Dancing to the Donors' Tune? Policy Choice in Aid‐Dependent Countries

Current aid rhetoric emphasizes the selective allocation of otherwise unconditional funds in support of the recipients' own plans, in contrast to the old donor practice of bundling money and policies. I show that when recipients have private information, policies reflecting their preferences and knowledge might result in such a regime. However, generous transfers can also induce them to conform to the outcome‐oriented expectations of donors at the expense of lower aid impact. Such behaviour is consistent with an abundance of case‐study evidence. Moderate disagreements over what the optimal policy is could actually produce better results. Certain forms of both donor competition and coordination might also eliminate this distortion, while a donor concern for need only removes incentives for aid‐seeking in the least needy countries. In summary, optimal aid policies are highly context‐specific, and donors should thus concentrate their efforts to practise more informed selectivity.     

International Capital Flows in the Model with Limited Commitment and Incomplete Markets

Recent literature has proposed two alternative types of financial frictions, i.e., limited commitment and incomplete markets, to explain the empirical patterns of international capital flows between developed and developing countries in the past two decades. This paper integrates these two frictions into a two-country overlapping-generations framework to facilitate a direct comparison of their respective effects. In our model, limited commitment distorts the investment made by agents with different productivity, which creates a wedge between the interest rates on equity capital vs. credit capital; while incomplete markets distort the investment among projects with different riskiness, which creates a wedge between the risk-free rate and the mean rate of return to risky capital. We show that the two approaches are observationally equivalent with respect to their implications for international capital flows, production efficiency, and aggregate output.     

The nexus between sustainable practices in hotels and future Gen Y hospitality students’ career path decisions

This study explored tertiary hospitality students’ attitudes and overall perceptions about green and sustainable practices; and how these may impact their future career paths in the hotel industry. A thematic analysis with data from 12 semi-structured interviews with students in a hotel management school in Australia was used to identify patterns and interpretive themes. Results revealed positive attitudes among Generation Y hospitality students towards working in a green and sustainable hotel environment. Implications highlight the need for sustainability education in the curriculum of tertiary education providers and strong emphasis on sustainability practices in employee training programs. The results also suggest possible impacts of sustainability practices in recruiting and hiring in the hospitality industry and how this may affect future hospitality employees and leaders.     

Exchange rate determination: a theory of the decisive role of central bank cooperation and conflict

Economists’ faith that variable exchange rates benevolently equilibrate has been empirically disconfirmed. That faith is here tackled at its theoretical core with an exchange rate model that although ultra abstract, includes the undeniable fundamentals of market power and differential goals of central bankers and large-scale private players. It permits a game theoretic analysis under the assumption that all agents maximize their payoffs. The paper then relaxes the assumption of maximising agents, allowing for a more complex and thus realistic second version of the model that is interpretable within SKAT, the Stages of Knowledge Ahead Theory of risk and uncertainty. In an experimental setting, this second version of the model points to: a) the inability of agents in central banks, governments and the private real and financial sectors to operate in maximising ways; b) destructive central bank conflict; and c) the widely discrepant outcomes arising from the dynamics of individual personality differences. The paper’s theoretical and empirical findings thus both point to the merits of a single world currency.     

Catching up on competitors: how organizations can motivate employees to work harder

The paper is an attempt to explain why some organizations are more competitive than others in terms of their human resources. It establishes under what circumstances some employees exert extra effort beyond the level required to keep their job and to get promotion by exploring the role of motivational forces that may complement the calculative considerations as suggested by expectancy theory. In a multivariate analysis proxies for five motivational mechanisms were tested, based on need theory, positive work disposition, intrinsic motivation, behavioural commitment as implied by organizational roles and social exchange theory. It emerged that all of them make their own contribution to the explanation of extra work effort.     

Betriebe lernen Ältere schätzen

Durch die demographische Entwicklung nimmt der Anteil der ?lteren Arbeitskr?fte stetig zu, w?hrend das Erwerbspersonenpotenzial insgesamt langfristig sinkt. Die Unternehmer müssen daher immer mehr ?ltere Arbeitnehmer neu einstellen. Hier k?nnte es aufgrund verschiedener Anforderungen zu Problemen kommen. Die Autorin untersucht die Besch?ftigungschancen ?lterer beispielhaft in sechs hessischen Regionen.     

Reforming Budgetary Institutions in Latin America: The Case for a National Fiscal Council

Latin America's economies have made tremendous improvements in recent years. Following the lost decade of the 1980s, economic growth has resumed. But the fruits of this progress remain to be consolidated. The political consensus supporting reform is fragile, and the economies of the region are still susceptible to destabilizing shocks, as recent events have underscored. Even well-devised economic policy strategies can be thrown off course by disturbances. This article proposes an institutional reform—a National Fiscal Council—designed to allow Latin American countries to break out of this vicious circle.