Does It Pay to Work in the Public Sector?

This paper uses microeconomic data from the British Household Panel and General Household Surveys to describe how the distribution of pay differs between the public and private sectors in 1983 and in the early 1990s. Separate analyses by gender and education group reveal that it is women and those with intermediate-level qualifications who do best in the public sector. The large differences between the shapes of the conditional (that is, holding age and education constant) distributions of wages in the public and private sectors are demonstrated using quantile regressions estimated separately for each education group. The paper also exploits the longitudinal structure of the data used to assess how much of these differences can be explained by the unobserved characteristics of individuals. JEL classifications: J31, J45.     

From New Public Management to New Public Governance? Hybridization and Implications for Public Sector Consumerism

This paper examines how variations in the notion of public sector consumerism become embedded in diverse governance practices. To this end, we extend the literature on public governance logics with insights from research on public sector consumerism and hybridization in public sector management reforms. Through a comparative, multi‐level analysis we trace the development of two governance logics largely corresponding to the distinction between New Public Management (NPM) and New Public Governance (NPG) in Swedish transport infrastructure policy. In contrast to research predicting or prescribing a relatively radical shift between such governance logics we show how they partly co‐evolved along two reform paths entailing notable variations in the degree of hybridization and the embedding of consumerist notions in emerging governance practices. In doing so, we draw attention to how the hybridization of governance logics is contingent on the alignment of diverse interests and differences in the process through which such logics are brought together. We discuss the implications of these findings for future research into public sector consumerism and hybridization in public sector management reforms.     

IPSAS or IFRS as the Framework for Public Sector Financial Reporting? New Zealand Preparers’ Perspectives

The last 30 years have seen public sector accounting in many countries undergo considerable change. More recently, some governments adopted accrual accounting and International Public Sector Accounting Standards (IPSAS), some adopted modified International Financial Reporting Standards (IFRS) while others continued with cash‐based accounting. New Zealand (NZ) has, for more than two decades, followed a sector neutral approach to financial reporting and standard setting where the same accounting standards were applied to all entities in all sectors: for‐profit, not‐for‐profit and the public sector. This period included the adoption of IFRS by for‐profit entities with minor modifications for the public sector. The suitability of IFRS for the public sector has been questioned and, recently, standard setters in NZ decided to adopt a sector‐specific standard‐setting approach with multiple tiers for each sector. The for‐profit sector will continue to follow IFRS but reporting standards for the public sector will be based on IPSAS. In this period of change we sought the views of preparers of public sector financial reports regarding the users of such reports and their preferences for the public sector reporting framework. We also sought the views of the preparers regarding the usefulness of each financial statement for users, and whether the benefits of reporting by their organisations exceeds the costs. The findings indicate support for maintaining IFRS as a basis for reporting in the NZ public sector. However, IPSAS modified to NZ conditions is also perceived as an acceptable option by respondents in this study. The income statement is, in the opinion of the respondents in this study, the most useful statement while cash flows appear to hold little value. A high proportion of respondents believe that the benefits of reporting exceed the costs, which contradicts the view that such reports are mainly compliance documents that provide little value. This finding contributes to the continuing debate on costs versus benefits on the recent introduction of IPSAS as the reporting framework for the public sector and the perceived appropriateness of IPSAS in public sector reporting.     

Complexities of Productivity Policies in the Finnish Public Sector: Knowing How to Do More with Less?

This paper examines public sector productivity policies as complexities between what is ‘known’ in policy principles and what is ‘done’ in everyday policy practice. Such complexities are explored in two productivity policy cases within Finnish local government: municipal amalgamations, and the low‐threshold concept of healthcare service. Utilising quantitative and qualitative data from Finnish local government the paper demonstrates the tensions between productivity policy principles, interpretations for productivity improvement (‘knowing’) and final outcomes for actually applying (‘doing’) productivity policy. The paper argues in favour of a new understanding for the research and practice of public policy and management.     

Public Sector Audit in Victoria: Leading Where?

The widespread debate and community concern about changes to the Victorian auditor-general's office shows that they go beyond accounting, business or competition issues (important as these are) and stand as significant matters of governance. The changes and the debate say something about the nature and character of our society - in particular, about the quality and qualities of Victorian political, business and professional leadership - and about the relative strengths of the Victorian parliament and the Victorian executive.     

Are Private Sector Standards Enough? An Example From Public Sector Hospitals in New Zealand

The aim of this paper is to assess whether and to what extent public sector hospital reports in New Zealand disclose information which best support the public interest. We analyse the content of the annual reports of Crown Health Enterprises (CHEs) for 1994, 1995 and 1996. It is concluded that the developments in public sector accounting, with respect to the public interest, have not permeated these reports to any significant extent. The following changes would improve these reportings: Reports providing costs relative to non-financial accomplishments; removing the traditional 'revenue' disclosure; disclosing non-financial as well as financial resources and obligations; providing further disaggregation in the reports; disclosing budgetary information and valuing assets alternatively. Implications of the lens used for the analysis are also considered.     

Does Public E-Procurement Deliver What It Promises? Empirical Evidence from Turkey

This article empirically investigates the economic effects of public e-procurement (PEP) adoption. We use a unique data set provided by the Public Procurement Authority of Turkey that covers all government procurement auctions for the years 2004–12, 588,454 auctions. We conclude that PEP adoption had adverse effects. The number of firms submitting bids in procurement auctions is significantly lower after PEP adoption. The procurement costs are significantly higher after PEP. These results suggest that policy makers should eliminate barriers to e-procurement adoption to gather the intended results of PEP.     

Strategic Management Thinking and Practice in the Public Sector: A Strategic Planning for All Seasons?

This paper explores how strategic management thinking manifests itself in strategic management practice in the public sector. Mintzberg's framework of ten strategic management schools of thought is chosen for mapping strategic management thinking. The paper analyses a convenience sample of 35 strategic management processes, observation of an agency's strategy reformulation process and interviews of managers in the public sector in Norway for informing the discussion. Strategic planning is heavily criticised in some of the business strategy literature. The analysis indicates that strategic management in the public sector extensively uses strategic planning, bundled with certain other schools of thought, despite tendencies to downplay formal, mechanistic planning in contemporary strategic management theory.     

Eclipse of the Public Corporation or Eclipse of the Public Markets?

The authors look back at Michael Jensen's 1989 article “The Eclipse of the Public Corporation.” They find some of his predictions have been borne out but other important ones, not. Jensen concluded that the publicly held corporation was in decline and had outlived its usefulness in many sectors. He argued that agency costs made public corporations an inefficient form of organization and that new private organizational forms promoted by private equity firms would likely replace the public firm. The number of public firms in the U.S. has declined significantly but there are still many hugely profitable and successful public companies. U.S. public markets are still well‐suited for firms with mostly tangible assets. So, what we are really witnessing is an eclipse not of public corporations, but of the public markets as the place where young firms with mostly intangible capital seek their funding. This is especially true when the usefulness of the intangible assets has yet to be proven. Sometimes the market is extremely optimistic about some intangible assets, but otherwise firms with unproven intangible assets may be better off funding themselves privately. This evolution has a downside: investors limited to public markets are cut off from investing in high intangible‐asset firms. Additionally, as fewer firms remain publicly listed, fewer firms will be transparent to society.     

A Comparative Analysis of Anglo‐Australian Pre‐packs: Can the Means Be Made to Justify the Ends?

Whereas pre‐packaged administrations have been prevalent in the UK for years, Australia's voluntary administration regime has been more restrictive of the practice. This article analyses the evolution of UK pre‐packs, why UK‐style pre‐packs are not prevalent in Australia and the challenges for UK and Australian lawmakers in striking the right balance with pre‐packs in their respective administration regimes. Building upon this analysis, the article proposes a mechanism that might make ‘connected‐party’ pre‐pack business sales work more fairly for stakeholders—that is, by obligating a connected‐party purchaser to make a future‐income contribution in favour of the insolvent company whose business has been ‘rescued’ by a pre‐packaged sale in administration. Copyright © 2012 INSOL International and John Wiley & Sons, Ltd.     

The Joy of Giving or Assisted Living? Using Strategic Surveys to Separate Public Care Aversion from Bequest Motives

The “annuity puzzle,” conveying the apparently low interest of retirees in longevity insurance, is central to household finance. Two possible explanations are “public care aversion” (PCA), retiree aversion to simultaneously running out of wealth and being in need of long‐term care, and an intentional bequest motive. To disentangle the relative importance of PCA and bequest motive, we estimate a structural model of the retirement phase using a novel survey instrument that includes hypothetical questions. We identify PCA as very significant and find bequest motives that spread deep into the middle class. Our results highlight potential interest in annuities that make allowance for long‐term care expenses.     

Financial Sector transparency and net interest margins: Should the private or public Sector lead financial Sector transparency?

This study examines the effect of private and public sector led financial sector transparency on bank interest margins across eighty-six economies. Using a two-step dynamic system generalized method of moments, least square dummy variables, fixed effects and bootstrap quantile panel models between 2005 and 2016, the findings of the two-step GMM are reported as follows. First, results reveal that financial sector transparency whether led by private or public sector reduces interest margins. Second, while no statistical evidence was found on which of the two (private or public sector led transparency) is more effective in dealing with bank interest margins, public sector-led financial transparency is found to be more consistent in reducing bank interest margins across many more economies. Third, the study shows that the effect of financial sector transparency is visible at lower and middle levels of bank interest margins implying that economies with lower and moderately high bank interest margin level can benefit more from policies targeted at improving transparency in the financial sector. These findings imply that the sampled countries must enact policies and laws that deepen and expand financial sector transparency in order to potentially reduce bank interest margins for the good of banking market participants and society at large.     

Can China reduce the carbon emissions of its manufacturing exports by moving up the global value chain?

This study analyses whether embedding in the global value chain has an impact on the carbon emissions of China’s exports. We develop a carbon decomposition model and use panel data for 14 manufacturing industries in China from 1995 to 2009 to empirically analyse the impact of China’s exports on carbon emissions. Our results show that the GVC effect on China’s carbon emissions embodied in manufacturing exports outweighs the scale, composition and technique effects.     

Borrowing to Finance Public Investment? The ‘Golden Rule of Public Finance’ Reconsidered in an Endogenous Growth Setting*

In this paper, we look for long‐run and short‐run effects of fiscal deficits on economic growth and welfare in a standard endogenous growth model. We show that, under very general hypotheses, the ‘golden rule of public finance’, which allows a government to run public‐investment‐oriented fiscal deficits, leads to a lower balanced‐growth path in the long run, and eventually in the short run, compared with balanced‐budget rules. Welfare effects are more difficult to assess, and depend on the form of the utility function. Our model shows that debt rules such as the golden rule may improve (if the consumption elasticity of substitution is ‘low’) or weaken (if the consumption elasticity of substitution is ‘high’) intertemporal welfare. Consequently, a balanced‐budget rule does not necessarily dominate debt rules from the point of view of welfare, while it does from the point of view of long‐run economic growth.     

Can the academic literature contribute to the debate over mandatory audit firm rotation?

Recently, the Public Company Accounting Oversight Board (PCAOB) issued a concept release soliciting public recommendations to improve auditor independence and audit quality (PCAOB, 2011). The focus of the release is on mandatory audit firm rotation (MAFR) with a request for commentaries addressing the advantages and disadvantages of MAFR. In this paper, we briefly summarize the recent literature on mandatory audit firm rotation and suggest how it can be useful to regulators as they consider the implementation of mandatory rotation. We find that the conclusions reached about the possible effectiveness of MAFR appear to depend on the type of data used (voluntary vs. mandatory auditor changes), suggesting that regulators should exercise care when drawing inferences from past audit firm rotation research.     

Growth and Public Debt: What Are the Relevant Trade‐Offs?

The interplay between growth and public debt is addressed considering a Barro‐type (1990) endogenous growth model where public spendings are financed through taxes on income and public debt. The government has a target level of public debt relative to GDP, and the long‐run debt‐to‐GDP ratio is used as a policy parameter. We show that when debt is a large enough proportion of GDP, two distinct balanced‐growth paths (BGPs) may coexist, one being indeterminate. We exhibit two types of important trade‐offs associated with self‐fulfilling expectations. First, we show that the lowest BGP is always decreasing with respect to the debt‐to‐GDP ratio while the highest one is increasing. Second, we show that the highest BGP, which provides the highest welfare, is always locally indeterminate while the lowest is always locally determinate. Therefore, local and global indeterminacy may arise and self‐fulfilling expectations appear as a crucial ingredient to understand the impact of debt on growth, welfare, and macroeconomic fluctuations. Finally, a simple calibration exercise allows to provide an understanding of the recent experiences of many OECD countries.