THE INFLUENCE OF DIFFERENT FORMS OF GOVERNMENT SPENDING ON DISTRIBUTION AND GROWTH

This paper deals with the influence of different types of government expenditure on growth in a post‐Keynesian framework. The analysis considers a government sector with a balanced budget and an autonomous and non‐linear investment function, interpreted along a Kaleckian and a Classical‐Harrodian line. It shows under which conditions different types of government expenditure are beneficial or detrimental for economic growth, comparing some results with those reached by Barro in his 1990 Journal of Political Economy article, and points out the emergence of phenomena like multiple equilibria, hysteresis and low growth traps.     

Are Ethical Banks Different? A Comparative Analysis Using the Radical Affinity Index

This article studies the differences between traditional financial intermediaries (commercial banks, savings banks and cooperative banks) and ethical banks based on property rights, in which the owner decides the ideology, principles, standards and objectives of the organisation. In ethical banking, affinity centres on positive social and ethical values. The article consequently focuses on an index proposed both to differentiate ethical banks from other types of banks, and also to pinpoint the differences between the various ethical banks themselves. This is the Radical Affinity Index (RAI), which groups banks together in terms of their stance on ethical commitment, concentrating on ethical ideology and principles (information transparency, placement of assets, guarantees and participation) and using a sample of 114 European banks. The evidence shows that transparency of information and placement of assets are factors that differentiate ethical banks from other financial intermediaries. Guarantees and participation are characteristics specific to ethical banks; these variables, however, do not offer clear evidence to our analysis.     

The Breakdown of Idiosyncratic Volatility Into Expected and Unexpected Components and Its Effects on Stock Returns in Brazil

Based on studies of idiosyncratic volatility developed in the recent literature, this study analyzes its relation with expected returns through the breakdown of idiosyncratic volatility in the Brazilian stock market and presents evidence of the importance of expected idiosyncratic volatility for asset pricing. We study the impact of the expected and unexpected components of idiosyncratic volatility on the returns of shares listed on the BOVESPA between 2004 and 2011. The results show a strong positive and significant relation between expected idiosyncratic volatility and returns. This evidence is highlighted when we use unexpected idiosyncratic volatility to control for unexpected returns. Additional robustness tests, controlling for size and momentum effects, also have positive and significant coefficients, corroborating previous findings.     

Institutional design and governance of airport regulators: The case of Latin America

This paper offers a cross-country assessment of the governance of airport regulators in Latin America. The analysis links the institutional design of airport regulators, whether in the form of independent regulatory agencies or government departments, to their overall governance. It examines four dimensions of regulatory governance: autonomy, transparency, accountability, and bureaucratic quality. Independent regulatory agencies in the Latin American airport sector seem to provide a better framework for transparency and bureaucratic quality than government departments. It is not conclusively found, however, that independent regulatory agencies contribute to a more autonomous decision-making or to an enhanced accountability of regulators to other branches of government and airport users. Overall, governance indicators of airport regulators in Latin America are well below the threshold that defines good governance.     

Pricing Bonds and Bond Options with Default Risk

The pricing of bonds and bond options with default risk is analysed in the general equilibrium model of Cox, Ingersoll, and Ross (1985). This model is extended by means of an additional parameter in order to deal with financial and credit risk simultaneously. The estimation of such a parameter, which can be considered as the market equivalent of an agencies' bond rating, allows to extract from current quotes the market perceptions of firm's credit risk. The general pricing model for defaultable zero-coupon bond is first derived in a simple discrete-time setting and then in continuous-time. The availability of an integrated model allows for the pricing of default-free options written on defaultable bonds and of vulnerable options written either on default-free bonds or defaultable bonds. A comparison between our results and those given by Jarrow and Turnbull (1995) is also presented.     

Environmental and socio-economic sustainability of chinampas (raised beds) in Xochimilco,Mexico City

The chinampas (raised beds) of Xochimilco, Mexico City, are highly productive, traditional wetland agricultural systems, which were able to feed most of the population in pre-hispanic times. There is a strong trend to substitute chinampas with plastic greenhouses for flower production, which creates negative impacts in the landscape, environment and culture. This study compares the environmental and socio-economic sustainability of chinampas and greenhouses, at both the farm and regional levels, using the MESMIS framework. Even though the results show that greenhouses are more profitable, the contribution of chinampas to ecosystem services cannot be substituted by greenhouses, as tree cover is lost, canals are filled and food is not provided. Greenhouses had a higher diversity, but also a higher agrochemical use and are heavily dependent on external inputs and subsidies. Chinampas have shifted from staple crops to commercial horticulture in order to remain a technically viable and economically feasible option for local farmers. However, compensation mechanisms for the provision of ecosystem services are urgently needed if this ancient system is to be maintained. The framework allowed the integration of indicators at both farm and regional scales, combining on-farm surveys with GIS techniques, which could assist in ecosystem service valuation.     

Vocational skills in the accounting professional profile: the Chartered Institute of Management Accountants (CIMA) employers' opinion

The increasingly dynamic environment in which accountants work has necessitated a reorientation of accounting education. In some countries this issue has raised great interest amongst accounting educators and practitioners. The ongoing debate has already resulted in the publication of several statements and research papers that have raised the question of the relevance of the role of vocational skills in accounting education. Examples of these vocational skills are communication skills, interpersonal skills, and problem-solving skills. This paper reports on the importance that the employers of management accountants gave to a specified set of vocational skills and capabilities and the level of ability of these skills exhibited by students. In order to prioritize future developments an integrated analysis of the two attributes, importance and exhibited level, is enabled by the use of strategic mapping. The results of this study suggest that the employers perceive deficiencies in several capabilities that they have identified as being quite important. These deficiencies exist, in the employers' opinion, both prior to recruitment and on professional qualification. The research also indicates that, in the opinion of these employers, the development of these skills should be a central concern for universities and professional bodies. The employers also indicated that vocational skills should be attained in an integrated way.     

The Endurance and Eclipse of the Controlled Vote: A Formal Model of Vote Brokerage Under the Secret Ballot

Throughout much of mankind's experience with elections, vote brokers – local elites who direct the voting decisions of a subset of the electorate – have been able to make or break political careers. In various polities, brokers have thrived in spite of the secret ballot, a surprising outcome given that vote secrecy would ostensibly allow citizens to pocket the inducements offered by such individuals and vote their consciences anyway. To address this puzzle, we develop a framework for understanding the persistence and demise of vote brokerage under the secret ballot. In our model, a broker contracts with voters using an outcome contingent contract: some fixed benefit is promised to all voters sharing one of several observable profiles should the broker's candidate win the election. Using this framework, we demonstrate that the existence of brokerage depends on the size of the electorate contained within the jurisdiction controlled by the broker, with large jurisdiction sizes tending to drive brokerage out of existence. Moreover, we detail the manner in which the strategies employed by brokers depend on their economic power, the size of social groups, and ideological polarization. Empirical evidence from Minas Gerais, Brazil is used to evaluate the performance of the model.