COMPETITION OR COOPERATION IN URBAN SERVICE DELIVERY?

ABSTRACT: Inter‐municipal cooperation is now as common among US local governments as for profit privatization. This article uses data from a national survey in 2007 to explore the benefits of cooperation – economies of scale, service coordination across the metropolitan region and greater community control. While privatization reforms have focused on harnessing the benefits of a competitive market, cooperation may be the new frontier where economies of scale and efficiency gains can be achieved with governments working together in a new form of collaborative service delivery.     

MEASURING VARIATIONS IN LIFETIME WELFARE EX ANTE AND EX POST: SOME EXPLORATORY CALCULATIONS

Whereas longevity‐adjusted consumption measures have become increasingly used as indicators of lifetime standards of living, it remained unnoticed that those measures, by relying on period – rather than cohort – life tables, constitute indicators of expected – rather than actual – lifetime standards of living. In order to estimate the actual gap between ex ante and ex post measures of lifetime welfare, this paper computes, for 19th‐century European economies, longevity‐adjusted consumption measures based on period and cohort life tables. It is shown that the gap between ex ante and ex post measures is statistically significant, and that attempts to reduce it are likely to be unsuccessful, because standards of living tend to exhibit, over temporal horizons as long as a human life, structural breaks, which make the ex ante measurement of lifetime welfare highly speculative.     

The Boom and the Bubble: The US in the World Economy

Most intellectuals would be pleased to have one major debate named after them. The Marxist economic historian Robert Brenner has managed the remarkable feat of unleashing two significant intellectual controversies. The first, in the historical journal Past & Present during the late 1970s and early 1980s, was provoked by his interpretation of the transition from feudalism to capitalism in early modern Europe. More recently, however, Brenner has switched his attention from the longue durée of European history to the economic dynamics of contemporary capitalism. In a massive journal-length article published in New Left Review in 1998 he offered a comparative analysis of the three major Western economies—the USA, Japan and Germany—from 1945 onwards, tracing the development of a protracted crisis of profitability that, Brenner contended, explained the ‘long downturn’ experienced by global capitalism since the early 1970s.     

Optimal speed of transition with a shrinking labour force and under uncertainty*

In the 1990s – during the restructuring of large state enterprises – Central European economies experienced high unemployment. Social policy expenditures, particularly targeted to the non‐employed, grew faster than expected due to the need to finance the out‐of‐the‐labour categories. In 1992, after the Passive Labour Market Policies’ reforms, the pace of transition decelerated. Unemployment dynamics, speed of transition and non‐employment policies are modelled based on the assumption that the labour force is shrinking over time. Dismissed workers have the opportunity to choose an outside‐option alternative to labour force participation. Individual uncertainty is assumed in a first phase of transition, while aggregate uncertainty – generating opposition to restructuring – is modelled in a second phase. The model predicts a slowdown in the speed of transition.     

Property rights protection and access to bank loans

Poor protection of private property has limited the access to bank loans by private enterprises in developing and transition economies. Under those circumstances, private entrepreneurs have resorted to various ways of enhancing the de facto protection of private property. Using a dataset of 3,073 private enterprises in China, this paper empirically investigates the impact of political participation and philanthropic activities – informal substitutes for the lack of formal protection of private property – on the access to bank loans.     

Trend and cyclical decoupling: new estimates based on spectral causality tests and wavelet correlations

The issue of decoupling of emerging market economies (EMEs) (especially in the Asian region) from the developments in advanced economies has become a subject of lively debate in recent years. Basically, decoupling seems to comprise three sub-hypotheses: (i) growth spillovers from advanced countries to EMEs decreasing progressively in importance, (ii) business cycles in EMEs becoming less synchronized with those of the advanced world and (iii) strengthening of growth spillovers and cyclical synchronization among the EMEs as a group. The received literature fails to distinguish adequately between the trend and cyclical aspects of the decoupling relationship. We resort to two frequency domain methods (nonstationary spectral causality testing and wavelet correlations), which seem to offer a neat separation of trend and cyclical decoupling. Based on a sample of seven EMEs from the Asian region (including the two large EMEs – China and India), we uncover strong evidence favouring both trend and cyclical decoupling.     

The legacy and promise of Vannevar Bush: rethinking the model of innovation and the role of public policy

The linear model of innovation argues that innovation takes place in a unidirectional sequence, with basic research directly diffusing in marketable product or process innovations. This perspective has served society well in past decades. However, recent productivity slowdowns in developed economies and the failure of innovation policies to continue to deliver desired results have called this perspective into question. Scholars explain these slowdowns by the oversimplification of the linear model which fails to consider the complexities associated with innovation processes. Although it is generally believed that Vannevar Bush’s report Science – The Endless Frontier – was based on his belief in a linear model of innovation and the notion that basic research is the ultimate source of all innovation, an examination of Bush’s writings and his life reveals that he believed in a more sophisticated model in which basic and applied research cross-fertilize each other and in which government’s job is not so much to stimulate basic research as it is to facilitate interactions between basic and applied research for the benefit of both and the prosperity of society. This paper explicates Bush’s model of the research and innovation process, explores the implications of that model, and derives policy recommendations.     

Marx on Ricardo: an explanation of some important misunderstandings

Ricardo's theory of value and distribution is reconstructed by proceeding along the lines of Marx's critique of Ricardo. It is thus an anti-critique of Marx's reading of Ricardo. The chapter ‘On Value’ in Ricardo's Principles is shown to be a consistent and rigorous treatment of the determinants of prices of production. According to Ricardo labor-values merely serve to approximate more elaborate standards of value. Marx's criticism is shown to rest crucially on his own misinterpretation of Ricardo's definitions and presupposes his own – faulty – theory of surplus value. Therefore Ricardo's theory can – contrary to Marx's theory of surplus value – still be regarded as a fruitful complement to Sraffa's model.     

Middle-ground players in dynamic imitative markets: global entry strategies of Korean firms in the biosimilars market

ABSTRACT

This study examines the strategies used to enter the biosimilars market – the emerging biogeneric market – by five Korean biopharmaceutical firms. The analysis is based on a conceptual framework that characterises the use of imitative innovation by middle-ground firms. These middle-ground firms are positioned between globally innovative firms from major developed economies and latecomer firms from large emerging economies. The study finds that the five Korean firms used three entry modes that resemble the typology of strategies commonly used in the previous catch-up stage: exploiting scale economies and specialisation. The study also reveals the risk and potential of each entry mode.     

Strange brew: The antinomies of distribution in W.S. Jevons' Theory of Political Economy *

Abstract

In the Preface to the second edition of his Theory of Political Economy (1879), W. Stanley Jevons announced an extraordinary turn in his analysis as he abandoned much of the explanatory framework used in the body of the text to explain cost of production and distribution. It is shown here that, when the Theory is read in the context of the objective and structure of Jevons' distribution analysis, the turn can be explained as Jevons' response to the realization that he was only able to reconcile his analysis of cost of production and of distribution in a special case.     

Capitalism and democracy at a crossroads: the civilizational dimension

This paper evaluates Schumpeter's grand vision as reflected in his Capitalism, Socialism and Democracy, and elaborates it in conjunction with the so-called “globalization” trends characteristic of the wake of the twenty-first century. In addition to the evolutionary nature of his methodology, the institutionalist dimension of Schumpeter's definitions are brought to light. A case is made for a fundamental process of “uncreative destruction” as far as the institutional setup of the economy is concerned. The contention of this paper is that there is ample support in Schumpeterian analysis for a counterpoint to the liberal thesis that envisages the worldwide spread of individualism, market economies, and democratic forms of government.     

Capitalism Unleashed: Finance,Globalization, and Welfare

Andrew Glyn, who died from a brain tumour in December 2007, aged 64, had been a key figure in socialist political economy since the 1970s. His seminal book with Bob Sutcliffe, British Capitalism, Workers and the Profits Squeeze, published in 1972, inspired a generation of political economists. It offered an arresting empirical analysis of the predicament of British capitalism, and occasioned a fierce and wide-ranging debate among socialist economists over its empirical accuracy, its theoretical approach and its political implications. It was one of the first and most important expressions of Ricardian Marxism in the 1970s, emphasising the importance of distributional struggles for the future economic and political development of capitalism.

He was actively engaged in politics and he was always ready to put his intellectual skills to practical use, as during the British miners' strike in 1984–5, when he provided a detailed critical analysis of the economic case being advanced by the employers and the Government against the union. At the same time he sought to understand the trends that were shaping the development of capitalism, and wrote two very influential books, Capitalism Since World War II: the Making and Breakup of the Great Boom (1984, with Philip Armstrong and John Harrison), and Capital Unleashed (2006), his analysis of the recent neoliberal phase of capitalist development.

He will be remembered for his skills as a teacher, his humane and tolerant approach to intellectual debate, and his lasting contributions to our understanding of contemporary capitalism.     

Dutertenomics: Populism,Progress, and Prospects

In 2016, when Rodrigo Duterte was elected Philippine President the economy was growing robustly. Despite the record growth, his election is considered a populist revolt of the middle‐ and upper‐class Filipinos. Yet, his economic policies – from his initial 10‐point agenda to the laws he approved – are liberal. This paper distinguishes and relates Duterte's authoritarian‐populist political style (“Dutertismo”) and his economic agenda (“Dutertenomics”). The distinction follows from his lack of interest in economic affairs, which he delegated to his team of economic managers. This team ably pushes important economic reforms because of the president's style, which so far has earned him wide public approval. After slowing down during the first half of Duterte's term, growth has recently picked up. To keep the momentum and public attention off human rights violations, Duterte needs to accomplish his economic agenda by mid‐2022. Drawing on his powers and popularity, he may yet be able to elicit the full support of Congress.     

Economics of Social Capital*

The literature on the idea of ‘social capital’ is now enormous. Offering an alternative to impersonal markets and coercive states, the communitarian institutions built around social capital have looked attractive to scholars in the humanities and social sciences. The literature in consequence has a warm glow to it. In this article, I first study the various contexts in which the promises people make to one another are credible and then suggest that the accumulation of social capital is a possible route to creating such a context. I offer a tight definition of social capital – namely, interpersonal networks – so as not to prejudge its ability to enhance human well-being. The links between the microfoundations of social capital and the macroeconomic performance of economies are then studied. I also show that economic theory not only identifies circumstances in which communitarian institutions can function well, but that it also uncovers a dark side, namely, their capicity to permit one group to exploit another within long-term relationships.     

INCOME UNCERTAINTY,CONSUMER DURABLES INVESTMENTS,AND HOME PRODUCTION: EVIDENCE FROM CHINA

We investigate the effect of uncertainty on home durable purchase decisions, and empirically evaluate the efficacy of consumer durable policies under uncertainty. A model of lumpy home capital adjustment shows that elevated uncertainty leads households to adopt a cautionary perspective and postpone their capital adjustment. We test this prediction using microevidence from China where both uncertainty and home production are substantial. We exploit a wide‐scale rebate program funded by the Chinese government as a natural experiment, and examine the impact on household investment. We find strong, significant, and robust evidence that greater income uncertainty inhibits durable adjustment. Our findings highlight the impediment that income uncertainty poses to investment in home durables, which are often considered as “engines of liberation” in emerging economies. (JEL E21, E64, J22, O16, O23, D91)     

Samuelson’s operationally meaningful theorems: reflections of E. B. Wilson’s methodological attitude

This paper sheds new light on Samuelson’s early methodology as presented in his Foundations of Economic Analysis (1947) by reflecting on the similarity between his mathematical economics and Edwin B. Wilson’s mathematics. Wilson was Samuelson’s professor of advanced mathematical and statistical economics; he was also a protégé of Josiah Willard Gibbs. Wilson defined mathematics as a language that consisted of three interconnected aspects: postulational, axiomatic, and operational. In his Foundations, in a Wilsonian style, Samuelson wrote in the opening page, ‘Mathematics is a Language’ and claimed that he offered operationally meaningful theorems. In this paper, it is argued that these maxims embodied Wilson’s approach, which framed Samuelson’s mathematical and statistical thinking around 1940 and which led him to present his work as being mathematically, theoretically, and empirically well founded. Wilson’s and Percy Bridgman’s operational methodologies are also compared and Wilson is presented as a mediator between Bridgman and Samuelson.     

The Issue of Efficiency and the Role of State in New Institutional Economics: A Critical Perspective

ABSTRACT

This article scrutinises and criticises the notion of efficiency and the role of state in the emergence and evolution of institutions and property rights within the tradition of new institutional economics. Specifically, the attempt is to criticise the efficiency view of the formation of property rights and institutions. It is shown that the efficiency concept cannot provide a sufficient rationale for explaining the origins of private property. Additionally, some recent developments of North's thought are critically scrutinised, showing that his theoretical apparatus could be conceived as a paradise for the eclectic. Further, the role of the state in different versions of the theory of property rights – with a special reference to North's treatment of the notion of state – is, also, critically examined. Although North’s work has virtues compared to the ‘naïve model’ of property rights by recognising and addressing the role of the state and the issue of power in the formation of property rights and institutions, he does not succeed in fully accounting for the existence of institutional arrangements, due to his adherence to an individualist framework.     

The Competitive Advantage of Collaboration – Throwing New Light on The Nordic Model

ABSTRACT

In one of the most influential contributions to modern political economy, Hall and Soskice have launched a distinction between ‘liberal’ and ‘coordinated’ market economies, placing the Nordic countries firmly in the latter category. We argue that, while the H&S distinction may serve classificatory purposes, seeing the Nordic model in terms of ‘coordinated capitalism’ blurs the distinctive features of the Nordic countries’ success as productive and fair economies. We contend that the central formula behind this success lies in what we call the Nordic model’s ambidexterity – the capacity to combine collaborative and competitive elements and skilfully navigate between them. Using an interdisciplinary perspective (inspired by organisation theory, cultural semiotics and evolutionary analysis), we provide a conceptual basis for reinterpreting the Nordic Model as an ambidextrous combination of culturally rooted, collaborative strategies that are subsequently competitively exposed. The article illustrates the workings of this ambidexterity in three societal domains: work life (including female participation), resource management – illustrated by the Norwegian petro-economy – and international business management and regulation with a focus on CSR. In each case we will show how collaboration is intertwined with pragmatic competitive exposure, yielding high productivity, high welfare, as well as fair income and wealth distribution.