HOW TO CLEAR UP THE PENSIONS MESS

All three pillars of the British pensions system are crumbling. The basic state pension is unsustainable in its present form. Defined benefit occupational pension schemes are fast disappearing, and with them the retirement hopes of millions of workers. A further 3 million low-income earners are not saving enough for their retirement. And uncertainty about pensions choices is widespread. In each case the primary cause of the problem is governmental or regulatory failure. The paper makes eight general and four specific proposals for restoring the system.     

Regional integration: an empirical assessment of Russia

Using a statistical model of commodity trade, we quantify the evolution of regional economic integration within Russia during 1995–1999, and explore potential determinants of this evolution. Our integration measure exhibits rich regional variation that, when aggregated to the national level, fluctuates substantially over time. In accounting for this behavior, we draw in part on theoretical models that emphasize the potential role of openness to international trade and regional disparities in income in threatening economic integration. Controlling for a host of additional regional- and national-level variables, we find a strong negative correspondence between openness to international trade and internal economic integration.     

Organizational slack and firm performance during economic transitions: two studies from an emerging economy. Justin Tan and Mike W. Peng. Strategic Management Journal 24(13) 2003, 1249–1263

The original article to which this erratum refers was published in Strategic Management Journal 24 (13): 1249–1263 (2003).     

Discrete choice surveys by telephone

In two consumer studies, discrete choice surveys were administered both by telephone and by traditional pencil and paper methods. Study participants responded to discrete choice surveys concerning pizza restaurants in the first study and fast food restaurants in the second. Neither aggregate level estimated utilities for the pizza restaurants, nor market shares for the fast food restaurants differed by method of administration. The results indicate that discrete choice surveys can be successfully administered by telephone. He received his Ph.D. in marketing from the University of Texas at Dallas. Dr. Perkins is interested in marketing research methodology and in the use of marketing research information in managerial decision making. Dr. Perkins has published articles in theJournal of Marketing Research andPsychometrika. He is a member of the American Marketing Association, the Marketing Research Association, and the TIMS College of Marketing. Jacqueline Roundy recently completed the M.S. degree in marketing from the Pennsylvania State University. In addition she holds an M.B.A. from the University of Utah. She is currently working in Europe.     

Employment response to supply and demand shocks under envy in wage formation

Summary We analyse the impact of wage envy on employment and on its sectorial allocation. A multi-sector general equilibrium model in which externalities among sectors arise through wage envy and decentralized bargaining is presented. In the no externality case, sectorial employment is a function of sectorial productivity and of the disutility of work. In the externality case, sectorial employment is additionally affected by union power in all sectors (with a negative sign even though bargaining is efficient), by the productivity in the other sectors (with an undetermined sign) and by the relative average propensity to consume goods of this sector (with a positive sign).Rijksuniversiteit Limburg, FNRS and Université Catholique de Louvain. I would like to thank Franz Palm for valuable comments on an earlier draft. This paper benefitted also from discussions with Torben Andersen, Jacques Drèze and Henri Sneessens (without implying them in any mistake). The detailed comments of the anonymous referee contributed to a large extent to clarify the exposition of the model.     

Distinctive characteristics of entities with an internal audit department and the association of the quality of such departments with errors*

Abstract. This research identifies those characteristics that could potentially influence a choice to create an internal audit department and tests via discriminant analysis to evaluate whether such attributes significantly distinguish between companies with and without an internal audit department. In addition, qualitative characteristics of such departments are described, as is the association of such traits with errors and the overall control environment. A sample of 260 companies is examined. Companies with internal audit departments are observed to be significantly larger, more highly regulated, more competitive, more profitable, more liquid, more conservative in accounting policies, more competent in their management and accounting personnel, and subject to better management controls. Key discriminant variables are the degree of regulation, decentralization, size, the duration of association with present auditors, the existence of an audit committee, EDP control, and pressures by external parties on management to achieve budgetary goals. Qualitative attributes of internal audit are systematically associated with the overall quality of the control environment, as well as errors. The most important attribute appears to be the independence of internal audit in terms of the propriety of the reporting level. An advantage of internal auditing is that external auditors report a 10 percent reduction in the number of hours incurred and greater flexibility appears to exist in the proportion of work performed in off-peak periods. Résumé. Les auteurs dressent l'inventaire des caractéristiques susceptibles d'influer sur le choix de créer un service de vérification interne et soumettent ces attributs à des tests, par voie d'analyse discriminante, afin de déterminer s'ils permettent d'établir une distinction claire entre les entreprises ayant et n'ayant pas de service de vérification interne. De plus, ils décrivent les caractéristiques qualitatives de ces services, de même que l'association de ces carctéristiques aux erreurs et au contexte global du contrôle. Les auteurs procèdent à l'examen d'un échantillon de 260 entreprises. L'étude révèle que les entreprises possédant des services de vérification interne sont beaucoup plus souvent des entreprises de grande taille, faisant l'objet d'une réglementation plus rigoureuse, plus concurrentielles, plus rentables, ayant davantage de liquidités, plus prudentes dans leurs conventions compatables, possédant une équipe de gestion et un personnel comptable plus compétents et soumises à de meilleurs contrôles de gestion. Les principales variables discriminantes sont le degré de réglementation, la décentralisation, la taille, la durée de l'association avec les vérificateurs actuels, l'existence d'un comité de vérification, le contrôle dans un cadre informatique et les pressions exercées par les tiers sur la direction pour l'atteinte des objectifs budgétaires. Les attributs qualitatifs de la vérification interne sont systématiquement asociés à la qualité globale du cadre de contrôle, de même qu'aux erreurs. L'attribut le plus important semble être le degré d'autonomie du service de vérification interne, c'est-à-dire le caractère approprié de ses liens hiérarchiques. La vérification interne comporte un avantage: les vérificateurs externes font état d'une réduction de 10 pour cent dans le nombre d'heures consacrées à la vérification, et il semble exister une plus grande souplesse dans la proportion du travail de vérification effectué en dehors des périodes de pointe.