Confidence in formal institutions and reliance on informal institutions in Bosnia and Herzegovina

This article uses survey data to investigate the relationship between citizens’ confidence in formal institutions and reliance on informal institutions in Bosnia and Herzegovina (BiH). We find an endogenous substituting relationship and that the different institutional structures currently existing in the two entities in BiH are significantly linked to respondents’ confidence in formal and reliance on informal institutions. In addition, perceptions of higher indirect costs of institutions and a lack of their improvement are associated with a lower confidence in formal and a greater reliance on informal institutions; the minority ethnic groups in each region are less confident in formal and rely more on informal institutions compared to the majority group; and more reliance on informal institutions is found amongst males and respondents from urban areas.     

ENERGY BUDGETING: JOULES OR DOLLARS?

The assumptions which must be made to accept ratios of energy output to energy input as an efficiency measure with normative significance are examined and found to be unrealistic. It is considered better for governments to modify market prices where divergences exist between private and social costs or benefits than to use energy ratios, or prices determined by energy considerations, as a criterion in allocating resources. Moreover, in a trading world, energy considerations are often of little use in positive analysis of the relationship between energy prices and the prices, or profitability of production, of different foods in a particular country.     

The story of deregulation in the dairy industry

The deregulation of dairy marketing that occurred on 1 July 2000 is a fascinating case study in microeconomic reform. The role of interacting industry and institutional features in the movement to deregulation is explained, with political realities being recognised. A key part of the deregulation bundle was an unprecedented "structural adjustment" package valued at about one and a half billion dollars (in 1998–1999). Questions are raised about the rationale for this package, the process of determining it and the means of funding it.     

TAX CHANGES AND MACHINERY INVESTMENT

The effects of recent tax changes on the profitability and feasibility of machinery investment and on the incentive for the substitution of labour by machinery are studied. Using two examples, variations in tax, interest and inflation rates are also evaluated, as is the effect of the consideration of tax bands. The results indicate that not only has the change in capital allowances made machinery investment less favourable, but so also does the use of tax bands, especially for more expensive items. If interest and inflation rates decline in the longer term the profitability of machinery investment will deteriorate, although feasibility may improve.     

The formal system paradogm for studying failures

One way in which general lessons may be learnt from sets of failures and disasters is by using a common conceptual framework for analysis. Many authors have found the use of individual systems concepts useful in their studies of failure. This paper presents a unified model that draws together those concepts and other related concepts. The model that is described forms part of a systemic methodology which has been used successfully in the understanding of failures. It is suggested that the model could be developed further so as to become a predictive and preventative tool.     

Behind methodological individualism

The unit is not an individual but a social individual, one whohas a place in the social order... To understand the individualwe must study him in his group setting; to understand the groupwe must study the individuals whose interrelated actions constituteit' (Solomon Asch, 1952, p. 257).     

Book Reviews

Andrew Macintyre, Business and Politics in Indonesia, Sydney: Allen and Unwin, in Association with the Asian Studies Association of Australia, 1991, pp. xv + 282. A$24.95.

Scott Pearson, Walter Falcon, Paul Heytens, Eric Monke and Rosamond Naylor, Rice Policy in Indonesia, Ithaca and London: Cornell University Press, 1991, pp. xii + 180. US$32.95.

Raymond J. Struyk, Michael L. Hoffman and Harold M. Katsura, The Market for Shelter in Indonesian Cities, Jakarta and Washington DC: Hasfarm Dian Konsultan and the Urban Institute Press, 1990, pp. xxiv + 475.

P. Boomgaard and A. J. Gooszen, Changing Economy in Indonesia, Volume 11: Population Trends 1795–1942, Amsterdam: Royal Tropical Institute, 1991, pp. 253. Dfl. 48.00.

Peter Boomgaard, Children of the Colonial State: Population Growth and Economic Development in Java, 1795–1880, Centre for Asian Studies Amsterdam, Monograph 1, Amsterdam: Free University Press, 1989, pp. x + 247. Paper: Dfl. 49.50.

Mohamed Ariff (ed.), The Pacific Economy: Growth and External Stability, Sydney: Allen and Unwin, 1991, pp. xvi + 322. Cloth: A$45.00; Paper: A$29.95.

L. Th. Schmit, Rural Credit Between Subsidy and Market: Adjustment of the Village Units of Bank Rakyat Indonesia in Sociological Perspective, Leiden: Leiden Development Studies No. 11, Leiden University, 1991, pp. 343. US$18.00.

Richard H. Patten and Jay K. Rosengard, Progress with Profits: The Development of Rural Banking in Indonesia, San Francisco: International Centre for Economic Growth and Harvard Institute for International Development, 1991, pp. xix + 114. US$9.95.

Hal Hill (Ed.), Indonesia Assessment 1991, Political and Social Change Monograph 13, Canberra: Department of Political and Social Change, Research School of Pacific Studies, Australian National University, 1991, pp. xx + 196. A$16.00.

Penjabaran Demokrasi Ekonomi [The Understanding of Economic Democracy], Jakarta: Ikatan Sarjana Ekonomi Indonesia [The Indonesian Economists Association], 1990, pp. v + 27 (Indonesian Version), v + 21 (English Version). Available from the ISEI Jakarta Office.

BRIEFLY NOTED: General Agreement On Tariffs and Trade (Gatt), Trade Policy Review — Indonesia 1991, 2 Volumes, Geneva, 1991.     

SDIs,tourism‐led growth and the empowerment of local communities in South Africa

Economic justice is the key aim of the tourism and/or agricultural development initiatives ‐ including the Wild Coast, Lubombo, Maputo, Coast2Coast and Okavango Upper Zambezi International Tourism SDIs. This article looks in more detail at the models and principles being adopted to achieve this in the tourism sectors of the SDIs, with particular reference to the Lubombo and Wild Coast initiatives. The article thus moves away from the general lessons learnt from international experiences to comprehensive guidelines for implementation and, towards the end, presents detailed checklists that can be used by practitioners of what the SDI technical team calls ‘empotourism’.