Military conquest and sovereign debt: Chile,Peru and the London bond market, 1876–1890

As a result of the War of the Pacific (1879–1883), Chile conquered Peruvian and Bolivian territories rich in nitrates and guano. We conduct econometric tests for structural breaks in the time series of the government bonds for Chile and Peru between 1876 and 1890 in order to examine the effects of the changes in resource endowments on the investors’ perceptions of the risk premia of Chilean and Peruvian securities. Our results reveal that investors were extremely pessimistic about the prospects of Chilean, and especially Peruvian debt prior to the war. Early Chilean victories that anticipated the transfer of the richly endowed provinces to Chile caused significant increases in the price of Chilean securities. But such was the low regard with which investors viewed the Peruvian government that the fall of Lima caused an increase in the price of Peruvian bonds on the hope that Chile would assume some of the responsibility for them. Endowments, reputations, and the countries’ financial conditions figure prominently as the driving forces behind the investors’ behavior.     

Networks in Socially Embedded Local Food Supply: The Case of Retailer Co-operatives

This paper investigates network development in food retailing, in order to evaluate the role of retailer consumer co-operatives. Opportunity is seen to lie in niche (for example, local) markets and a social/ethical orientation. The method is single case and exploratory. Investigation shows that a co-operative can survive and add value as an alternative organizational form, when genuine social responsibility is experienced by a network consisting of the co-operative, its members, customers, suppliers and the community as a whole.     

The Impact of Pharmacy-Specific Any-Willing-Provider Legislation on Prescription Drug Expenditures

Many states have implemented some form of Any-Willing-Provider (AWP) legislation, which requires a managed care organization (MCO) to accept any provider, who agrees to the managed care organization’s reimbursement rates, terms, and conditions, into its network. AWP laws may result in larger networks, more patient choice, and greater competition among providers. Opponents cite AWP legislation as prohibiting managed care organizations from selective contracting and obtaining discounts by offering providers a larger volume of patients. Such legislation is therefore argued to prevent MCOs from effectively reducing health care costs. A small literature exists on the effect of these laws on hospital expenditures, physician expenditures, and total health care expenditures. Most studies, however, fail to recognize that the vast majority of the existing laws target pharmacies exclusively, as opposed to more comprehensive laws that also apply to physicians and hospitals. If AWP legislation prevents cost reduction available through selective contracting, then states with such legislation may incur higher health care expenditures. I find that pharmacy-specific AWP legislation is associated with increased pharmaceutical expenditures. This result is robust to several alternative specifications.     

Match Point Management — Gleichzeitig Kosten- und Marktperformance verbessern

Der Matchpoint entscheidet über Sieg oder Niederlage. Match Point Management zeigt, wie man Krisen meistert, indem man gleichzeitig Gewinn und Kosten verbessert — ohne in die Falle eines zyklischen Auf und Ab zu tappen.     

The Perverse Effect of Debt Tax Benefits on Firm Investment Decisions

In this paper we question the idea that the deduction of debt interest is always an effective policy instrument to spur firm investment. We analyse the investment decision in presence of a borrowing constraint on the amount of debt that the firm can raise. We show that if the debt interest rate is decreasing in the firm's capital accumulation and another financial resource more expensive than debt is available (at least for levels of debt lower than the upper bound), then the deduction of the debt interest from taxes on capital income may reduce firm investment. This theoretical result is relevant for economic policy decisions when financial intermediaries are not willing to finance beyond a certain threshold but firms have access to other sources of finance.     

Hidden patterns in exchange rate regime choice

There have been a number of empirical attempts to account for variation in exchange rate regime choice, but these attempts point in several directions and are not made sense of easily. One reason for the differences among studies is that standard statistical techniques are unable to identify the nonlinear and contingent relationships among the factors that influence the choice of exchange rate regime. This article utilizes a statistical technique that reveals complex nonlinear interactions among variables. The analysis reveals that the influence of past inflation acts to condition the influence of labor market rigidity and that political stability plays a key role for both high and low inflation countries.     

Matrix Representation of Conflict Resolution in Multiple-Decision-Maker Graph Models with Preference Uncertainty

Explicit matrix representations of solution concepts in a graph model of a multiple-decision-maker conflict with preference uncertainty are developed. In a graph model, the relative preferences of each DM over the available states are crucial in determining which states are stable according to any stability definition (solution concept). Unfortunately, it is often difficult to obtain accurate preference information in practical cases, so models that allow preference uncertainty can be very useful. In this work, stability definitions are extended to apply to graph models with this feature. The extension is easiest to implement using the matrix representation of a conflict model, which was developed to ease the coding of logically-defined stability definitions. Another benefit of matrix representation is that it facilitates modification and extension of the definitions.     

The Principled Legal Firm: Insights into the Professional Ideals and Ethical Values of Partners and Lawyers

Understanding how the professional ideals and values of partners influence lawyers’ everyday life is a relatively unexplored area given the inherent difficulties of gaining access to lawyers. This case study sheds light on the professional ideals and ethical values of partners and lawyers in a mid-tier Sydney law firm. Semi-structured interviews with partners and lawyers/legal clerks reveal how partners’ professional ideals and ethical values play a pivotal role in: (1) upholding positive normative evaluations of lawyer/firm propriety (moral legitimacy), (2) stressing the importance of a balanced working life (cognitive legitimacy) and (3) satisfying younger lawyers’ needs for personal support, autonomy and responsibility (pragmatic legitimacy). The principled actions of partners are portrayed as the cornerstone of shaping a moral community in legal practise.