Consolidation in the public sector: a cross-country comparison

This article analyses consolidated annual accounts in the public sector in six countries (Sweden, the UK, the USA, Canada, New Zealand and Australia) highlighting the differences and similarities in approaches. The authors also examine international trends and take an in-depth look at the International Public Sector Accounting Standards Board (IPSASB).     

Stairway to heaven or highway to hell: Liquidity,sweat equity,and the uncertain path to ownership

We study a setting in which a principal contracts with an agent to operate a firm over an infinite time horizon when the agent is liquidity constrained and privately observes the sequence of cost realizations. We formulate the principal’s problem as a dynamic program in which the state variable is the agent’s continuation utility, which is naturally interpreted as his equity in the firm. The optimal incentive scheme resembles what is commonly regarded as a sweat equity contract, with all rents back loaded. Payments begin when the agent effectively becomes the owner, and from this point on, all production is efficient. These features are shown to be similar to features common in real‐world work‐to‐own franchising agreements and venture capital contracts.     

The relationships between CEO characteristics and strategic risk-taking in family firms

Abstract

We examine the influences of chief executive officer (CEO) personal characteristics on family firms’ strategic risk-taking. Building on upper echelons theory, we investigate the influences of CEO family relationships, the CEO professional education, other career experiences, tenure, and career horizon have on the risk level a company takes. By analyzing a sample of 107 Italian family firms listed on the Milan Stock Exchange, we find that company’s risk-taking significantly and negatively relates to CEO family relationship and professional education, but positively to CEO career horizon. This provides support to the argument that such CEO personal characteristics are key factors in explaining differences in risk-taking among family firms. Further, our analysis of control variables shows that family firms’ risk-taking relates positively to board size and negatively to company size. These results suggest that company and board characteristics also significantly influence the risk levels taken by a company.     

The new public corruption: Old questions for new challenges

This paper focuses on corruption in public procurement. It describes the contemporary face of corruption by investigating the role of public accountability in the fight against corruption. The paper describes a specific episode of corruption relative to the awarding of government contracts for big events, such as the celebration of the 150th anniversary of Italian unification. Relying on the philosophical insights of Rousseau, Popper, Kant and others, the study suggests the need for enabling a democratic control and constructing a public ethics for the common good.     

Currency substitution and the stability of the Italian demand for money before the entry into the monetary union, 1972–1998

A money demand function for M2 is estimated for Italy for the period 1972–1998 within an error correction framework. This period has been characterized by major structural changes in the Italian financial system and by major changes in monetary policy. This study takes these changes into account. Moreover, currency substitution, especially between Italy and Germany is incorporated into the model. By accounting for structural breaks and currency substitution a stable money demand function can be found.Financial support from the Deutsche Forschungsgemeinschaft, SFB 373, is gratefully acknowledged. We thank Uwe Hassler, Goethe Universität, Frankfurt, and Carsten Trenkler, SFB 373, Humboldt-Universität zu Berlin, for helpful comments. An earlier version has been presented at the ESEM 2001, Lausanne.     

Developing a Territory Balanced Scorecard approach to manage projects for local development: Two case studies

This paper applies Kaplan and Norton's Balanced Scorecard theory to propose a tool to compare twin local development projects implemented under international cooperation schemes. This tool, called the Territory Balanced Scorecard (TBSc), allows the competitive potential of the territorial system to be measured by means of a rating. Consequently, using the TBSc, it is possible to interpret the characteristics of the supply territory and, by an ad-hoc approach, plan the required increase in headquarters functions and the competences linked thereto. This paper follows a rationale grounded on the territorial setting and offers a methodological decision support tool that enhances the ability of decision makers acting at Local Authority level. A feature of the TBSc model is the fact that, although it is designed for the public sector (mission-oriented), it does enable us to obtain profit-driven indicators that are designed to highlight the economic and territorial strategic ancillary benefits in terms of competitiveness. The TBSc can be considered a valuable strategic tool in management and local development systems and the result also implicitly contains the plan for creating a potential network (in this case among islands in the Mediterranean) in order to delineate a set of principles and analytical and programming devices that would assist in reshaping local economic systems.     

Endogenous Money: An Analytical Approach

The paper proposes a constructive interpretation of the Post Keynesian debate between horizontalists and structuralists. Both approaches defend an endogenous money theory, but they discriminate between different analyses of the credit market and the reserve market. A more general model encompassing both approaches is presented here and some of its implications are discussed.     

Delegating management to experts

Owners of property and assets frequently delegate decisions about operating and maintaining their property to managers who are better informed about local market conditions. We analyze how owners optimally contract with managers who vary in their expertise at prescribing service. We show that the most expert managers offer the greatest variation in operating recommendations. Owners benefit from dealing with experts provided they contract sequentially, whereby terms are negotiated gradually as the manager acquires information.     

City versus Metropolis: The Northern League in the Milan Metropolitan Area

Entire metropolitan areas are often seen as fundamental components of the emerging global space–economy. The national and global roles of central cities, however, may lead them in fundamentally different economic and political directions from their hinterlands if the functions of the cities are decreasingly complementary to those of their surrounding areas. In particular, the political complexions of city and hinterland may come to reflect different cultural and economic orientations as a result of divergence in political–economic trajectories between the two. This possibility is explored using the example of the northern Italian city of Milan and its hinterland, taken as the provinces of Bergamo, Como, Lecco and Varese, and the rest of the province of Milan outside of the city with respect to geographical patterns of support for the regionalist/separatist movement, the Northern League, over the course of three national elections: 1992, 1994 and 1996. Putatively a movement representing the interests of northern Italy as a whole, the Northern League’s stands on issues tended increasingly to represent the identities and interests of the small manufacturing firms that dominate part of the fringe of the metropolitan area, whereas Milan itself has an economic base of advanced services and national–oriented manufacturing firms that would lead to the expectation of a very different political orientation. Analysis of election returns suggests a divergence between city and hinterland that is in large part accounted for by their distinctive economic trajectories. There is no simple identity between a city and its metropolis. On considère souvent des zones métropolitaines entières comme des composantes fondamentales de l’espace économique mondial naissant. Les rôles nationaux et planétaires des grandes villes centrales peuvent toutefois les pousser dans des directions économiques et politiques totalement différentes de leur arrière–pays si leur fonction perd de sa complémentarité par rapport à leur zone environnante. Les aspects politiques de la ville et de l’arrière–pays peuvent notamment finir par traduire des orientations économiques et culturelles distinctes è la suite d’une divergence dans leurs trajectoires politico–économiques respectives. Cette possibilité est étudiée au travers de l’exemple de Milan, ville du nord de l’Italie, et de son arrière–pays (couvrant les provinces de Bergame, Côme, Lecco, Varèse et le reste de la province de Milan extérieur à la ville) en s’attachant à la carte géographique des partisans du mouvement régionaliste et séparatiste de la Ligue du Nord au cours de trois élections nationales (1992, 1994 et 1996). Ce mouvement, supposé traduire les intérÁts de toute l’Italie du Nord, a penché de plus en plus souvent pour des positions représentant les identités et intérÁts des petites industries qui dominent partiellement la périphérie de la zone métropolitaine, alors que la base économique de Milan se compose de services de pointe et d’entreprises industrielles d’envergure nationale laissant supposer une orientation politique toute différente. Une analyse des résultats des élections révèle une divergence entre ville et arrière–pays, en grande partie justifiée par leurs axes économiques distincts. Il n’existe pas d’identité simple entre une ville et sa métropole.