Gatekeeping as Accumulation and Domination: Decentralization and Class Relations in Rural South India

Gatekeeping is taken here to mean the act of channelling formal and informal resources between the state and society for private economic and political gain. Based upon fieldwork in Karnataka, India, this paper argues that whilst traditional forms of control over the labouring class have been eroded, gatekeeping increasingly allows the dominant class to exert a more subtle form of political control, which in turn facilitates processes of accumulation. Rather than equalizing political power and control over public resources, heightened levels of fiscal decentralization to village councils (gram panchayats) have increased levels of gatekeeping, which both provides a significant share of the politically active dominant class's income and forges new patterns of labouring class dependence upon the dominant class. This heightens socio‐economic differentiation and reproduces the latter's political dominance despite the loosening of labour‐related ties. In addition, it is argued that although a minority of gatekeepers are from the labouring class, their inclusion facilitates dominant class accumulation rather than their own upward mobility. The paper stratifies gatekeeping in order to locate it amongst the totality of social relations between and within classes, which collectively produce processes of accumulation, differentiation and domination within society. The paper concludes that although the forms taken by extra‐economic aspects of capital's control over rural labour have been altered during the erosion of traditional forms of dominance, they remain highly significant and are increasingly so in the fieldwork area in a context of decentralized governance.     

Some Results in the Theory of Arbitrage Pricing

This paper derives a stronger version of Huberman's recent “preference free” pricing theorem. This pricing result relates the expected return on an asset to its factor responses and the covariance structure of the residuals from a linear factor model. It must characterize any infinite asset economy in which no arbitrage opportunities are present whether or not the factor model has uncorrelated residuals. This result provides the intuition for the role of residual risk in the pricing model and eliminates some classes of arbitrage opportunities still present under Huberman's bound. Some applications to empirical tests and performance measurement are also discussed.     

Agency,Delayed Compensation,and the Structure of Executive Remuneration

In this paper we examine the factors affecting the structure of executives' compensation packages. We focus particularly on the role of various types of delayed compensation as means of “bonding” executives to their firms. The basic problem is to design a compensation package that rewards actions that are in the long-run interest of the stockholders. Firms must take into account their ability to discern unfortunate circumstances from mismanagement, the extent to which a compensation package forces the executive to face risks beyond his control, and the willingness of a given executive to bear this risk. We use our theory to interpret some executive compensation data from the early 1970s.     

Short Selling and Earnings Management: A Controlled Experiment

During 2005 to 2007, the SEC ordered a pilot program in which one‐third of the Russell 3000 index were arbitrarily chosen as pilot stocks and exempted from short‐sale price tests. Pilot firms’ discretionary accruals and likelihood of marginally beating earnings targets decrease during this period, and revert to pre‐experiment levels when the program ends. After the program starts, pilot firms are more likely to be caught for fraud initiated before the program, and their stock returns better incorporate earnings information. These results indicate that short selling, or its prospect, curbs earnings management, helps detect fraud, and improves price efficiency.     

Financing Constraints and Workplace Safety

We present evidence that financing frictions adversely impact investment in workplace safety, with implications for worker welfare and firm value. Using several identification strategies, we find that injury rates increase with leverage and negative cash flow shocks, and decrease with positive cash flow shocks. We show that firm value decreases substantially with injury rates. Our findings suggest that investment in worker safety is an economically important margin on which firms respond to financing constraints.