Municipal bonds as alternatives to PPPs: Facilitating direct municipal access to private capital

The advantages of using municipal bonds to finance urban infrastructure are becoming increasingly evident to policy makers in emerging economies, many of whom are making efforts to accelerate the development of municipal bond markets in their countries. Municipal bonds are sometimes viewed as a less expensive way of financing infrastructure than by public‐private partnerships (PPPs), or methods that maintain greater public control over projects and service provision. The objective of this article is to place current efforts by the South African government to promote municipal bond market development in an international context. This is done by briefly reviewing the advantages local governments experience by issuing municipal bonds to finance infrastructure; discussing some experiences of other countries in trying to accelerate the development of municipal bond markets; and reviewing the need and prospects for an active municipal debt market in South Africa. The article also examines the extent to which municipal bonds should be thought of as alternatives to PPPs in an emerging economy context.     

Managing groundwater in a mining region: an opportunity to compare best‐worst and referendum data

In nonmarket valuation, practitioners must choose a format for the valuation questions. A common approach in discrete choice experiments is the ‘pick‐one’ format, often with two alternative policy proposals and a status quo from which the respondent selects. Other proposed formats, include best‐worst elicitation, where respondents are asked to indicate their most and least favoured alternative from a set. Although best‐worst formats can offer efficiency in data collection, they can also lead to responses that are difficult to reconcile with neoclassical welfare estimation. The current article explores methodological issues surrounding the use of pick‐one versus best‐worst data for nonmarket valuation, focusing on framing and status quo effects that may occur within three‐alternative discrete choice experiments. We illustrate these issues using a case study of surplus groundwater use from Western Australian mining. Results identify concerns that may render best‐worst data unsuitable for welfare estimation, including a prevalence of serial choices in which the status quo is universally chosen as the worst alternative, rendering part of the choice process deterministic. Asymmetry of preferences and serial choices can be obscured when models are estimated using ‘naively’ pooled best‐worst data. Results suggest that caution is warranted when using best‐worst data for valuation, even when pooled results appear satisfactory.     

The Thrift IPO as the First Stage of its Subsequent Sale

Although the underpricing of initial public offerings (IPOs) has been well documented, the underpricing of foreign IPOs have received relatively little attention. In a comparative analysis of foreign and domestic IPOs in the U.S. market for the 1990-1993 period, we find that for a matched sample, foreign IPOs are significantly more underpriced. Our results are consistent with the models developed by Rock (1986), Beatty and Ritter (1986), and Carter and Manaster (1990). Examination of the characteristics of foreign IPOs reveals that they are more likely to be larger in size, employ more prestigious underwriters and are much more likely to list on the New York Stock Exchange (NYSE).     

Understanding the Components of Bank Failure Resolution Costs

In this paper, we demonstrate how the resolution costs associated with over 1,000 bank failures from 1986 to 2007 are distributed across the method of resolution, bank size, regulatory periods, and the existence of fraud. In addition, we document the time spent in the resolution by the resolution method and legislative period. Finally, we show how various classes of claimants against the failed banks bear the costs of the failure.     

Uncovering the links between regulation and performance measurement

The aim of the research was to explore and evaluate previous work focusing on the relationship and links between regulation and performance measurement. The objectives were to seek out examples in the literature on the unintended consequences of performance measurement and regulation. Several explanatory frameworks are developed and discussed. It is intended that the frameworks can be developed and used: (a) to assist our conceptual understanding of the unintended consequences of regulation and performance measurement at the firm level; (b) to guide regulators in policy making by showing the issues and opportunities that exist as a result of regulation and performance measurement; and (c) to serve as a platform to identify and recommend areas for future research.     

Consumer insolvency in Australia

This paper seeks to identify and assess the features of Australian bankruptcy regulation as they apply to consumer insolvency. Although Australian bankruptcy law makes no explicit recognition of ‘consumer bankruptcy’ as a regulatory target in itself, the Australian legislation nevertheless has a number of features that impact on what would generally be seen to be consumer bankrupts. After providing an outline of the legislative framework within which consumer bankruptcy operates, the paper examines the consumer insolvency aspects of this legislation, together with an assessment of proposed reforms. Some brief comparisons of the ‘consumer’ features of Australian regulation with that of the more fully developed consumer provisions of the Canadian and the United States bankruptcy legislation, are made in order to highlight the Australian position. The Australian Act has historically drawn heavily on English bankruptcy legislation but inevitably Australia has to some extent developed along its own path. Notable is the reasonably vigorous approach to discharge from bankruptcy. The proposed reforms to the Bankruptcy Act, which have followed a detailed consultative process, are largely directed to consumer debtors. Some of these reforms are directed against a perceived debtor abuse of the bankruptcy system. Other reforms, such as increasing the availability of debt agreements, are more generous to insolvent debtors. On the whole the reforms appear to be based more on political than empirical grounds.     

Markets for Efficiency and Fairness

The allocation and distribution of resources by the state has failed to achieve the egalitarian ends socialists had predicted. Rosalind Levaćić, Lecturer in Economics at the Open University, outlines the advantages of the market in raising incomes and socio-economic status. Bureaucratic allocation should be replaced by personal purchasing power underpinned by redistributive taxation.     

African Americans in southern rural regions: The importance of legacy

This analysis reassesses the importance of the combined legacies of race, class, and culture by using the concentration of African Americans in a county as a general measure of this phenomenon for thirteen Southern states. Explanatory variables associated with labor force structure, social well-being and region provide evidence that those areas of the South with the highest concentrations of African Americans continue to be the most disadvantaged. These results suggest little change for metropolitan counties with increased concentrations of African Americans. The analyses point toward the need for a focused assessment of the efficacy of existing public and private programs to provide a foundation for overcoming the negative dimensions of the regional legacy.