Multiple Criteria Decision Making: A Case Study of the Columbia River Salmon Recovery Plan

A common problem faced by decision makers is choosing the best alternative from among many. Traditionally, such decisions in the public arena were made using benefit-cost analysis, which involves the conversion of all costs and benefits associated with a project into monetary terms. But public projects often have a variety of economic, ecological, social and political objectives, many of which cannot or perhaps should not be converted to monetary terms. In such projects decisions must be made based on multiple, even conflicting objectives. Multiple criteria decision making (MCDM) methods are widely used for such decisions. However, a common disadvantage among many such methods available in the literature is that they require input from a real decision maker. This paper presents the development and application of an expert system based on fuzzy set theory and IF-THEN rules. The system mimics a real decision maker. Along with two conventional MCDM methods the developed expert system was applied on a data set from the Columbia River Basin salmon recovery plan to assess its potential usefulness as a decision-making tool for natural resource projects. The results suggest that the fuzzy expert system is easy to develop and makes better decisions than the other two conventional MCDM methods used.     

Openness can be good for growth: The role of policy complementarities

This paper studies how the effect of trade openness on economic growth may depend on complementary reforms that help a country take advantage of international competition. This issue is illustrated with a simple Harris–Todaro model where welfare gains after trade openness depend on the degree of labor market flexibility. The paper then presents cross-country, panel-data evidence on how the growth effect of openness may depend on a variety of structural characteristics. For this purpose, the empirical section uses a non-linear growth regression specification that interacts a proxy of trade openness with proxies of educational investment, financial depth, inflation stabilization, public infrastructure, governance, labor market flexibility, ease of firm entry, and ease of firm exit. The paper concludes that the growth effects of openness may be significantly improved if certain complementary reforms are undertaken.     

Equilibria in the spatial stochastic model of voting with party activists

Stochastic models of elections typically indicate that all parties, in equilibrium, will adopt positions at the electoral center. Empirical analyses discussed in this paper suggest that convergence of this kind is rarely observed. Here we examine a stochastic electoral model where parties differ in their valences – the electorally perceived, non-policy “quality” of the party leader. It is assumed that valence may either be exogenous, in the sense of being an intrinsic characteristic of the leader, or may be due to the contributions of party activists, who donate time and money and thus enhance electoral support for the party. Theorem 1 shows that vote maximization depends on balancing these two opposed effects. Theorem 2 provides the necessary and sufficient conditions for convergence to the electoral mean when activist valence is zero. The paper then examines empirical electoral models for the Netherlands circa 1980 and Britain in 1979, 1992 and 1997 and shows that party divergence from the electoral mean cannot be accounted for by exogenous valence alone. The balance condition suggests that the success of the Labour party in the election of 1997 can be attributed to a combination of high exogenous valence and pro-Europe activist support.     

The “probability of a fit choice”

This paper attempts to model elections by incorporating voter judgments about candidate and leader competence. The proposed model can be linked to Madison’s understanding of the nature of the choice of Chief Magistrate (Madison, James Madison: writings. The Library of America, New York, 1999 [1787]) and Condorcet’s work on the so-called “Jury Theorem” (Condorcet 1994 [1785]). Electoral models use the notion of a Nash Equilibrium. This notion generally depends on a fixed point argument. For deterministic electoral models, there will typically be no equilibrium. Instead we introduce the idea of a preference field, $H,$ for the society. A condition called half-openess of $H$ is sufficient to guarantee existence of a local direction gradient, $d,$ Even when $d$ is not well-defined we can use the idea of the heart for the society. This is an attractor of the set of social moves that can occur. As an application, a stochastic model of elections is considered, and applied to the 2008 presidential election in the United States. In such a stochastic model the electoral origin will satisfy the first order condition for a local Nash equilibrium. We then show how to compute the Hessian of each candidate’s vote share function, and obtain necessary and sufficient conditions for convergence to the electoral origin, suggesting that there will be a social direction gradient. The origin maximizes aggregrate voter utility and can be interpreted as a fit choice for the polity.     

Accounting and the Truth of Earnings Reports: Philosophical Considerations

This paper investigates the philosophical nature of accounting reports of earnings. Standard setters' authoritative pronouncements (conceptual frameworks, GAAP, EITFs, etc.) hold to the realist philosophical view that true earnings reports are ex post representations of some ex ante out-there, preexisting, extra-linguistic real economic increase in the enterprise's wealth. Contra this view, in practice financial accounting executives, in league with investment analysts, routinely engage in earnings management and manipulation in order to satisfy the capital market's insatiable demands for earnings levels which will support and enhance the enterprise's stock market price. The paper considers this state of affairs from Harold Frankfurt's truth, lies and ‘bullshit’ treatise (2005, 2006). It sees earnings reports as ‘short of lies’, and so the accountants can only be faulted for their indifference to the truth and for giving the impression that they are trying to present the truth. A poststructuralist philosophical perspective, however, problematizes this conclusion on the basis that accounting language is not a transparent medium but rather is the material used to manufacture accounting ‘truths’. It sees accounting ‘truths’ as contingent upon linguistic doctrinal accounting discourses currently ceded place of privilege by standard setters and upon the subjective considerations of accountants when they produce reports of earnings. The paper concludes that both Frankfurt's perspective and that of poststructuralist philosophers can provide valuable insights into this ironic state of affairs.     

Income Redistribution and Direct Taxes and Transfers in New Zealand

This article examines the redistributive effects of direct taxes and transfers in New Zealand. First, it reports summary measures of the income tax-and-transfer system using the NZ Household Economic Survey. Second, the article examines the characteristics of low-income NZ taxpayers. A decomposition by individual and household characteristics shows that different groups of low-income taxpayers can be affected quite differently by various aspects of the tax-and-transfer system. In particular, reforms involving tax-free zones do not appear to be well targeted to help those most in need.     

Determinants of US direct foreign investment in the Caribbean

This study evaluates two groups of variables (economic and structural/locational) associated with US short- and long-run direct foreign investment (DFI) in the Caribbean over the 1983–1994 period. Separate generalized least square models for the Caribbean and Latin America were estimated to determine whether differences existed between the two regions as to the variables associated with the levels of DFI. This helped provide insights as to the strategies that should be maintained or introduced to give the Caribbean a competitive edge in attracting the limited amounts of US DFI likely to be available for investment in the Western hemisphere.     

Productivity Growth in the Western Hemisphere (1978–94): The Caribbean in Perspective

Productivity growth, technical efficiency change, and technological change were measured for a sample of 30 countries in the Western Hemisphere for the 1978–1994 period using the Malmquist index. The Caribbean compared unfavorably with North America and the Latin American regions. Evidence indicated some support for the convergence hypothesis. Regression analysis indicated that productivity growth in the Caribbean was positively associated with civil, economic, and political liberty.