Formation of the non‐state sector and privatisation in Kazakhstan and Uzbekistan

In this paper, we take a detailed look at one Polish bank's experiences with financial sector reforms focusing on a bank-led enterprise-restructuring plan that linked directly bank privatization and recapitalization to bad-debt workouts. Based on personal interviews and original statistical data, we evaluate the performance of Bank Depozytowo-Kredytowy (BDK) in promoting financial and operational restructuring of its clients. We found that BDK continued to provide soft lending to keep four old military‐industrial companies afloat and actually increased its exposure to these companies during the program. The five success stories among BDK's clients were companies that had external agents other than the bank promoting and monitoring their operational restructuring. From our case study of BDK, we conclude that, while banks may play a role in financial restructuring of their clients, their ability to affect operational restructuring is quite limited. Moreover, stateowned banks are particularly vulnerable to incentive problems when dealing with large state-owned enterprises that may be too big or too political to fail.     

Ownership and enterprise performance in the Russian oil industry, 1992–2012

This article examines enterprise performance in Russian oil companies between 1992 and 2012. The analysis is based upon longitudinal trend output data, and distinguishes between four different types of owners – outsider private, insider private, federal state and regional state. In comparison with previous studies which considered just 1999–2004, and identified outsider private companies as the best performers, this article finds that over the longer period 1992–2012 federal state and insider private-owned companies actually performed best. The explanation for this relates to institutions and the business environment.     

Transaction costs,collective action and adaptation in managing complex social–ecological systems

With the escalating uncertainties and surprises faced in responding to environmental and natural resource challenges has come growing recognition of the need to manage such issues as social–ecological systems and value the capacities that enable adaptation to these changes. Adaptations in environmental management often involve complex, including wicked, problems of collective action. Institutions introduced to reduce the transaction costs of solving these problems do not come for free.A cost effectiveness framework designed to provide a comprehensive and logical structure for economic evaluation of path dependent institutional choices in this context, and a procedure for boundedly rational empirical application of the framework, are proposed and illustrated in this article — including for the choice between water buy-back and infrastructure upgrade programmes for accumulating the ‘environmental water’ needed to sustain the ecosystems of Australia's Murray–Darling Basin. Also outlined is a research strategy designed to help identify the heuristics needed for application of this procedure.     

Changes in Employment and Hours,and Family Income Inequality in the United.States, 1969–1989

This paper estimates how much changes in employment and hours worked for family heads and spouses contributed to the rise in the family income inequality between 1969 and 1989. Change in labor market activity of family heads accounts for half of the increase in the income gap between the top and bottom 10th families. The effect of change in work effort on the income inequality is considerably weaker where four-fifths of families in the middle of income distribution are considered. This result is robust to changes in the selection of the population. The rise in the inequality of labor market activity occurred largely within families headed by prime-age men. The rise in the percentage of families headed by female and the decline in employment rate for older family heads are relatively minor factors. [J2, E2, N3]     

Dual-track Ownership Reforms: Lessons from Structural Change in China, 1978‐1997

The dual-track approach is characteristic of evolutionary reforms in China. The most important aspect of this dualism has been the reform of the ownership structure. On the one track, new, basically market-oriented institutions emerged in a parallel economy comprising non-state enterprises. On the other track, stateowned enterprises were retained and reforms were restricted to conservative policy changes bringing minor productivity-enhancing measures. In order to highlight the performance of the two tracks, a widely neglected indicator is employed to check the performance of enterprises: namely a structural comparison of the resource reallocation processes of both tracks over time. It becomes clear that structural adjustment was basically generated by the new track. In addition, it is shown that the increasing competition from the new track will not accelerate structural adjustment of the old track as long as institutional reforms of SOEs are not significantly extended.     

Economic growth and growth linkages in China 1994–2003

This paper investigates to what extent income growth in the Chinese provinces is linked to growth and income levels in neighboring provinces. We find that the rate of income growth in a province is positively related to income and growth in neighboring provinces. However, we find no evidence of such positive interdependence between growth in rich coastal provinces and their immediate inland neighbors. This suggests that there has been little synchronization in economic growth rates between these regions, and/or that the immediate hinterland of the coastal growth centers might have been bypassed as China's manufacturing sector has migrated westward.     

Why garden for wildlife? Social and ecological drivers,motivations and barriers for biodiversity management in residential landscapes

Residential landscapes with private gardens are major land covers in cities and their sustainable management is paramount for achieving a resilient urban future. Here we focus on the value of residential ecosystems for biodiversity conservation and explore the social and ecological factors that influence wildlife-friendly garden management. Using a stratified sampling design across the UK city of Leeds, this interdisciplinary study develops and applies a mixed method approach, including questionnaires, interviews and ecological surveys across multiple spatial scales. We quantify wildlife-friendly gardening using two measures: (i) the number of wildlife-friendly features within gardens (the wildlife resources index, WRI); and (ii) the frequency of winter bird feeding. Wildlife-friendly gardening is influenced by a combination of garden characteristics and management intensity, householder demographics, wider environmental activity and landscape context. Residents reveal a range of motivations for wildlife-friendly gardening, notably personal well-being and a moral responsibility to nature. Respondents expressed a duty to maintain neighbourhood standards, revealing that social norms are a considerable barrier to uptake of wildlife-friendly activities, but also provide an opportunity where neighbour mimicry results in diffusion of wildlife-friendly practices. Community-driven initiatives that engage, educate and empower residents are better placed to encourage wildlife-friendly gardening than top-down financial incentives.     

Whose money is it anyway? Using prepaid incentives in experimental economics to create a natural environment

Simulating a real world environment is of utmost importance for achieving accurate and meaningful results in experimental economics. Offering monetary incentives is a common method of creating this environment. In general, experimenters provide the rewards at the time of experiment. In this paper, we argue that receiving the reward at the time of the experiment may lead participants to make decisions as if the money they are using were not their own. To solve this problem, we devised a “prepaid mechanism” that encourages participants to use the money as if it were their own.     

Crisis and self-fulfilling expectations: The Turkish experience in 1994 and 2000–2001

In this paper we analyze the role of fundamentals and self-fulfilling expectations in the crisis episodes of Turkey in 1994 and 2001. The question is how much of the occurrence of a crisis can be attributed to market expectations and how much to fundamentals. The model is estimated using a Markov switching framework in which the devaluation expectations affect crisis probability via three different specifications. Such a framework which allows for sunspots performs better than a purely fundamental-based model. The study shows that besides the fundamentals in the economy, shifts in agents' devaluation expectations have played a crucial role and that a Markov switching model with constant transition probabilities provides better estimates for the Turkish currency crises.     

The Taylor rules and macroeconomic fluctuation in China: 1994–2006

The correlation and controllability of money supply as the intermediate object of monetary policy is gradually weakening, the argument that interest rate substitutes the money supply for the alternative object is hotly discussed. According to the Taylor rule and its extensions, this paper has a positive analysis on the efficiency of Taylor-type rules in China through historical analysis, policy reaction function approach and co-integration technology of time series analysis. This paper draws a conclusion that Taylor rule is unstable in China, and less correlation can be found between interest rate and the output gap, and the central bank focus on the inflation target rather than economic growth. Therefore, the central bank should abide by the simple rule of inflation targeting.     

Have budget deficits and money growth caused changes in interest rates and exchange rates in Canada?

This paper examines empirically the causal impact of monetary and fiscal policy on exchange rates and interest rates in Canada using a six-by-six vector autoregressive (VAR) model with variable lag structure. The results suggest that changes in the base money and budget deficits have no direct causal effects on exchange rates, a finding consistent with the monetary explanation that exchange rates follow a random walk. Also consistent with the Ricardian equivalence hypothesis, the results reveal no direct effect of budget deficits on interest rates, casting doubts on the crowding-out phenomenon for Canada. In contrast, changes in the base money unidirectionally cause changes in interest rates, implying some support for using interest rates as a key intermediate policy target for the Canadian monetary authorities.     

The Evolution of Income Composition Inequality in Italy, 1989–2016

We study the evolution of inequality in income composition in terms of capital and labor income in Italy between 1989 and 2016. We document a rise in the share of capital income accruing to the bottom of the distribution, while the top of the distribution increases its share of labor income. This implies a falling degree of income composition inequality in the period considered and a weaker relationship between the functional and personal distribution of income in Italy. This result is robust to various specifications of self-employment income; nonetheless, it hinges crucially on the treatment of rental incomes. While the dynamics of imputed rents has brought about a more equitable distribution of capital incomes across the income distribution, that of actual rents has led to higher concentration of capital incomes at the top in the decade preceding the outbreak of the financial crisis. Finally, we conceptualize a rule of thumb for policy makers seeking to reduce income inequality in the long run.     

The relationship among money supply, banking lending and aggregate demand in China: 1994–2006

Based on the framework of Bernanke & Blinader (1988) and Walsh (2003), this paper provides a concise analysis for relationship among money supply, banking lending and aggregate demand; and makes an empirical test on relationship among China’s money supply, banking lending and aggregate demand from 1994 to 2006 by adopting the single-equation regressive model and vector autoregressive model in terms of Keynesian structural model and monetarism simplified model. The result shows that money supply and banking lending have both played a driving role on real economy. Because of non-market interest rates, Keynesian structural model cannot explain the transmission mechanism of China monetary policies better than monetarism simplified model. __________ Translated from Jingji kexue 经济科学 (Economic Science), 2008, (1): 5–15     

Challenges in water and sanitation services: Do natural disasters make matters worse?

This article exploits a plausibly exogenous variation in peak ground acceleration to evaluate the impact of the 2015 earthquake on water and sanitation services among affected households in Nepal. Estimates from a difference-in-differences research design show that the severity of the earthquake is associated with a 9.4 percentage point decline in the likelihood of washing hands, a 6.63 percentage point decline in the likelihood of using water filters and an 18.16 percentage point decline in the likelihood of using flush to a piped sewer system. These negative effects of seismic shocks on binary indicators of water treatment and toilet services continue to persist even in earthquake-affected districts where aid for water, sanitation, and hygiene (WASH) services was allocated for disbursement. While prospects of leakage in aid distribution across different levels of governance cannot be empirically tested, findings indicate that effective implementation of WASH-related aid can partially mitigate disaster-induced adverse outcomes related to water treatment and toilet services.     

A Common European Space? National Identity,Foreign Land Ownership and EU Enlargement: The Polish and Czech Cases

In central and eastern Europe, symbiosis between particular ethnic-cultural nations and territorial areas is understood as corresponding to a natural and moral order. European Union enlargement challenges this mindset by legally transforming ‘national territory’ into ‘supranational’ real property or even opening the possibility of restitution claims by ‘foreigners’. In the Polish and Czech cases this is highly contentious, principally due to the prospect of Germans and/or Austrians obtaining land. Rather than representing prosaic exchange among neutral economic agents the issue is embroiled in a complex of political and emotive influences, with historical roots that run deeper than the communist era. Realisation of a common European legal order is accompanied and to some extent hindered by misgivings about a liberal space of free access, unrestricted capital movement and no discrimination on grounds of nationality.     

Monetary policy and bank lending in a low interest rate environment: Diminishing effectiveness?

This paper analyses the effectiveness of monetary policy on bank lending in a low interest rate environment. Based on a sample of 108 large international banks, our empirical analysis suggests that monetary policy is less effective in stimulating bank lending growth when interest rates reach a very low level. This result holds after controlling for business and financial cycle conditions and different bank-specific characteristics such as liquidity, capitalisation, funding costs, bank risk and income diversification. We find that the impact of low rates on the profitability of banks’ traditional intermediation activity helps explain the subdued evolution of lending in the period 2010–14.     

Do long-term interest rates drive GDP and inflation in small open economies? Evidence from Poland

This article investigates the impact of long-term interest rates on macroeconomic variables in a small open economy. It shows that the time-varying term premium stabilizes GDP without affecting significantly inflation volatility in Poland – a typical open economy with flexible exchange rate. This conclusion is drawn from an estimated dynamic stochastic general equilibrium model in which segmented asset markets and imperfect asset substitutability give rise to the time-varying term premium in the long-term interest rate. Furthermore, the impulse response analysis of the model reveals that the term premium stabilizes GDP when the small economy is hit by shocks that are absent in closed economy models (country risk premium and export preference) which points to the different impact of the term premium on relatively close (large) and open (small) economies.