Technical Efficiency in the Angolan Banking Sector with the B‐convexity Model

This paper analyses technical efficiency in Angolan banks from 2005 to 2010 with an innovative production frontier model, the model. The intermediate approach is adopted. It is observed that the efficiency increases over the observation period, according to the international experience, market share and local markets. Policy implications indicate that competition and governance should be promoted in order to increase efficiency.     

Rational stability of choice functions

Two independent approaches have been used to analyze choices. A prominent notion is rationalizability: individuals choose maximizing binary relations. An alternative is to analyze choices in terms of standards of behavior with the notion of von Neumann–Morgenstern (vNM)-stability. We introduce a new concept ($r-$stability) that in turn extends the notion of stability and rationality. Our main result establishes that every rationalizable choice function is $r-$stable and every vNM-stable choice has an $r-$stable selection. An appealing property of $r-$stability is that well-known solution concepts (top cycle, uncovered set, …) are $r-$stable, while they are neither rationalizable nor vNM-stable.     

A few bad apples: Communication in the presence of strategic ideologues

I propose a very simple model of strategic communication. The motivation is to help explain widespread persistent disagreement about objective facts. In the model, there is a message sender and a receiver, and two possible states of the world, left or right. The sender is one of three types: honest, or a leftist or rightist “ideologue.” The honest type observes a private signal in , with higher values implying stronger support for the right state, and reports the observed value truthfully. Ideologues strategically choose any message from this set to maximize the receiver's belief in their preferred state, ignoring any private information they may have. I show that a small presence of ideologues can have a large effect on communication: while we might expect ideologues to just send extreme messages, in most equilibria ideologues use “strategic understatement,” and in many cases actually mix over all non‐neutral (non‐N∕2) messages to mimic honest types and gain credibility. This distorts the interpretation of these messages such that all messages on a side of the spectrum (above or below N∕2) have the same effect on receiver beliefs. This coarsened communication is less informative than even the weakest non‐neutral messages in the absence of ideologues. I show by example how ideologues can cause large delays in the time required for receiver beliefs to converge to truth.     

Strategic Incentives in Teams: Implications of Returns to Scale

This article demonstrates the critical relationship between the characteristics of the production function and the strategic incentives in a team. Equilibrium effort increases in team size when substitutability is low relative to returns to scale. Effort levels are actually strategic complements when returns to scale exceed the substitutability of members' effort. Moreover, even with equal shares the well‐known problem is determined by returns to scale and becomes worse as returns increase. While a target scheme can support the optimal output level as an equilibrium, it does not completely deter free riding. A team member will accommodate shirking by increasing their own effort within a remarkably large “accommodation zone” where the additional effort cost is less than the bonus. This accommodation of shirking by others exists for different returns to scale and even for very low levels of substitutability.     

Political Economy of Intergovernmental Fiscal Transfers: The Rural‐Urban Dynamics in Ghana

This study examined the political economy dimension of fiscal transfers from the national government to district assemblies based on the formula distribution policy created under Ghana's 1992 Constitutional democracy. The two‐step system GMM for dynamic linear panel analysis was estimated from locational perspectives of rural and urban in relation to political swing and aligned districts. Data on annual District Assemblies Common Fund transfers and election results were used for the analyses from 1994 to 2014 covering 167 assemblies. From the results, average transfers to each district was Gh 6.28 million but it increased by 3.5 per cent in politically aligned rural districts and by 6.4 per cent in urban swing districts. During election years, the increases were even higher, precisely 5 per cent and 10 per cent for rural aligned and urban swing districts, respectively. These suggested that the government generally targets more urban swing voters than rural aligned voters. The allocation formula was influenced by political factors, as election years tended to be associated with higher transfers. The swing effects dominated the sharing mechanism. Therefore, to reduce political influence on the allocation formula, an independent body should be established to make recommendations directly to parliament. This should dampen the political influence of incumbent governments on the allocations.     

Price Transmission and Market Integration in Oyo State,Nigeria

Abstract: The paper tests the market integration of the main staple agricultural commodities in Oyo State. Monthly prices in covering a period of 8 years (1994–2001) were obtained from Oyo State Agricultural Development Programme (OYSADP) and analysed using the Ravallion Model. The study also calculated the Indices of Market Concentration (IMC) to measure the degree of spatial market integration. The IMCs for cassava, yam, white maize and yellow maize were 0.3074, 0.0814, 0.02712 and 0.1648 respectively. The IMCs imply high short‐run market integration between the reference and rural markets. The market integration indices confirm that price changes in the urban markets (Bodija and Ilora) translated to changes in the price of cassava, yam, maize, yellow maize in rural markets (Akanran, Towobowo, Anko, Irepodun, Oje, Kajola, Akala and Aberu). It is concluded that agricultural commodity arbitrage is working. The degree of market integration can be enhanced by the provision of not only transport infrastructure but by provision of adequate formal marketing information and standardization of weights and measures in the system.     

Trade uncertainty and specialization. Social versus private planning

Summary A small trading economy which produces and trades an arbitrary, but finite, number of goods and faces given terms of trade in combination with an uncertain volume of trade is studied. An exogenous probability of trade disruption forces both public and private decision-makers to specialize to a lesser extent in accordance with their comparative advantage. A unique optimal point of production exists for each probability of trade disruption. A private competitive economy will not produce at this point: it produces too much of the good with a comparative advantage.Notation C ² class of twice continuously differentiable functions - C _i consumption of goodi - f free-trade utility function - g autarky utility function - p international relative price of goody - p _d domestic relative price of goody - Q solution set of - U utility function - U marginal utility of goodi - U _x marginal utilities of lastn goods - x goodx - x ^* autarky production of goodx - x free-trade production of goodx - x _pr private production of goodx - x ₀ optimal production of goodx - x _m maximal production of goodx - y goody - Y income function - private economy equilibrium function - difference function - production possibility function - _x derivative of - probability that free trade occurs - indirect utility function - solution function to optimality problem - c consumption vector - p relative price vector - x goods vector - t transpose - R ₊ ⁿ n-dimensional positive orthant This article communicates the opinion of the author. The views expressed herein are not necessarily shared by his employer.Comments by Willem Buiter, Casper de Vries and participants at the Buiter Workshop Series at the University of Groningen (May 1989) were very useful.     

Employment,schooling and productivity growth

Summary This paper presents an empirical analysis of labour demand and labour productivity growth in The Netherlands. Assuming an aggregate production function with as factors capital and 3 types of labour, distinguished by educational attainment, cost minimization leads to a set of 3 labour demand relations to be estimated on time series data. Using the estimates and the implied elasticities, aggregate labour productivity growth is decomposed into factor substitution, autonomous factors, labour time shortening, economies of scale, utilization rates and the increased educational level of the working population. The contributions of substitution, utilization rates and education appear to be substantial, notably in the seventies.

List of symbols

Variables a _i Efficiency index of skill leveli - C production - h _i working-time index for skill leveli - g _i steady-state growth rate of skill leveli - K capital stock - L _i employment volume of skill leveli - L _i ^* desired level of labour skill leveli - p output price - p ^* desired output price - s _i ^* long-run static labour shares in the production value - p _k rental price of capital - P index of total factor productivity - P _l index of labour productivity - u _i utilization rate of skill leveli - u _k utilization rate of capital - w _i wage rate for skill leveli - y production volume - y _yij Hicks partial elasticities of complementarity - _i steady-state cost share of skill leveli - _k Bk steady-state cost share of capital - _f lf highest level price index in cost function nesting - _g 4 intermediate level price index in cost function nesting - _h 4 lowest level price index in cost function nesting - _i steady-state relative wage share of skill leveli - _ij Allen partial elasticities of substitution Parameters d _i l adjustment speed of skill leveli - d _p price adjustment speed - M mark-up on marginal costs - scale elasticity of production - _i distribution parameter in cost function,i = 3, g - _i distribution parameter in cost function,i = k, h - _i distribution parameter in cost function,i =1, 2 - _i autonomous labour productivity growth for skill leveli - _i cost share of skill level in base year - _f production cost index in base year - _i hours elasticity in labour efficiency index - group elasticity of substitution betweenL ₃ and (K, (L ₁,L ₂)) - _g Og group elasticity of substitution betweenK and (L ₁,L ₂) - _h 6h group elasticity of substitution betweenL ₁ andL ₂ We would like to thank B. Downey, G.M.M. Gelauff, A. Nieuwenhuis, J.M.M. Ritzen, J.C. Siebrand and an unknown referee for helpful comments on earlier drafts.     

Incentive and Dilution Effects of Employee Stock Bonuses and Stock Options: Evidence from Taiwan

Employee stock bonuses (ESBs) and employee stock options (ESOs) are the means for high-technology companies in Taiwan to reward their employees. This research connects the Ohlson (1995 Ohlson, JA. 1995. Earnings, book values, and dividends in equity valuation. Contemporary Accounting Research, 11: 661–687. [Crossref] , [Google Scholar]) model and Linear Structural Relations (LISREL) model to investigate these effects of ESBs and ESOs, respectively, for a sample of high-technology companies in Taiwan. I generate two empirical generalizations. (1) The incentive effects of ESBs are significantly associated with performance, thus enhancing firm value; in addition, the incentive effects of ESBs are greater than the dilution effects. (2) The incentive effects of ESOs are also significantly associated with performance, whereas the dilution effects of ESOs are insignificant. Although evidence supports the incentive effects of providing ESOs and ESBs, it is debatable whether ESOs and ESBs dilute shareholders’ equity.     

Social capability deficits and productivity behaviour of African manufacturing firms: Evidence from Lesotho garment producers

Despite attempts to induce strong competitiveness in African manufacturing firms, poor productivity performances continue to hinder their ability to operate successfully in international markets. This paper argues that, while many plausible explanations can be put forward for this failing, analysis of the firms' social and institutional contexts can provide useful insights into why they have continued to perform badly. Adopting the technological catch-up framework proposed by Abramovitz (1986) Abramovitz, M. 1986. Catching up, forging ahead and falling behind. Journal of Economic History, 46(2): 385–406. [Crossref], [Web of Science ®] , [Google Scholar], the paper uses the case of Lesotho garment producers to illustrate how an environment characterised by significant social capability deficits has a negative impact on local firms' competitiveness. Strategic interventions to improve the quality of infrastructural services deliveries are suggested as urgently needed remedial measures.     

Publication

Laporan Tahun Pembukuan 1960-65 [Report for the Fiscal Years 1960-65]. Bank Indonesia, Djakarta, 1968. Pp. xii + 3O1 and appendices.

Masalah Ekonomi Beserta Pemetjahannja [Economic Problems and their Solution]. Symposium organised by the Central Presidium of KAMI, 1-6 June 1968. Student Senate, Faculty of Economics, University of Indonesia, Djakarta, 1968. Mimeographed, pp. 260.

Business Prospects in Indonesia Today. Published by the Committee for the 17th August Celebration and the Indonesian Community in Hong Kong, August 1968. Pp. 182.

Statistical Pocketbook of Indonesia, 1964-1967. Central Statistical Bureau, Djakarta, 1968. Pp. lii + 418.

Data-data Statistik Pokok Pembangunan Ekonomi [Basic Statistics for Economic Development]. Badan Perent janaan Pembangunan Nasional, Djakarta, 17 August, 1968. Mimeographed, pp. 50.

Report of the Singapore Technical Fact-Finding Mission on the Development of Tourism in Bali. Economic Development Division, Ministry of Finance, Republic of Singapore, June 1968. Pp. 79, Sp. $3.00

Bank Negara Indonesia Unit I, Bulletin of Economic and Financial Statistics, July 1968. Mimeographed, pp. 29.

Indonesian Economic Review vol. 1, no. 1-, May 1968-. Djakarta, Berdikari Ltd (monthly).

Iklantara, No. 1-, August, 1968-, Djakarta, Iklantara Advertising Agency (monthly).     

Publications

Brian May, The Indonesian Tragedy, Routledge & Kegan Paul, London, 1978, pp. xvii + 438. A$19.95.

Harold Crouch, The Army and Politics in Indonesia. Ithaca andLondon: Cornell University Press, 1978. 377 pp. ISBN 0-8014-1155-6.

International Rice Research Institute (1978). Changes in Rice Farminf in Selecred Areas of Asia. International Rice Research Institute. Los Banos, Laguna, Philippines.

Molster, H.C. (1978). Methods of Estimating Fertiliser Response with an Application 10 Urea Use to Rice in Jogjakarra, Indonesia. Centre for Amicultural Publishing and Documentation, Wageningen.     

Book Reviews

Yoshihara Kunio, The Rise of Ersatz Capitalism in Southeast Asia, Singapore: Oxford University Press, 1988.

Pang Eng Fong (Ed.), Labour Market Developments and Structural Change: The Experience of Asean and Australia, Singapore: Singapore University Press, 1988, pp. 296 + xvii, index.

Michael T. Skully and George J. Viksnins, Financing East Asia's Success: Comparative Financial Development in Eight Asian Countries, Hong Kong: Macmillan, 1987, pp. 242 + xiii. cloth: $82.95.

Felix Schmidt Der Beitrag des Staedtischen Informellen Sektors zur Sozialoekonomischen Entwicklung Indonesiens. Dargestellt am Beispiel der Stadt Bandung [The Contribution of the Urban Informal Sector to Socio-economic Development in Indonesia: The Case of the City of Bandung], Schriften zu Regional - und Verkehrsproblemen in Industrie Bandung], Schriften zu Regional - und Entwicklungslaendem, Bd 45, Berlin: Duncker and Humbolt, 1988, pp. 295 + xix. DM 68,-.

Jennifer Alexander, Trade, Traders and Trading in Rural Java, Singapore: Oxford University Press/ASAA Southeast Asia Publications Series, 1987.

Colin MacAndrews, Land Policy in Modern Indonesia, Boston: Oelgeschlager, Gunn and Hain/The Lincoln Institute of Land Policy, 1986, pp. 119 + viii.

Wolf Donner, Land Use and Environment in Indonesia, London: C. Hurst and Company, 1987, pp. 368 + xix.

Robert Repetto, The Forest for the Trees? Government Policies and the Misuse of Forest Resources, Washington: World Resources Institute, pp. 105 + viii. Cloth: $US 10.00.

Sjahrir, Kebijaksanaan Negara - Konsistensi dan Implementasi [Public Policy - Consistency and Implementation], Jakarta: LP3ES, 1987, pp. 230 + viii.

Mubyarto, Ekonomi Pancasila: Gagasan dan Kemungkinan [The Pancasila Economy: Concept and Possibilities], Jakarta: LP3ES, 1987, pp. 238 + ix.

M. Dawam Rahardjo, Perekonomian Indonesia: Pertumbuhan dan Krisis [The Indonesian Economy: Growth and Crisis], Jakarta: LP3ES, pp. 299 + xviii.

Anthony Reid, Southeast Asia in the Age of Commerce, 1460–1680. Volume One: The Lands Below The Winds, New Haven and London: Yale University Press, 1988, pp. 275 + xvii.

E.E. van Delden, Klein Repertorium: Index op Tijdschriften met Betrekking tot Voormalig Nederlands-lndie. Deel 1: Tijdschrift voor het Binnenlandsch Bestuur 1887–1900, Amsterdam: Koninlijk Instituut voor de Tropen, 1986, pp. 79.     

Publications

Economic Data for Investors in Indonesia. Bank Indonesia, Djakarta, 1968. Pp. xv + 220.

Report for the Years 1960-1965. Bank Indonesia, Djakarta, 1968. Pp. xii + 288 and appendices.

Ringkasun Hasil Survey2 Masalah 1965-1967 Dun Rentjunu Survey Masalah, 1968-1969 [Summary of Results of the Agro-Economic Survey 1965-67 and Plans for 1968-691. Survey Agro-Ekonomi Indonesia, Djakarta, 1968. Pp. x + 81.     

Publications

Herbert Feith and Lance Castles, (ed.) Indonesian Political Thinking 1945-1965. Cornell University Press, 1970. Pp. xvi + 505. Price $US13.50.

Usha Mahajani, Soviet and American Aid to Indonesia-1949-68. Papers in International Studies, Southeast Asia Series No. 14, Ohio University Center for International Studies, Athens, Ohio, 1970. Pp. vii + 41. Price $2.00.

B. Soedarso, Korupsi di Indonesia [Corruption in Indonesia]. Djakarta, Bhratara, 1969. Pp. 108.

Gunnar Myrdal, Asian Drama. New York, Pantheon Press, 1968. (Volume II, pp. 937-958.)

R. E. Park, Effects of Graft on Economic Development: An Examination of Propositions from the Literature. Rand Corporation, June 1969. Pp. 29. Bibliography.

Syed Hussein Alatas, The Sociology of CoCorruption. Singapore, Donald Moore Press, 1968. Pp. 87. Bibliography.

Neil J. Smelser, (Ed.) Readings in Economic Sociology. Englewood, New Jersey, Prentice Hall, 1965. Pp. 303.

J. S. Nye, ‘Corruption and Political Development: A Cost-Benefit Analysis’, American Political Science Review, June 1967. Bibliography.     

Publications

J. Panglaykim and Ingrid Palmer, State Trading Corporations in Developing Countries. Rotterdam, Rotterdam University Press, 1969, pp. 199.

Mendjelang Repelita [Looking Forward to the Five Year Plan], Proceedings of the Fifth Congress of the Indonesian Association of Economists, Palembang, 5-8 April 1969. Faculty of Economics, University of Indonesia, Djakarta, 1969. Pp. vi + 244. (Price not stated).

The Promotion of Private Investment in Indonesia, prepared by a Study Group of the Business and Industry Advisory Committee of the OECD. Paris, March 1969, Pp. 46.

Regional Seminar on Agriculture, Papers and Proceedings. Asian Development Bank, Sydney, Australia, 10-12 April 1969. Pp. 248.

The First Five Year Development Plan 1969/70-1973/4. Department of Information, Republic of Indonesia, Djakarta, 1969. 5 volumes. (This is the official English language translation of the Plan, which was reviewed in Bulletin Vol. V, No. 2, pp. 70-79.     

RATES OF RETURN TO EDUCATION IN BOTSWANA: RESULTS FROM THE 2002/2003 HOUSEHOLD INCOME AND EXPENDITURE SURVEY DATA SET

Using the most recent Household Income and Expenditure Survey data (2002/2003), this paper presents current rates of return to education for Botswana. The results show that the rates of return have in general declined by one percentage point on average between the periods as shown in Table 2 . If we, however, look at the averages for the different school cycles, the fall in the average rates is quite significant at about six percentage points between the periods. The biggest fall is for secondary education, especially upper secondary education, which fell by 28 percentage points between the periods. The rates of return to tertiary education, however, rose by more than 50 percentage points. Ignoring upper secondary, the pattern of rates of return has remained similar to the results of the study based on the 1993/1994 data. Rates are higher for tertiary education and lower for secondary than for primary education. This results are still consistent with rates of return generally rising with level of education. At policy level, the results continue to support sharing of costs between Government and beneficiaries or their parents especially at tertiary education level. Second, the results indicate the need for the country to continue to vigorously pursue job creation and reorient the education system from emphasis on white collar jobs.

Table 2. Mincerian earnings function: overall Ψ
Dependent variable (ln monthly earnings)

Publications

Emil Salim, Collection of Writings in Indonesian Economic Review 1968 (pp. 31); Kumpulan Tulisan-Tulisan Collected Writings 1969/70-1971 (pp. 65); Collection of Writings 1969/70-1971 (pp. 152), Secretariat of Bappenas, Djakarta 1971 (mimeographed).

V. Arkhipov, Economics and Economic Policy of Indonesia 1945-1968 . The Institute of Oriental Studies of the Academy of Sciences of the U.S.S.r. Moscow, 1971. Pp. 438 (in Russian).

Bruce Glassburner (ed.) The Economy of Indonesia: Selected Readings. Cornell University Press, 1971. Pp. xii + 443. $15. This impressive collection of readings on the Indonesian economy consists of 13 articles written by 12 experts-6 Australians, 4 Americans, and, unfortunately, only 2 Indonesians.

Indonesia, No. 7 (April 1969), No. 8 (October 1969), No. 9 (April 1970), No. 10 (October 1970), No. 11 (April 1971). Cornell Modern Indonesia Project. Cornell University, Ithaca, New York.

M. Brown (ed.) Indonesia: Plans and Prospects. Asia (quarterly journal of the Asia Society), Autumn 1970 issue, pp. 138.     

Publications

Sajogyo, Usaha Perbaikan Gizi Keluarga (ANP Evaluation Study 1973), Lembaga Penelitian Sosiologi Pedesaan, Institut Pertanian Bogor, Bogor, 1975. Rp 1000 pp. xiii + 195.

Committee on Economics Teaching Material for Asian Universities (ed.), Economic Theory and Practice in the Asian Setting, Volume 1: Macroeconomics, pp. 172.

Economic Theory and Practice in the Asian Setting, Volume 2: Microeconomics, pp. 1970.

Economic Theory and Practice in the Asian Setting, Volume 3: The Economics of Agriculture, pp. 245.

Economic Theory and Practice in the Asian Setting. Volume 4: The Economics of Development, pp. 274.

New Delhi: Wiley Eastern Ltd., 1975 (Available through the Asia Office, The Agricultural Development Council, Inc. Tanglin P.O. Box 84, Singapore 10).

Seminar Hasil Penelitian Lapangan. Pusat Latihan Penelitian Ilmu² Ujung Pandang (Seminar on Results of Fieldwork, Social Science Research Training Centre, Ujung Pandang), 8–11 December 1976, Hasanuddin University and Social Science Research Training Centre.

Seminar Hasil Penelitian Lapangan 1976, Pusat Latihan Penelitian Ilmu² Sosial, Aceh (Seminar on Results of Fieldwork, Social Science Research Training Centre, Aceh), 6-9 December 1976, Syiah Kuala University and Social Science Research Training Centre.

Werner Rutz, Indonesien: Verkehrserschliessung seiner Ausseninseln (Transport Penetration of the Outer Islands), Paderborn, Germany, 1976. Pp. 182, 15 fold-in maps. DM58.00.

C.L.M. Penders (ed. & transl.), Indonesia: Selected Documents on Colonialism and Nationalism, 1830-1942. University of Queensland Press, St. Lucia, 1977, pp. 347 + glossary and index.

J. D. Legge, Indonesia. second edition, Prentice-Hall of Australia, Sydney, 1977.

Tax Inspection For Foreign Bodies and Aliens, Indonesian Tax Guide For Foreigners, Jakarta, April 1975, pp. 75.

Drs. B. Usman, Kumpulan Karangan Pajak Sinar Harapan 1973-5, PT Sinar Agape. Press, January 1977, pp. 211 Rp 2500.

Drs. B. Boediono, Pajak Penjualan, Direktorat Jenderal Pajak, Jakarta 1975, pp. 931.

Sritua Arief, Indonesia Growth, Income Disparity and Mass Poverty. Jakarta, Sritua Arief Associates (P.O. Box 2250, Jakarta), 1977.

Indonesian language version, pp. xviii + 150, Rp 5000.

English language version, pp. ii + 207, Price on application.

Kumpulan Bacaan Sosiologi Pedessaan (Readings on Rural Sociology), Lembaga Penelitian Sosiologi Pedesaan, Institut Pertanian, Bogor. 1975.

Direktorat Jenderal Industri Tekstil, Buku Petunjuk Industri Tekstil (A Guide-book to the Textile Industry), Jakarta, 1976. Pp. ix + 410. Rp 6750.

Brian Lynch. Indonesia: Problems and Prospects. Sorrett Publishing Company, Melbourne, 1977, pp. 183. Recommended price $A11.95.

Dr Ir Herman Soewardi. Respons Musyarakat Desa Terhadap Modernisasi Produksi Pertanian, Terutama Padi, Gadjah Mada University Press, 1976, pp. 175.

Douglas Miles, Cutlass and Crescent Moon. A Case Study of Social and Political Change in Outer Indonesia. Centre for Asian Studies, University of Sydney, 1976, pp. 160.