T. Coleman Andrews: crusader for accountability in government

T. Coleman Andrews was an exceptional accountant whose career during the second quarter of this century spanned professional accounting practice, public service, military service and business management. This paper documents his contributions to accounting and administrative reform through the public-service positions he held in government at local, state and national levels. Earlier work by Flesher and Flesher (1989) focused on his contributions to operational auditing during his years at the General Accounting Office, and these contributions are reviewed here. In addition, this paper describes his later work with the Hoover Commission and as commissioner of the Internal Revenue Service.     

Aggregative games and best-reply potentials

This paper introduces quasi-aggregative games and establishes conditions under which such games admit a best-reply potential. This implies existence of a pure strategy Nash equilibrium without any convexity or quasi-concavity assumptions. It also implies convergence of best-reply dynamics under some additional assumptions. Most of the existing literature’s aggregation concepts are special cases of quasi-aggregative games, and many new situations are allowed for. An example is payoff functions that depend on own strategies as well as a linear combination of the mean and the variance of players’ strategies.     

The coordination roles of relief organisations in humanitarian logistics

The number of organisations involved in relief work in general and humanitarian logistics specifically is large and increasing, creating new complexity. In this paper we analyse different types of coordination and roles in two case studies of the humanitarian cluster system based on its initial development and the Kenyan Post-election crisis. The different and unclear roles of the organisations create significant problems before and after cluster activation and deactivation. Individual organisations take on many roles in the cluster system and beyond it in terms of coordination. The clarity of the roles affects the need for and ease of coordination. We suggest a simple basic categorisation of roles as a starting point for developing this concept in the field of humanitarian logistics and connect this to coordination.     

Offshoring and international competitiveness: antecedents of offshoring advanced tasks

During the past decade, offshoring has become an established business practice. Yet it is still more common to offshore less advanced tasks compared with offshoring more advanced tasks, i.e., tasks closer to the core activities of the firm. The latter is a new phenomenon which raises many new issues on the boundaries of the firm. More or less advanced tasks can be found within all activities, e.g., in sales and marketing where telesales is on the less advanced end of the scale while branding and identity building are on the advanced end of the scale. This article focuses on the antecedents of advanced offshoring, exploring what causes firms to offshore some of their more advanced tasks. Our findings indicate that while the lower cost of unskilled, labor-intensive processes is the main driver for firms that offshore less advanced tasks, the offshoring of advanced tasks is part of firms’ strategy to achieve international competitiveness through access to cross-border knowledge flows and foreign knowledge resources. Furthermore, offshoring of advanced manufacturing tasks seems to be more widespread and experience-based than the offshoring of advanced service tasks.     

The Fiscal Framework in a Currency Union: Lessons from a Comparison between the Euro Area and the Eastern Caribbean Currency Union

This paper draws out lessons from the euro area (EA) that are transferable to the Eastern Caribbean Currency Union (ECCU) and other Caribbean economies with fixed exchange rates. Based on observations from both the EA and the ECCU, we present a new policy framework which is capable of imposing fiscal discipline, with the aim of avoiding the risk of unsustainable fiscal policies reappearing and of preventing monetary policy from being undermined by undisciplined national governments. In the ECCU case, we find that fiscal deficits are more a result of financial and trade imbalances than fiscal indiscipline per se. Consequently, constraints on overall debt, public and private, rather than direct limits on endogenous public deficits, appear to be the appropriate response.     

Active Investors, LBOs, and the Privatization of Bankruptcy

In this testimony to the House Ways and Means Committee on February 1, 1989 (when LBOs and other highly leveraged transactions were under fierce attack by politicians and the media), the author identified “LBO associations” such as KKR and Forstmann Little as a valuable innovation in organizational form—a new model of management and governance that was competing directly with the headquarters of large public corporations, especially conglomerates. In the author's words, LBOs “substitute incentives provided by compensation and ownership plans for the direct monitoring and often centralized decision-making in the typical corporate bureaucracy.” In illustrating his point, the author noted that whereas the CEOs of U.S. companies during the '70s and '80s saw their personal wealth go up by only about $3 for every $1,000 increase in firm value, the average CEO in an LBO experienced a change of $64 per $1,000—and for the partners of the LBO firm, the closest equivalent to a conglomerate CEO, the change was about $200 per $1,000. Based on the performance of the first wave of LBOs to return to public ownership, such dramatic concentrations of equity ownership appear to have produced large gains in operating efficiency. (And since the author's testimony, these findings have been confirmed by subsequent studies of later periods and in other countries.) The heavy debt loads in these transactions, besides making possible the concentration of equity ownership, also perform an important control function, intensifying the search for efficiencies and discouraging reinvestment in low-return projects. For those LBOs that have trouble servicing their debt loads, the author argues that the costs of insolvency should turn out to be significantly lower than for traditional public companies because LBOs provide strong incentives to keep the process of reorganizing troubled companies out of the bankruptcy court (a prediction that, although proving wrong in the early‘90s, has turned out to be true of the most recent wave of private equity deals).     

Is it efficient to analyse efficiency rankings?

When production functions are estimated as frontier functions, the deviations from the frontier can be interpreted as individual inefficiency estimates. Unfortunately, it has recently been shown that efficiency differences across individuals are very often statistically insignificant. In this paper, we will analyse the consequences of the consideration of confidence statements for the reliability of efficiency rankings. The stochastic frontier and confidence intervals derived by Horrace and Schmidt are compared to the COLS approach and bootstrap confidence intervals. The membership function is proposed as a simple Monte-Carlo approximation for the probability for an individual to be the most efficient in the sample. First version received: May 1998/final version accepted: July 1999     

Fatal occupational accidents in Danish fishing vessels 1989-2005

The purpose of the study was to study the circumstances and incidence rates of fatal accidents in inspection obligated and non-inspection obligated Danish fishing vessels to identify areas for prevention. Information about the fatalities came from maritime authority reports, including vessel disaster reports, post mortem reports, maritime inquiries and police reports. The person- and vessel years at risk came from the Danish Directorate of Fisheries. During the period 1989-2005, 114 fatalities occurred. Sixty-one of the fatalities occurred in 36 vessel disasters mainly caused by foundering/capsizing due to stability changes in rough weather and collisions; 39 fatal occupational accidents mainly occurred on the larger inspection obligated trawlers during fishing. In the remaining 14 other fatal accidents, the main causal factors were difficult embarking/disembarking conditions by darkness in foreign ports and alcohol intoxication. In the period 1995-2005, the overall incidence rate was 10 per 10,000 fishermen per year with no down-going trend during that period. The fatal accident rates are still too high, despite the efforts to reduce the risk. Increased focus on regular and repeated safety training for all fishermen and improved safety measures are needed, especially in the underscored areas of sea disasters concerning small vessels and occupational accidents on big vessels. Better registration of time at risk for fishermen is needed to validate the effect of the safety measures.