Market Reform and Infrastructure Development in Transition Economies

This paper analyzes the determinants of investments in physical infrastructure over the first decade of market reform in Central and Eastern Europe and other former Soviet economies. Both market and political reform would be expected to have an impact on the level of infrastructure, but the relationship will likely differ for infrastructure which remains dependent on the public sector and that which becomes more dependent on private investment after such reforms. Results for a large cross section of transition economies show that market reform has had a positive impact on both traditional and newer types of infrastructure, with a stronger impact on the newer types which are more likely to be market‐derived. The findings also suggest that market reform is more likely to push investors to develop infrastructure when political and market reforms are accomplished in tandem.     

Doing it all: Women’s employment and reproductive work in Tajikistan

Central Asia has low labor force participation rates for women, despite high levels of poverty in the non-oil producing countries. Female labor force participation is related to competing uses for women’s time, especially in a context of poor infrastructure and limited availability of purchased replacements for household labor. We examine factors affecting women’s participation in employment and reproductive household work in Tajikistan, drawing on the 2003 Tajikistan Living Standards Survey. We incorporate specific conditions in Central Asia, including the prevalence of extended family households, norms about how women share household work, an absence of market substitutes for caring and reproductive labor, employment in family enterprises and poor infrastructure, especially in rural areas. We estimate the system using a Generalized Maximum Entropy (GME) approach. We find that few individual and household characteristics are related to time in employment. Time in noncare reproductive work decreases if a woman receives direct remuneration for her employment (compared to working in a family farm or enterprise but receiving no direct remuneration), but increases if the woman has less access to infrastructure. Rural women spend more time in both employment and non-care reproductive work than urban women, but less time in care work. Lack of infrastructure may leave women with few choices with respect to non-care reproductive work, while overall levels of time poverty create pressures on care time.     

The case for process mining in auditing: Sources of value added and areas of application

Process mining aims to extract knowledge from the event logs maintained by a company's ERP system. The objective of this paper is to make the case for why internal and external auditors should leverage the capabilities process mining offers to rethink how auditing is carried out. We do so by identifying the sources of value added of process mining when applied to auditing, which are as follows: 1. process mining analyzes the entire population of data and not just a sample; 2. critically that data consists of meta-data—data entered independently of the actions of auditee—and not just data entered by the auditee; 3. process mining allows the auditor to have a more effective way of implementing the audit risk model by providing effective ways of conducting the required walkthroughs of processes and conducting analytic procedures; 4. process mining allows the auditor to conduct analyses not possible with existing audit tools, such as discovering the ways in which business processes are actually being carried out in practice, and to identify social relationships between individuals. It is our argument that these sources of value have not been fully understood in the process mining literature, which has focused on developing it as a statistical methodology rather than on applying it to audit practice. Only when auditors and audit researchers appreciate what is new and unique about process mining will its acceptance in auditing practice become feasible.     

Exchange Rate Effects on Domestic Prices in Bulgaria and Poland: Progress in Making Markets?

The economic liberalization which has occurred in Central and Eastern Europe (CEE) over the past 15 years generally has involved establishing domestic markets and privatizing state‐owned firms, both with the intention of integrating the CEE economies into the global economy and allowing the benefits of competition to be realized. We explore how well this has been accomplished in two countries, Poland and Bulgaria, and the domestic conditions that contribute to its accomplishment. The sensitivity of domestic markets to international shocks, as reflected in exchange rate effects on domestic prices, may be viewed as an indicator of how integrated a country’s markets are into the global economy, and a proxy for competition in those markets. In explaining variation in exchange‐rate pass‐through, we examine the impact of market structure, economic liberalization and infrastructure as factors contributing to the development of competitive markets. We find that although integration into global markets can significantly increase market competitiveness, domestic factors also play a significant role.     

Analysing the lobby-effect of port competitiveness’ determinants: a stochastic frontier approach

Building upon a formerly performed study on port competitiveness, this article discusses the use of a stochastic frontier model as an interesting novel use to test, identify and correct respondents’ bias by applying it to competitiveness analysis based on perceptions of senior executives. Measuring the importance of competition determinants of seaports, conventionally analyzed using a SWOT-analysis based on (transport) infrastructure as a prime requirement for port activity growth, is an important issue to port management. However, it seems that the “institutional” environment of a seaport is also critical in obtaining a competitive advantage. In Haezendonck et al. (2000 and 2001) those port specific advantages and disadvantages were identified using factor analysis and L1-regression on the perceptions of 75 respondents, all senior executives and experts, through a survey. As regards the results of this study, critiques were formulated on the use of perceptions, often biased due to the political lobbying potential of the results. Since respondents often see independent studies as an opportunity to obtain more or early government subsidies, attract new investment projects or at least highlight the attention on their specific problems and demands, they were prone to underestimating the positive impact of the key success factors of the studied seaport compared to its main rivals, in this case major seaports in the so-called Hamburg–Le Havre competitive range. The purpose of this article is to test the assumption that respondents significantly underestimate the positive impact of port specific advantages and to see which of the respondent subgroups within the 75 respondents sample are more responsible than others for this underestimation. In addition, we argue and demonstrate that the use of a stochastic frontier method is appropriate for this matter. Each of 25 considered competition determinants of the original study is decomposed into a noise and “efficiency” term, based on the Bayesian stochastic frontier model (BSFM). In this article, we find evidence that BSFM could be used to test the “lobby-effect” or underestimation of the real effect of determinants, that terminal operators as a subgroup of respondents, are more likely to underestimate the key success factors than the subgroup of port experts and that those determinants that are directly related to government action show more underestimation than competitiveness determinants that result from private investments.     

Synergies between Farming and Rural Tourism: Evidence from Flanders

Support for rural development and agri-environment measures is often defended on the basis of the contribution of farming to the attractiveness of rural areas and the growing rural tourism sector. Farmers may benefit from the presence of tourism by offering accommodation or selling farm products to tourists. We analyse rural tourism data for Flanders to determine whether agricultural amenities contribute to the price rural tourists are willing to pay for lodging at a farm. We find that farming practices do indeed influence the attractiveness of an area for tourism and have an impact on the prices that can be charged for accommodation. Amenities from agriculture such as permanent grassland have a positive influence on rental prices. However, the presence of intensive agricultural and livestock farming and associated polluting activities decrease the attractiveness of rural regions for tourism. Farm tourism is found to make an important contribution to the farm income and economy of a rural region. Farm tourism constituted more than 30 per cent of the farm income of certain farms. Overall, our findings support the idea of major synergies between farming and rural tourism. Strengthening this relationship may therefore be a good strategy for countryside management and rural development.     

Fostering societal impact and job satisfaction: the role of performance management and leader–member exchange

ABSTRACT

Performance management (PM) can alienate employees from experiencing societal impact. This is problematic since societal impact influences employees’ job satisfaction. To avoid such unintended effects, we investigate two conditions under which PM could instead benefit the societal impact and job satisfaction of employees: consistency and leader-member exchange. Results show consistent PM fosters job satisfaction, mediated by societal impact and moderated by leader–member exchange. Public organizations should streamline expectations communicated through PM and constructive leader relationships could reinforce this process. By examining the conditions under which PM can avoid unintended effects on employees, we add to the debate on PM effectiveness.     

When employee performance management affects individual innovation in public organizations: the role of consistency and LMX

Abstract

Public sector challenges translate in more complex job demands that require individual innovation. In order to deal with these demands, many public organizations have implemented employee performance management. In a multilevel study, we examine when employee performance management affects individual innovation. We contribute by focusing on consistent employee performance management and Leader–Member Exchange (LMX). Based on goal-setting theory, we first argue that employee performance management fosters individual innovation when it entails consistent subpractices. Subsequently, LMX is theorized to function as a moderator in this linkage. We use multilevel data from 68 elderly homes and 1095 caregivers in Flanders to test our hypotheses. The study reveals that individual innovation is related to consistent employee performance management, and that LMX functions as a moderator in this relationship. Our findings contribute to scholars’ understanding of effects from employee performance management in public organizations.     

Transition to market economics: Employment and informal activity in rural areas

According to the neo-liberal model, the high levels of unemployment and collapsing real wages of transition will reallocate labor to new activities. But whether and how households actually reallocate labor is the subject of growing debate. We use survey data from Bulgaria to develop a typology of rural households based on their labor allocation characteristics. We find a diversity of outcomes. A significant share of households experience no change in labor allocation, some shift labor to own commercial enterprises, but a significant minority are displaced from the emerging market economy. Potential for informal activity among these households appears limited. Of great concern is the regional concentration of such households.     

Innovations in well-being tourism in the Nordic countries

Since the development of community-based tourism (CBT) governments, development agencies and NGOs have placed considerable emphasis on this development model. However, CBT has been strongly criticized with respect to low economic impact in terms of jobs and income, the result of small-scale interventions, its low life expectancy after external funding ends, the monopolisation of benefits by local elites, or the lack of business skills to make it operational.

This article explores the viability of the CBT model to support socio-economic development and poverty alleviation via a Nicaraguan case study. The characteristics and effects of different modes of organising community tourism were examined, based on an impact assessment and lifecycle analysis of the CBT Nicaraguan Network. The results showed how traditional top-down CBT, created and fully funded by external organisations, reflected the general criticisms of the approach, while bottom-up CBT, borne as a result of a local initiative, demonstrated longer life expectancy, faster growth, and more positive impacts on the local economy. The findings suggest a shift is required in the attention of donors and policy-makers towards redistribution policies that strengthen the skills, resources, and conditions of micro, community-based and family entrepreneurship, together with a stronger orientation towards the domestic markets.