Losing Credibility: The Stabilization Blues

In exchange rate-based stabilization programs, credibility often follows a distinct time pattern. At first it rises as the highly visible nominal anchor provides a sense of stability and hopes run high for a permanent solution to fiscal problems. Later, as the domestic currency appreciates in real terms and the fiscal problems are not fully resolved, the credibility of the program falls, sometimes precipitously. This paper develops a political-economy model that focuses on the evolution of credibility over time, and is consistent with the pattern just described. Inflation inertia and costly budget negotiations play a key role.     

The Effect of Incentive regulation on Infrastructure Modernization: Local Exchange Companies' Deployment of Digital Technology

This study examines the investment patterns of all large local exchange telephone companies in the United States over time. It identifies how different regulatoy environments have influenced the recent historical pattern of investment in modern infrastructure equipment. It focuses exclusively on the postdivestiture experience of local telephone exchange companies (LECs). It examines the growth of fiber-optic deployment and of complementary equipment associated with the modernization of today's information infrastructure. The study estimates the influence of different regulatory structures on infrastructure deployment by LECs. The study is unique in that if relates individual LEC investment patterns to LEC-specific regulatory, demographic, and economic characteristics. Thus, it isolates the contribution of state regulatory policies from that of other demographic and economic factors in the determination of infrastructure deployment at the state LEC rather than at the corporate level. Its main findings are as follows: First, price regulation (and, in particular, price caps) is a more potent regulatory mechanism than the standard earnings sharing scheme. Second, when associated with an earnings sharing scheme, price regulation is less effective in triggering infrastructure deployment than when it is implemented by itself. These results raise questions about the effectiveness of a popular regulatory instrument-earnings sharing schemes-and highlight the effectiveness of generic price-cap regulation. These results have implications for the design of regulatory policy at both the state and federal levels. In particular, given the importance currently being placed on the development of the information superhighway, regulatory emphasis should be focused more on price regulation than on regulating profits.     

Deliberation Councils, Government-Business-Citizen Partnerships, and Public Policy-Making: Cases from Singapore, Malaysia, and Canada

The authors assert that one of the least appreciated but important institutional factors underlying the remarkable growth in the East Asian miracle economies is the deliberation council: a consultative arrangement linking government, business and civil society. They describe three such councils, two in Southeast Asia and one in North America, and reveal the critical features of effective councils which can be found regardless of the political, social and economic contexts in which they operate. Efforts to adapt and apply successful councils in other contexts should consider the following common features: focus on clear and specific mandates; staffing by credible individuals who represent a broad cross section of stakeholders; process and procedures for collaboration which are transparent, systematic, and straightforward; decision making via unanimity rule; and communication of council decisions through one voice, the chairperson. The authors contend that councils of this nature are helpful, if not critical, in stabilizing the policy environment, and promoting business development in the Asia-Pacific region especially in periods of fiscal crisis.     

Political Determinants of Intergovernmental Grants: Evidence From Argentina

This paper explores the determinants of federal grants allocation across provincial states in Argentina. Our analysis suggests that the redistributive pattern implicit in the federal system of intergovernmental grants cannot be explained on normative grounds exclusively. In order to understand the rationale behind federal grants distribution, a positive approach could render better results. Specifically, we claim that the distribution of federal grants could be associated with political variables such as the political representation of jurisdictions at Congress. The econometric analysis suggests that the significant disparity observed in the per capita representation across different provinces is an important factor explaining the allocation of those transfers. In this respect, overrepresented provinces, both at the senate and at the lower chamber, have received, on average, higher resources from the national government compared to more populous and less represented states. These results are consistent with those observed in other countries.     

The European response to the challenge of the Japanese steel industry (1950–1980)

Between 1950 and 1980, the European delay with respect to Japan and the relative loss of competitiveness in the integrated steel industry was due to an institutional, geographical and economic logic based largely on historical factors. Europe had a long steel-making history that was closely related to its sources of raw materials. The new technological paradigm turned this former advantage into a clear disadvantage, while the large investments made in the Thomas and open hearth processes and the affordable price of scrap delayed the adoption of the Basic Oxygen Furnace (BOF) until its superiority had been clearly demonstrated. The European steel industry was not at the forefront of the transformation, but merely adapting to the changes, pushed by the threat of a new uncomfortable competitor.     

Economic crisis and benefits of the Internet: differentiated Internet usage by employment status

Using data from the Spanish Survey on Equipment and Use of ICTs in Households for 2007–2011, this paper evaluates the effect of employment status on the diffusion of the Internet among the labor force. We use a bivariate probit with sample selection model to account for a potential selection bias that arises because online usage is only observed for Internet users. Our results show that, controlling for income, employment influences online adoption and usage, and we find evidence of a digital divide in adoption and usage by education and age among the labor force. Employed individuals are more likely to have accessed the Internet and used it more frequently than the unemployed and for different activities. However, conditional on adoption, they do not use the Internet for more personal activities. These findings suggest that firms promote and subsidize Internet access, but this sponsored access does not translate into more personal use.     

Entrepreneurial Narratives in Sustainable Venturing: Beyond People,Profit, and Planet

Sustainable venturing, the process of starting a new sustainable enterprise, has been studied extensively through the triple‐bottom‐line lens. The narratives employed by sustainable entrepreneurs, however, have proven to be more complex and diverse. In this paper, we set out to inductively explore the narratives underlying sustainable venturing. We conducted an interpretative analysis to elucidate how these entrepreneurs perceive, think about and give meaning to sustainability as they develop their ventures. Findings allow for an expansion of the role of narratives in business venturing toward a more sophisticated conceptualization grounded in how actual entrepreneurs experience and enact sustainability in the context of their ventures.