Engineering the Financialization of Urban Entrpreneurialism: The JESSICA Urban Development Initiative in the European Union

Urban entrepreneurialism and neoliberal urban governance are assuming new forms under finance‐dominated accumulation. We examine and contribute to theorizing the mechanisms through which urban governance is financialized, taking as a case study JESSICA, one of the European Union's initiatives to implement an ‘urban sensitive’ policy for sustainable and integrated development. Like other initiatives promoting financialization, JESSICA deploys the logic of finance to select and fund urban social initiatives and development projects on the basis of their potential return on investment (ROI). Understanding this process requires placing questions of political economy—how urban governance is shaped by the broader political‐economic context—with questions of governmentality—how stakeholders are enrolled in and come to take for granted new governance initiatives. Following the multi‐scalar institutional infrastructure is crucial to understanding how this works. Taking a relational multi‐scalar approach, we trace how changes at the supranational scale filter down to shape urban policy selection and performance in Sofia, Bulgaria, where we document how ROI calculations conflict with social welfare priorities. Contrasts between the trajectory of financialization of urban governance in the European Union and the United States demonstrate how this is geographically variegated, shaped by the broader context/conjuncture within which such financialization is embedded.     

Stochastic model specification search for Gaussian and partial non-Gaussian state space models

Model specification for state space models is a difficult task as one has to decide which components to include in the model and to specify whether these components are fixed or time-varying. To this aim a new model space MCMC method is developed in this paper. It is based on extending the Bayesian variable selection approach which is usually applied to variable selection in regression models to state space models. For non-Gaussian state space models stochastic model search MCMC makes use of auxiliary mixture sampling. We focus on structural time series models including seasonal components, trend or intervention. The method is applied to various well-known time series.     

The functions of clothes and clothing (dis)satisfaction: A gender analysis among British students

This study examines the social psychological functions clothes fulfil for young women and men, and the role that these perceived functions play for their (dis)satisfaction with their clothing generally. Sixty female and sixty male British students indicated why an item of clothing they particularly valued was important to them, including perceived functional and mood-related benefits, but also clothes as means for expressing personal and social identity. They also completed a measure of general (dis)satisfaction with one's clothing (Francis, 1990), and described their current financial circumstances.Results of diverse multivariate statistical tests support all three sets of hypotheses: (1) By comparison, men take a more self-oriented approach to clothes, stressing their use as expressive symbols of personality and their functional benefits, whilst women also have other-oriented concerns, choosing to use clothes as symbols of their social and personal interrelatedness with others; (2) although the perceived need for new clothing depends partly on financial constraints, women are more concerned with clothing in the context of peer relations, independently of financial constraints; and (3) the patterns of links between social psychological functions of valued items of clothing and general clothing (dis)satisfaction are gender-specific.Implications of gender differences throughout the clothes consumption cycle — buying motivations, purchase, and use — are discussed with respect to differential aspects of clothing advertising likely to influence women's and men's purchases on the one hand, and with respect to consumer policy tasks in assisting consumers on the other, particularly in the context of addictive buying of women.

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Zusammenfassung Die Funktionen von Kleidung und die (Un)Zufriedenheit mit Kleidung: Geschlechts-spezifische Analyse bei englischen Studenten Die Studie untersucht zum einen die sozialpsychologischen Funktionen von Kleidungsstücken für junge Frauen und MÄnner und zum anderen die Rolle, die diese Funktionen für die (Un)Zufriedenheit mit ihrer Kleidung generell für die Betroffenen haben. Jeweils 60 weibliche und mÄnnliche englische Studenten gaben an, weshalb ein bestimmtes Kleidungsstück für sie besonders wichtig war; dabei spielten funktionale und stimmungsmÄ\ige Aspekte eine Rolle, aber auch der Aspekt, da\ Kleidungstücke persönliche und soziale IdentitÄt ausdrücken. Au\erdem wurde von ihnen ein Ma\ der generellen (Un)Zufriedenheit mit der eigenen Kleidung erhoben. Schlie\lich beschrieben sie ihre derzeitige finanzielle Situation. Die Ergebnisse der verschiedenen multivariaten Analysen bestÄtigen alle drei Gruppen von Hypothesen: (1) Im Vergleich haben MÄnner eine stÄrker selbstorientierte Beziehung zu Kleidungsstücken, die ihren Gebrauch als Ausdruck der eigenen Persönlichkeit und ihre tatsÄchliche Funktion betont, wogegen Frauen auch au\en-orientierte Aspekte verfolgen, indem sie Kleidungsstücke als Symbole ihrer sozialen und persönlichen Beziehung mit anderen auswÄhlen; (2) Auch wenn das Bedürfnis nach neuer Kleidung teilweise von den finanziellen Möglichkeiten abhÄngt, denken Frauen an Kleidung stÄrker im Zusammenhang mit Partner-beziehungen, und zwar unabhÄngig von der finanziellen Situation; (3) Die Beziehungen zwischen den sozialpsychologischen Funktionen besonders geschÄtzter Kleidungsstücke einerseits und der generellen (Un)Zufriedenheit mit der Kleidung andererseits sind geschlechtsspezifisch. Implikationen von Geschlechtsunterschieden wÄhrend des gesamten Konsumzyklus bei Kleidung — Kaufmotive, Kauf und Gebrauch — werden auch in Beziehung mit Einflüssen der Kleidungswerbung und mit verbraucherpolitischen Fragestellungen diskutiert.

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Jason Cox teaches psychology and sociology in London.     

Expectation formation and regime switches

Economic agents often have to make decisions in environments affected by regime switches but expectation formation has hardly been explored in this context. We report about a laboratory experiment whose participants judgmentally forecast three time series subject to regime switches. The participants make forecasts without context knowledge and without support from statistical software. Their forecasts are only based on the previous realizations of the time series. Our interest is the explanation of the average forecasts with a simple model, the bounds & likelihood heuristic. In previous studies it was shown that this model can explain average forecasting behavior very well given stable and stationary time series. We find that the forecasts after a structural break are characterized by a higher variance and less accuracy over several periods. Considering this transition phase in the model, the heuristic performs even slightly better than the Rational Expectations Hypothesis.     

FOREIGN DIRECT INVESTMENT: THE KNOWLEDGE‐CAPITAL MODEL AND A SMALL COUNTRY CASE

This research looks at how foreign direct investment (FDI) in a small open economy compares with that of larger countries. I apply several specifications of the knowledge‐capital model to unique FDI data from the isolated country of Iceland, allowing for comparison with previous analysis of larger and similarly open economies. Using this together with other techniques, I seek to explain investment determinants by geography, economic size and skilled labor availability. The results of these analysis show that popular specifications do not accurately predict the effects for a small country case.     

Fixed Costs, Foreign Direct Investment, and Gravity with Zeros

Fixed costs play a crucial role in current models of foreign direct investment (FDI), yet they are almost entirely ignored in empirical treatments of FDI. We fill this gap by using a 1989–2001 panel of FDI flows into Iceland to examine the determinants of fixed costs for multinational firms and how these influence aggregate patterns of investment. Our additions to research in the field include usage of several natural-resource variables, and the analysis of data on initial entry of FDI into a developed country. We use the Heckman two-step procedure, which allows us to account for fixed costs and their impact on estimation. Taken together, we find that the standard OLS approach to the data incorrectly links the quantity of FDI to source-country variables while in fact most of their role is in determining whether FDI takes place at all.     

Federal Trade Commission v. General Motors: An unsettling settlement

The authors report and criticize a settlement between the Federal Trade Commission (FTC) and General Motors (GM). The case described in detail concerned defective automotive parts produced by GM which caused substantial economic harm to consumers due to non-disclosure. Both FTC and GM opted for a consent order agreement and established an arbitration procedure for recovery of damages. This settlement was found unsatisfactory by state attorneys general because it does not give the consumer simple access to remedy. State consumer protection agencies now try to help consumers by providing them with information which they can use in the arbitration proceedings. It is too early to draw definite conclusions about the effectiveness of the remedial approach chosen by the FTC and about the results of state initiated efforts to assist GM customers with a complaint.

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Ein ungleicher Vergleich: Federal Trade Commission v. General Motors

Zusammenfassung Der Beitrag berichtet von einem Verfahren der Federal Trade Commission (FTC) gegen den Automobilkonzern General Motors (GM), das Defekte an der Schaltungsautomatik der Nockenwelle und der Einspritzpumpe an GM-Fahrzeugen seit 1974 betraf. Unter ihrer generalklauselartigen Zuständigkeit, unlautere oder täuschende Handelspraktiken zu bekämpfen, hat die FTC die Möglichkeit, Herstellern und Händlern nicht nur ein bestimmtes Verhalten im Wettbewerb zu verbieten, sondern auch Ersatz anzuordnen. Diese Zuständigkeit läuft parallel mit der einzelstaatlichen Befugnis, für den Verbraucher schützend tätig zu werden. Im Regelfall vergleichen sich FTC und der angegriffene Wettbewerber. Dieser Vergleich (consent decree) wird vor der endgültigen Wirksamkeit öffentlich bekannt gemacht. Jede interessierte Person, darunter auch einzelstaatliche Verbraucherschutzbehörden, können kritische Kommentare einreichen.Im vorliegenden Fall hatte die FCT vor allem aus prozeßökonomischer Sicht auf einen Vergleich hingearbeitet, der anders als die frühere Praxis nicht direkt eine Ersatzleistung für die zahllosen geschädigten Verbraucher vorsah, sondern ein Schiedsverfahren installierte. Diese Vorgehensweise wird in dem Bericht, der auf einer Stellungnahme der Justizminister der US-amerikanischen Einzelstaaten fußt, lebhaft kritisiert. Um dem Verbraucher dennoch eine effektive Durchsetzung seiner Rechte zu ermöglichen, bemühen sich die Verbraucherschutzbehörden der Staaten — hier das Beispiel Wisconsin — um Aufklärung und Hilfe. Eine endgültige Beurteilung ist angesichts der angelaufenen Schiedsverfahren noch nicht möglich.

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Stephen J. Nicks is Assistant Attorney General, State of Wisconsin, and Program Director, Wisconsin Department of Justice Office of Consumer Protection, 123 West Washington Avenue, Madison, Wisconsin 53707, USA. Mark M. Leitner is Law Clerk, Wisconsin Department of Justice Office of Consumer Protection.     

Core concepts for incomplete market economies

We examine the notion of the core when cooperation takes place in a setting with time and uncertainty. We do so in a two-period general equilibrium setting with incomplete markets. Market incompleteness implies that players cannot make all possible binding commitments regarding their actions at different date-events. We unify various treatments of dynamic core concepts existing in the literature. This results in definitions of the Classical Core, the Segregated Core, the Two-stage Core, the Strong Sequential Core, and the Weak Sequential Core. Except for the Classical Core, all these concepts can be defined by requiring the absence of blocking in period 0 and at any date-event in period 1. The concepts only differ with respect to the notion of blocking in period 0. To evaluate these concepts, we study three market structures in detail: strongly complete markets, incomplete markets in finance economies, and incomplete markets in settings with multiple commodities. Even when markets are strongly complete, the Classical Core is argued not to be an appropriate concept. For the general case of incomplete markets, the Weak Sequential Core is the only concept that does not suffer from major defects.     

Provincializing Critical Urban Theory: Extending the Ecosystem of Possibilities

Advocating a provincialization of critical urban theory, we seek to move beyond current polarizations and disputes over the basis of urban theory, creating space to take seriously the possibility that no single theory suffices to account for the variegated nature of urbanization and cities across the world. Such provincialization requires a serious engagement with both mainstream and critical Anglophone urban theory, challenging the seeming naturalness of knowledge claims through rigorous theoretical and empirical scrutiny from the standpoint of peripheral perspectives located outside the core. This entails recognizing the existence of a shifting ecosystem of critical urban theories, putting these into even‐handed critical conversation with one another. The collective resilience of urban theory will be dependent upon ongoing engagement across such diversity. At the heart of such an ecosystem are shifts in practice, seeking a new comparative analytic that destabilizes the universalism of the dominant norm, against which all other exemplars are to be compared, with the imperative of taking the field seriously.