THE THREAT EFFECT OF ACTIVE LABOR MARKET PROGRAMS: A SYSTEMATIC REVIEW

This paper is a systematic review of the threat effect of active labor market programs for unemployed individuals. The threat effect is the induced change in the hazard rate of leaving unemployment prior to program participation. Studies included in the review all estimated a threat effect, with the participants in all cases being unemployed individuals in receipt of benefit of some kind during their tenure of unemployment. Eight of these studies have been included in a meta-analysis: The meta-analysis, which has been carried out using a random effects model to account for heterogeneity, indicated a hazard ratio of 1.25 for the pooled estimate. We conclude that active labor market programs constitute a statistically significant threat effect, although it is modest.     

INTERNATIONAL CORPORATE TAX AVOIDANCE: A REVIEW OF THE CHANNELS,MAGNITUDES, AND BLIND SPOTS

This paper reviews the rapidly growing empirical literature on international tax avoidance by multinational corporations. It surveys evidence on the main channels of corporate tax avoidance including transfer mispricing, international debt shifting, treaty shopping, tax deferral, and corporate inversions. Moreover, it performs a meta-analysis of the extensive literature that estimates the overall size of profit shifting. We find that the literature suggests that, on average, a 1 percentage-point lower corporate tax rate will expand before-tax income by 1%—an effect that is larger than reported as the consensus estimate in previous surveys and tends to be increasing over time. The literature on tax avoidance still has several unresolved puzzles and blind spots that require further research.     

THE RELATIONSHIP BETWEEN RELATIVE RISK AVERSION AND THE LEVEL OF EDUCATION: A SURVEY AND IMPLICATIONS FOR THE DEMAND FOR LIFE INSURANCE

The expected utility hypothesis has been widely used in the construction of economic models and numerous difficulties are encountered in attempting to take into account preferences toward risk in a real‐world setting. More recently, attention has focused on comparative studies in economics and business in an international framework and problems related to the hypothesis of relative risk aversion (RRA). One ambiguous hypothesis is the relationship between the level of RRA and the level of education, which has been found either positive or negative. From a causality point of view, it may be argued that investors with a high level of education are less risk averse, but it may also be argued that less risk‐averse individuals choose to pursue a higher level of education. The purpose of this paper is to survey the empirical literature on this subject. It provides evidence that risk aversion is negatively correlated with higher education and human development. The results have important implications for macroeconomic empirical studies and the demand for financial assets and more specifically on the demand for life insurance. Assuming the same degree of RRA for utility‐maximizing consumers should be limited to homogeneous samples.     

POVERTY AND RECOVERY: THE HISTORY OF AID AND DEVELOPMENT IN EAST AFRICA

Poor countries are believed to be trapped in a vicious circle of poverty where low incomes lead to low savings and insufficient resources for investments. Foreign aid is supposed to boost investment and link poor countries to a virtuous circle of growth. But real per capita growth has not been present in the modern history of Kenya and Tanzania ‐ even though foreign aid has increased many times over. Does the recent history in Uganda pave the way for new principles of efficient aid, or is it just a rare occasion of aid‐induced behavioural change?     

THE CLIOMETRICS OF INTERNATIONAL MIGRATION: A SURVEY

Abstract This is a survey of some of the key studies in the literature on international migration in history that may be described as cliometric. This literature uses the concepts and approaches of applied economics to investigate a range of historical issues and there are strong parallels with the questions that have been addressed in the literature on contemporary migrations. Here I focus on the period 1850–1940 and chiefly on migration from Europe to the New World. The survey is organized around six themes that include the forces driving migration, over time and across space; the assimilation of migrants and their effects on wages and income distribution in source and destination countries; and the evolution of immigration policy. Although this literature has drawn heavily on the tool kit of applied economists it also provides a wider perspective on many of the issues that concern migration today.     

THE EMPIRICAL MERIT OF STRUCTURAL EXPLANATIONS OF COMMODITY PRICE VOLATILITY: REVIEW AND PERSPECTIVES

This paper presents both the history of and state‐of‐the‐art in empirical modeling approaches to the world commodity price volatility. The analysis builds on the storage model and key milestones in its development. Specifically, it is intended to offer a reader unfamiliar with the relevant literature an insight into the modeling issues at stake from both a historical and speculative viewpoint. The review considers primarily the empirical techniques designed to assess the merits of the storage theory; it does not address purely statistical approaches that do not rely on storage theory and that have been studied in depth in other streams of the commodity price literature. The paper concludes with some suggestions for future research to try to resolve some of the existing empirical flaws, and hopefully to increase the explanatory power of the storage model.     

EMPIRICAL STUDIES OF GASOLINE RETAILING: A GUIDE TO THE LITERATURE

Abstract This paper surveys the empirical literature on gasoline retailing, which has been growing rapidly over the last three decades, possibly in response to antitrust and regulatory concerns and increased availability of pricing data. Studies of both pricing and non‐price decision variables are considered. In general, it is found that crude oil prices are the primary driver of national price movements over time. However, market structure has been identified as playing a role in price dynamics, equilibrium selection and price differentials across markets and stations. The economic literature emphasizes the importance of heterogeneity across stations and coordination problems faced by retailers. Several directions for future work are suggested, including the development of theory and demand estimation using high‐frequency station level data.     

TIME IS OF THE ESSENCE: THE IDEA OF THE COROLLARY OF THE COASE THEOREM AND A POSSIBLE APPLICATION

Extant theories on the application of the Coase Theorem to the development market have focused on the effects of zoning on the environment or upon property prices. As an original contribution to the Coasian research on the interface between the development market and the statutory planning machinery, this article seeks to develop a Coasian proposition informed by what has been called the corollary of the Coase Theorem, which allows for an empirical examination of the impact of property prices on decisions to use resources under different institutional arrangements. Our proposition is that the procedural steps taken to consume resources are not contingent on property prices unless the associated transaction costs are positive or property rights ambiguous.     

THE ECONOMICS OF FISCAL DECENTRALIZATION

Abstract There is no complete overview or discussion of the literature of the economics of federalism and fiscal decentralization, even though scholarly interest in the topic has been increasing significantly over recent years. This paper provides a general, brief but comprehensive overview of the main insights from the literature on fiscal federalism and decentralization. In doing so, literature on fiscal federalism and decentralization is grouped into two main approaches: ‘first generation approach’ and ‘an emerging second generation approach’. The discussion generally covers the two notions of fiscal decentralization: ‘fiscal autonomy’ and ‘fiscal importance’ of subnational governments as the background of the most recently developed index of fiscal decentralization in Vo. The relevance of this discussion to any further development of a fiscal decentralization index is briefly noted.     

THE ECONOMICS OF NETWORKS: A SURVEY OF THE EMPIRICAL LITERATURE

Abstract.  Network effects, the increase in value of consuming a product if many other consumers use the same product, are a feature of many markets and in particular of many high-technology products. This paper surveys the burgeoning empirical literature that has developed especially during the last years. After theoretical work dominated the earlier years of research in this area, newer research has combined theoretical models with empirical studies and applied work with direct implications for public policy, marketing and company strategies. Furthermore, insights from the study of social networks have been applied to analyse how consumers interact with each other. The paper argues that a closer analysis of the network structure of consumer interaction promises fruitful future research avenues and advances in our understanding of how network effects operate.     

PROCEDURES FOR MANAGERS IN IDEA-DEFICIENT SITUATIONS: AN EXAMINATION OF BRAINSTORMING APPROACHES

The literature of brainstroming procedures has been examined in order to obtain guidlines for managers in idea-deficient situations. Various techniques and procedures have developed and are often incorporated into larger systems of managerial problem-solving. There seem two main reasons for utilizing the processes. The first is as an aid to creativity. The second is as an effective means of amassing ideas. These underlying principles have not been satisfactorily validated in the literature, but use of the technique for the latter, variety generating purpose, may be easier to justify than use as a creativity spurring device. It is suggested that further research is needed into expectations of practitioners and clients of brainstorming sessions.     

ECONOMIC ANALYSIS OF KNOWLEDGE: THE HISTORY OF THOUGHT AND THE CENTRAL THEMES

Following the development of knowledge economies, there has been a rapid expansion of economic analysis of knowledge, both in the context of technological knowledge in particular and decision theory in general. This paper surveys this literature by identifying the main themes and contributions, and outlines the future prospects of the discipline. The wide scope of knowledge‐related questions in terms of applicability and alternative approaches has led to the fragmentation of research. Nonetheless, one can identify an enduring quest for analyzing various aspects of the generation, dissemination and use of knowledge in the economy.     

THE REGIONAL EFFECTS OF MONETARY POLICY: A SURVEY OF THE EMPIRICAL LITERATURE

This survey provides an updated review of the empirical literature on the regional effects of monetary policy in economic activity by means of undertaking a threefold perspective. First, the main methodological dimensions of this literature are examined while pinpointing those modelling or methodological traits that constitute a source of diverging estimates and thereby produce inconclusive evidence. Secondly, the estimates yielded by the literature are summarized by carrying out a cross‐study analysis of the results for each monetary union. By drawing on empirical regularities that are robust across studies, the conclusiveness of the results is assessed, while those monetary unions for which conclusive evidence is still lacking are also identified. Lastly, the sources of regional heterogeneity identified by these studies are reviewed in order to shed some light on the linkage between monetary policy and territorial heterogeneity. As a result of this threefold perspective, this survey delivers overall structured conclusions and updated policy‐relevant lessons. Moreover, various research gaps and emerging topics in the literature are also identified.     

WHAT IS THE EFFECT OF HOUSEWORK ON THE MARKET WAGE,AND CAN IT EXPLAIN THE GENDER WAGE GAP?

Abstract Does housework reduce the market wage, and if so, does it have a similar impact for males and females? In this paper, we survey and evaluate the recent and growing empirical literature on the linkages between housework and the wage rate. The review is motivated by unexplained gender wage gaps across studies, which consider personal and market‐related factors. We focus on this less‐studied aspect of wage determination. We consider the required modelling framework, and provide standardized estimated effects of housework on the hourly wage across studies. We evaluate how this literature has addressed potential estimation problems, in particular, the endogeneity of housework, concavity of the housework–wage function, threshold effects and work effort effects. We conclude that the evidence across ordinary least squares, instrumental variable, fixed effects and two‐stage least squares results casts serious doubt on the idea that the negative female housework–wage relationship is only driven by endogeneity bias or individual‐specific characteristics. Yet, much more needs to be done to address modelling and data requirements, and we point out likely and promising future research directions.     

A SURVEY OF RECENT DEVELOPMENTS IN THE LITERATURE OF FINANCE AND GROWTH

Abstract.  This paper provides a survey of the recent progress in the literature of financial development and economic growth. The survey highlights that most empirical studies focus on either testing the role of financial development in stimulating economic growth or examining the direction of causality between these two variables. Although the positive role of finance on growth has become a stylized fact, there are some methodological reservations about the results from these empirical studies. Several key issues unresolved in the literature are highlighted. The paper also points to several directions for future research.     

THE ECONOMICS OF TAXPAYER COMPLIANCE

Abstract. There is a great deal of evidence to suggest that tax evasion is now fairly extensive throughout Western Europe and North America. Academic economists have shown considerable interest in various aspects of tax evasion. In this article we examine the literature on two particular issues. First, why do individuals evade their tax obligations and second, what policies should governments pursue in attempting to reduce or eliminate evasion? We concentrate on income tax evasion which has been the major preoccupation in the literature. We first show that the compliance costs of income tax evasion are quite substantial. We then examine theoretical attempts to model individual taxpayers behaviour. Here we find that it is extremely difficult to make unambiguous predictions concerning the effects of changes in important variables, such as income tax rates. Next, we review the empirical ‘evidence’ obtained from (i) attitudinal surveys, (ii) tax games, and (iii) econometric analysis of individuals’ tax returns. All of these studies are found to be flawed in certain major respects. Finally, we consider a number of policy options available to tax authorities. Given the difficulty of determining a socially optimal level of evasion, governments are likely to pursue suboptimal policies aimed at entirely eliminating tax evasion. However, even here there is considerable disagreement about the design of an efficient policy.     

SHIFTING BOUNDARIES IN ECONOMICS: THE INSTITUTIONAL COGNITIVE STRAND AND THE FUTURE OF INSTITUTIONAL ECONOMICS

This paper aims at contributing to the debate on the future of institutional economics and of the field as a whole by starting from the literature that discusses the relationship between Old‐Original Institutional Economics and New Institutional Economics. It suggests that the process of reunifying OIE and NIE (and evolutionary economics) prompted by part of the literature could be improved by the contribution of the Cognitive Institutional Economics. The paper follows a two‐stage pathway: first, it frames the debate on the relationships between NIE and the OIE and it concentrates on a subset of the literature that shows that NIE's recent developments complicate the distinction between NIE and OIE, and it explores the possibility that NIE and OIE may merge so that an amalgam of NIE, OIE and Evolutionary Economics becomes the next economic paradigm. Secondly, the paper argues that a step forward in the direction outlined by the literature has been made by CIE, which is a research stream that developed from cross‐fertilization among NIE, OIE and the Hayekian contributions to the analysis of institutions. In the concluding remarks, the possible emergence of a single institutional paradigm is discussed in the light of the literature about change in economics.     

THE POLITICAL ECONOMY OF ENVIRONMENTAL CONSEQUENCES: A REVIEW OF THE EMPIRICAL LITERATURE

As a key concern for human survival and development, environmental issues have been widely perceived to be impacted by various political institutional factors. A considerable body of literature has attempted to investigate how different political factors affect environmental policymaking and outcomes. In this paper, we critically review related scholarly works published in peer‐reviewed economic journals in the past 30 years, with an emphasis on the empirical literature. Political institutional factors considered in this survey include corruption, the general concept and specific elements of democracy, and the vertical structure of environmental regulation authority within different levels of governments (i.e. environmental federalism). Studies focusing on the interplay of these factors are also highlighted. Based on a critical review, we provide a guide to the datasets, methodologies, and main findings of the literature. We also point out the existing gaps, and put forward suggestions for future research directions.     

THE MULTIDIMENSIONAL EFFECTS OF RELIGION ON SOCIOECONOMIC DEVELOPMENT: A REVIEW OF THE EMPIRICAL LITERATURE

Religion plays a fundamental role in most people's lives with profound implications for socioeconomic development. This survey provides a comprehensive and systematic overview of the causal mechanisms between religion and development discussed and tested in the economics literature, and reviews quantitative empirical evidence on the actual effects of religion on economic and social dimensions of development. We start by disaggregating the concept of religion into four religious dimensions and propose a framework to conceptualize causal mechanisms. Numerous mechanisms are possible but only a few uncontested findings exist. Religion is ambivalent vis‐à‐vis development: although religious ideas can foster certain forms of human capital acquisition and labor market participation, scholars have found a negative relationship between religious dimensions and both income and gender equality as well as innovation activities. Religious identity is also a source of labor market discrimination and has ambivalent effects on economic growth and social cohesion. Methodological challenges refer to the availability of fine‐grained data, especially for developing countries, the use of concepts and definitions, and the lack of causal inference.     

THE SUBSTITUTABILITY OF STRATEGIC CONTROL CHOICES: AN EMPIRICAL STUDY*

In one stream of literature, organizational control has been observed to have two types - bureaucratic and cultural - and to be related to strategic adaptation. In another stream of literature, societal culture has been discussed as influencing the choice of organizational control types. This empirical study combines these two streams of literature. Drawing on Child (1981) we argue that the choice of organizational control types is a cultural choice. Within this context, the substitutability of one organizational control type for the other is examined using data from two culturally distinct sets of organizations - Japanese and American. The results of canonical correlation analysis suggest that the substitutability hypothesis is supported in only a very limited sense and that the relationship between the two control types may be better viewed as balanced. Implications of these results for strategic managers are discussed.