New development: Breaking out or hanging on? Internal audit in government

Public audit is in transition. On the one hand, professional organizations claim it is time ‘to break out’ and develop new roles for auditors that ‘add more value’. On the other hand, critics are concerned about public sector accountability deficits necessitating more control and urging auditors to hold on to their traditional role. This article discusses tensions and relevance between these positions and their implications for auditing in government. The article will help policy-makers in their strategic decision-making on the role and focus of internal audit in government.     

Public–Private Partnerships and the Design Process: Consequences for Architects and City Building

Governments are increasingly using public–private partnerships (PPPs) to deliver public infrastructures and facilities. The prime motivation to embark on these partnerships is often to deliver products and services on time and on budget. It is generally assumed that by transferring project risks and responsibilities to private‐sector actors, governments can achieve better value for money. This article provides a novel perspective on the standards applied in PPP endeavors as it examines the tensions between the public management rationale behind value for money on the one hand, and conceptions of design and city building on the other. We focus on planning practice in the Canadian province of Ontario to show that governments apply different understandings of value in PPPs which, in turn, affect the way the design process is run. Architects, who are used to playing the role of master builder in a traditional public infrastructure project, are shifted into a less influential position and struggle with their new role. Furthermore, a different set of priorities applies in the new procurement process. The increasing use of PPPs can thus have significant consequences for city building.     

Two price economies in continuous time

Static and discrete time pricing operators for two price economies are reviewed and then generalized to the continuous time setting of an underlying Hunt process. The continuous time operators define nonlinear partial integro–differential equations that are solved numerically for the three valuations of bid, ask and expectation. The operators employ concave distortions by inducing a probability into the infinitesimal generator of a Hunt process. This probability is then distorted. Two nonlinear operators based on different approaches to truncating small jumps are developed and termed $QV$ for quadratic variation and $NL$ for normalized Lévy. Examples illustrate the resulting valuations. A sample book of derivatives on a single underlier is employed to display the gap between the bid and ask values for the book and the sum of comparable values for the components of the book.     

Representations in simulated workplaces

In vocational education students are to be prepared to participate in communities of practice. Hence they need technical skills as well as content knowledge e.g. science and mathematics. Research has shown that the instructional strategy of guided co-construction may lead to deeper understandings within a practice. The research questions in this article aim at finding out whether guided co-construction is an effective strategy in joining experience and general knowledge with representations as tools for communication and orientation. The present study is a qualitative analysis of a design-based research project. Our goal was to establish how the use of representations developed within a process of tandem tricycle construction. We looked for video data that could potentially explain how representations were used in practice and how such use was related to vocational and academic disciplines. Interesting differences could be revealed which were clearly related to differences in the way representations were designed and used in the whole cycle of problem solving (the construction of a technical object). At two of the four schools the representations remained visible and continued to be used until the end of the process. Designing and using representations as a core activity in vocational education could be the key to integrate theory in designing and constructing in the workshop.     

Travel-time reliability impacts on railway passenger demand: a revealed preference analysis

We study the impact of travel-time reliability on trips made by railway passengers. Unlike most of the studies in this area, which make use of stated preference survey data, we use a revealed preference data set obtained by measuring the railway reliability and the number of season-ticket holders on the Dutch railway network. We make use of six travel-time reliability indicators, including the standard deviation and the 80th minus the 50th percentile of travel time. Our results indicate that the 80th minus the 50th percentile indicator best explains the fluctuations in the number of season-ticket holders. A 10% improvement of this indicator results in a 1.47% increase in the number of season-ticket holders.     

A note on the existence of Nash networks in one-way flow models

We study the one-way flow model of network formation with owner-homogeneous link costs and heterogeneous profits. Recently, several proofs of existence of Nash networks are discussed in literature. The proof by Billand et al. (Econ Theory, 2007, forthcoming) is based on a nice and clear idea, but the technical elaboration is tedious and too complex in our opinion. In this note, we provide an alternative and easy accessible proof based on the same idea. Also, we show by means of a counterexample that Nash networks may not exist for games where link costs are heterogeneous, but arbitrarily close to owner-homogeneity.     

Binary misclassification and identification in regression models

We study a regression model with a binary explanatory variable that is subject to misclassification errors. The regression coefficient is then only partially identified. We derive several results that relate different assumptions about the misclassification probabilities and the conditional variances to the size of the identified set.     

The impact of public R&D investments on patenting activity: technology transfer at the U.S. Environmental Protection Agency

ABSTRACT

This paper presents estimates of the impact of public R&D on patenting activity at the U.S. Environmental Protection Agency (EPA). Using a time series of public sector agency data, we estimate the per-capita R&D elasticity of new patent applications using a knowledge production function framework model that is an expanded version of what other scholars have used with private sector data. New patent applications are an important step in the technology transfer activities of a federal agency. We estimate this elasticity to be about 2.0. This elasticity value represents an initial estimate of the impact of EPA’s R&D investments on its technology transfer activity.     

Governance Mechanisms and Bond Prices

We investigate the effects of shareholder governance mechanismson bondholders and document two new findings. First, the impactof shareholder control (proxied by large institutional blockholders)on credit risk depends on takeover vulnerability. Shareholdercontrol is associated with higher (lower) yields if the firmis exposed to (protected from) takeovers. In the presence ofshareholder control, the difference in bond yields due to differencesin takeover vulnerability can be as high as 66 basis points.Second, event risk covenants reduce the credit risk associatedwith strong shareholder governance. Therefore, without bondcovenants, shareholder governance, and bondholder interestsdiverge.