Seeing Like a Theorist

Warren Magnusson sees a problem endemic to political thought and practice: we see the world in ways that presume and reaffirm the necessity of a sovereign territorial state, on pain of violent disorder in its absence. The solution is to ‘see like a city’, shaking off the dualism of sovereignty versus anarchy and finding a richer space of political possibilities. I admire and applaud Magnusson's critical efforts to challenge dominant categories and illuminate possibilities, but these aims rest uneasily with his polemical contrast between sovereignty and cities.     

Bidding for Labor

We present a competing-auction theory of the labor market, where job candidates auction their labor services to employers. An equilibrium matching function emerges which has many of the features commonly assumed, including constant returns to scale in large economies. The auction mechanism also generates equilibrium wage dispersion among homogeneous workers and constrained-efficient entry of vacancies in large economies. In a dynamic version of the model, we generate implied numerical values for equilibrium unemployment and wage dispersion. The theory makes the novel prediction that wage dispersion is a decreasing function of the discount factor and labor market tightness. Journal of Economic Literature Classification Numbers: E24, J31, J41, J64, D44.     

Maximizing human development

The Human Development Index (HDI) is widely used as a measure of well‐being. We examine the allocations implied by the maximization of this index using a standard growth model. Maximization leads to consumption (excluding education and health expenditures) being pushed to minimal levels. It also leads to the overaccumulation of education and/or health capital and possibly physical capital, relative to the standard golden rule. We propose an alternative specification for the HDI, where consumption replaces income as a proxy for decent standard of living. Maximization of this alternative implies a ‘human development golden rule’ which balances consumption, education and health expenditure. We advocate the method of optimization subject to constraints for revealing the policy implications of taking an achievement measure and its underlying philosophy seriously.     

Central Government Control over Local Authority Expenditure: The Overseas Experience

This article compares the macroeconomic performance of centralized countries and decentralized countries in the OECD between 1984 and 1995. It considers three views of decentralization: the level of state and local taxes, the degree of decentralized power over tax rates, and the freedom of access for states or local authorities to capital markets. The evidence does not support the commonly held fear that decentralized countries may perform worse. In terms of growth, the two types of country seem evenly matched, and in terms of inflation and unemployment, decentralized countries actually seem to perform consistently better. It is possible, because central governments in decentralized countries concentrate on fewer activities, such as macroeconomic policy, that they tend to perform these activities better.     

Contractual governance and illiberal contracts: some problems of contractualism as an instrument of behaviour management by agencies of government

This paper considers the significance, as a matter both of politicaland of legal analysis, of the considerable and growing use inthe UK of ostensibly contractual or contract-like arrangementsbetween public authorities and members of society whose behaviourit is judged necessary to manage and control. We argue thatthese new arrangements often amount to instruments of illiberalpolicy, both in procedure and implementation. Drawing on a modelof contractual relations found in social work policy, we assessthe manifestation of contract-like features in recent governmentpolicy toward young offenders and workfare participants. Wethen provide a detailed application of the illiberal argumentin respect of the contractual arrangement promoted in the UKGovernment's New Deal programme and Jobseekers' Allowance. Weconclude that illiberal tendencies in these workfare schemesmay have unintended but nonetheless significant brutalisingeffects upon both participants and administrators.     

The Use of Census Data for Hedonic Price Estimates of Open-Space Amenities and Land Use

Hedonic price models for determining marginal implicit prices of open-space amenities and nonresidential land use were estimated using housing data from the census. Alternative model specifications were compared to evaluate the effects of aggregating land-use data by alternative levels of census geography as well as the use of different sample sizes of census blocks. It was determined that land use is best aggregated at the block group level and that entire populations or very large sample sizes of census blocks should be used with hedonic models.     

Tools-Я-us

Our methods of inquiry predetermine most of what we are able to know. While our modes of understanding ought to correspond to the complexities confronting us in our modern technological society, they do not. Soft systems methodology helps us focus on what is problematic and how it can be approached — and offers direction to exert moral control over our tools and technologies.

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Anti-insurance: Analysing the Health Insurance System in Australia

This paper develops a model to analyse the Australian health insurance system when individuals differ in their health risk and this risk is private information. In Australia private insurance both duplicates and supplements public insurance. We show that, absent any other interventions, this results in implicit transfers of wealth from those most at risk of adverse health to those least at risk. At the social level, these transfers represent a mean preserving spread of income, creating social risk and lowering welfare – what we call anti-insurance. The recently introduced rebate on private health insurance can improve welfare by alleviating anti-insurance.     

The effects of expertise,end goal,and product type on adoption of preference formation strategy

The global preference formation model identifies several preference formation strategies (i.e., own-based, other-based, or hybrid) that consumers use to select among alternative product offerings. This article examines how consumers’ expertise level (novice vs. expert), their end goals (satisficing vs. optimizing), and product type (search vs. experience product) collectively influence the preference formation strategy likely to be adopted. Results from an experiment indicate that the adoption of a given strategy is influenced by interactions between subjects’ expertise level and their end goals and the product type. Novice satisficers employed a higher proportion of own-based strategies than novice optimizers, but expert satisficers used a lower proportion of own-based strategies than expert optimizers. When compared to novices choosing a search product, novices selecting an experience product used a lower proportion of own-based and a higher proportion of other-based strategies. Similarly, when compared to experts choosing a search product, experts selecting an experienced product used a lower proportion of own-based strategies, but this was accompanied by a higher proportion of hybrid strategies. Implications and directions for future research are discussed. Her current research interests include consumer choice processes, electronic decision aids, and measurement issues in marketing. His research interests include consumer information search, marketing communications, and measurement issues.