The islamic economic system

The Islamic economic system is a theoretical construct of an industrial economy whose members follow the Islamic faith. This essay surveys the elements of such a system, as presented in a series of recent books on Islamic economics. Particular attention is paid to the injunction against interest payments and to the requirement of paying a wealth tax with regard to aggregate saving.     

Management improvement in the federal government: An inside view

Our mammoth federal bureaucracy, set up to handle growing numbers of programs and budgets, offers the greatest management challenge in history. Drawing on his experience in various federal departments, the author describes some of the major problems facing managers in federal government: lack of expertise, divided loyalties, the separation of management from policy development, neglect of less visible tasks, inability to measure results, and cumbersome administrative mechanisms. Using several examples, he shows how a practical approach, utilizing basic management principles, has helped to solve some of these problems. The quality of top managers has been improved, management planning and control improved, and programs simplified and decentralized.     

Collective Household Models: Principles and Main Results

In the traditional approach to consumer behaviour it is assumed that households behave as if they were single decision‐making units. This approach has methodological, empirical and welfare economic deficiencies. A valuable alternative to the traditional model is the collective approach to household behaviour. The collective approach explicitly takes account of the fact that multi‐person households consist of several members which may have different preferences. Among these household members, an intrahousehold bargaining process is assumed to take place. In addition to providing an introduction to the collective approach, this survey intends to show how different collective household models, each with their own aims and assumptions, are connected.     

The battle for the essence of entrepreneurship

Nicolai Foss and Peter Klein have penned a most remarkable book on the theory of the firm. They offer a rich analysis of the economic organization through the lenses of various approaches including Austrian economics and neo-institutional economics. Their work is a welcome addition to the field of entrepreneurship studies, as it focuses on the role of entrepreneurship within established organizations. While I embrace most of the authors’ conclusions, I disagree with a central piece of their analysis: The rejection of the Kirznerian framework. In establishing judgment as the fundamental explanans of the theory of entrepreneurship, Foss and Klein introduce the bias of seeing entrepreneurship as allocating resources in firms. Moreover, introducing the process of judgment does not offer new insights that cannot be obtained through Kirznerian discovery analysis. Fundamentally, the essence of entrepreneurship is at stake. And it is not a debate about semantics. It is my contention that Israel Kirzner offers a more fundamental theory of entrepreneurship — one that can be applied within and beyond the realm of the firm, and that helps us explain social change, market processes, development, and growth.     

Reward-to-Risk Ratios in the Treasury-Bill Market

We estimate the ex‐ante reward per unit of spot‐rate volatility (the reward‐to‐risk ratio) for U.S. Treasury bills on a monthly basis and find that these ratios vary predictably over time. Reward‐to‐risk ratios are positively autocorrelated; month‐to‐month changes in these ratios are negatively autocorrelated. Variation in these ratios contributes at least as much variation to ex‐ante excess returns as does variation in interest‐rate volatility. Because ex‐ante volatility and the rewards to volatility vary independently, variation in ex‐ante premiums is greater than the variation attributable to changing volatility alone.     

The plantation economy as an economic system

The recent literature on plantation economies is surveyed and an attempt is made to test some of the proposed hypotheses and ideas, using a sample of 41 nations around 1960. Four questions form the focus of the analysis: What is a plantation? What are the economic, political, and social forces giving rise to the plantation system of agriculture? What are the impacts of the plantation system on the rest of the economy and society? And what are the forces bringing change to plantation economies?