The Augmented Solow Model with Mincerian Schooling and Externalities

Abstract. We combine the augmented Solow model with the Mincer equation to derive a specification that identifies an education externality within a production function framework. The previous empirical literature has not reached a consensus about the size of the education externality, which is given by the difference between the microeconomic and the macroeconomic return to education. Relative to our benchmark value that is based on a parameterization of the derived specification, we find that the estimated education externality is too large when the empirical model is not properly restricted, and appears to be absent when all control variables of the empirical model are properly accounted for. We note that the absence of an education externality is difficult to reconcile with observed levels of education subsidies for efficiency reasons.     

Assisted Self-help Housing in Mexico: Advocacy, (Micro)Finance and the Making of Markets

This article examines forms of housing finance that offer poor households opportunities for sourcing resources for construction work through non-mortgage microloans. In Mexico, these housing microfinance schemes have recently been incorporated into national housing policies. On a global level, the past 10 to 15 years have seen the emergence of institutional investment in microfinance. I reflect on these processes in this article by bringing critical accounts of financial inclusion in development studies and the debate on financialization within urban studies and beyond into dialogue. I combine micro- and macro-scale perspectives to examine how households become financial clients and how finance gains influence by expanding capitalist markets into the informal housing sector. This discussion is based on policy review and document analyses and an empirically grounded account of an assisted self-help housing case study. In the article I draw on three focal concepts—risk, debt and marketization—to highlight the ambivalences of the expanded access to finance for poor households engaged in self-organized building practices. These ambivalences emerge from the multiplicity of operational logics and motivations in the field of housing provision for the poor, and the profoundly conflicting rationalities of financial- and social-sector actors.     

The Difficult Relation between International Law and Politics: The Legal Turn from a Critical IPE Perspective

International law is currently undergoing a major transformation that has provoked a ‘legal turn’ in the field of International Relations. At the heart of this transformation are the juridification of international politics and subsequently the judicialisation of international law. This contribution argues that scholars of critical International Political Economy have not yet paid enough attention to this process. What is needed is a theory of international law that is able to grasp the societal implications of this transformation. In a first step some accounts drawing on Antonio Gramsci and Evgeny Pashukanis are presented, with a view to making their theory fruitful for analysing international law. Against the background of an empirical study that compares the global regulation of trade in goods with the trade in services, delivered notably through natural persons, some major shortcomings of these accounts are outlined. The last part of the contribution presents some ideas on how to further develop a critical theory of international (trade) law that introduces a communicative dimension into the legal turn with a view to distinguishing between different extra-economic dynamics.     

Fund Manager Allocation

We show that fund families allocate their most skilled managers to market segments in which manager skill is rewarded best. In efficient markets, even skilled managers cannot generate excess returns. In less efficient markets, skilled managers can exploit inefficiencies and generate higher performance than unskilled managers. Fund families seem to be aware of the relation between skill, efficiency, and performance, and allocate more skilled managers to inefficient markets. They pursue this strategy when hiring new fund managers and when reassigning managers to funds within the family. Overall, we conclude that fund families allocate fund managers in an efficient way.