discovering the truth about aid

Economists in the House of Lords are rare; Russell Lewis interviews the celebrated sceptic of foreign aid - Lord Bauer, better known perhaps as Professor P. T. Bauer, and explores his still controversial views about inter-government aid and aspects of his eventful life.     

THE POTENTIAL IMPACT OF ENVIRONMENTAL CROSS-COMPLIANCE ON ARABLE FARMING

It is argued that the ongoing CAP/GATT reforms provide a basis for the introduction of environmental cross-compliance (ECC). ECC enables policymakers to restrict output-related direct support payments to those farmers who comply with specified environmental guidelines aimed at reducing the external damage effects of agricultural production. This paper is an exploratory investigation of ECC and presents the results of a farm-level linear programming analysis of 15 North-West England arable farms. The environmental guidelines, which relate to permanent as opposed to rotational set-aside and to levels of fertiliser use, are widely applicable to the extent that ECC can be implemented as a voluntary policy system. They are clearly effective in achieving policy goals since all but one of the farmers investigated would comply with the full range of restrictions considered. Within this range, gross margins are reduced by up to 10 per cent while area and output of seed crops are reduced by around 22 per cent and 12 per cent respectively. Row crops area and output are more robust, each falling by just under 4 per cent.     

Estimating the covariance matrix for regression models with ar(1) errors and lagged dependent variables

We propose a simple procedure, based on an artificial linear regression, for consistently estimating the covariance matrix of the parameter estimates for linear regression models with serially correlated errors and lagged dependent variables.     

An examination of the ethical beliefs of managers using selected scenarios in a cross-cultural environment

Academic literature addressing the topic of business ethics has paid little attention to cross-cultural studies of business ethics. Uncertainty exists concerning the effect of culture on ethical beliefs. The purpose of this research is to compare the ethical beliefs of managers operating in South Africa and Australia. Responses of 52 managers to a series of ethical scenarios were sought. Results indicate that despite differences in socio-cultural and political factors there are no statistically significant differences between the two groups regarding their own ethical beliefs. Results thus support the view that culture has little or no impact on ethical beliefs.Russell Abratt (DBA Pretoria) is Professor of Marketing at the University of Witwatersrand, Johannesburg, South Africa. His research interests include business ethics and promotional strategy. His work has been published in various sources includingJournal of Business Ethics, European Journal of Marketing, International Journal of Advertising andIndustrial Marketing Management.Deon Nel (DCom Pretoria) is Professor of Marketing at the University of Pretoria, South Africa. His research interests include business ethics and group decision making in organisations. His work has been published in various sources includingJournal of Business Ethics, European Journal of Marketing, Management Research News.Nicola Higgs is a graduate student at the University of the Witwatersrand, Johannesburg, South Africa.     

Capitalist lessons for communists

Are there any tips that capitalists can offer former communists in introducing and managing a market economy? Russell Lewis reviews the dangers and opportunities.     

Full Steam Ahead or Abandon Ship? An Empirical Investigation of Complete Pivot Decisions

New products or services often misalign with customer preferences, and sometimes these initial offerings must be abandoned and replaced. Factors influencing these “complete pivot” decisions are poorly understood. We use behavioral decision theory to develop a theoretical model of pivot decisions that tests our predictions via a conjoint analysis experiment. We find that magnitude of the miss (revenues compared to plan), length of the runway (cash available/burn rate), and attribution for the miss (reason for customer misreads) significantly influence complete pivot decisions, and we simultaneously consider interactions. Individual grit and impulsiveness also shape the effects of some attributes.     

Beer Uses and Attitudes in the Craft Era

Abstract

This article aims to address the shifts in uses and attitudes in the era of craft beer’s growth in the United States, where brand loyalty has diminished in importance; whereas the need for exploration and trial has increased in importance. These changes have implored a need for craft beer marketers to change tactics in regards to how customers learn about new beers to try, the most trusted sources and influencers of beer choice, and how to build loyalty in an increasingly brand dis-loyal customer. The gap in research being addressed is seeking to find the pathway from how traditional beer marketers have grown brands and loyal customers to where we are today, where the customer is increasingly fickle, enjoys the newness that comes from shifting loyalties, and tends to reject brands that become too strong in this arena.     

Financial development and top income shares in OECD countries

We examine the causal impact of financial development (FD) on top income shares for a panel of 14 OECD countries—five Anglo‐Saxon countries, eight continental European countries, and Japan—over a 110‐year period. In our main General Method of Moments estimates, we find that a 1‐percentage‐point change in FD increases the top 1% income share by 0.2%. In distribution terms, a 1‐SD incr=ease in FD increases the top 1% income share by around 0.4 of an SD. The effects are robust to various measures of top income shares and FD and alternative estimation techniques, including nonparametric estimation. FD is typically viewed in positive terms in that it makes it easier to access credit and facilitates economic growth. Our results are important because they contribute to understanding of the potential negative effects of FD.