US state-level economic freedom during the COVID-19 pandemic

The COVID-19 pandemic led to extensive new government regulations and lockdown policies that significantly reduced economic freedom across US states. Many of these new pandemic-related regulatory restrictions on economic freedom varied significantly from state to state but are largely missed by the existing Economic Freedom of North America Report (EFNA). This paper adjusts the Our World in Data COVID-19 Stringency Index into a state-level measure of lockdown regulatory freedom and then merges it into the EFNA index to better measure relative economic freedom across US states in 2020. We find significant differences in the relative ranking of economic freedom between states once we adjust for lockdown regulatory restrictions.     

The implications of de‐collectivist industrial relations laws and associated developments for worker health and safety in Australia, 1996–2007

The institutional and regulatory interlinkages between industrial relations (IR) and occupational health and safety (OHS) are seldom explored in the IR literature. This article begins to address this gap by examining regulatory initiatives in Australia during a period of neoliberal government. It examines the laws enacted by the federal government during this period and events and cases arising from these laws that go some way to illustrating their effects. Evidence is also drawn from detailed research on a number of state OHS inspectorates between 2004 and 2006. It is argued that de‐collectivist changes to IR laws exacerbated problems posed by the growth of flexible work arrangements and a drop in union density, weakening participatory provisions in OHS laws and promoting work arrangements that undermined OHS standards. The study provides evidence of the implications of a divergence in the trajectory of IR and OHS laws and the importance of better integrating worker protection laws.     

Political Influence and the Banking Sector: Evidence from Korea*

This paper uses panel data to compare the performance of Korean banks with and without effective government control of the appointment of chief operating officers. A privatization programme succeeded in spreading ownership of banks widely among the public, but government retention of an ownership stake in an institution meant de facto control by government. Despite charging lower loan rates, banks controlled by government experience higher bad loans ratios. This is in line with expectations of regulatory forbearance and government protection for recipients of political loans. Banks controlled by government are less efficient than privately controlled banks and bad loan variables are higher at banks with lower efficiency scores.     

Unpacking linguistic devices and discursive strategies in online social movement organizations: Evidence from anti-vaccine online communities

This study investigates linguistic devices and discursive strategies employed by online social movement organizations (SMOs) in attempts to deinstitutionalize long-standing, institutionalized behaviors. The research draws from an in-depth analysis of public discourse within anti-vaccine online communities in Italy and contributes to the social movement literature on framing and the theory of discursive institutionalization. It employs semi-automated text-analysis methods and interpretive analysis of textual data from seven anti-vaccine social media communities, before and subsequent to the 2017 regulatory intervention of the Italian government to increase vaccination rates. This intervention followed a phase of intense debate centered on the decrease in vaccination coverage and the spread of anti-vaccine ideas in social media as well as in the broader public discourse. The study analyzes the discursive strategies and linguistic devices of community leaders (moderators) and followers (members), and investigates shifts in micro-level online anti-vaccine discursive strategies that developed after the government regulation. The findings suggest that anti-vaccine online SMOs employ specific sets of linguistic devices, namely rhetorical fallacies, that support well-defined discursive strategies such as those aiming to delegitimize actors that endorse vaccines. Furthermore, the evidence shows that these linguistic devices and discursive strategies, after the government regulation, shift from an evidence-based stance towards values and emotions-based argumentations.     

Does Private Money Buy Public Policy? Campaign Contributions and Regulatory Outcomes in Telecommunications

To what extent can market participants affect the outcomes of regulatory policy? In this paper, we study the effects of one potential source of influence—campaign contributions—from competing interests in the local telecommunications industry, on regulatory policy decisions of state public utility commissions. Our work is unique in that we test the effects of campaign contributions on measurable policy outcomes. This stands in stark relief against most of the existing literature, which examines potentially noisier measures of policy outcomes—such as the roll‐call votes of legislators, to examine how private money may influence public policy. By moving to more direct measures of policy effects, and using a unique new dataset, we find, in contrast to much of the literature on campaign contributions, that there is a significant effect of private money on regulatory outcomes. This result is robust to numerous alternative model specifications. We also assess the extent of omitted variable bias that would have to exist to obviate the estimated result. We find that for our result to be spurious, omitted variables would have to explain more than five times the variation in the mix of private money as is explained by the variables included in our analysis. We consider this to be very unlikely.     

Does Monetary Aid Catalyse New Business Creation? Analysing the Impact of Global Aid Flows on Formal and Informal Entrepreneurship

Official development aid – monetary transfers to developing countries to promote social and economic development – reached more than $140 billion in 2016. However, traditional forms of government bilateral aid continue to decline, while private aid is rising. Nevertheless, the impact of this aid, including its potential to stimulate economic development through new business formation, remains uncertain. In this study, we examine the impact of three sources of monetary aid flows on formal and informal entrepreneurship. Drawing from the international political economy literature we argue that bilateral aid and private aid are associated with higher levels of informal entrepreneurship, while multilateral aid is accompanied by lower levels. Moreover, we show that bilateral and private aid are linked with lower levels of formal entrepreneurship, while multilateral aid has no impact. The analyses of a panel of 313 observations from 49 countries provide robust support for these arguments.     

Divided we stand: How contestation can facilitate institutionalization

Existing literature on institutionalization highlights that regulatory institutions emerge from resolving disputes, paying little attention to the key behavioral aspect of disputes: contestation. In this paper, I aim to advance the literature by developing a model of contestation-based institutionalization; contestation facilitates the adoption of new regulatory institutions, laws. Drawing on socio-legal and network perspectives on the way people argue in a dispute, I focus on a behavioral code of contestation – the shared understanding and expectation about how to argue rather than what to argue. Contestation makes it easier for lawmakers to adopt a new regulatory institution when the lawmakers argue in conformity with the code. Network and event history analyses of animal lawsuits and laws in the United States from 1865 to 2010 confirm this model. This paper highlights the value of looking into the behavioral dimension of disputes and advances our understanding of institutionalization without emphasizing dispute resolution.     

Sustainability‐oriented capabilities for eco‐innovation: Meeting the regulatory,technology, and market demands

Despite consensus in the literature that regulation, technology push, and market pull drive eco‐innovation (EI), evidence remains limited on the diverse firm capabilities needed to boost EI. Building on the natural‐resource‐based view of the firm and the EI literature, this paper posits that firms need to renew and realign their capabilities, and ultimately develop distinctive sustainability‐oriented capabilities, in order to meet the rapidly changing regulatory, technology, and market demands. Results of the analysis, based on a survey of U.K. firms, reveal that EIs are more likely to arise when firms (a) build capabilities on voluntary self‐regulation (i.e., executive driven environmental management system and corporate social responsibility) because such organizational capabilities allow them to address increasing regulatory pressures; (b) invest in environmental research and development (i.e., eco‐R&D)—instead of generic research and development—because it provides them with the relevant and specific technological capabilities to tackle technology shifts towards sustainability; and (c) develop capabilities in green market sensing as such capabilities allow them to address green consumption needs.     

EUROPEAN ACCOUNTING REVIEW

This study contributes to the accounting literature by providing empirical evidence from China that adopting IFRS does not necessarily lead to IFRS-type accounting practices. We examine the impact of regulatory enforcement, in particular, an important Chinese government compulsory compliance policy implemented in 2001, and audit upon the convergence of Chinese accounting practices. Using a sample of 103 Chinese B-share companies between 1999 and 2004, we reveal that the decline in earnings difference between firms' financial statements under Chinese GAAP and IFRS is the result of the implementation of the 2001 policy and the audit committee which effectively control the firm's application of standards rather than the differences between the standards. The effect of audit committee leads us further to argue that the convergence of accounting practices may be affected by not only the lack of insufficient understanding of IFRS by local accounting professionals, but also the management opportunistic behaviour during the application of different standards. It implies that corporate governance may affect the convergence of accounting practice. However, we do not find evidence for international audit firms outperforming their Chinese local CPAs with regard to IFRS compliance. Therefore, the Chinese government should be cautious in promoting the participation of international audit firms in China for achieving IFRS compliance.     

Assessing the effectiveness of the Malcolm Baldrige National Quality Award model with municipal government

This study examines the applicability of the MBNQA 2002 criteria to the government sector and contributes to the growing body of literature that addresses the need for performance metrics for government organizations. As the MBNQA is being proposed and pilot tested in government organizations, this work provides support for the transference and application of the model to government services in a municipal government.This study demonstrates the first structural model test using Partial Least Square (PLS) of an instrument that was based on a one-to-one item to criteria correspondence. We collected data from a city government and used PLS to analyze the survey data and tested the MBNQA model fit. The findings of this study show that the proposed Malcolm Baldrige National Quality Award (MBNQA) criteria-based instrument provides a viable set of measures for a municipal government to review and measure their business (organization) processes. These measures can enhance decision making about resource allocations because such measures allow evaluation of processes and a better understanding of the integration among these processes.     

Political ideology,social capital,and government innovativeness: evidence from the US states

We use the number of finalists and winners recognized by the Innovations in American Government Awards (IAGA) programme to measure state government innovativeness from 1986 to 2013. The measure is moderately related to two existing state policy innovativeness indexes. The fifty states vary remarkably and persistently in government innovativeness, which is more driven by internal antecedents than external ones. We find that between-state effects outperform within-state effects in explaining government innovativeness. We also reveal that government ideology, citizen ideology, and social capital are positively related to government innovativeness. The index developed in this study can be used in pertinent studies, and the findings contribute to the literature on public sector innovation.     

Are regulations the answer for emerging stock markets? Evidence from the Czech Republic and Poland

Does the emergence of a stock market require a well-developed legal and/or regulatory system? Although historical work by Neal and Davis [Neal, L., & Davis, L. (2005). The evolution of the rules and regulations of the first emerging markets: The London, New York, and Paris stock exchanges, 1792–1914. Quarterly Review of Economics and Finance, 45, 296–311] and Stringham [Stringham, E. (2003). The extralegal development of securities trading in seventeenth century Amsterdam. Quarterly Review of Economics and Finance, 43, 321–344] suggests that securities markets have successfully developed with little government oversight, numerous authors [including Black, B. (2001). The legal and institutional preconditions for strong securities markets. University of California Law Angeles Law Review, 48, 781–855; Coffee, J. (1999). Privatization and corporate governance: The lessons from securities market failure. Journal of Corporation Law, 25, 1–39; Frye, T. (2000). Brokers and bureaucrats: Building market institutions in Russia. Ann Arbor: University of Michigan Press; Glaeser, E., Johnson, S., & Shleifer, A. (2001). Coase versus the Coasians. Quarterly Journal of Economics, 116, 853–899; Mlčoch, L. (2000). Restructuring of property rights: An institutional view. In L. Mlčoch et al. (Eds.), Economic and Social Changes in Czech Society After 1989. Prague: The Karolinum Press; Pistor, K. (2001). Law as a determinant for equity market development – the experience of transition economies. In Peter Murrell (Ed.), The Value of Law in Transition Economies (pp. 249–287). Ann Arbor: Michigan University Press; Stiglitz, J. (1999). Whither reform. Ten years of the transition. Keynote Address, Annual Bank Conference on Development Economics, Washington, DC, April 28–30, 1999; Zhang, X. (2006). Financial market governance in developing countries: Getting the political underpinnings right. Journal of Developing Societies, 2, 169–196] argue that the Czech Republic and other Eastern European governments need more regulation for their newly created stock markets. They maintain that the Warsaw Stock Exchange, which is seen as more regulated, has outperformed the Prague Stock Exchange which is seen as largely unregulated. Thus increased regulations are a key to increased performance. This article, however, maintains that the evidence from the Czech experience has been misinterpreted. This article provides an in depth case study of the Czech stock market and finds that (a) Czech capital markets have been hindered by government intervention from their beginning, (b) that the evidence on Poland's superior performance is not as strong as suggested, and (c) that Czech regulators seem to be unqualified, lack the proper incentives, and are unlikely to benefit the market. Under these circumstances it appears that Neal and Davis (2005:311) are correct that increased government involvement is unlikely to improve the situation.     

中国政府绩效审计理论研究的发展与展望——基于2000年—2009年国内九大期刊的初步证据

从归类梳理2000年—2009年国内九大期刊上发表的有关政府绩效审计理论研究论文中可以看出我国政府绩效审计研究已显示出政策导向性和实践导向性。按照绩效审计理论研究文献的内容,从目标、职能角色和作用、整体框架、审计实践、比较研究这五个方面对现有的绩效审计理论研究成果进行了归纳,并对深化我国绩效审计理论研究提出了具体看法。     

Trends in local government in Europe

Abstract

The article explores which reform trends are expected to play a significant role in the further development of local government in European countries. Analysis is based on an adopted Delphi survey of (mainly academic) local government experts from thirty-two countries. Results include a list of trends structured by the perceived importance for the coming ten years. Redistributing responsibilities and duties across levels of government constitute the highest ratings out of all trends. Furthermore, results do not provide clear evidence to support a shift from public management to governance as has recently been proclaimed in academic debate and literature. Management topics continue to be of great importance. Last but not least, clusters extracted point to different reform groups, which highlight more reluctant or enthusiastic attitudes to the relevance of the suggested trends of the study.     

When (not) to indulge in ‘puffery’: the role of consumer expectations and brand goodwill in determining advertised and actual product quality

We analyze why some firms advertise product quality at a level different from the actual quality of a product. By considering the interacting effects of product quality and advertising, we develop a dynamic model of consumer expectations about product quality and the development of brand goodwill to determine the optimal values for the decision variables. The model parameters are determined based on prior literature and we use numerical techniques to arrive at the solution. We then derive conditions under which a firm will find it optimal to overstate or understate product quality. The results suggest that quality may be overstated in markets characterized by high price sensitivity, low quality sensitivity, low brand loyalty, and high source credibility, suggesting the need for vigilance on the part of consumers, upper level managers and regulatory authorities in such market conditions. This is important because current regulatory resources are insufficient to reduce deceptive advertising practices (Davis JJ. 1994. Ethics in advertising decision‐making: implications for reducing the incidence of deceptive advertising. Journal of Consumer Affairs 28 : 380–402). Further, the law of deceptive advertising prohibits some advertising claims on the ground that they are likely to harm consumers or competitors (Preston IL, Richards JI. 1993. A role for consumer belief in FTC and Lanham Act deceptive advertising cases. American Business Law Journal 31 : 1–29). Also, Nagler (1993. Rather bait than switch: deceptive advertising with bounded consumer rationality. Journal of Public Economics 51 : 359–378) shows that deceptive advertising causes a net social welfare loss and a public policy effectively preventing deception will improve social welfare. Copyright © 2000 John Wiley & Sons, Ltd.     

Accountant's Truth: Knowledge and Ethics in the Financial World

Performance auditing, or value for money (VFM) auditing, has been a long-standing component of accountability in public administration. During the 1980s and 1990s performance auditing has allegedly been increasingly adopted in the new public management. While there has been much research on public management and performance auditing in central government, local government has been relatively neglected in the literature. Municipalities and counties in local government have an important role in public sector service production in most European countries, and especially in the Nordic countries. It is therefore surprising that performance auditing in this context has received so little scholarly attention. This study is aimed at filling some of this gap. The purpose of this comparative study is, therefore, to explore how performance auditing practices, including performance measurement, are used to assess and verify value for money in local government and to enhance the accountability of municipalities and counties. This study analyses how informants from both auditors and auditees in Finland and Norway perceived the efficiency of conducting performance audits in local government. Despite some problems related to the quality of the performance audit reports, the informants perceived performance audit to function as a useful, rational public management tool.     

PRODUCTIVE GOVERNMENT EXPENDITURE AND ECONOMIC GROWTH

Abstract.  We provide a comprehensive survey of the recent literature on the link between productive government expenditure and economic growth. We show that an understanding of the core results and the ensuing contributions can be gained from the study of their respective Euler equations. We argue that the existing literature incorporates many relevant aspects; however, policy recommendations tend to hinge on several knife-edge assumptions. Therefore, future research ought to focus more on idea-based endogenous growth models to check the robustness of policy recommendations. Moreover, the inclusion of hitherto unexplored types of government expenditure, e.g. on the 'rule of law', would be desirable.     

关于我国政府经济行为规制具体措施的看法

政府经济行为规制是我国经济建设中所应重点注意的方面,需要我们认真地研究。经济法对政府经济调节权力的规制集中在对政府经济行为的规范上,文中从政府经济调节权力的规制、政府经济行为的法律责任规制、政府经济行为的程序规制、政府经济行为的信息公开化规制等层面探讨我国政府经济行为的规制,为我国政府经济行为的规制提出建议。     

Choosing strategic responses to address emerging environmental regulations: size,perceived influence and uncertainty

How companies respond to impending regulations is a significant aspect of corporate strategy. Regulations, especially environmental regulations, are expanding quickly and increasingly important to firm success. The threat of impending environmental regulation forces companies to choose levels of strategic responses on a continuum from passive to active. Using practitioner oriented research and existing theoretical models of corporate response, this study finds that the type of strategic response is negatively related to size, positively related to state uncertainty and negatively related to effect/response uncertainty. Based on existing literature and the results of this study, the paper suggests that simplifying the uncertainty construct could lead to more definitive findings in future research. The study results also suggest that a curvilinear relationship may exist between managerial perception of influence and level of strategic response. Most importantly, the findings could have a significant impact on firm decision making regarding environmental investments. For example, it is hoped that firms will be able to use the findings of this study to further understand and anticipate their competitors' decisions. Practitioners may also benefit from the conclusions on uncertainty in that they may be able to more cleanly parse the types of uncertainty immersed in impending environmental regulations. Finally, firms may be better able to understand decisions by their own managers and their competitors' managers in terms of their perceived influence over the regulatory process. Copyright © 2007 John Wiley & Sons, Ltd and ERP Environment.     

Immigration policy and market institutions in liberal market economies

This article examines how the regulatory character of market institutions shapes government responses to labour shortages, with particular reference to immigration policy. The period between the late 1990s and the late 2000s saw many advanced economies relax entry controls on select categories of foreign workers. This trend was most pronounced among states with liberal market institutions. The underlying reasons for these trends are analysed through an examination of the motivations for reform in Australia and the UK, two states that oversaw significant liberalisations of their labour immigration policies. It argues that the liberal character of key market institutions encouraged firms in these states to look to external rather than internal solutions for meeting their labour requirements. These findings suggest that perspectives from the comparative political economy scholarship, most notably the varieties of capitalism literature, may provide insights into the way that different modes of market regulation shape immigration policy preferences.