Bribery and inspection technology

The e-government movement advocates increased use of technology to improve government efficiency and reduce corruption by reducing the discretionary power of government officials. This paper studies the relationship between improvements in inspection technology within a Principal-Supervisor-Agent model, where the supervisor is an inspector who is hired by the principal to investigate the agent’s potentially illegal actions. We show that when technology increases the marginal or total productivity of the supervisor’s effort, improvements in inspection technology encourage some types of bribery. Although such technological improvements induce an equilibrium with bribery, compliance and social welfare can still rise. However, when technology and supervisory effort are sufficiently substitutable, improvements in technology may reduce compliance when bribery occurs in equilibrium even when those same technological improvements would have raised compliance in the absence of bribery. We also characterize the relationship between the principal’s socially optimal technology and the anti-corruption policy available to the principal and find that the socially optimal inspection technology may be a substitute for or a complement to the anti-corruption policy. Finally, we show that for any set of policies that optimally induces a no-bribe equilibrium, there exists another set of policies that induces an equilibrium with bribery that is pareto superior to it.     

Spilling the social capital beans: a comparative case study of coffee service enterprises within Asia-Pacific

Abstract

Despite the importance of social capital to organizational performance, there is scant insight within service contexts. Accordingly, this research explores social capital in two Asia-Pacific service enterprise cases – a Thai coffee franchise and a Coffee Roasters Guild in Australia. In the Thai case, social capital in the service experience emerged from norms common in Thai society and manifested via social enterprise initiatives. Findings from Australia indicate social capital helps form a strong organizational identity leading to better economic and social outcomes and an enhanced service experience, benefiting numerous stakeholders. The study demonstrates varying patterns of social capital in Asia-Pacific service enterprises, contributing to theory and practice.     

Power, growth, and the voracity effect

Why is it that resource-rich countries tend to have lower growth rates than resource-poor countries? And why is it that many countries that enjoy terms-of-trade windfalls end up with lower growth rates? To explain these puzzles, we extend the neoclassical growth model by replacing the representative agent with multiple powerful groups and by introducing a new concept, the voracity effect—a more than proportional increase in redistribution in response to an increase in the raw rate of return. We show that, in an economy with powerful groups and weak institutions, the voracity effect operates if the elasticity of intertemporal substitution is high enough. That is, there exists a negative relationship between the growth rate and the raw rate of return, which is positively related to the terms of trade. We provide some empirical evidence in support of the mechanism we propose.     

Do ratings of firms converge? Implications for managers,investors and strategy researchers

Research summary : Raters of firms play an important role in assessing domains ranging from sustainability to corporate governance to best places to work. Managers, investors, and scholars increasingly rely on these ratings to make strategic decisions, invest trillions of dollars in capital, and study corporate social responsibility (CSR), guided by the implicit assumption that the ratings are valid. We document the surprising lack of agreement across social ratings from six well‐established raters. These differences remain even when we adjust for explicit differences in the definition of CSR held by different raters, implying the ratings have low validity. Our results suggest that users of social ratings should exercise caution in interpreting their connection to actual CSR and that raters should conduct regular evaluations of their ratings. Managerial summary : Ratings of corporate social responsibility (CSR) guide trillions of dollars of investment, but managers, investors, and researchers know little about whether these ratings accurately measure CSR. In practice, there are examples of highly rated firms becoming embroiled in scandals and the same firm receiving sharply different ratings from different rating agencies. We evaluate six of the leading raters and find little overlap in their assessments of CSR. This lack of consensus suggests that social responsibility is challenging to measure reliably and that users of these ratings should be cautious in drawing conclusions about firms based on this data. We encourage the rating agencies to regularly validate their data in an effort to improve the measurement of CSR. Copyright © 2015 John Wiley & Sons, Ltd.     

Railroads and Time Consciousness in the Antebellum South

Historians have often looked to industrial capitalism to furtherour understanding of "time consciousness." This article explorestime consciousness through the experience of a railroad in pre-CivilWar South Carolina. Examining the South Carolina Railroad allowsus to examine how time consciousness operated in a region notassociated with industrial capitalism, and also see how multipletimes could function simultaneously. While clocks were importantto railroad operations, companies also had to address an arrayof non-clock times. Moreover, companies were never fully incontrol of their own time, but were in constant conflict andnegotiation with various groups in the community. While industrializationand factory labor remain important ways to understand time consciousness,looking beyond the factory walls can help historians make betteruse of the analytical power of time.     

Demand for Money in Transition: Evidence from China’s Disinflation

We examine money demand in the Chinese economy during a period characterized by significant disinflation and outright deflation, coupled with strong output growth. Our study establishes a stable money demand system for broad money M2. Inflation affects the adjustment of the system towards equilibrium, and shocks to broad money are found to lead to higher inflation in the context of an impulse response analysis. No evidence of non-linearity in money demand is found for the disinflationary period. The results provide support for the People’s Bank of China’s policy of specifying intermediate targets for money growth. Importantly, our results suggest that movements in the nominal effective exchange rate should be taken into account in a successful implementation of such a policy.

A CULTURAL THEORY OF INFORMATION BIAS IN ORGANIZATIONS

Organizations show an essential cultural pluralism. Taking this into account, we aim at developing a cultural theory of organizations. A central role in this theory is played by information rejection, which can follow any of four different styles: risk absorption, networking, paradigm protection, or expulsion. These can be related to different types of organizational cultures, in particular to markets, hierarchies, and sects. Different kinds of information bias institutionalize different kinds of leadership.