Gardiner C. Means's institutional and post-Keynesian economics

In this tribute to the work of Gardiner Means, we shall argue that his influence has been on a par with that of Keynes on economists of an unorthodox persuasion. It is argued that his pioneering work in studying the modern corporation as an institution that needs to be fully understood, renders him a first-rate institutionalist. Intriguingly, it is also suggested that his interest in the microeconomic foundations of macroeconomic performance are suggestive of post-Keynesian concerns.     

The globalization of the rule of law and human rights

The third millenium will be a defining period for the future of human rights worldwide. In the second millenium, rudimentary concepts of human rights emerged, evolved, expanded and ultimately were woven into an intricate and detailed web of rights that has been globally enunciated, but not yet universally recognized and enforced. Since World War II, developments have occurred at an escalating pace. The UN and the World Court have been established. Criminal tribunals have been created, and regional courts and regional security organizations have been installed. There is growing recognition that rulers of nations must be subject to civil and criminal jurisdiction of international law. At the close of the second millenium we are witnessing the first ever indictment of a sitting ruler for violations of international criminal law. Despite important progress, many obstacles must be overcome before the rule of law will prevail globally.     

Studying (Small) businesses with the Michigan Employment Security Commission longitudinal data base

This paper addresses the usefulness of a longitudinal data file constructed from records on employers from the Michigan Employment Security Commission. We describe the main features of the data file, which includes quarterly (and in some cases, monthly) data from the third quarter of 1978 through the first quarter of 1983, plus the fourth quarters of 1983–87. We then illustrate the uses of the data with two examples: (1) studying changes in the Michigan economy, in particular the early growth and survival of new units of different sizes; and (2) studying the behavior of wages and employment following changes in ownership.Judith Connor and Steven Heeringa are primarily responsible for Section II and the Appendix, John Jackson for Section III, and Charles Brown for Section IV.     

Regional Production and Cost Minimization in the Republics of the Former Soviet Union

After the disintegration of the Soviet Union, the problems encountered early in the reforms made it obvious that understanding the system and structure of the economy during the Soviet period was crucial for predictions and recommendations. The present study analyzes the production of the republics of the former Soviet Union, by grouping them into the regions defined by common geographical and historical conditions, and by estimation of cost functions that represent the two major theories of international trade: the Heckscher-Ohlin and Ricardo-Viner models. The estimated parameters of the cost functions allow us to draw conclusions about the achievement of cost minimization and to calculate the elasticities that represent the comparative statics of both models. As a result of the analysis, it is demonstrated that the achievement of the cost-minimization goal depends on local conditions.     

How Corporate Diversity and Size Influence Spinoffs and Other Breakups

In recent months, the list of large diversified companies that have decided they would be worth more as several smaller, focused companies has grown sharply. In many of these cases, it has been outside pressure from activist investors that has motivated these actions by management—and with some pretty favorable results. But what is driving these strategic actions and what is most important in determining whether breakups create value? To answer this fundamental questions, it is critical to decide whether large, diversified companies have a value recognition problem or a value creation problem. In this article, the authors present and try to integrate the findings of two separate but related research studies on business diversity and size with the aim of identifying their implications for corporate strategy and helping company executives create more value for their investors. The specific reasons for underperformance by large diverse companies vary greatly, but there are a number of potential problems discussed in this article, including organizational “distance,” capital allocation, human capital allocation, cross subsidies, and ineffective governance. Instead of waiting for activist investors to demand a breakup, executives of large diverse companies should be proactive in addressing the potential weaknesses of their organizations. Private equity firms understand how to make diversification work and many of today's executives could learn some valuable lessons from these firms. Large diverse businesses should embrace “Internal Capitalism,” a corporate culture and set of practices that emphasizes the importance of strategic decision‐making that is linked through continuous performance assessment to the corporate goals of boosting efficiency and sustainable growth.     

When adding a fuel efficient car increases an automaker's CAFE penalty

We derive the conditions that cause an automaker's Corporate Average Fuel Economy (CAFE) fine to increase when it sells an additional, fuel efficient car. Raising the CAFE standards would broaden the range of fuel economies that produce this effect. Copyright © 2005 John Wiley & Sons, Ltd.     

Peasant communes and factor markets in late nineteenth-century Russia

The peasant land commune was the emblematic institutional feature of agrarian Russian society before the Revolution of 1917. Economic historians have long blamed the commune for restricting household behavior in ways that contributed to Russia's economic “backwardness” by the late 19th century. Drawing on new household-level data collected from archival sources in Moscow province, this article provides the first microeconomic analysis of local factor markets and household behavior within the institutional context of the Russian peasant commune. The empirical evidence indicates that peasant households did have substantial flexibility when it came to allocating their land and labor holdings. In response to mortality shocks or lags in the communal adjustment of land, households engaged in land rentals and off-farm labor market transactions to improve upon suboptimal factor endowments. Although these findings do not imply that the resulting allocation of resources was fully efficient, they do illustrate how peasants made rational factor market transactions in a seemingly inhospitable institutional environment.