POWER AGAINST PEOPLE: A CHRISTIAN CRITIQUE OF THE STATE

This article, based on the author's IEA web publication of the same name, challenges the widespread view that government is the best vehicle for achieving positive social change. Rather it argues that the over-mighty state has always been the chief cause of oppression, poverty and war throughout the world.     

THE EVOLUTION PROCESS OF ENTREPRENEURSHIP STUDIES IN THE 21ST CENTURY: RESEARCH INSIGHTS FROM TOP BUSINESS AND ECONOMICS JOURNALS

The present study involves a literature survey of 1710 entrepreneurship papers published in 28 top business and economics journals in 12 research disciplines. This paper finds that despite increased recognition of the importance of entrepreneurship, the research literature on entrepreneurship remains fragmented. Studies of entrepreneurship processes have been the dominant theme, but new issues of entrepreneurship are emerging. Based on the entrepreneurship reviewed, this paper summarizes potential research directions.     

FROM THE CLASSICAL ECONOMISTS TO EMPIRICISTS: A REVIEW OF THE TERMS OF TRADE CONTROVERSY

Contrary to the classical position, the works of Prebisch and Singer in the middle of the last century launched the controversial hypothesis of a long-term decline in the terms of trade of primary products vis-á-vis manufactured goods and a corresponding decline in the terms of trade of developing countries vis-á-vis advanced ones. The present study traces the origin and evolution of the hypothesis and reviews the related statistical debate. It also reviews the theoretical support for the Prebisch–Singer hypothesis. It is an exercise in the history of economic thought to trace how the controversies surrounding the terms of trade have evolved over time, specifically noting that, with the development of the field of econometrics, the central thesis of the argument got lost somewhere in the realm of hi-tech statistical debates.     

PEASANTS AGAINST PRIVATE PROPERTY RIGHTS: A REVIEW OF THE LITERATURE

Land is the main – if not the only – asset for a majority of people in developing countries. The definition and allocation of rights over land are thus naturally essential aspects of individuals’ daily lives, as well as critical determinants of social and economic development. The privatization of land rights has long been seen as a necessary process, enhancing both efficiency and equity. However, privatized land rights have not always emerged endogenously, while exogenously driven programs of land privatization have not always been successful nor popular. This has raised questions about the expected benefits of land rights privatization. This paper aims at summarizing the main arguments and studies, both theoretical and empirical, on this issue, with a specific focus on the factors that can make privatization inefficient or detrimental for the most concerned individuals.     

THE ECONOMETRICS OF THE HOLY GRAIL — A REVIEW OF ECONOMETRICS: ALCHEMY OR SCIENCE? ESSAYS IN ECONOMETRIC METHODOLOGY

Books reviewed in this article: David F. Hendry (1993) Econometrics: Alchemy or Science? Essays in Econometric Methodology     

COMPETITION BETWEEN EQUITY MARKETS: A REVIEW OF THE CONSOLIDATION VERSUS FRAGMENTATION DEBATE

Technological advances and regulatory initiatives have led to the emergence of a competitive, but fragmented, equity trading landscape in several markets around the world. While these changes have coincided with benefits like reduced transaction costs, advancements in trading technology, and access to a diverse array of execution venues, regulators and market participants have also raised concerns about the welfare implications of innovations like dark pools as well as the resulting increase in execution complexity. Exchanges are often viewed as natural monopolies due to the presence of network externalities and economies of scale. However, heterogeneity in traders' preferences means that no single venue can serve the interests of all investors. Fragmentation of the marketplace can be seen as a direct outcome of this heterogeneity. In this paper, we review the theoretical and empirical literature examining the economic arguments and motivations underlying market fragmentation, the resulting implications for liquidity and price efficiency, and the role for public policy. Beyond the concerns for equity markets, the lessons from this literature are relevant for other asset classes experiencing an increase in competition between trading venues.     

THE ROLE OF LAW IN ECONOMIC GROWTH: A LITERATURE REVIEW

Abstract Compared with other explanatory variables, such as capital accumulation, technological innovations, geographical endowments, economic openness, and cultural factors, institutions, especially legal institutions have been regarded as a crucial condition for economic growth in recent years. The importance of legal rules is systematically revealed by a series of cross‐country econometric studies conducted by La Porta et al., who claim that legal origins are central to understanding the divergence in living standards across the regions and countries of the world and, compared with civil law countries, especially those countries with French civil law tradition, common law countries have enjoyed superior economic outcomes. The controversies set off by La Porta et al.'s proposition indicate that there are a number of questions that are difficult to explain by La Porta et al.'s theory, and hence call for more work on comparative analysis of different legal families before a consensus can be reached.     

A PATCHWORK SAFETY NET: A SURVEY OF CLIOMETRIC STUDIES OF INCOME MAINTENANCE PROGRAMS IN THE UNITED STATES IN THE FIRST HALF OF THE TWENTIETH CENTURY

Abstract Social welfare programs in the USA are designed to serve as safety nets for people in hard times, in contrast with the universal approach found in many other developed western nations. In a survey of cliometric studies of social welfare programs in the USA, we examine the variation in the safety net in the USA across states in the 20th century, the determinants of the variation and its impact on socioeconomic outcomes. The USA has always displayed substantial variation in the extent of the safety net because the features of most public social welfare programs have been and currently are determined by local and state governments, even after the federal government became involved in the 1930s. Differences across states persist strongly for typically a decade, although the persistence weakens with time, and there are some periods when federal intervention led to a re‐ordering. The rankings of state benefits differ from program to program, and economic and political factors have different weights in determining benefit levels in panel data estimation of their effects. Variation in benefits across programs during the early 1900s had significant impact on labour markets, economic activity, family formation, death rates and crime.     

GENDER PAY GAPS IN THE FORMER SOVIET UNION: A REVIEW OF THE EVIDENCE

The goal of this paper is to examine the patterns and movements of the gender pay gaps in the countries of the former Soviet Union (FSU) and to place them in the context of advanced economies. We survey over 30 publications and conduct a meta‐analysis of this literature. Gender pay gaps in the region are considerable and above the levels observed in advanced economies. Similar to advanced economies, industrial and occupational segregation widen the gaps in the FSU countries, whereas gender differences in educational attainment tend to shrink them. However, a much higher proportion of the gaps remains unexplained, pointing toward the role of unobserved gender differences related to actual and perceived productivity. Over the last 25 years, the gaps contracted in most FSU countries, primarily due to the reduction in the unexplained portion. Behind the contraction at the mean are different movements in the gap across the pay distribution. Although the glass‐ceiling effect has diminished in some FSU countries, it has persisted in others. We investigate the reasons underlying these findings and argue that the developments in the FSU region shed new light on our understanding of the gender pay gaps.     

ETHNIC DIVERSITY,PUBLIC SPENDING,AND INDIVIDUAL SUPPORT FOR THE WELFARE STATE: A REVIEW OF THE EMPIRICAL LITERATURE

We review the empirical literature that studies the effect of ethnic diversity on public spending and on individual support for the welfare state. The survey puts a particular focus on the fast‐growing literature that uses experiments to study the effects of ethnic diversity. Many of these studies have appeared since the pioneering survey by Alesina and La Ferrara and have not been covered by a survey before.     

THE CREATION AND DIFFUSION OF INNOVATION IN DEVELOPING COUNTRIES: A SYSTEMATIC LITERATURE REVIEW

In this study, we review the literature on the creation and diffusion of innovation in the private sectors (industry and services) in developing countries. In particular, we collect evidence on what are the barriers to innovation creation and diffusion and the channels of innovation diffusion to and within developing countries. We find that innovation in developing countries is about creation or adoption of new ideas and technologies; but the capacity for innovation is embedded in and constituted by dynamics between geographical, socio‐economic, political and legal subsystems. We contextualize the findings from the review in the current theoretical framework of diffusion of innovations, and we emphasize how the institutional context typical of developing countries impacts the diffusion itself.     

THE INTERNALISATION OF ENVIRONMENTAL EXTERNALITIES AFFECTING DWELLINGS: A REVIEW OF COURT CASES IN HONG KONG

In 1960, Ronald Coase suggested that there are many methods to solve the problem of externalities apart from imposing Pigovian taxes. Internalisation is one of those noted in his classic paper, ‘The Problem of Social Cost’. This paper studies the possibility of residents receiving compensation from pollutant generators. Data collected from Hong Kong law reports over the past 20 years show that there is forty‐fold increase in number of water seepage court cases since the first case in 1994. The total amount of compensation has also increased greatly. There are, however, far fewer court cases where residents seek compensation from generators of noise and air pollution. This may reflect a combination of high transaction costs and low expected benefits from such cases.     

A REVIEW OF THE BRITISH ACADEMY REPORT,PUNCHING OUR WEIGHT: THE HUMANITIES AND SOCIAL SCIENCES IN PUBLIC POLICY MAKING1

The report argues that policy‐makers fail to make effective use of the high quality research of UK academics in the humanities and social sciences. Yet greater co‐operation between the government and academia could undermine the independence of the latter by increasing the role of the state in the funding and direction of university research.     

MANAGEMENT CONTROL SYSTEMS IN FAMILY FIRMS: A REVIEW OF THE LITERATURE AND DIRECTIONS FOR THE FUTURE

Family firms play a significant role in the global economy. Although family firm literature has devoted much time and effort to investigating topics concerning corporate governance, leadership, ownership and succession, accounting issues have received relatively scant attention. In this paper, we assemble and critically review extant literature on the choice of management controls. This is an essential topic for firms as management control systems (MCS) are used to make sure subordinates behave in function of the goals of the firm. Family firms, however, have distinct features, such as differences in governance structures and goals, which can have a significant impact on whether and how MCS are used. We conclude this review paper by providing avenues for future research that can advance our understanding of both the determinants and the outcomes of the choice of MCS.     

EVIDENCE ON THE IMPACT OF TARIFF REDUCTIONS ON EMPLOYMENT IN DEVELOPING COUNTRIES: A SYSTEMATIC REVIEW

This paper analyses the evidence on the impact of tariff reductions on employment in developing countries. We carry out a systematic review of the existing empirical literature, and include both, ex post econometric evidence and ex ante Computable General Equilibrium (CGE) simulation studies. The synthesis of results suggests that the effects of tariff reductions on employment are country and trade policy specific. When looking across higher quality econometric studies that control for the endogeneity of tariffs, only a couple of studies have statistically significant results, and these suggest that employment is likely to decrease slightly in the short run following trade liberalization. This is consistent with the notion that there are winners and losers from trade policy reform. These results are in contrast with the CGE findings, which by design incorporate projections of the medium‐run economy‐wide knock‐on effects suggested by economic theory. The synthesis of CGE studies suggests non‐negative effects of trade liberalization on aggregate employment and moderate inter‐sectoral labour reallocation effects.     

THE MOST IMPORTANT BOOK ON THE MOST IMPORTANT TOPIC OF OUR DAY: A REVIEW OF AFTER WAR: THE POLITICAL ECONOMY OF EXPORTING DEMOCRACY,BY CHRISTOPHER J. COYNE1

Efforts to export democracy and liberty through military intervention have often been ineffective and have resulted in unintended and undesirable consequences. Countries are free because of belief systems, and institutions that follow from those beliefs, which support and reinforce political and economic freedom. Rational constructivist attempts at nation building are therefore likely to fail in places where there is no tradition of such beliefs and institutions. In this superb book Coyne argues that principled non‐interventionism and free trade have historically had the greatest degree of success and should be our guiding policies today.     

A REVIEW OF THE COLLECTED WORKS OF F. A. HAYEK: VOLUME II,THE ROAD TO SERFDOM: TEXT AND DOCUMENTS – THE DEFINITIVE EDITION,EDITED BY BRUCE CALDWELL1

The latest volume in The Collected Works of F. A. Hayek is the best yet. The Introduction is a delight and the Appendix of related documents is fabulous and fascinating. The long effort to produce the collection has therefore been very worthwhile.     

BANKING AND BORROWING IN THE EU ETS: A REVIEW OF ECONOMIC MODELLING,CURRENT PROVISIONS AND PROSPECTS FOR FUTURE DESIGN

Abstract This paper deals with the issue of banking and borrowing in the context of the European Union Emissions Trading Scheme (EU ETS) by attempting to provide a policy‐oriented unifying theoretical framework. After describing the main features of the EU ETS, the core part of the paper consists of variations of an intertemporal continuous time optimization model. Additional elements include flexibility measures currently discussed and proposed in other emissions trading systems (USA, Australia), which include the use of safety valves, minimum price auctioning or offsets from domestic or international projects.