When the earth shakes … and science with it. The management and communication of uncertainty in the L’Aquila earthquake

In the spring of 2009, a strong earthquake shook the Italian city of L’Aquila and the region surrounding it. Besides the tragedy of human and material losses, the disaster triggered an unprecedented series of legal consequences. In this paper, we take the L’Aquila case, in all its psychological, social and legal controversies as exemplary for reflecting on how uncertainty can be recognized, treated and communicated in the context of mass emergencies. We examine the inherent path-dependency and multidimensional nature of uncertainty by projecting it along a number of axes, analyzing how the different components evolve and interact with each other. We show that contradictions, controversies and conflicts are bound to arise in the practice of expert advice for public policy as a result of: 1) the improper reduction of the overall situational uncertainty to its scientific component only; 2) the treatment and communication of scientific uncertainty as an independent variable that can be analyzed and computed in isolation from ethical, political and societal concerns. Finally, we provide some suggestions about a more integrated approach to expert advice for public policy.     

The Role of Auditing in Corporate Governance in Australia and New Zealand: A Research Synthesis

Corporate governance is of growing importance in Australia, New Zealand and all over the world. Corporate governance interacts with auditing and it is useful to understand how corporate governance and auditing affect companies. A related issue is whether better governance is a substitute for auditing or a complement. Previous studies of that issue have had mixed results. This review article provides a synthesis of Australian and New Zealand research about corporate governance and auditing that assesses what has been found and examines issues that can be explored using multiple studies. We conclude that despite extensive research, there is still considerable uncertainty about how corporate governance mechanisms are related to auditing and how auditing is associated with corporate governance. We conclude that recommendations for better governance (beyond a minimum level) are not yet supported by evidence. The results are intended to be helpful in providing advice about policy in Australia and New Zealand, and in determining directions for new research.     

Fuzzy logic,trading uncertainty and technical trading

From the market microstructure perspective, technical analysis can be profitable when informed traders make systematic mistakes or when uninformed traders have predictable impacts on price. However, chartists face a considerable degree of trading uncertainty because technical indicators such as moving averages are essentially imperfect filters with a nonzero phase shift. Consequently, technical trading may result in erroneous trading recommendations and substantial losses. This paper presents an uncertainty reduction approach based on fuzzy logic that addresses two problems related to the uncertainty embedded in technical trading strategies: market timing and order size. The results of our high-frequency exercises show that ‘fuzzy technical indicators’ dominate standard moving average technical indicators and filter rules for the Euro-US dollar (EUR-USD) exchange rates, especially on high-volatility days.     

Recent environmental research in the Netherlands: towards post-normal science?

Dutch environmental sciences have a tradition of multi- and interdisciplinarity and are developed in close interaction with Dutch environmental policy. Interdisciplinarity and policy relevance, two elements that are also prominent in the climate change scientific and policy debate, form highly important issues within the theory of post-normal science. The greater part of the Dutch climate research is organised in the National Research Programme (NRP), a research programme that explicitly focuses on delivering a contribution to the policy process. This paper uses four criteria for post-normal science (namely the management of uncertainty, the management of inter- and transdisciplinarity, the management of policy relevance and the management of quality) to detect a trend towards post-normal science. These criteria are useful for indicating long-term shifts but they do not (yet) provide measurable standards to assess scientific programmes like the NRP. The paper concludes that the NRP can not be typified as a post-normal research activity, but that it undoubtedly contains post-normal aspects. Especially the growing attention that is paid to the involvement of different stakeholders and divergent perspectives refers to a post-normal scientific practice.     

Quotas May Beat Taxes in a Global Emission Game

Economists have persistently argued that market-based instruments are better suited than command and control instruments (CAC) to achieve pollution abatement targets cost-effectively. However, this advice has not yet fallen on fertile soil. CAC is the predominant instrument in practical environmental policy. The paper attempts to give an explanation for this observation by analyzing two countries negotiating emission reductions in a world with typical institutional restrictions. Negotiations are assumed to be either on a uniform emission reduction quota or a uniform emission tax. Counterintuitively, it turns out that in such a second-best world an agreement under a cost-inefficient quota regime may be superior to an efficient tax agreement with respect to ecological and welfare criteria. Moreover, in contrast to a quota agreement, a tax agreement may not be feasible and stable if countries exhibit asymmetric cost-benefit structures.     

Climate change, human genetics, and post-normality in the UK

Virtually intractable matters characterized by uncertainty over consequences, diverse and multiple engaged interests, conflicting knowledge claims, and high stakes, call for post-normal policy responses. This paper explores how two such responses have been implemented in the UK through the management of specific aspects of anthropogenic climate change and human genetics, which we argue can be described as “wicked” or post-normal issues. To address these, approaches require that a broader range of epistemic positions and worldviews be recognized as valid in the policy development process. We suggest that the concept of boundary organisations is well suited to examine some of the institutions that have been set up in the UK to deal with the two post-normal issues we consider here. This paper explores the extent to which the UK Climate Impacts Programme and the Human Genetics Commission respond to a post-normal policy approach and their achievements in overcoming epistemological boundaries and effecting integrated management responses. We conclude by considering the insights such an analysis offers into operationalising post-normal policy approaches. As intermediaries and facilitators, we suggest the two organisations can be considered forerunners in applying a post-normal approach to climate change adaptation and human genetics, respectively.     

Futurist networks: cases of epistemic community?

This article analyses the concept of epistemic community focusing the attention on two aspects, which contribute to define this ‘actor’: knowledge and capacity of acting under the conditions of uncertainty. The link between these two issues and the ‘nature of future studies’ is considered and the possibility of considering some organisations and institutions as future epistemic communities is explored. The case of the World Futures Studies Federation is examined in detail.In 1992, Peter Haas defined an ‘epistemic community’ as follows: “an epistemic community is a network of professionals from a variety of disciplines and backgrounds, they have a shared set of normative and principled beliefs, which provide a value-based rationale for the social action of community members; shared causal beliefs, which are derived from their analysis of practices leading or contributing to a central set of problems in their domain and which then serve as the basis for elucidating the multiple linkages between possible policy actions and desired outcomes; shared notions of validity—that is, inter-subjective, internally defined criteria for weighing and validating knowledge in the domain of their expertise; and a common policy enterprise—that is a set of common practices associated with a set of problems to which their professional competence is directed, presumably out of the conviction that human welfare will be enhanced as a consequence” [1].In ancient Greek, the term ‘episteme’ has a meaning which belongs to the philosophical sphere; ‘community’ is a concept which comes from the religious tradition and, more recently, has been the objective of sociological studies. Epistemic community links the two terms to indicate a ‘new’ and in some aspects, atypical political actor. At etymological level we already have a first sort of indication with respect to what is meant: politics as a synthesis of religion (faith), sociology (the decisions taken by policy makers have consequences on the whole society) and philosophy (intended as Weltanschaung). The German term Weltanschaung means the idea, concept or the ‘vision’ of the world and life. It is the way in which an individual or a social group considers the position of the human being in the world and the attitudes and actions they develop on the basis of a particular vision of the cosmos.In addition to this formal definition, Haas identifies other characteristics: “members of an epistemic community share inter-subjective understandings; have a shared way of knowing; have shared patterns of reasoning; have a policy project drawing on shared causal beliefs, and the use of shared discursive practices and have a shared commitment to the application and production of knowledge” [1].This definition could be analysed in several ways with particular attention to one or more of the indicated criteria. We could assume that the expression ‘possible policy actions and desired outcomes’ is to be understood as the ‘long term implications, expected, possible, probable and desired’ of a decision taken or that which will be taken, and this would already represent a linkage between the policy, the futures studies and an epistemic community; moreover, usually ‘the policy choices concern consequences, which can only be partially anticipated’ [2]. This gives rise ‘to the desire for information, which is not so much based on purely technical knowledge but rather information, which is the product of human interpretation’ [1]. Epistemic communities, national or trans-national, are one possible provider of such information.At this stage, and considering only this aspect of the whole definition, we could argue that a network of experts active in the field of future studies would represent the perfect portrait of what we are looking for: a multi-person actor able to ‘anticipate’, using knowledge, various backgrounds and expertise. To anticipate, in this context, might be specified as to understand or comprehend global and local changes. In general, futurists work within the framework of complexity and uncertainty, try to re-define problems in broader context and attempt to comprehend ‘change’ using knowledge.An example could be helpful: the change we are experiencing in Eastern European countries appears as multi-dimensional: in less than 15 years those countries have moved from a

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socialist economy (closed and planned), to a

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‘Western economy’ (the so-called market economy), to a

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technological one as a consequence of globalisation and, lastly,

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to the learning economy.

The first step (socialist economy), recalls other sectors in which the ‘ideas’ were closed and planned. The society was divided into classes and the dominant concept was ‘war’. In this context, every single action was intended as a possibility to demonstrate the points of strength of a system: sports, culture and economy were part of the battle and the vision of the future was mostly influenced by the possibility to destroy or to be destroyed. Examples of these considerations could be seen in the choice made by the USA government in its participation at Olympic Games in Moscow (1980), the USSR’s answer in 1984 (Los Angeles Olympic Games) and the proliferation of nuclear holocaust movies such as The Day After. These ideas were strongly present amongst the people of the Eastern countries, but after 1989, things changed and ‘gradually’ the new paradigms based on ‘Western values’ and, for a few, Western lifestyles, emerged. Probably these changes caused shocks in the local societies, shocks that have had consequences also in the way these societies now see their futures. The third step, the shift to a technological economy, has been faster and wider, thanks largely to the new communication technologies and the Internet. In understanding and developing alternative futures for Eastern Europe, futurists have to take account of the fact that all the three economies exist side by side—Eastern Europe does not represent one or the other economies, it is a complex mix of all the three economies. This complexity is further augmented by the fact that Eastern European societies have not had enough time to understand their present in order to be able to desire possible, alternative futures. Further, economic competitiveness is now based more and more on the capacity to develop and apply knowledge [3]. Thus, futures of Eastern Europe are a function of its capacity to develop relevant new forms of knowledge. Futurists cannot afford to ignore this connection between the knowledge and alternative futures.Thus, the concept of epistemic community and the theory of ‘knowledge economy’ have a great deal in common. If we consider that the so-called ‘decision-makers’ are (in democratic countries) elected by the people, we can argue that that section of the people able to disseminate consciousness of problems, possible solutions and long term implications, posses a form of power. Without engaging with this power, we cannot shape viable and meaningful futures.Are there any trans-national networks of expert where it is possible to identify these characteristics of an ‘embryonic’ epistemic community? In some respect this could be the case of the World Futures Studies Federation (WFSF), or of the Washington-based World Future Society (WFS) or, at regional level, of the Namur-based euroProspective or the Finland Futures Research Centre, where we have structured networks of the experts coming with different experiences, from different backgrounds, a common interest (to analyse the society from different perspective, but all future oriented), a shared task (to disseminate the use of futures studies not only as a tool but also as a way of thinking) and diversity in knowledge, which is what keeps them together. Moreover, for most of the members, the idea of knowledge economy is already their reality and the capacity to understand trends, possible (or even better) probable futures is the aim of their professional activities.If we briefly consider those organisations, we could assume that they already posses some aspects related to the concept of epistemic community: the WFS for example “strives to serve as a neutral clearinghouse for ideas about the future, membership is open and the Society includes 30,000 people in more than 80 countries from Argentina to Zimbabwe. Members come from all walks of life, they include sociologists, scientists, and educators” [4]. If the WFS’s main strength is in trans-national partnership and different backgrounds of its members, the regional experience that euroProspective is carrying out is mostly based on the construction of a European network of experts. The inter-exchange of ideas and a common ‘mission’ are the two elements, which could let us consider this organisation as futures epistemic communities. Another example, at national/regional level, is the one provided by the Finland Futures Research Centre; the link with epistemic community is offered by the activity and the nature of some projects of this institution such as ‘sustainable energy development in developing countries’, ‘Russian energy and global climate’, ‘collisions of nature and culture in transport policy’, ‘professional delphiscan, an expert system’ [5]—all of these projects or tools (delphiscan is a software) are aimed at producing a relationship between political power and future and knowledge power.There are several reasons why we cannot consider the WFSF by itself as an epistemic community. Perhaps the most important is that it does not have a direct link with the political power; neither does the Federation seek any kind of influence on public authorities or on the decision-making process. But in as much as the Federation is concerned with managing change, it could be considered as an actor able to help people and the institutions understand the on-going processes of change. In the coming years, it will probably be forced to become an epistemic community as it will be necessary to ‘represent and clarify the relation between knowledge management, ICT usage and experts in futures studies as mediators between the complexity of political decision and the tendency of institutions to became advanced learning organisation’ [6] and [7].We also need to study the role the futures studies can play in clarifying those ‘shadow zones’ between the political power and the complexity of the decision-making processes. In this respect, it has to be underlined that the demand for the expert advice is a common phenomenon in policy-making processes, at local, national and international level. All this processes have a concrete objective, which would offer the possibility to exploit the added value of a ‘federation intended as a sort of epistemic community’: the credibility of the futures studies and, consequentially, the credibility of the experts active in this field, depends on this. The debate and the progress of these considerations should be developed in a multi-disciplinary and trans-disciplinary way with respect to several subjects and research areas, but this is only a logical consequence of the ‘nature and the different backgrounds’ already represented in the Federation.A theme (which emerged during the conference held in Brasov), which allows us to identify a relationship between an epistemic community and the social needs is globalisation. While globalisation is difficult to pin down, it is quite evident that we are living through a phase of transition. But as futurists and a potential epistemic community, our goal ought to be to develop an understanding of, and perspectives on, post-globalisation societies. This suggests that we need to identify the relationships between an epistemic community, the futures studies and the organisations active in this field such as WFSF and euroProspective.The analytical tools offered by the concept of epistemic community seem appropriate under the current prevailing conditions of uncertainty and ignorance. Understanding uncertainty and bringing multi-faceted expertise and knowledge to analyse difficult problems and propose future solutions are the two fundamental characteristics of futurists. The constitution of a network of experts coming from different backgrounds is already a reality inside the Federation but, at the moment, there is no linkage with the traditional and democratic forms of power. To become an active epistemic community, the WFSF has to realise its potential and develop these much needed linkages.     

Post-normal institutional identities: Quality assurance,reflexivity and ethos of care

This paper suggests adopting a ‘post-normal science’ (PNS) style and practice in scientific advice, and motivate the urgency of this methodological stance with the increasing complexity, and polarisation affecting the use of science-based evidence for policy. We reflect on challenges and opportunities faced by a ‘boundary organisation’ that interfaces between science and policy, taking as example the European Commission’s Directorate General Joint Research Centre, whose mission is stated as that to be the “in-house science service”. We suggest that such an institution can be exemplary as to what could be changed to improve the quality of evidence feeding into the policy processes in the European Union. This paper suggests how an in-house culture of reflexivity and humility could trigger changes in the existing styles and methods of scientific governance; at the JRC, taken as example, this would mean opening up to the existing plurality of norms and styles of scientific inquiry, and adopting more participatory approaches of knowledge production, assessment and governance. We submit that the institutional changes advocated here are desirable and urgent in order to confront the ongoing erosion of trust in ‘evidence based policy’, anticipating controversies before they become evident in the institutional setting in which institutions operate.     

How behavioural science can improve financial advice services

Evidence from the behavioural sciences, notably economics and psychology, has profoundly changed the way policymakers and practitioners view expert advice to consumers. In this article, we take stock of the behavioural science evidence on financial advice and explore its implications for the profession. We organise the evidence in a comprehensive theoretical framework that also serves a practical purpose: the design of behaviour change interventions. We suggest various ways in which financial advisers can use the insights from behavioural science to improve the take-up and effectiveness of their advice. Finally, we discuss ethical and practical considerations for the financial advisor wishing to put behavioural science knowledge to use.     

Forms of talk in policy dialogue: distinguishing between adversarial and collaborative discourse

Uncertainty, the precautionary principle and scenario are three important concepts in current regulatory debates concerned with risk management. In this paper, each concept is described in relation to its regulatory context and a linkage between the three concepts is established. Three scenarios relating to increasing scientific and technical uncertainty are presented. The most obvious regulatory approach to uncertainty is to ban a product, process or substance under the aegis of the precautionary principle. However, this may not be appropriate in all cases and a range of other possible policy responses to uncertainty are discussed and avenues for further research suggested.     

Land-releasing policy and welfare in a dual economy

This article examines a variety of impacts of the policy of releasing public land for agricultural in the Harris-Todaro economy for the short run as well as the long run. We contrast the effects for the economy under import quotas versus tariffs. Our analysis suggests that the land-grant policy in the presence of a tariff is effective in promoting welfare for both the short run and the long run. However, the policy in the presence of an import quota may not be effective in the long run.     

Reliability rating and reflective questioning: a case study of extended review on Australia's risk assessment of Bt cotton

The governance of emerging technologies is frequently constructed around risk assessment processes. However, when risk assessment as a decision‐making tool is applied to controversial fields such as genetic modification, stem cell research and nano‐scaled science and technology, inherent uncertainties and conflicting social values arise to challenge the adequacy of traditional approaches. In this paper, I propose a framework through which risk assessments may be exposed to a process of ‘extended review’, incorporating both natural and social science quality criteria and modes of reflection. I call this framework ‘Reliability Rating and Reflective Questioning’. The framework is developed through a detailed case study review of a particular risk assessment document. The case study risk assessment reviewed in this paper is that performed by an Australian governmental authority on the impact of genetically modified ‘Bt’ cotton on non‐target organisms. Through highlighting errors, misrepresentations, assumptions and embedded value judgements within the risk assessment document, I argue that the framework of ‘Reliability Rating and Reflective Questioning’ can serve as a useful tool for gauging and improving the quality of risk assessment, especially when used as a decision‐making tool for emerging technologies with high levels of uncertainty and strongly conflicting values.     

Changing science and ensuring our future

Science is not static but dynamic. A key challenge in its development is the reflection and accommodation of weaknesses, rather than just inherent strengths, both in its practices and institutional structures and settings. Pivotal to this are a range of issues including uncertainty, contextual issues, broader societal involvement, interdisciplinarity, and the enablement of reflexivity. These are not unrelated, autonomous concerns but intrinsically interdependent ones. For example extended characterisation and representation of uncertainty can facilitate integration between what have been regarded as separate: the technical and the contextual. This will require reflexive practices, often involving dialogue between scientists and the broader community. Much of this correlates with recent developments in social theory, such as conceptions of the risk society, and has significant implications for the relationship between the natural and the social sciences. This paper will identify, examine and describe these emergent changes to science and discuss their broader implications.     

Oil prices and economic policy uncertainty: Evidence from global,oil importers,and exporters’ perspective

Containing various information, economic policy uncertainty reflects significant rises and declines when facing shocks like financial crisis, oil-price change, and other specific economic or policy events. This paper empirically studies the interaction between oil prices and the newly formulated economic policy uncertainty indices using a time-varying parameter vector autoregression framework. Generally, the results of this study suggest that economic policy uncertainty reveals fluctuating responses to oil price shocks, while the oil price has a negative response to the uncertainty. The findings also reveal that the economic policy uncertainty indices for oil-importers and oil-exporters respond to oil price shocks differently. The oil price shock has a larger fluctuation to the economic policy uncertainty of oil-exporters than that of importers. Moreover, for the oil-exporters, the negative response to the oil price shock is greater than that of the oil-importing countries. This paper also discusses the impact of asymmetric shocks of oil price on economic policy uncertainty. In particular, after two financial crises, positive shocks decrease the uncertainty and vice versa. These findings are robustly verified.     

Cost Uncertainty and Taxpayer Compliance

The existence of a private cost borne by audited taxpayers affects the tax enforcement policy. This is so because tax auditors will face now two sources of uncertainty, namely, the typical one associated with taxpayers’ income and that associated with the taxpayers’ idiosyncratic attitude towards tax compliance. Moreover, the inspection policy can be exposed to some randomness from the taxpayers’ viewpoint due to the uncertainty about the audit cost borne by the tax authority. In this paper we provide an unified framework to analyze the effects of all these sources of uncertainty in a model of tax compliance with strategic interaction between auditors and taxpayers. We show that more variance in the distribution of the taxpayers’ private cost of evading raises both tax compliance and the ex-ante welfare of taxpayers. The effects of the uncertainty about the audit cost faced by the tax authority are generally ambiguous. We also discuss the implications of our model for the regressive (or progressive) bias of the effective tax system.     

VALUE FOR MONEY AUDITING IN NEW ZEALAND: COMPETING FOR CONTROL IN THE PUBLIC SECTOR

This paper provides an overview of the changing role of performance or Value for Money (VFM) auditing in the New Zealand public sector. In many countries there has been a strong interest in public sector reform and the place of accounting technologies such as VFM. A theoretical framework, derived from public policy literature, is used to explain the changing role and relevance of VFM auditing in New Zealand. Within the policy process problems, solutions and opportunities are relatively separate streams. Expert groups or epistemic communities compete to define the problem and to advocate their particular solutions. The Office of the Auditor-General is presented as an epistemic community within the New Zealand policy process and the technology of VFM as a solution to the problems of the day. However, the Treasury (NZ) also developed a policy solution involving radical restructure of the public sector, challenging the existing role of VFM. In response, the Audit Office re-defined the role of VFM auditing as a service to the parliamentary select committees. The changing role of VFM illustrates the flexible and the contestable nature of accounting technologies and casts some doubt on the argument that the growth of accounting in the public sector is inevitable.     

Evolutionary theory in public health and the public health of evolutionary theory

Evolutionary theory is the most powerful explanatory system in the life sciences and is the only framework that can unify knowledge in otherwise disparate fields of research. Considerable advances have been made in the application of evolutionary biology to health issues in recent decades. Health researchers and practitioners could benefit considerably from an understanding of the basic principles of evolution and how humans have been shaped by natural and sexual selection, even if they are not explicitly testing evolutionary hypotheses. Life History Theory is a powerful framework that can be used for examining modern human environments and developing environments that maximize opportunities for positive health outcomes. Many of the recommendations derived from this framework converge with the visions of current public health advocates. Despite the benefits of an evolutionary framework, the challenges that face those attempting to integrate evolutionary theory into public health are perhaps greater than those in the social sciences. Although considerable advancements in the understanding of health issues have already been made, health researchers with an evolutionary perspective are very few in number and face constraining disciplinary attributes. Advances in medical technology will continue to extend the boundaries of saving lives in danger, however traditional public health efforts may be reaching their limits of effectiveness in encouraging health-promoting behaviors. This may partially account for the current interest in broad social and policy change to enhance health and reduce health disparities amongst sub-populations. Such substantial physical and social restructuring will face many challenges and gradual progress may be enhanced by a strong foundation of evolutionary human science. The slow but eventual integration of evolutionary principles will gradually enhance the effectiveness of health interventions and provide an ultimate explanation for patterns in health outcomes that are otherwise puzzling. The speed at which the field of public health adopts a Darwinian framework has yet to be determined, and several futures are possible. This pace will depend on several factors, including the visible utility of evolutionary theory for addressing the health promotion goals of the field.     

货币政策公告、政策不确定性及股票市场的预公告溢价效应——来自中国市场的证据

中国人民银行周期性发布的货币政策相关公告为市场判断货币政策走向提供重要信息。较于实体经济反馈政策信息具有滞后性,股票市场是否在货币政策公告期内及时对政策消息做出反应,即存在公告效应？股票价格是否体现预期货币政策调整带来的不确定性？本文基于2011-2017年A股市场数据,研究我国股票市场在我国货币政策相关公告发布前后几日这一较短窗口区间内的市场反应。结果表明,股市指数在发布货币供应量指标的公告前几天内会出现显著为正的风险溢价,而在指标发布后溢价并不显著,这一现象我们称之为货币政策相关公告的“预公告溢价效应”。本文发现,预公告溢价的产生并非由于市场提前预期到货币政策的走向,而是来源于投资者预先获得了对政策不确定性的溢价补偿。本文进一步就防范系统性风险、从数量型货币政策工具向价格型转变等问题提出了相关政策建议。     

经济政策不确定性、地区文化与保险需求

本文在拓展背景风险理论研究的基础上,揭示了经济政策不确定性对保险需求的影响及其受地区文化制约的理论机制。并利用2007-2017年中国30个地区的月度面板数据,检验了经济政策不确定性、地区文化与保险需求间的内在联系。结果发现:第一,经济政策不确定性会对保险需求产生显著正影响,且这种效应在地区人身险需求上表现更明显;第二,将地区文化指标集纳入经济政策不确定性与保险需求关系的研究框架,发现地区文化差异会对经济政策不确定性影响保险需求产生调节效应。因此政府需在充分重视经济政策波动和文化对经济活动的双重影响基础上,加强国内社会保障体系建设,建立更透明的信息传递渠道,培育人们主动抵抗风险的意识和文化习惯,调整保险供给结构,以减少不确定性对社会经济行为的负面冲击。