The impact of referendums on the centralisation of public goods provision: a political economy approach

The paper compares decision-making on the centralisation of public goods provision in the presence of regional externalities under representative and direct democratic institutions. A model with two regions, two public goods and regional spillovers is developed in which uncertainty over the true preferences of candidates makes strategic delegation impossible. The political economy argument against centralisation of Besley and Coate (J Public Econ 87:2611–2637, 2003) does therefore not apply. Instead, it is shown that the existence of rent extraction by delegates alone suffices to make cooperative centralisation more likely through representative democracy under reasonable assumptions. In the case of non-cooperative centralisation, the more extensive possibilities for institutional design under representative democracy increase the likelihood of centralisation. Direct democracy may thus be interpreted as a federalism-preserving institution.     

USING HAPPINESS DATA FOR ENVIRONMENTAL VALUATION: ISSUES AND APPLICATIONS

Abstract.  In addition to standard methods of environmental valuation, a novel approach has recently emerged which models individuals' self-rated happiness as a function of their incomes and the prevailing environmental conditions. The estimated relationship is used to calculate the trade-off people would be willing to make between income and environmental conditions, i.e. the increase in income necessary to compensate individuals for any given decline in environmental quality. While the basic idea is simple, the theoretical and empirical details may be complex, and they may vary from application to application. This paper discusses the relevant conceptual and methodological issues and reviews applications to air and water pollution, noise nuisance, climate parameters, and natural hazards.     

MULTIVARIATE METHODS FOR MONITORING STRUCTURAL CHANGE

Detection of structural change is a critical empirical activity, but continuous ‘monitoring’ for changes in real time raises well‐known econometric issues that have been explored in a single series context. If multiple series co‐break then it is possible that simultaneous examination of a set of series helps identify changes with higher probability or more rapidly than when series are examined on a case‐by‐case basis. Some asymptotic theory is developed for maximum and average CUSUM detection tests. Monte Carlo experiments suggest that these both provide an improvement in detection relative to a univariate detector over a wide range of experimental parameters, given a sufficiently large number of co‐breaking series. This is robust to a cross‐sectional correlation in the errors (a factor structure) and heterogeneity in the break dates. We apply the test to a panel of UK price indices. Copyright © 2011 John Wiley & Sons, Ltd.     

A quintessential immigrant niche? The non-case of immigrants in the Dutch construction industry

Students of immigrant entrepreneurship show a distinct preference for ethnic concentrations. They focus on small entrepreneurship in sectors with large concentrations of immigrant businesses or on ethnic commercial precincts. This preference stems from practical and theoretical considerations. It seems that the study of such concentrations, or niches, is essential to the theoretical understanding of the structural determinants of small entrepreneurship and the processes of economic incorporation of immigrants. This paper challenges this orthodoxy. It argues that it is important to assess the factors and processes that positively and negatively affect the formation of niches. This argument is corroborated by an analysis of the construction industry in the Netherlands. According to Waldinger (1995: 577), ‘construction represents the quintessential ethnic niche’, but immigrants in the Netherlands did not carve out a niche. This exceptional situation can be attributed to a sector-specific configuration of social, economic and institutional processes.     

Expatriate or local bosses? HCN subordinates' preferences in leadership behaviour

This article explores host-country national subordinates’ preferences in leadership behaviour comparing expatriate bosses and local bosses. From a sample of 240 middle managers in Hong Kong with experience with both local Chinese bosses and expatriate bosses from a broad spectrum of Western and Asian countries, it was found that the subordinate managers assessed the leadership behaviour of their expatriate bosses to be significantly closer to that of their perceived ideal boss. American leadership behaviour was the most preferred and Japanese leader style was the least preferred, with British leadership style comprising a middle group. Implications of these findings for international business firms and future academic research are discussed.     

Organizing innovation projects under technological turbulence

Research on the organization of innovation projects suggests that increased project flexibility is a common reaction to high levels of technological turbulence. However, existing definitions of project flexibility are inconsistent and sometimes unclear, and empirical evidence is limited. This article makes an important distinction between flexible project planning and flexible project specifications. A negative relationship is found between flexible project planning and innovation project performance, whereas flexible product specifications are found to contribute positively.This article also examines how technological turbulence contributes to the choice of flexible or inflexible strategies. Technological turbulence can be present in the external environment or can be internal to the firm, when radically new products are developed. The findings suggest that when businesses perceive technological turbulence in the environment they are more likely to adopt flexible approaches to innovation in an attempt to adapt to external pressures. In technologically innovative projects, product specifications are likely to remain fixed while project organization is likely to be adapted to the needs of the project.Taken together, the findings suggest that innovation projects should maintain stable organization, schedules and budgets, but stay flexible about product specifications. Vigilance with regards to external and internal conditions of technological turbulence, which may lead organizations to be more flexible in terms of project planning, is needed.     

The process of consultation: responding to challenge

China could be a challenging destination for Western business expatriates. However, their extent of adjustment to life and work could be contingent on the size of the location of their assignment. Maybe Westerners adjust more easily to large cities with their more Western-style way of life and consumption patterns than to less Westernized small towns and villages. To examine this proposition, a mail survey was directed at Western business expatriates assigned to locations of varying size in China. As expected, results showed that the size of the location was positively associated with adjustment to the general non-work environment as well as with work adjustment. Surprisingly, there was no relationship between the size of the location and adjustment to interacting with host nationals, presumably due to language problems. The distinct implications of these findings are discussed in detail.     

Human capital inequality and income inequality: testing for causality

This study investigates the causal relationship between human capital inequality and income inequality in case of Pakistan. The annual time series data ranging from 1973 to 2009 is used for econometric analysis. Johanson co-integration and Granger Causality tests are used to confirm the existence of long run relationship and the causal relationship between human capital inequality and income inequality. The results indicate that there is positive relationship between the two types of inequalities in the long run. The estimates of causality test indicate that income inequality causes the human capital inequality but human capital inequality does not cause income inequality. Policy initiatives to reduce income inequality may empower people economically to avail skill building opportunities and accumulate their human capital through access to educational services.     

Forecasting interest rates with shifting endpoints

We consider forecasting the term structure of interest rates with the assumption that factors driving the yield curve are stationary around a slowly time‐varying mean or ‘shifting endpoint’. The shifting endpoints are captured using either (i) time series methods (exponential smoothing) or (ii) long‐range survey forecasts of either interest rates or inflation and output growth, or (iii) exponentially smoothed realizations of these macro variables. Allowing for shifting endpoints in yield curve factors provides substantial and significant gains in out‐of‐sample predictive accuracy, relative to stationary and random walk benchmarks. Forecast improvements are largest for long‐maturity interest rates and for long‐horizon forecasts. Copyright © 2013 John Wiley & Sons, Ltd.     

Technology assessment network building: The International Association of Technology Assessment and Forecasting Institutions

With the globalization of trade and the increased understanding of transboundary problems such as global climate change, the need for understanding the consequences of technological change has never been higher. Institutional arrangements necessary to assess these changes and make decision makers aware of the consequences have not necessarily adapted to these world conditions. In response to this leading technology assessment and forecasting institutions formed an international association of technology assessment and forecasting institutions to assist in the diffusion of technology assessment in the decision-making process. This paper discusses the origins of the International Association of Technology Assessment and Forecasting Institutions (IATAFI) and the goals and vision for the organization. The following articles represent some of the topics discussed at the first IATAFI conference in Bergen, Norway in May 1994.