. We find evidence that priming for market participation affects positively the beliefs regarding the trustworthiness of anonymous strangers and increases trusting decisions.

Are Two Knaves Better Than One? Every Man A Knave: Hume, Buchanan, And Musgrave's View On Economics And Government, Andrew Farrant, Maria Paganelli

Maria Pia Paganelli

It is commonplace to view market agents as self-interested knaves, while government agents are either as knaves or public-spirited angels. What are the consequences of these different motivational assumptions in modeling governmental and market behavior? We compare David Hume, James M. Buchanan, and Richard Musgrave. We claim that Hume, the only one thinking consistently in terms of the worst-case, offers a second best solution for both the government and the economy, which may turn out to be the best possible solution given human nature. Because of the reciprocal check, two knaves are better than one. More is preferred to less …

Commodification And Contract Formation: Placing The Consideration Doctrine On Stronger Foundations

David Gamage

Under the traditional consideration doctrine, a promise is only legally enforceable if it is made in exchange for something of value. This doctrine lies at the heart of contract law, yet it lacks a sound theoretical justification – a fact that has confounded generations of scholars and created a mess of case law. This paper argues that the failure of traditional justifications for the doctrine comes from two mistaken assumptions. First, previous scholars have assumed that anyone can back a promise with nominal consideration if they wish to do so. We show how social norms against commodification limit the availability …

Undergraduate Public Finance (Bepp 201), Matthew Freedman

Matthew Freedman

This course will examine the role of the government in the economy and its impact on individuals and firms. The aim of the course is to provide an understanding of the reasons for government intervention in the economy, the extent of that intervention, and the response of individuals and firms to the government’s actions. A wide variety of topics will be covered, including (but not limited to) environmental regulation, education, health care, social insurance programs, budget deficits, and the taxation of both individuals and firms.

The syllabus is posted here.

Course materials are posted on Canvas.

Taught Spring …

Medical Paternalism And The Rule Of Law: A Reply To Dr. Relman, Charles Baron

Charles H. Baron

In this Article, Professor Baron challenges the position taken recently by Dr. Arnold Relman in this journal that the 1977 Saikewicz decision of the Supreme Judicial Court of Massachusetts was incorrect in calling for routine judicial resolution of decisions whether to provide life-prolonging treatment to terminally ill incompetent patients. First, Professor Baron argues that Dr. Relman's position that doctors should make such decisions is based upon an outmoded, paternalistic view of the doctor-patient relationship. Second, he points out the importance of guaranteeing to such decisions the special qualities of process which characterize decision making by courts and which are not …

News Of Corporate Failure: Evaluating The Relationship Between Individual Assessments And Market Investments, Ann Williams

Ann E Williams

Individuals’ comprehension of communication is shaped by the use of metaphor. This study illustrates how the use of metaphor in business and economic news coverage shapes individuals’ responsibility attributions in ways that can ultimately influence consumers’ investment decisions. In a randomized experimental design, participants were invited to read news articles that described the bankruptcy of a business. The treatment text narrated the bankruptcy using metaphor, while the control text narrated the same event without the use of metaphor. After exposure to the communication text narrated with metaphor, responsibility attributions and subsequent investment decisions were significantly altered. The findings suggest that …

Cornering The Black Market: A Role For The Corner Store In Community Development, Seneca Vaught

Seneca Vaught

This paper addresses these important themes by examining the impact of corner stores in two American cities: Buffalo, New York and Atlanta, Georgia. The paper illustrates how corner stores can effectively address unique demands in urban niche markets and the problems and possibilities these approaches present. The paper puts these developments into a historical, economic and spatial context that illustrates how neighborhood stores emerge and the dynamics of race, economics, and geography that they engage. Finally, the paper illustrates several models for effective small propriety grocers that specifically address issues of economic disparity and racial divisions, illustrating how these examples …

The Changing Distributions Of New Ph.D. Economists And Their Employment: Implications For The Future, Ronald Ehrenberg

Ronald G. Ehrenberg

[Excerpt] Academic careers are no longer the be-all and end-all for economics Ph.D. students, and the findings and background provided by Siegfried and Stock help to explain why this is so. The median age at which individuals receive economics Ph.D.'s in the Siegfried and Stock sample is 32. While they are somewhat surprised at this finding, it parallels the experiences of many other fields. Increasingly, students are working before proceeding to doctoral studies. Often Ph.D. students in economics enter their programs after having spent several years working for government agencies or research consulting companies—work that has whetted their appetites for …

Do Economics Departments With Lower Tenure Probabilities Pay Higher Faculty Salaries?, Ronald Ehrenberg, Paul Pieper, Rachel Willis

Ronald G. Ehrenberg

The simplest competitive labor market model asserts that if tenure is a desirable job characteristic for professors, they should be willing to pay for it by accepting lower salaries. Conversely, if an institution unilaterally reduces the probability that its assistant professors receive tenure, it will have to pay higher salaries to attract new faculty. Our paper tests this theory using data on salary offers accepted by new assistant professors at economics departments in the United States during the 1974-75 to 1980-81 period, along with data on the proportion of new Ph.D.s hired by each department between 1970 and 1980 that …

Economic Freedom And Fiscal Performance: A Regression Analysis Of Indices Of Economic Freedom On Per Capita Gdp, Jason Ockey

Jason R Ockey

This paper explores whether different forms of economic freedom drive fiscal performance. We also seek to determine which specific measurements of economic freedom have the most statistically significant impacts. Though the results of our analysis show that economic freedom does impact levels of per capita GDP, the interpretation of these results is more complicated. Because some indices of economic freedom have negative effects on per capita GDP or are statistically insignificant, it is important to note that simply generally increasing a country’s overall level of economic freedom will not necessarily spur economic growth or increase fiscal performance. This paper does …

Local Rules And A Global Economy: An Economic Policy Perspective, Dan Danielsen

Dan Danielsen

This article explores the growing significance and theoretical implications of ‘local rules’—such as Chinese labour standards, US financial regulation and Swiss bank secrecy rules—in the global economy. In particular, the argument developed is that Ronald Coase’s framework for analysing the effects of legal rules on economic welfare can help to reveal important weaknesses in current international legal approaches to analysing the transnational impact of local rules as well as contribute to a ‘global economic policy perspective’ better attuned to problems of power in the global regulatory order. Such a perspective will help us to see the effects of power differences …

Resolving Large, Complex Financial Firms, Thomas Fitzpatrick, Mark Greenlee, James Thomson

James B Thomson

How to best manage the failure of systemically important fi nancial fi rms was the theme of a recent conference at which the latest research on the issue was presented. Here we summarize that research, the discussions that it sparked, and the areas where considerable work remains.

How Well Does Bankruptcy Work When Large Financial Firms Fail? Some Lessons From Lehman Brothers, Thomas Fitzpatrick, James Thomson

James B Thomson

There is disagreement about whether large and complex financial institutions should be allowed to use U.S. bankruptcy law to reorganize when they get into financial difficulty. We look at the Lehman example for lessons about whether bankruptcy law might be a better alternative to bailouts or to resolution under the Dodd-Frank Act’s orderly liquidation authority. We find that there is no clear evidence that bankruptcy law is insufficient to handle the resolution of large complex financial firms.

Who's To Blame When A Business Fails? How Journalistic Death Metaphors Influence Responsibility Attributions, Ann Williams

Ann E Williams

This study unites a textual analysis and an experimental audience study to document the use of death metaphor in business news and to assess the impact that death metaphor has on audiences' attributions of responsibility for corporate failure. The findings show that death metaphors are frequently used in financial press coverage and that the use of death metaphor influences audience members' responsibility attributions by intensifying overall levels of blame, while simultaneously deflecting blame away from the executives responsible for managing the firm and diffusing it to other factors, including the state of the economy, the government, and individual consumers.

Sheep And Their Herders: Testing The Myth Of Rational Voters – A Latvian Case Study, Daniel Brou, Kirk Collins, Brent Mckenzie

Daniel Brou

Through the use of a simple behavioural political economy model, we cast doubt on the assumption that voters behave in predictable ways dependent on their expected support for government policies. We show that under certain conditions an unfavourable (i.e. welfare reducing) policy may result, even with well-informed, welfare maximising voters. While true that voter behaviour may align with government policies, this alignment has more to do with a perceived lack of influence, rather than policy support. The case of Latvia's accession to the European Union is used as a case study to evaluate the government's policy in terms of voting …

The Importance Of Financial Market Development On The Relationship Between Loan Guarantees For Smes And Local Market Employment Rates, Ben Criag, William Jackson, James Thomson, Craig Armstrong

James B Thomson

We empirically examine whether a major government intervention in the small firm credit market yields significantly better results in markets that are less financially developed. The government intervention that we investigate is SBA guaranteed lending. The literature on financing small and medium size enterprises (SMEs) suggests that small firms may be exposed to a particular type of market failure associated with credit rationing. And, SMEs in markets that are less financially developed will likely face a greater degree of this market failure. To test our hypothesis we use the level of bank deposits per capita as our relative measure of …

Being Consumed: Economics And Christian Desire, William Cavanaugh

William T. Cavanaugh

Are Christians for or against the free market? Should we not think of ourselves as consumers? Are we for or against globalization? How to we live in a world of scare resources? William Cavanaugh brings us a theological view and practice of everyday economic life with the use of Christian resources. He argues that we should not take the free market, consumer culture, globalization, and scarcity as givens, but change the terms of debate in each case. His consideration of the free market is not a question of for or against, but when exactly a market is truly free. He …

China’S Ventures In Africa, Emmanuel Aning, Delphine Lecroute

Emmanuel Kwesi Aning

In this paper, we are guided by several questions of which the critical one is whether Sino-African relations are merely opportunistic and based on an ad hoc momentum, or whether they reflect a real strategy based on presence and territorial domination in the new context of competition and cooperation on the reconfigured African continent. We argue that any endeavour to appreciate the complexities of this relationship needs a more nuanced and differentiated appreciation and understanding of Sino-African relations. Such an approach will elucidate the complex relationship between Africa and China and, more importantly, emphasise the delicate nuances that are overlooked …

Domestic Monopoly, Quotas & Contestable Rents, William Rieber

William Rieber

The Effect Of The Financial Aid Package On The Choice Of A Selective College, A. Studenmund, Thomas Slobko, Robert Moore

A. H. Studenmund

This paper examines the effects of financial aid on the decision to attend a selective liberal arts college using data obtained from applicants accepted to Occidental College in 1989. Patterned after a similar empirical investigation by Ehrenberg and Sherman for accepted freshmen at Cornell in 1981, logit probabilities of enrollment equations are estimated based on (1) observable characteristics of the individual students, (2) the net costs of attending Occidental and the various alternative colleges under consideration (including the financial aid packages offered) and (3) other characteristics of these alternative colleges. The results, like Ehrenberg and Sherman's, indicate that relative tuition …

The Critical Wage, Unemployment Duration, And Wage Expectations: The Case Of Chile, A. Studenmund, Sholeh Maani

A. H. Studenmund

This study tests the relevance of the job search model to understanding unemployment in developing countries by utilizing a 1982 data set describing unemployed men in Chile. The findings indicate that the model is relevant to a developing country: the job seekers studied based their critical wages on their perceptions of their own productivity, economic resources, and search costs, and they reduced their wage requirements as the duration of their unemployment increased. The authors also show, in the first direct test of this question, that the critical wage and the expected wage are determined jointly and that the expected wage …

Spurious Correlation And The Incremental Capital-Output Ratio, A. Studenmund

A. H. Studenmund

No abstract provided.

Toward A Better Understanding Of The Incremental Capital-Output Ratio, A. Studenmund, J. Vanek

A. H. Studenmund

No abstract provided.