Economic development and Indigenous Australia: contestations over property,institutions and ideology*

Economic development for remote Indigenous communities cannot be understood unless the relative importance of customary activity, potentially enhanced by native title legal rights in resources, is recognised. The present article uses a three‐sector hybrid economy framework, rather than the usual two‐sector private (or market) and public (or state) model to more accurately depict the Indigenous economy. Examples are provided of the actual and potential significance of the customary sector of the hybrid economy. Focusing on the concepts of property and institutions, it is demonstrated that significant local, regional, and national benefits are generated by the Indigenous hybrid economy. A role is foreshadowed for resource economists and the New Institutional Economics in quantifying these benefits, including positive externalities, so that they might be more actively supported by the state.     

Expatriation and repatriation in MNCs: a taxonomy

The challenge of the management of expatriates and repatriates has never been more timely nor urgent: globalization has forced expatriation into the corporate agenda, confronting us with an array of questions on HRM strategy and practice. We propose that a wide range of current thinking and practice may be conveniently grouped into a taxonomy of five organizational options, each advancing a different set of expatriation relationships: Global, Emissary, Peripheral, Professional, and Expedient. A framework outlining the main configurations of these options generates a generic model for expatriation at the organizational level. This forms the principal part of the article, followed by a comprehensive discussion and implications for practice. © 2002 Wiley Periodicals, Inc.     

Policy Consequences of Multiple Equilibria and the Indeterminacy of Economic Outcomes in a Boundedly Rational World: Closing the System with Non-Economic Variables1

In the conventional economic wisdom, the notion of unique equilibria that are efficient and Pareto optimal dominates the modeling discourse. Hebert Simon proposed an alternative analytical framework where the notion of multiple and sustainable equilibria is critical. Multiple equilibrium is the crucial stylized fact of economic life that requires better understanding and modeling. Of particular significance, Simon touched on the importance of institutions and differential power relationships in affecting economic outcomes. But this modeling approach was not well developed by Simon. Following from his contributions, further develop the notion of multiple equilibria especially in the realm of production with an emphasis on x-efficiency theory. I bring to bear the importance of institutional parameters (including power relationships), culture, norms, ethics, and moral sentiments to the determination of economic outcomes. In the model developed here, boundedly rational decision-makers’ choices are contextualized and constrained by complex environmental factors. No one choice is either inevitable or economically efficient. A multiplicity of outcomes is possible and sustainable inclusive of those that are suboptimal. Much depends on individual preferences and institutional design. This has significant implication for institutional design and policy.     

Lessons from a basic income programme for Indigenous Australians

This article examines the importance of basic income in supporting development and economic security in remote Australian Indigenous communities. Specifically we draw on the case of the Community Development Employment Programme (CDEP) and examine its significant basic income features: it provided economic security, flexible definitions of work, community control and a means to establish community development initiatives. We find that CDEP suited the economic and cultural circumstances of remote-living Aboriginal people whose livelihoods depend on a hybrid form of economy inclusive of customary (non-market) practices rather than market capitalism. We then trace shifts in Indigenous policy in recent times which saw the dismantling of CDEP in the name of ‘real’ employment, and we examine the consequences of this for Aboriginal people. We end by proposing the reinstatement of a more complete basic income scheme, initially for people in remote Indigenous communities in Australia who are in deepest poverty.     

Modelling Credit Risk for SMEs: Evidence from the U.S. Market

Considering the fundamental role played by small and medium sized enterprises (SMEs) in the economy of many countries and the considerable attention placed on SMEs in the new Basel Capital Accord, we develop a distress prediction model specifically for the SME sector and to analyse its effectiveness compared to a generic corporate model. The behaviour of financial measures for SMEs is analysed and the most significant variables in predicting the entities' credit worthiness are selected in order to construct a default prediction model. Using a logit regression technique on panel data of over 2,000 U.S. firms (with sales less than $65 million) over the period 1994–2002, we develop a one-year default prediction model. This model has an out-of-sample prediction power which is almost 30 per cent higher than a generic corporate model. An associated objective is to observe our model's ability to lower bank capital requirements considering the new Basel Capital Accord's rules for SMEs.     

Morgan Stanley Roundtable on Managing Financial Trouble

Against the current backdrop of troubled credit markets and the possibility of growing defaults, a distinguished group of bankruptcy academics and practitioners explore a number of questions raised by the emergence of increasingly active distressed investors: Are these relatively new market forces and mechanisms at least partly responsible for today's historically low default rates? Can they be expected to continue keeping default rates low, even if the economy goes into recession? And perhaps most important, by preventing or delaying defaults, will these new reorganization methods end up increasing recoveries and preserving value? The second half of the discussion focuses on some of the potential problems, or obstacles to the working of these market forces. For example, how will distressed situations play out in cases involving dispersed creditors, such as the holders of CDOs and CLOs? Will there be negative side effects from other financial innovations such as credit derivatives? While acknowledging the challenges of resolving some relatively new kinds of inter‐creditor conflicts, most of the panelists expressed confidence that today's distressed investors, working within the context of a streamlined Chapter 11 process, can be expected to play a major role in preserving values for creditors. At the same time, such investors will help perform the critical economic function of ensuring, in Douglas Baird's words, “that those companies that should survive do survive” and that corporate assets, whether liquidated piecemeal or kept within the firm, end up in their highest‐valued uses with their most efficient users.     

The Decomposition of the Corporate Body: What Kant Cannot Contribute to Business Ethics

Kant is gaining popularity in business ethics because the categorical imperative rules out actions such as deceptive advertising and exploitative working conditions, both of which treat people merely as means to an end. However, those who apply Kant in this way often hold businesses themselves morally accountable, and this conception of collective responsibility contradicts the kind of moral agency that underlies Kant’s ethics. A business has neither inclinations nor the capacity to reason, so it lacks the conditions necessary for constraint by the moral law. Instead, corporate policies ought to be understood as analogous to legal constraints. They may encourage or discourage certain actions, but they cannot determine a person’s maxim – which for Kant is the focus of moral judgment. Because there is no collective intention apart from any intentions of the individual agents who act as members of the corporation, an organization itself has no moral obligations. This poses a dilemma: either apply the categorical imperative to the actions of particular businesspeople and surrender the notion of collective responsibility, or apply a different moral theory to the actions of businesses themselves. Given the diffusion of responsibility in a bureaucracy, the explanatory usefulness of collective responsibility may force business ethicists to abandon Kant’s moral philosophy.     

Staple theory and export-led growth: constructing differential growth

The staple theory is a subset of the export-led growth hypothesis, designed to explain the growth and economic development of resource-rich economies. It is a theory that has been misunderstood and is seen to be at odds with the stylised facts of economic growth and development as well as with mainstream neoclassical wisdom. This article presents a brief and critical historiography of the staple theory from which a simple model of staple growth and development is gleaned. As well, data are presented which suggest that staple theory remains an important analytical tool to help explain economic development and growth.