The distance between Buchanan's “An Economic Theory of Clubs” and Tiebout's “A Pure Theory of Local Public Expenditures”. New insights based on an unpublished manuscript

This article introduces Buchanan's comment on Tiebout's “A Pure Theory of Local Public Expenditures”. It helps us to understand the nature of the relationship between Buchanan and Tiebout. Usually, it is claimed that Buchanan modelled Tiebout's insights, that there exists a Buchanan-Tiebout hypothesis, and that Buchanan in 1965 complemented what Tiebout had written in 1956. We show that Buchanan could not have written “An Economic Theory of Clubs” as a complement of “A Pure Theory of Local Public Expenditures”. He disagreed with Tiebout's ideas on mobility because he saw mobility as a cause of inefficiencies and not a cause of homogeneity in groups. This is what we show by putting Buchanan's comment on Tiebout into historical perspective. It appears that Buchanan interpreted Tiebout 1956 from the perspective of his works on fiscal federalism from the early 1950s. We show that there is a continuity between Buchanan's work from the early 1950s and his works in the early 1970s; and Buchanan's way of reading Tiebout is part of it. Hence, when he wrote “An Economic Theory of Clubs”, Buchanan was convinced that Tiebout was wrong and that he was offering an alternative framework for public economics.     

Clarence Ayres’s Critique of Orthodox Economic Theory

Mainstream economists and liberal politicians are criticizing the Third Way as it is being applied in the Netherlands. They argue that mutual consultation precludes an efficient adaptation to disturbances. The present study analyzes changes in wage and income policy in the Netherlands until 2005. It finds that wage and income policy has proven to be flexible enough to address “new” challenges in the Netherlands. The flexibility is rooted in a culture of tolerance that allows for some breaking of working rules. The latter arises from bounded socialization, that is, the imperfect transmission of information with respect to social working rules that result in similar but not identical copies of institutions.     

An Exploration of the Economic Significance of Social Security

The modem social security carries some elements of humanitarianism or social stability, but it is more an economic means. It can reduce overproduction, increase effective demand and facilitate the balance between the demand and supply, and prevent the frequent occurrence of economic crisis. All the creatures of the God are there for a reason. The amount of production is based on the amount of currency. But some parts of currency are transformed into savings, and savings cannot be turned into investment immediately. The entailing overproduction breaks the balance between the demand and supply, and results in economic crisis. In modem society, it is the social security or those ＂lazy bones＂ that represses and eliminates the overproduction, which can be expressed by the equation： Savings = Investment ＋ Social security （consumption）. In this way, the balance between the demand and supply is realized.and the social production and life can continue in a normal way.     

Three Decades After James Street’s “The Institutionalist Theory of Economic Development”: What Does Institutional Approach to Economic Development Mean Today?

James Street’s article, “The Institutionalist Theory of Economic Development,” (1987) is a masterpiece of institutionalist research on economic development. The thirty-year anniversary of its publishing is an invitation to review what the institutional approach to economic development means today. This article, therefore, aims to present a historical survey of works published in the Journal of Economic Issues (JEI) on economic development.     

Schumpeter’s Theory of Economic Development: 100 years of development

This article sheds light on the impact of Schumpeter’s Theory of Economic Development over the last 100?years, and identifies insights from that work that are less well-known, but that have the potential for informing current developments in evolutionary economics. We identify these insights by tracing the development of Schumpeter’s ideas in Theory of Economic Development, which he revised heavily between the first and second German and the English editions. We not only report material lost in the process and developments in Schumpeter’s thinking that can be read off of the revisions, but also indicate how the newfound material can inform and inspire evolutionary economics today.     

Labour Mobility of Minorities Versus Majorities–Theory and Application

Most American newspapers are published in cities in which no other daily newspaper is published. While these newspapers are considered city monopolists, this study examines the effect of readership competition across cities. By using a sample of 386 newspaper firms that publish in cities in which no other daily newspaper is published, this paper demonstrates that these ‘monopoly’ newspapers face significant readership competition from newspapers published in other cities.     

Emil Lederer’s Theory of Economic Fluctuations and the Role of Financial Institutions

Abstract

Emil Lederer was characterized as the “leading academic socialist of Germany in the 1920’s” by Joseph Schumpeter and was a highly respected economist of his time. However, most aspects of his work remain totally unexplored. This paper focuses on Emil Lederer’s theory of economic fluctuations defending the thesis that certain aspects of Lederer’s conceptualization of economic fluctuations underwent considerable modifications when his 1925 article Konjunktur und Krisen is compared with his 1938 book Technical Progress and Unemployment, a shift unacknowledged so far in the literature. In his first attempt to tackle the issue, in Konjunktur und Krisen (1925), Lederer had constructed an explanation consistent with the so-called “disproportionality theory” introduced by Tugan-Baranowsky (codified as “early Lederer”). However, Lederer’s conception of the business cycle during the 1930s and especially in his major work Technical Progress and Unemployment underwent considerable modifications. Lederer’s (1938 Lederer, E. 1938. Technical Progress and Unemployment, Geneva: King and Son.  [Google Scholar]) analysis is, apparently, very ‘Schumpeterian’ (codified as “late Lederer”). In this version of his theory, the cycle is explained by supply-side factors, and more specifically by technical change. Additionally, Lederer’s view on the role of financial institutions (credit and banks) with regards to business cycles is analysed. Lederer avoided attributing a causative role to monetary factors. The interrelation between ‘real’ factors and financial institutions constitutes an essential element in his analysis of the business cycle.     

An Empirical Study on the Contribution of Fiscal Expenditure to Sichuan＇ s Agricultural Economic Growth

利用1978～2010年间四川财政支农和第一产业相关数据,运用协整检验理论及误差修正模型,分析了四川财政支农支出对第一产业的增长效应。研究结果显示,四川财政支农支出相对于第一产业GDP增长弹性系数为0．784。财政支农支出结构中对四川第一产业增长效应高低次序依次为：支援农村生产最高,农林水利气象等部门事业费次之,科技投入及农业基本建设支出最差。     

Britain’s Industrial Evolution: The Structuring Role of Economic Theory

We trace the coevolution of industrial organization and the ideas and policies that have influenced Britain’s industrial development from Alfred Marshall’s pioneering work on the English industrial districts to the present. Then, we examine four contemporary districts — in footwear, motorsport, sparkling wine, and cyber security — that are internationally competitive, despite decades of ill-informed policy choices, if not neglect. We also investigate the case of British elite sport as a high-performance industrial cluster with potentially transferrable institutional arrangements, particularly with regard to the nature and role of the strategic lead body and the state, as well as relationships within the system. We conclude that Marshall’s methodological and theoretical approach to understanding industrial organization — and his belief that industrial districts would coexist with other forms of industrial organization (rather than be superseded by them) — helps to explain the dynamism of contemporary British industrial districts, with important implications for Britain’s industrial revitalization.     

Recontextualizing Clarence Ayres’s The Theory of Economic Progress through Archival Evidence

Abstract

Our article seeks to recontextualize Clarence Ayres’s The Theory of Economic Progress through a reconsideration of the criticisms of the book and Ayres’s personal standpoint on it. We believe that the negative reception of the book conveys the mainstream perspective. Additionally, our article stresses some of Ayres’s thoughts on Western society that were not included in The Theory of Economic Progress but were introduced by him through correspondence around the same time his famous book was written and disseminated. We conclude that Ayres was more radical than his writings reveal.     

Compendium＇ of Livelihood Economic Theory： Farmer Issue is the fundamental problem of livelihood Economy

民生问题与民生经济是两个概念。民生经济首先应是民生改善经济;民生经济还存在民生逆转,民生被认为出现问题时,民生经济的概念就被第一次狭隘化了;民生经济还是基本民生经济,在这一层次民生经济取得了进一步狭隘的形式。最后,民生经济本质上是包容性经济。现阶段继续把民生与国计、民生与经济隔离的发展方式必须转变。在我国农民最＂大＂、农民最多,农民的民生解决得最不好,农民身上蕴藏着最大的经济发展潜力。所以,归根到底,农民问题是我国民生经济的根本问题。     

“Bad” Decisions,Poverty, and Economic Theory: The Individualist and Social Perspectives in Light of “The American Myth”

Social outcomes are analyzed either by placing responsibility for those outcomes on the individual or to locate the cause in a specific social factor – discrimination. Here, I argue that individual decision-making cannot be the cause of poverty, illustrative of one outcome, and that commentary specifying a particular social factor is insufficient to address the fundamental, underlying cause of poverty. Rather, one must examine the nature of the economic system that lies at the root of such issues. In the process of developing the argument, it is shown that the individualist explanation of poverty is linked to the neoclassical framework, and that this individualist explanation is a product of the (capitalist) economic system itself which then induces an ideology both privileging such an explanation and preventing the development of satisfactory theory that would inform proper policy. An example of this point is drawn from the 1960’s “war on poverty” program.

The University of Manitoba Generates Significant Economic Benefit to Manitobans

Thepurposeofthisreportistoassessthesignificantbenefits－bothdirectandindirect－ofTheUniversityofManitoba(UofM)totheManitobaeconomy.Directbenefitsarequantifiable,whileindirectbenefitsareintangible,butnonethelessimportant.Thefullimpactoftheseeconomicbenefitsismademoredramaticwiththeuseofcommonlyderivedmultipliers.TheeconomicroleoftheUniversitycanbeexpressedintermsofitsabilitytostimulate:　　　economicimpacts　　　employment,and　　　thetransitiontoaknowledgeeconomy.　　Aneconomicmultiplierm…     

The Index of “Economic Independence”: A New Measure of an Economy’s Ability to Survive Unilaterally

The objective of this article is to fill an existing gap in the literature by constructing an index which attempts to assess the degree of a nation’s immunity to economic risk by quantifying its level of economic independence and its ability to survive unilaterally. To do so, and following the conventional methodology of indices, the article first identifies the dimensions underlying economic independence and then selects the various indicators that best reflect each dimension. It then normalizes each indicator by using its highest and lowest historic goalposts. Finally, it averages the composite index using specific weights assigned first to each indicator and second to each dimension. The economic independence index, which was constructed for 112 countries, provides a gauge to such countries on where they stand in terms of economic resilience and how much risk they face if they were to stand alone economically, or pursue policies that are undesirable from the perspective of more economically powerful countries. This index thus provides a tool for governments to measure the direction and magnitude of government action needed to improve their respective nations’ level of economic independence.     

An Instrumentalist Critique of “Cost-Utility Analysis”

This paper seeks to explain the causes of turbulence in foreign exchange markets in selected transition economies (Albania, Belarus, Bulgaria, Croatia,Macedonia, Moldova, Romania and Ukraine) over the period 1995-2006. It uses a set of categorical regression (CATREG) models. It considers the influence of macroeconomic, social development, institutional and external variables, based on first, second or third generation previously released theoretical models, bringing a new innovative and wider approach to the field. It finds that the insights developed by second and third generation models complement rather than substitute for the explanation provided by first generation models in the case of transition economies.     

Response to the Comment: “What is Heterodox Economics? Conversations with Historians of Economic Thought”

The comment to “What is Heterodox Economics? Conversations with Historians of Economic Thought” spotlights critical issues in the possibility and probability of articulation and proposes a compelling argument in the explanation of the “inability of heterodoxy to define itself...” The core argument suggests that heterodox groups of economic thought cannot successfully articulate the nature of its varied programs until it recognizes and articulates the metaphysically and ontologically different system of knowledge which serves as the foundation for heterodox thought.