Budgeting and governing for deficit reduction in the UK public sector: act three ‘accountability and audit arrangements’

This paper explains how the UK central government has changed accountability and audit arrangements for local government in England, while retaining its approach to setting annual budgets within the context of multi-year spending reviews. It highlights how dismantling the institutions and processes that monitored outputs and outcomes for spending, such as public service agreements and comprehensive area assessment, meant that top-down accountability became focused overwhelmingly on financial conformance rather than organizational performance for local government. Supplementary reforms to increase the transparency or ‘visibility’ of public administration, and thereby enable greater bottom-up accountability, have resulted in a performance assessment system that is neither rigorous nor standardized. The overall result is a weakening of local accountability arrangements.     

Optimal marginal and average income taxation under maximin

Using the Mirrlees optimal income tax model under maximin, we derive fairly mild conditions for a decreasing marginal tax rate throughout the skill distribution with no bunching, a strictly concave tax function in income and a single-peaked average tax schedule. Assuming additive preferences and an isoelastic disutility of labor function, these tax profiles are implied by aggregate skills that are non-decreasing with the skill level. If preferences are quasilinear in leisure or in consumption, these tax profiles are also obtained under a large set of skill distributions.     

The endogeneity bias in the relation between cost-of-debt capital and corporate disclosure policy

Abstract

The purpose of this paper is twofold. First, we provide a discussion of the problems associated with endogeneity in empirical accounting research. We emphasize problems arising when endogeneity is caused by (1) unobservable firm-specific factors and (2) omitted variables, and discuss the merits and drawbacks of using panel data techniques to address these causes. Second, we investigate the magnitude of endogeneity bias in Ordinary Least Squares (OLS) regressions of cost-of-debt capital on firm disclosure policy. We document how including a set of variables which theory suggests to be related with both cost-of-debt capital and disclosure and using fixed effects estimation in a panel data-set reduces the endogeneity bias and produces consistent results. This analysis reveals that the effect of disclosure policy on cost-of-debt capital is 200% higher than what is found in OLS estimation. Finally, we provide direct evidence that disclosure is impacted by unobservable firm-specific factors that are also correlated with cost of capital.     

No Arbitrage in Discrete Time Under Portfolio Constraints

In frictionless securities markets, the characterization of the no-arbitrage condition by the existence of equivalent martingale measures in discrete time is known as the fundamental theorem of asset pricing. In the presence of convex constraints on the trading strategies, we extend this theorem under a closedness condition and a nondegeneracy assumption. We then provide connections with the superreplication problem solved in Föllmer and Kramkov (1997).     

The Role of a Toolkit in Mobilising Women in Local and Regional Development

This paper introduces UK readers to the EuroFEM Toolkit which has been developed with European Union (EU) funding. The Toolkit is a collection of methods and stories taken from women's projects in European member states and is aimed at supporting, encouraging and facilitating women's involvement in every sector of local and regional development. The context for the development of the Toolkit is set within the debate about gender mainstreaming and what this means for local and regional development.     

Risking the self: the impact of self-esteem on negative word-of-mouth behavior

Negative word-of-mouth is a pervasive and persuasive force on consumers, yet little is known about the characteristics of the people who decide to share, or not to share, this information. We examine the impact of consumer trait self-esteem on tendencies to share negative word-of-mouth. Prior work has shown that consumer self-esteem moderates the likelihood of sharing positive word-of-mouth, yet extending this theory to negative word-of-mouth behavior results in conflicting predictions. This paper addresses these contradictions by adopting a two-dimensional view of self-esteem (self-liking and self-competence). We suggest that these dimensions will have opposing effects on the sharing of negative word-of-mouth. Two studies show that individuals high in self-competence are less willing to share negative word-of-mouth, whereas individuals high in self-liking are more willing to do so—results that would be disguised by treating self-esteem as a single-dimension construct.     

Do ads that tell a story always perform better? The role of character identification and character type in storytelling ads

The growing use of storytelling as an advertising strategy for brands online poses the question of their relative effectiveness compared to more factual types of ads. In this context, this article focuses on the role of character identification and character type in the effects of narrative transportation that occur from storytelling ads. Using four experimental studies in two different contexts, two brand types, and two character types (human versus animal), the findings present a cautionary tale for the use of storytelling. By generating higher levels of narrative transportation, storytelling video ads can reduce character identification, which results in an overall decrease in positive attitude toward the brand, when using animal characters. These main findings are nuanced in the presence of joyful emotions. Implication for research and practice are discussed.