Delineating a forum for business policy scholars

This note is a follow-up on one published in 1987. A sample of tenured business policy scholars, with significant track records in publishing, rated key management journals with respect to their appropriateness as outlets for scholarly research in the business policy field. The results of the survey are reported.     

Fiscal centralization versus decentralization: Growth and welfare effects of spillovers, Leviathan taxation, and capital mobility

This paper develops an endogenous growth model with spillovers of public goods, Leviathan taxation, and mobile capital to examine the relative merits of centralized and decentralized fiscal systems for economic growth and social welfare. We show that a decentralized system dominates a centralized system in terms of economic growth; however, the difference in social welfare between a decentralized and a centralized system is non-monotonic and displays a hump-shaped relationship with respect to capital mobility. Since higher capital mobility induces stronger tax competition, this finding implies that there is an optimal degree of tax competition; some tax competition is desirable, but fierce tax competition may be harmful. We also show that there is a critical level of spillovers of public goods above which centralization dominates decentralization in terms of social welfare, as in previous studies; however, if spillovers are below this critical level, capital mobility also matters in the welfare comparison between centralized and decentralized systems.     

Optimising communications for charity brand management

The paper presents recomendations on how to enhance communications planning through new integration and media neutral planning techniques (open planning) linked to Integrated Marketing practice. The paper is based on best practice research in charity and commercial sectors, including NSPCC and National Trust. Copyright © 2005 John Wiley & Sons, Ltd.     

Employment equity,human resource development and institution building in South Africa

The process of economic and social reconstruction in South Africa (SA) has harnessed capital, organized labour and state agencies in emergent tripartite macro-policy forums; in particular, the National Economic Development and Labour Commission. Public policy on human resource development, affirmative action and diversity issues is increasingly an outcome of negotiations in these structures. However, although significant legislative developments on these issues are envisaged in the near future, institutional adaptation has not been adequately researched. The apartheid state was constructed on the ideological basis of ethnic fragmentation rationalized by ethnic and cultural diversity. At the same time, diversity is a social reality in building common national and organizational goals, symbols and identity.

This paper discusses structural and labour market factors associated with the process of employment equity and diversity management in South African organizations. A research project, the Breakwater Monitor, at the Graduate School of Business, University of Cape Town, has established a national database covering some one million employees, which enables benchmarking of company and sectoral practices in regard to affirmative action, diversity policy, training and development and skills formation. The project has also begun to track diversity representation at all levels across major sectors longitudinally, using a common job evaluation standard for comparability. The project considers both quantitative and qualitative factors in human resource development. Findings from this project are presented and discussed in the context of human resource development.     

An explicit solution to an optimal tax problem

Under specific but perhaps not over-restrictive assumptions on social welfare and consumer preferences, an explicit closed-form solution for an optimal linear income tax is derived. Specifically, given linear income supply functions and a rank-order social welfare function, the optimal tax rate and benefit level are characterized by four parameters: I, a measure of pre-tax inequality in the ability (wage) distribution; r, the fraction of potential total income required for (non-redistributed) government revenue; σ, the fraction of potential total income required for consumer subsistence expenditures; and a disincentive parameter, δ, the marginal propensity to spend on leisure or the amount by which earned income is reduced in response to a unit increase in unearned benefit. Defining , the ratio I/(1 - σ - r), the optimal tax rate τ is given by: The formula is used to fully characterize τ in terms of the parameters. Results include the following: τ = 0 if I = 0; τ = 1 if δ = 0; τ is increasing in I, σ and r; τ may be increasing or decreasing in δ depending on the value of ; when disincentive effects are large, τ becomes close to so that, in such economies, if σ and r are small, the optimal tax rate is equal to the measure of pre-tax inequality. Formulae for the deadweight loss associated with the tax are derived and some observations are offered on the empirical issues associated with the model.     

A Note on Finding the Optimal Allocation Between a Risky Stock and a Risky Bond

The allocation of financial assets among securities with different levels of risk is an essential topic in the study, analysis, and strategic use of derivative securities and markets. In a recent paper, Browne (1999) determined the optimal allocation strategy for dividing investments between a risky stock and a risky bond. In this note, Browne's equation determining the optimal strategy is studied and some methods are described for solving it. In addition, some useful rules‐of‐thumb, computational methods, and approximation techniques are presented. © 2001 John Wiley & Sons, Inc. Jrl Fut Mark 21:1181–1196, 2001     

UK FISCAL CHANGES AND NEW FORESTRY PLANTING

The taxation and grant arrangements for UK forestry were radically changed in April 1988. This paper considers the consequence of these changes for new forestry investment in Scotland by examining five models which describe different site types. The investment appraisals show that after April 1988 forestry will no longer be of interest to investors seeking a tax shelter or wishing to invest borrowed capital. Acceptable real returns to capital will be found only on relatively good quality sites. A major reduction in the rate of new planting is indicated and a shift away from poorer planting land. The rate and location of new planting will depend critically on farmland prices and the extent to which better-quality land is released for planting under the normal consultation procedures.     

Genetics and Insurance: What have we Learned So Far?

Genetics and insurance is an area unusually exposed to rapid scientific advance, close public and political scrutiny, and popular myth. It may be leading the way towards evidence-based underwriting. This survey paper describes some of the experience gained since actuarial involvement began in the mid-1990s, particularly the vital link with genetic epidemiology. We survey the relevant aims and outputs of genetic epidemiology, mainly relating to single-gene disorders, and the use of genetic epidemiology in actuarial models. The part that actuarial models might play in evidence-based approaches to underwriting and policy-making is discussed.     

Adult Polycystic Kidney Disease and Critical Illness Insurance

Abstract

Adult polycystic kidney disease (APKD) is a single-gene autosomal dominant genetic disorder leading to end-stage renal disease (ESRD, meaning kidney failure). It is associated with mutations in at least two genes, APKD1 and APKD2, but diagnosis is mostly by ultrasonography. We propose a model for critical illness (CI) insurance and estimate rates of onset of ESRD from APKD using two studies. Other events leading to claims under CI policies are included in the model, which we use to study (a) extra premiums under CI policies if the presence of an APKD mutation is known, and (b) the possible costs arising from adverse selection if this information is unavailable to insurers. The extra premiums are typically very high, but because APKD is rare, the possible cost of adverse selection is low. However, APKD is just one of a significant number of single-gene disorders, and this benign conclusion cannot be assumed to apply to all genetic disorders taken together. Moreover, ignoring known genetic risks in underwriting sets a precedent that could have unintended consequences for the underwriting of nongenetic risks of similar magnitude.