ASSESSING DAMAGES: THE 1983 ISRAELI BANK SHARES CRISIS

In 1983, Israeli bank shares collapsed following several years during which the banks had actively intervened to promote share prices and thereby contributed to a 300% rise in real terms. During the crisis the government assumed control of the banks, which they did not begin to sell back to the public until 1993. We compare 1993 bank share prices after the banks were partially relisted on the Stock Exchange with 1983 precrisis values. The 1993 time-adjusted market values were $10 billion lower than in 1983, a decline borne by precrisis shareholders ($4 billion) and by taxpayers ($6 billion). Of this latter amount, two-thirds represents a transfer from the government to shareholders, while approximately one-third represents an efficiency loss - and hence a direct cost - resulting from government ownership of the banks for 10 years following the crisis. The results highlight the risk inherent in a banking system that is both concentrated and universal and illustrates the costs associated with sustained government ownership.     

Refining the search for project success factors: a multivariate, typological approach

Although the causes for project success and failure have been the subject of many studies, no conclusive evidence or common agreement has been achieved so far. One criticism involves the universalistic approach used often in project management studies, according to which all projects are assumed to be similar. A second problem is the issue of subjectiveness, and sometimes weakly defined success measures; yet another concern is the limited number of managerial variables examined by previous research. In the present study we use a project-specific typological approach, a multidimensional criteria for assessing project success, and a multivariate statistical analysis method. According to our typology projects were classified according to their technological uncertainty at project initiation and their system scope which is their location on a hierarchical ladder of systems and subsystems. For each of the 127 projects in our study that were executed in Israel, we recorded 360 managerial variables and 13 success measures. The use of a very detailed data and multivariate methods such as canonical correlation and eigenvector analysis enables us to account for all the interactions between managerial and success variables and to address a handful of perspectives, often left unanalyzed by previous research. Assessing the variants of managerial variables and their impact on project success for various types of projects, serves also a step toward the establishment of a typological theory of projects. Although some success factors are common to all projects, our study identified project-specific lists of factors, indicating for example, that high-uncertainty projects must be managed differently than low-uncertainty projects, and high-scope projects differently than low-scope projects.     

The industrial and commercial demand for electricity under time-of-use pricing

In this paper we have developed and estimated the demand for electricity by an industrial (commercial) firm subject to time-of-use (TOU) pricing of electric power. In the application we use a quadratic production function and directly incorporate into the production process the restrictions that some inputs cannot vary over the day. We show that the TOU structure implies a unique set of parameter restrictions across the demand functions for inputs.     

Aggregate Margin Debt and the Divergence of Price from Accounting Fundamentals

We examine whether, in the aggregate, margin debt is associated with the divergence of price from accounting fundamentals. We find that investors increase their margin debt following upward price movements away from accounting fundamentals, consistent with these investors being extrapolative in aggregate. We also find evidence that margin debt appears to be linked to temporary overpricing in recent periods, as the aggregate ratio of margin debt to price is reliably associated with negative future returns since at least 1992. Our results are consistent with the theoretical literature that predicts extrapolative traders have a destabilizing effect on market prices, and helps explain why prices diverge from accounting fundamentals.     

Second Opinions and Price Competition: Inefficiency in the Market for Expert Advice

We consider a market in which an expert must exert costly but unobservable effort to identify the service that meets the consumer's need. In our model, experts offer competing contracts and the consumer may gather multiple opinions. We explore the incentives that a competitive sampling of prices and opinions provides for experts to exert effort and find that there is a tension between price competition and the equilibrium effort. In particular, the equilibrium fails to realize the second best welfare optimum. An intervention, that limits price competition via price control, increases welfare.     

Public Pension Programs in Southeast Asia: An Assessment

This paper assesses public pension programs in select Southeast Asian economies (Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam – henceforth referred to as the SEA6) and the key issues facing them. The criteria used in assessing pension systems are the philosophy of pension design, the extent of coverage, investment policies and performance, and administrative and compliance costs. The paper argues that three broad reform directions to strengthen public pensions merit consideration. The first direction is to enhance the professionalism of the existing provident and pension fund organizations, including their governance practices. The second direction is to strengthen the role of noncontributory budget‐financed pensions (e.g. social pensions). The third is to adopt a systemic perspective to pension reform that includes reforms in complementary areas (labor markets, public financial management practices, and the civil service); developing a financing‐mix of pensions; and lastly, improving effective coverage by exploring complementarities between health care and pension programs.     

Researching the future: method or madness?

This paper examines the methodological issues behind futures studies, questioning whether it is possible to claim a futures study as methodologically ‘sound’, and critiquing how futures methodology fits within the methodological paradigms currently recognised in the research field. The extent to which futures methodology can be considered a paradigm in its own right is also examined as are the assumptive foundations of futures studies. While all the evidence raises many questions as to the form of futures methodology, the lack of clarity does not make a futures study invalid or unreliable, and hence sensemaking from the chaos of futures ‘data’ does ensure that futures studies can be based on method rather than madness.

How does one research the future? The very notion of researching the future is a paradox. The word research lies within the time boundaries of the past and the present so to research the future appears a logical impossibility. Attempts to ground the methodology in any single paradigm or set of constructs proves a fruitless task. Indeed, it becomes apparent that when undertaking research into an area that is something new, in the future, which could constitute a new field of research, fundamentally a new methodology needs to be created. This paper discusses how the development of a futures methodology is an on-going process which cannot be bounded by the limitations of strict rigour, but is nevertheless a rigorously sound approach to carrying out research.

When researching the future, no one method is appropriate in isolation. While quantitative methods such as forecasting, extrapolation and time series may prove useful if there is raw numerical data to work with, a hypothesis cannot be tested and proven as is the case in many quantitative studies. Given the nature of ‘the future’ itself, raw quantitative analysis needs contextualising and interpreting in light of the assumptive future constructs, and the assumptions themselves need examining for ‘assumption drag’ so that underlying trends and wave patterns are accounted for [1].     

Lively Lands: The Spatial Reproduction Squeeze and the Failure of the Urban Imaginary

This article argues that the theoretical invisibility of non-privatized land tenures constitutes a failure of the urban imaginary, which restricts the ability to forge less commodified urban futures. The article explicates two attributes of non-privatized land—fungibility and combinatoriality—that produce an urban land nexus capable of fostering pro-poor agglomeration economies and generating socialities that exceed the model of the separative self that is hegemonic in more propertied settings. Fungibility, it shows, externalizes supportive economies of production and reproduction into surrounding neighborhoods by shifting the boundaries and terms of usufruct without cadastral oversight or regulation. Combinatoriality—a hybrid formulation of combined territories and combined territorialities—describes overlapping forms of access to land or demarcations of legitimate land use, either competitive or reciprocal. Together, these two attributes of non-privatized land systems produce a propinquity requirement for economic production, or a social density and liveliness more limited in privatized land markets. Through a diagnostic analogy with the simple reproduction squeeze characteristic of subsistence agrarian settings, it charts how an urban spatial reproduction squeeze—felt globally in dense, rising-rent environments across the global North and South—generates subsistence needs that mixed-tenure environments are uniquely capable of fulfilling and that can provide inspiration for radical housing struggles elsewhere.     

Contractual Mix Between Cash and Kind Wages of Casual Workers in an Agrarian Economy

A two‐agent general‐equilibrium model is developed for explaining the mix of wage payment between cash and kind among landowners and workers. Its focus is on how, in the absence of insurance instruments but in the presence of heterogeneous tastes and attitudes toward risk among agents, the payment mix between cash and kind can serve as a welfare‐improving, risk‐hedging device. The model is used to determine how this optimal mix of wage payment would be affected by changes in risk‐aversion, consumption preferences, technology, price risk, and production risk. While the complexity and nonlinearity of the model make it impossible to obtain clear‐cut analytical results, simulation results are derived and shown to be rather robust. These results are also broadly supported by the findings of a small‐scale survey of agricultural wage contracts in India.