Labour and Environmental Standards: The ‘Lemons Problem’ in International Trade Policy

Environmental and labour standards have become an important international trade issue. This article examines and ranks alternative trade policy responses available to an importing country with concerns over such standards. While a full import embargo may sometimes be preferable to allowing unrestricted access to unlabeled noconforming imports, a partial embargo that allows imports which demonstrably conform to the standard is always a better policy; and labeling solutions, which separate conforming and non‐conforming imports, are typically better still. Consequently, full import embargoes based on non‐conformity with labour or environmental standards are poor policy choices and should generally remain prohibited by WTO rules.     

The ‘Real’ Impact of GATT/WTO – a Generalised Approach

Rose’s result in 2004 that GATT/WTO has no significant impact on bilateral trade triggered off a series of empirical studies. Each of those studies augments Rose’s paper in one specific methodological aspect with the general finding that GATT/WTO significantly fosters members’ trade, although the estimated impact varies between 2 per cent and 195 per cent of trade creation. We combine the methodological contributions of previous studies to overcome these isolated approaches, to account for possible interactions and to develop a more general view on the impact of GATT/WTO. In particular, we find that GATT/WTO promotes members’ trade by around 86 per cent.     

Tariff Preferences,WTO Negotiations and the LDCs: The Case of the ‘Everything But Arms’ Initiative

By assessing the impact of the recently adopted ‘Everything But Arms’ (EBA) initiative of the EU on the Least Developed Countries (LDCs) and by showing how further multilateral trade liberalisations erode the EBA preferences and impact the LDCs, this paper attempts to uncover the LDCs’ difficult positions in the WTO trade negotiations. Due to its limited product coverage and previous preferences granted by the EU, welfare impacts of the EBA on the LDCs are shown to be small and the bulk of these gains are associated with the ‘sensitive’ products that are subject to gradual liberalisations. Moreover, these small gains are likely to disappear if the EU conducts trade policy reforms in fulfilling its WTO obligations, resulting in an actually worse‐off situation for the LDCs. Extending the analysis to a multilateral trade liberalisation scenario reinforces the above results that the LDCs may well lose due to preference erosion and higher world market prices. It concludes that other development assistance measures from developed countries should be made available to the LDCs to ease their dependency on trade preferences and to foster their supply capacities. The LDCs themselves should attempt to integrate the duty and quota‐free market access status contained in the EBA into a binding WTO agreement to secure a stable trading environment. But more importantly, in order to solve the difficulties at the root these countries should actively engage in reforming their own trade policies.     

Globalization and the ‘confidence game’

We show that governments in developing countries have an incentive to play the “confidence game” — wherein the need to win the confidence of the international capital market ‘can actually prevent a country from following otherwise sensible policies and force it to follow policies that it would normally consider perverse’. This incentive arises because of a combination of a ‘conformity bias’ and ‘good news bias’ in governmental decision making in an open economy, which results in inefficient outcomes which increases rather than decreases the threat of devaluation. While institutions that encourage greater transparency and the public revelation of information, may often mitigate this inefficiency, on some occasions increased transparency may even exacerbate the inefficiency.     

INSTITUTIONAL ECONOMICS: SURVEYING THE ‘OLD’ AND THE ‘NEW’

This paper surveys and compares the literature on the ‘new’ institutionalism (North, Williamson, etc.) with that of the ‘old’(Veblen, Commons, Mitchell). A criterion for distinguishing these two schools is suggested, along with criticisms of the limitations of each. The ‘new’ institutionalism is associated with methodological individualism and the idea that the individual should be taken as given. Particular attention is paid to ‘new’ institutionalist treatments of markets and firms. The paper moves on to examine some ‘old’ institutionalist criticisms of ‘economic man’ as well as some negative features of the ‘old’ institutionalism. On the positive side, the latter is seen to have an ‘evolutionary’ dimension, related to modern work in the area of technological change.     

A comparison of monetary and fiscal policy interaction under ‘sound’ and ‘functional’ finance regimes

The interest rate and the fiscal balance can be thought of as two independent instruments to be assigned to two targets, the path of output and the path of public debt. Under what we term a ‘sound finance rule’ the interest rate targets output while the fiscal balance targets public debt; under a ‘functional finance rule’ the budget balance targets the output gap and the interest rate targets the debt ratio. The same unique combination of interest rate and fiscal balance will be consistent with output at potential and a constant debt‐GDP ratio regardless of which instrument is assigned to which target. The stability characteristics of the two rules differ, however. At low levels of debt, both rules converge to the targets, but there is a threshold debt level above which only the functional finance rule converges. Contrary to conventional wisdom, therefore, the case for countercyclical fiscal policy becomes stronger, not weaker, when the ratio of public debt to GDP is already high. We apply our framework to describe the possibility of policy‐generated cycles in the United States over the past five decades.     

ON PASLNETTI'S ‘G’ MATRIX

Pasinetti's vertically integrated H matrix has been much used in economic theory but his other vertically integrated matrix, G — which is of a quite different nature — has been little noticed. This paper considers the nature of the G matrix, its relationship to H, and varous issues — concerning consumption and growth, value added, sales revenue and differential growth or profit rates — for the analysis of which G is a very useful analytical tool.     

Choice,diversity and ‘false consciousness’ in women's careers

The central theme of this paper is that contemporary literature concerning women's careers is based on assumptions held by researchers and not actually on views held by women themselves. Many feminist researchers are guilty of assuming ‘false consciousness’ on the part of their subjects by explaining these women as being victims of gender or patriarchal systems instead of making a mindful decision founded on choice. The empirical work draws on in‐depth interviews with 39 women architects. Of the 39 women interviewed, 20 had adopted alternative ways of working in the sense that they had rejected the conventional career within an organization. Their reasons for this were diverse and ranged from wanting to combine child or elder care with work; involvement in local politics; wanting time for further study or sporting activities; as well as just not wanting to work full‐time. In short, this research demonstrates that work is not always a central interest in the lives of individuals and supports Hakim's view of heterogeneity among women.     

Transitioning into a ‘throwaway planet’

It is generally considered to be safer for the environment to repair a malfunctioning product for further reuse than to dispose of it and replace it with a newly manufactured product, unless the product is being replaced with a more energy efficient alternative. However, whereas United States has long been labelled a ‘throwaway society’, this paper presents the results of an international consumer survey which demonstrates that as other nations develop with respect to GDP per Capita (Gross Domestic Product per Capita), they too start transitioning into throwaway societies. This transition then calls into account of just how environmentally damaging this practice will become.     

Consumer attitudes to ‘Healthy’ restaurants

This paper describes the results of a qualitative research study that sought the views of consumers about using restaurants as a setting for health promotion and, specifically, for providing low-fat healthy food choices. As health promotion has evolved from a major focus on individual change toward a greater focus on the environments in which people live, work and recreate, restaurants in Australia are now being targeted as appropriate organizations for change. Consumers in this study expressed cautious interest in the idea. However, it was clear that their prime motivation for choosing a restaurant and a restaurant meal did not lie with healthy food considerations. Instead, issues such as cost, personal preference and hygiene appeared to be more important.     

Getting From ‘Me’ to ‘We’: Role Clarity,Team Process,and the Transition From Individual Knowledge to Shared Mental Models in Employee Dyads

Shared mental models are crucial for team functioning; however, little research to date has focussed on uncovering the predictors of shared mental models. The present study investigates the effect of role clarity on shared mental models by means of its indirect effects via team process. Two hundred and two undergraduate students participated in a dyadic firefighting simulation in which their role clarity, team process, and mental model similarity were measured. Analyses conducted at the dyadic level suggest that role clarity predicts mental model similarity via its effects on team process. Copyright © 2018 ASAC. Published by John Wiley & Sons, Ltd.     

On the Marginalist Theory of ‘Capital Supply’

A familiar theory of how the volume of lending depends on the rate of interest is deficient in at least two respects. First, it treats household income as independent of the rate of interest; second, it supposes the relative prices of consumption commodities to be independent of that rate.