Embargoes and corporate goals

A recent article in Food Policy, ‘US-Soviet grain embargoes: regulating the MNCs’, by Erik Lindell,¹ broached the problem of controlling and regulating multinational corporations (MNCs) during recent US-Soviet grain embargoes. While agreeing with Lindell's analysis as far as it goes, Peter Okaiyeto provides a conceptual framework to improve our understanding of why MNCs behave as they do, demonstrating that MNCs will undermine those global interests of their national governments that run counter to their own interests.     

Modes of behavior

This paper introduces a model of behavior in which people are seen as behaving in different ways (modes) at different times and in different contexts. The existence of these modes of behavior creates pressures for the creation of distinct institutional structures which reflect the difference between the modes. The proposed model is a combination or synthesis of models used by economists and other social scientists; it attempts to bring together analyses ordinarily separated by academic discipline lines.     

Index

This paper provides empirical estimates of the stock market reaction to tender offers, both successful and unsuccessful. The impact of the tender offer on the returns to stockholders of both bidding and target firms is examined. The evidence indicates that for the twelve months prior to the tender offer stockholders of bidding firms earn significant positive abnormal returns. In the month of the offer, only successful bidders earn significant positive abnormal returns. Stockholders of both successful and unsuccessful targe firms earn large positive abnormal returns from tender offers, and most of these returns occur in the month of the offer. For all classes of firms, there is no significant post-offer market reaction. The market reaction to ‘clean-up’ tender offers is also estimated and target stockholders again earn significant positive abnormal returns.     

On the Unequal Inequality of Poor Communities

Communities differ in important ways in their needs, capacities,and circumstances. Because central governments are not ableto discern these differences fully, they seek to achieve theirpolicy objectives by relying on decentralized mechanisms thatuse local information. Household and individual characteristicswithin communities can also vary substantially. A growing bodyof theoretical literature suggests that inequality within communitiescan influence policy outcomes in ways that are either harmfulor helpful, depending on the circumstances. Until recently,empirical investigations into the impact of inequality havebeen held back by a lack of systematic evidence on community-levelinequality. This study uses household survey and populationcensus data to estimate per capita consumption inequality withincommunities in three developing economies. It finds that communitiesvary markedly in their degree of inequality. It also shows thatthere should be no presumption that inequality is less severein poor communities. The kind of community-level inequalityestimates generated here can be used in designing and evaluatingdecentralized antipoverty programs.     

Small-Scale Industry, Environmental Regulation, and Poverty: The Case of Brazil

Governments and international development agencies have intensifiedefforts to promote small-scale enterprises as an engine of propoorgrowth. In Brazil, however, small-scale industries may alsobe responsible for the bulk of air pollution emissions. Althoughemployees of polluting small-scale industries in Brazil arenot disproportionately poor, simulations suggest that stringentenvironmental regulation resulting in widespread closures ofpollution-intensive small-scale industries would result in anonnegligible increase in poverty among employees of these firms.The results suggest that the enthusiasm for small-scale enterprisesneeds to be tempered by awareness of the potential environmentalcosts imposed by this sector.     

Sales compensation governance: the last frontier of corporate reform

The area of sales compensation has remained relatively untouched by recent pressures for compensation reform. This article highlights some of the ways that sales organizations stumble in managing their compensation programs, and why it takes more than a simple tactical fix to address these problems effectively. The authors describe a more structured governance framework that not only identifies and resolves key sales compensation issues, but ultimately safeguards the effectiveness and financial integrity of the sales organization itself.