Ownership of firms and efficiency: The competence argument

To assess alternative forms of ownership of firms and allocation of capital, the standard incentive argument is complemented and qualified by an argument considering competence. Regarding capital as a currency conveying decision authority for organizing production, this argument recognizes that the competence for exercising this authority is scarce. The allocation of this competence is studied as the key part of the allocation of scarce economic competence, which requires organizational change and determines the efficiency of allocation of all scarce resources, including economic competence itself. Comparative institutional analysis reveals the superiority of a constitution that requires private and tradeable ownership of firms and open entry to capital markets in the organization of supply, while it limits economic inequalities and provides for policies intervening in competence-requiring final demand.     

Entrepreneurship and institutional change

Entrepreneurs do more than just buy low and sell high; they sometimes also change our institutions, including our categories of thought. New institutional economics has been examining incentives that drive individuals to bring about market-supporting institutional arrangements. There is, however, an aspect of entrepreneurship conducive to institutional changes that has been neglected by contemporary institutionalist theories and that remains underdeveloped in entrepreneurship research. When and how does entrepreneurship bring about institutional change? I suggest that entrepreneurs are agents of institutional change when cultural categorization is ambiguous with regard to the proper and permissible applications of novel artifacts. Motherhood, for example, used to be a simple category, but surrogacy changed that radically. Examining newspaper evidence, social surveys, statutory law, and judicial cases, I show how entrepreneurs, by provoking a change in interpretation and judgment, challenged the existing institutional legal ordering of procreation turning a technically feasible method of surrogacy into current practice.     

Universal basic income: A viable policy alternative?

Although the need for an efficient Roma integration policy is growing in Europe, surprisingly little robust scientific evidence regarding potential policy costs and expected benefits of alternative policy options has supported the policy design and implementation so far. The present study attempts to narrow this evidence gap and aims to shed light on long‐run economic, budgetary and fiscal effects of selected education and employment policies for the inclusion of the marginalised Roma in the EU. We employ a general equilibrium approach that allows us to assess not only the direct impact of alternative Roma integration policies but also to capture all induced feedback effects. Our simulation results suggest that although Roma integration policies would be costly for the public budget, in the medium‐to‐long run, economic, budgetary and fiscal benefits may significantly outweigh short‐ to medium‐run Roma integration costs. Depending on the integration policy scenario and the analysed country, the full repayment of the integration policy investment (positive net present value) may be achieved after 7 to 9 years. In terms of the GDP, employment and earnings, the universal basic income scenario may have the highest potential impacts, particularly in the medium‐to‐long run.     

A measure of mutual complete dependence

Two random variables X and Y on a common probability space are mutually completely dependent (m.c.d.) if each one is a function of the other with probability one. For continuous X and Y, a natural approach to constructing a measure of dependence is via the distance between the copula of X and Y and the independence copula. We show that this approach depends crucially on the choice of the distance function. For example, the L ^p -distances, suggested by Schweizer and Wolff, cannot generate a measure of (mutual complete) dependence, since every copula is the uniform limit of copulas linking m.c.d. variables. Instead, we propose to use a modified Sobolev norm, with respect to which mutual complete dependence cannot approximate any other kind of dependence. This Sobolev norm yields the first nonparametric measure of dependence which, among other things, captures precisely the two extremes of dependence, i.e., it equals 0 if and only if X and Y are independent, and 1 if and only if X and Y are m.c.d. Examples are given to illustrate the difference to the Schweizer–Wolff measure.     

Pluralism or isolation of Civilisations? Russia's foreign policy discourse and the reception of Huntington's paradigm of the post‐cold war world

This paper studies the effects of Samuel Huntington's ‘Clash of Civilisations’ thesis on Russian foreign policy discourse. In response to Huntington's thesis, two major currents of Russia's foreign policy thinking ‐ Liberals and Nationalists ‐ are identified, both of which are critical of the thesis. The two groups offer diametrically opposed alternatives to Huntington's paradigm of the post‐Cold War world. The Liberal‐Nationalist controversy reflects Russia's debates about its own political identity and provides us with a rich and informative understanding of the process of identity formation. By identifying Russia's various reactions to the ‘Clash of Civilisations’ thesis, the paper identifies potential influences of various currents in Russian foreign policy thinking on the country's future foreign policy. It also suggests some implications for further studies of cultures/civilisations in international politics.     

The CAPITAL in Social Capital: An Austrian Perspective

In recent decades economists started discovering the importance of the social dimension of economic interactions. Contemporary economics has borrowed several sociological concepts for its own use, among the most important being the concept of social capital. However, this transfer within disciplines did not occur without a loss—the nature of social capital in economics remains confused and obscure. The purpose of this article is to clarify it, specify the possibilities for its use, and discuss their limits. It is argued that economics once also possessed a view of human beings that was more “socialized” than the modern neoclassical Homo oeconomicus, and that this more “socialized” view still exists in the Austrian school of economics. Because this tradition of economic thought has also developed an elaborate capital theory, it can serve as an ideal source where we can look for inspiration in the current social capital debate. First, social capital is (re)defined along these lines as an individual's asset connected with recognized reciprocity (as opposed to interactions usually classified as “altruistic”). Then major critical claims about the relation between social and physical capital are answered and the connection between social capital, trust, and social norms is described.     

Evolutionary developmental economics: how to generalize Darwinism fruitfully to help comprehend economic change

Darwinism is shown possible to generalize fruitfully to help comprehend economic change by drawing on evolutionary developmental biology (“evo–devo”)—its recent version, less concerned with replication of genes than with genomic instructing of development of organisms. The result is a conceptual model with multilevel applications, generalizing development as instructed self-organizing with inputs from environments, and evolution as experimental search for instructions making the development successful. Its economic interpretation suggests to unite several existing fields into evolutionary developmental economics, where economic change can be studied comprehensively as development instructed by actual institutional rules, intertwined with the evolution of these rules.     

Food,energy and environment: Is bioenergy the missing link?

We study price linkages between the food, energy and bioenergy markets. A vertically integrated multi-input, multi-output market model allows us to derive testable hypothesis, which we test by applying time-series analytical mechanisms to nine major traded food commodity prices along with one weighted average world crude oil price. The data consists of 939 weekly observations from January 1993 to December 2010. The empirical findings confirm the theoretical hypothesis that the prices for crude oil and food commodities are interdependent: a USD 1/barrel increase in oil prices and food commodity prices increase by between USD 0.09/tonne and USD 1.65/tonne.