Industrial reform in Jamaica in the 1980s: an export promotion strategy

Jamaica has shifted gradually from an import substitution strategy of industrialization in the 1960s and early 1970s to a much more export-orientated approach. Policy in the 1980s has been based around changes to the real exchange rate, foreign trade liberalization, fiscal incentives to new investment, particularly foreign investment, and selective support through various subsidies. Performance has been mixed, however, with only the garment sub-sector of manufacturing achieving significant export growth. Furthermore, the heavy involvement of transnational firms in the new industrial investment raises questions about the long-run viability of the form of export promotion currently being pursued     

THE ECONOMICS OF SECTION 301: A GAME-THEORETIC GUIDE*

Extrapolating from some simple game-theoretic models, this paper suggests that invoking Section 301 will tend to shift the terms of agreement in the US's favor. This shift will be larger (a) the greater the harm to the targeted country from having its access to the US market limited; (b) the smaller the targeted country's ability to harm the US in retaliation; (c) the smaller the costs within the targeted country of complying with the US demands; and (d) the greater the benefit to the US – in the US negotiators' perception – from the demanded liberalization. But these determinants of the success of a Section 301 action do not identify the areas where the social gains from freer trade are largest. Thus there is a tendency to direct Section 301 actions at the wrong targets. Section 301 increases bargaining frictions: attempts to exploit the bargaining power that comes from either private information or commitments can lead to costly delays to agreement or even the possibility of a complete breakdown in the negotiations. And the use of retaliatory strategies can upset an existing global equilibrium and lead to counter-retaliation.     

The effect of ESOP adoptions on corporate performance: are there really performance changes?

Employee Stock Ownership Programs (ESOPs) have long been promoted as a motivational tool: employees become profit‐minded owners. Latterly, however, more ESOPs are being used as part of a takeover defense: here the ESOPs main purpose is to put more company stock in friendly hands—the employees—who, like existing management, could suffer layoffs, etc. in a hostile takeover. We find that, as a group, only the takeover‐related ESOPs are associated with increased leverage (itself a takeover defense). Non‐target firms show no long‐term increase in debt‐to‐assets. We find little evidence to support the motivation hypothesis: while actual labor costs are lower for ESOP firms, after industry‐adjusting they tend to be unaffected or higher. We find that a few measures of firm financial performance [return‐on‐equity (ROE), return‐on‐assets (ROA), net profit margin (NPM)] do improve significantly, but this appears to be largely a short‐term effect. Industry‐adjusted holding period returns appear to be unaffected by the ESOP; however, ESOP firms that leverage show evidence of long‐term market underperformance. We conclude that ESOPs provide, at best, only a short‐term boost to corporate performance. Copyright © 2000 John Wiley & Sons, Ltd.     

The new politics of pressure – the Trades Union Congress and new Labour in government

The TUC’s political role has been in the forefront of its function for most of its history and has revived with the election of new Labour. This article argues that the TUC’s current political approach is unlikely to contribute towards significant union resurgence in the workplace or politically.     

Astroturf: Interest Group Lobbying and Corporate Strategy

We study three corporate nonmarket strategies designed to influence the lobbying behavior of other special interest groups: (1) astroturf , in which the firm covertly subsidizes a group with similar views to lobby when it normally would not; (2) the bear hug , in which the firm overtly pays a group to alter its lobbying activities; and (3) self-regulation , in which the firm voluntarily limits the potential social harm from its activities. All three strategies reduce the informativeness of lobbying, and all reduce the payoff of the public decision-maker. We show that the decision-maker would benefit by requiring the public disclosure of funds spent on astroturf lobbying but that the availability of alternative influence strategies limits the impact of such a policy.     

Technological and financial approaches to risk management in agriculture: an integrated approach*

In the present paper, risk‐management problems where farmers manage risk both through production decisions and through the use of market‐based and informal risk‐management mechanisms are considered. It is shown that many of these problems share a common structure, and that a unified and informative treatment of a broad spectrum of risk‐management tools is possible within a cost‐minimisation framework, under minimal conditions on their objective functions. Fundamental results are derived that apply regardless of the producer's preference towards risks, using only the no‐arbitrage condition that agricultural producers never forego any opportunity to lower costs without lowering returns.     

Mortgage credit conditions in the UK

It is widely perceived that credit conditions for UK consumers, particularly in the mortgage market, have been radically liberalized since the 1970s. The implications for the housing market and consumer spending have been important. This article by John Muellbauer draws on a 1997 paper by the author which examined data from the Survey of Mortgage Lenders to learn, from information about loan-to-value ratios of first-time buyers, classified by region, about changes in mortgage credit conditions. By controlling for economic and demographic influences on credit conditions, a single time-varying index of mortgage credit conditions was extracted from these SML data. This index rises in the 1980s, peaking towards the end of the decade. It retraces part of its rise in the early 1990s before rising again by 1995 to a level not far below the previous peak. The article considers whether more recent data suggest a further liberalisation of mortgage credit conditions. It draws on joint research with others to discuss possible implications for consumer spending, house prices, the volume of property transactions and mortgage defaults.