WILL THE MARKET KEEP BRAZIL LIT UP? OWNERSHIP AND MARKET STRUCTURAL CHANGES IN THE ELECTRIC POWER SECTOR

After achieving significant success until the 1970s, the Brazilian electric power sector stalled due to financial problems. The government promoted a shift toward a private ownership model and tried to entrust the market with creating a stable and efficient energy supply. However, the energy crisis highlighted the difficulties in this transition. This paper points out that the uncertainty inherent in the market‐based model increased information rent for the private companies and complicated the post‐privatization expansion scenario. Privatization driven by macroeconomic problems should be carefully reexamined, especially for public utilities with strong natural monopoly characteristics, since markets tend to fail to supply the socially optimal supply, thus directly affecting people's lives.     

THE CLUSTERING OF IPO SPREADS IN KOREAN IPO MARKET: COMPETITION OR COLLUSION?

This paper examines whether the clustering of initial public offering (IPO) spreads in the IPO market occurs through competition or collusion, using the period from January 2000 to July 2006 as the analytical range. It finds that the Korean IPO market spread is clustered at 3.5% on moderately sized IPOs (i.e., IPOs between 9 (KRW billion) and 33 (KRW billion)), representing a 74% overall rate that increases gradually over time. Our empirical results refute the collusion theory. The Korean IPO market is characterised by low concentration. A 3.5% spread does not represent abnormal profits relative to other IPOs. Cost saving (i.e. an inverse U shape) is confirmed by the use of 3.5% offers. Our results also show that factors typically related to underwriters and issuers – such as proceeds, secondary sales, earnings and reputation – affect the 3.5% spread used both positively and negatively. Thus, consistent with the efficient contract theory, the use of a 3.5% contract becomes less likely as proceeds increase but becomes more likely for IPOs of over 35 (KRW billion). On the one hand, the use of a 3.5% contract becomes more likely the more insider shares an IPO contains and the higher the volatility of the stock return (an insignificant factor). On the other hand, the use of a 3.5% contract becomes less likely the higher the earnings and debt (insignificant factors) and the more reputable the underwriter. Underpricing in 3.5% IPOs is conditioned by proceeds and secondary sales, not reputation and IPO market concentration. Thus, we conclude – against the cartel theory – that there is no collusive conspiracy in the Korean IPO market and that underwriters do not reap excess profits from 3.5% IPOs.     

THE CAMBRIDGE CONTROVERSIES: OLD WAYS AND NEW HORIZONS--OR DEAD END?

‘[T]he established critics of a theory have nearly asmuch interest in the survival of the theory they criticize asits supporters; for when it is abandoned they are transportedfrom the exciting forefront of current scientific debate toa dignified but unexciting position in the museum of the historyof the subject’ (Nuti [1974, p. 364]). ‘If anything explains the heat of debates in growth [andcapital] theory, it is the difficulty thinkers in the scholastictradition have in appreciating that, for workers in the scientifictradition, it makes sense to entertain a model and use it withoutbeing committed to it; while the scientists cannot imagine whymere models should be the object of passion’ (Mirrlees[1973, p. xxi]).     

HONG KONG'S INFLATION AND DEFLATION UNDER THE US DOLLAR PEG: THE BALASSA-SAMUELSON EFFECT OR EXPORT PRICE SHOCKS?

Hong Kong's US dollar peg, adopted in 1983, has failed to deliver price stability. Hong Kong experienced high inflation before the Asian financial crisis and prolonged deflation after it. The annual rate of inflation (GDP-deflator based) was 7.4% in the first period (1985–97) and −2.0% in the second (1998–2007). There was no clear trend for the inflation rate to converge to the US level. The nominal anchor via a fixed exchange rate in Hong Kong had an upward and downward drift in the order of 4% from the US inflation rate, casting doubt on the anchor's efficacy. Despite Hong Kong's high output growth relative to that of the United States, the Balassa-Samuelson effect was not the main factor behind the pre-Asian crisis inflation. Price shocks in service exports played a major role in Hong Kong's general prices through the two periods.     

CHILD LABOR AND SCHOOL ENROLLMENT IN RURAL INDIA: WHOSE EDUCATION MATTERS?

This paper empirically analyzes the determinants of child labor and school enrollment in rural Andhra Pradesh, India. A village fixed‐effect logit model for each child is estimated with the incidence of child labor or school enrollment as the dependent variable, in order to investigate individual and household characteristics associated with the incidence. Among the determinants, this paper focuses on whose education matters most in deciding the status of each child, an issue not previously investigated in the context of the joint family system. The regression results show that the education of the child's mother is more important in reducing child labor and in increasing school enrollment than that of the child's father, the household head, or the spouse of the head. The effect of the child's mother is similar on boys and girls while that of the child's father is more favorable on boys.     

SOJOURNERS OR A NEW DIASPORA? ECONOMIC IMPLICATIONS OF THE MOVEMENT OF CHINESE MINERS TO THE SOUTH-WEST PACIFIC GOLDFIELDS

Chinese gold seekers were the largest non-British group on the goldfields of Australasia and constituted the largest nationality on some diggings. In considering the movement of Chinese miners to and throughout the goldfields colonies of the southwest Pacific, this articles argues there existed a more complex pattern of migration than that suggested by the sojourner model of arrival, brief stay and departure. It examines the links between migration patterns and economic activity, and argues that economic history perspectives complement the insights offered by recent social and cultural history in the field.     

AN INDUSTRIOUS REVOLUTION IN AN EAST ASIAN MARKET ECONOMY? TOKUGAWA JAPAN AND IMPLICATIONS FOR THE GREAT DIVERGENCE

This paper addresses a question raised by Jan de Vries' on the relationship between industriousness and the rise of the market in East Asia. Was the growing industriousness in Tokugawa Japan, as de Vries suggests, a substitute ‘for the absence of markets’? The examination refers to two versions of Chayanov's peasant farm model and their empirical relevance to the Tokugawa agrarian history, with special reference to the formation of labour‐intensive peasant farming (Akira Hayami's version of an industrious revolution), product specialisation, and the markets for production factors, land, and labour. Its implications for the Great Divergence debate are also discussed.     

THE EMPLOYER SIZE-WAGE EFFECT: CAN DYNAMIC MONOPSONY PROVIDE AN EXPLANATION?

In this paper we argue that a dynamic monopsony model (basedon labour market frictions) predicts a positive relationshipbetween wages and employer size, but also that the effect willbe larger in the non-union sector than in the union sector,and larger for women than for men. We examine evidence on theemployer size-wage effect using several microeconomic data sources,and find it to be generally consistent with these predictions.After examining other theoretical explanations, our conclusionis that at least part of the employer size-wage effect is aresult of monopsony power in the labour market.     

SH?RANG-SOFLĀ: THE ECONOMICS OF A NORTHEAST IRANIAN VILLAGE*

The village of Sh?-Soflā, located in the Gorgān region of northeast Iran, has had its predominantly agricultural economy revolutionized over recent years by significant increases in the percentage of cotton, tobacco, and other cash crops planted by its peasants, paralleled by a tightening of the grip of commercial capital upon the small producer. In this paper, I propose to examine the impact of these revolutionizing changes upon the structure of the agricultural economy, using the material gathered during a field study of the village of Sh?rang-Soflā carried out by the author in August of 1963.     

EXPLORING THE IMPACT OF FOREIGN AID ON CORRUPTION: HAS THE “ANTI‐CORRUPTION MOVEMENT” BEEN EFFECTIVE?

Though many studies have referred to an “anti‐corruption movement” beginning in the 1990s by major international organizations, none has empirically tested its effectiveness on corruption. The data show that from 1997 onward, the impact of multilateral aid is strongly and robustly associated with lower corruption levels, while bilateral aid is shown to be an insignificant determinant. An increase in any official development assistance (ODA) pre‐1997 is associated with higher levels of corruption or has no impact at all. Using panel data from 1986 to 2006, this study reveals a more nuanced relationship between ODA and corruption than previous studies and demonstrates that when disaggregating the time periods, there are sensitive temporal effects of ODA's effect on corruption overlooked by earlier studies, and provides initial evidence of the effectiveness of the international organization anti‐corruption movement in the developing world.