On the challenge to competitive authoritarianism and political patronage in Malaysia

In March 2008, Malaysia's political landscape was shaken by election results showing that the Barisan Nasional had won less than two thirds of the parliamentary seats and lost five states to the opposition. A two‐thirds supermajority had been seen as a sacred threshold for the coalition to ensure its continued legitimacy. It is conjectured here that the 2008 election represented a challenge to the competitive authoritarian regime and that this had direct effects on firms with ties to the ruling coalition. The empirical results show that firms with political patronage were indeed adversely affected by the electoral outcome. More specifically, firms with close ties to the Barisan Nasional experienced a significant negative value effect. Firms characterised by political patronage also saw their leverage reduced significantly more than other firms after the 2008 election, suggesting that their access to debt capital had become more restricted. Moreover, this effect was mainly driven by changes in long‐term debt. These results suggest a significant negative impact on connected firms as the political status quo was challenged in Malaysia.     

Foreign direct investment and inequality: Evidence from China's policy change

In this paper, we examine the impact of foreign direct investment (FDI) on local urban inequality in China. Specifically, we consider the FDI policy change as an exogenous shock on the local labour markets. We find that cities that have experienced a bigger policy change in promoting FDI between 1997 and 2002 are significantly more unequal in 2005. This pattern is mainly driven by the positive association between FDI liberalisation and skill premia. The result holds after we control for other policy changes, such as privatisation of state-owned enterprises, infrastructure and trade liberalisation. We then turn to investigate the mechanisms using firm and individual-level information. Our firm-level evidence shows that FDI firms not only hire relatively more high-skilled workers but also provide relatively higher wages to high-skilled workers compared to domestic firms. Moreover, the individual-level analysis shows that FDI has a significantly positive spillover effect on wages received by skilled workers employed by state-owned enterprises, but not wages of unskilled workers.     

The Headmaster Ritual: The Importance of Management for School Outcomes

We estimate the impact of individual principals on school outcomes by using panel data that allow us to track principals over time. We find that individual principals have a substantive impact on school policies, working conditions, and student outcomes. In particular, students who attend a school that has a one standard deviation better principal improve their achievement by between 0.05 and 0.1 standard deviations. Despite rich background information on principals, it is difficult to characterize successful management, suggesting that innate skills are central. We find that the scope for discretion is larger among voucher schools and in areas with school competition.     

Free Trade versus Autarky under Asymmetric Cournot Oligopoly

The paper compares free trade with autarky in an asymmetric multi‐country world under Cournot competition with constant returns to scale and linear demand. We derive respective conditions under which free trade will hurt a country's consumers, benefit its firms, induce it to export, increase its output and raise its welfare. We show that these conditions are linked in a clear order, with one implying the next. We further demonstrate that free trade can reduce world total output and total consumer surplus as well as world welfare. Along the way, we correct several oversights in the literature.     

Marginalized Predictive Likelihood Comparisons of Linear Gaussian State‐Space Models with Applications to DSGE,DSGE‐VAR,and VAR Models

The predictive likelihood is useful for ranking models in forecast comparison exercises using Bayesian inference. We discuss how it can be estimated, by means of marzginalization, for any subset of the observables in linear Gaussian state‐space models. We compare macroeconomic density forecasts for the euro area of a DSGE model to those of a DSGE‐VAR, a BVAR and a multivariate random walk over 1999:Q1–2011:Q4. While the BVAR generally provides superior forecasts, its performance deteriorates substantially with the onset of the Great Recession. This is particularly notable for longer‐horizon real GDP forecasts, where the DSGE and DSGE‐VAR models perform better. Copyright © 2016 John Wiley & Sons, Ltd.     

Conflict Evolution: Tracking the Middle East Conflict with Drama Theory

The situation in the Middle East has developed through an episodic process in which the protagonists have periodically changed the ‘game’ that they are playing by inventing new options, seeking to eliminate the options available to others, or by raising or eliminating doubts in the minds of others about their intentions. Such conflict evolution is readily captured by the framework of drama theory which goes some way to explaining the pressures motivating such actions. This paper traces the recent development of relations between the Israelis and the Palestinians through a succession of drama theoretic models. The importance of taking note of interactions at several levels is highlighted: stalemate at one level may be dislodged by actions taken in others. It is concluded that any resolution of the confrontations in the Middle East is likely to require the active involvement of the international community but may be destabilised by pressure from internal factions within the key parties.     

Party Discipline and Environmental Policy: The Role of “Smoke‐filled Back Rooms”*

We adopt the view that greater party discipline induces legislators to commit to promised policies after being elected. We then develop the hypothesis that the effect of party discipline on the stringency of environmental policy is conditional on the degree of government corruption. Our empirical work suggests that greater party discipline results in more stringent environmental policies when the level of corruption is relatively low, but in weaker policies when the level of corruption is comparatively high.     

Consumer coping strategies: a study of consumers committed to eating local

This paper deals with consumer coping strategies when consumers experience difficulties in implementing an innovation. The particular setting for exploring this issue is a group of consumers in Michigan who are committed to eating local. The paper explores how these consumers cope or balance their commitment to eating local with the constraints they face on buying and preparing local food Following a literature review of coping strategy and consumer coping strategies in relation to innovations, the paper presents the results of three focus groups conducted with members of a Student Organic Farm, a food cooperative and a Slow Food Convivium. The consumers we interviewed mostly adopt problem‐centred, confrontative strategies: they change their food‐consumption habits including shopping, purchasing, cooking, storing and obviously, eating. None of these changes are easy to implement, and most require re‐allocations of time as well as trade‐offs to overcome time and cost barriers. In return, some of these consumers feel empowered. This study allows us to offer a working hypothesis that the process is dynamic: the more committed consumers are, the more they adopt problem‐centred, confrontative strategies and forget more fatalist emotion‐centred or avoidance strategies. These findings contribute to literature on consumers' coping strategies and suggest future research avenues.