FAIR TRADE IS COUNTERPRODUCTIVE – AND UNFAIR

Fair trade – paying a price premium for commodities based not on quality but on employment and other conditions – is counterproductive and unfair. It results in consumers getting a lower‐quality product. Much of the gain from the price premium goes to the fair‐trade bureaucracy rather than to the producer. Fair trade may even, if effective, destroy the banana industry. A better solution for consumers and third‐world producers is to abolish all remaining trade barriers.     

Linking learning and effective process implementation to mass customization capability

This study investigates the role of learning and effective process implementation in the development of mass customization capability. Building upon the knowledge-based view of the firm, we argue that internal and external learning are two knowledge-generation routines that contribute to effective process implementation. Effective process implementation, in turn, is a knowledge-based manufacturing capability, which, as a function of internal and external learning, leads to mass customization capability. We employ structural equation modeling to empirically test the effects of learning on mass customization capability, mediated by effective process implementation, using survey data collected from 100 manufacturing plants in 3 industries and 6 countries. Our results provide empirical evidence supporting the proposed model of the effect of internal and external learning on mass customization capability, fully mediated by effective process implementation. This research is one of the first studies to integrate insights from the knowledge-based view of the firm and mass customization. It complements the OM view of mass customization, which to date has largely focused on the technical side, by demonstrating the role of managerial practices and learning in cultivating mass customization capability in a manufacturing environment.     

Technological Change and Transition: Relative Contributions to Worldwide Growth During the 1990s*

In this paper we use the Kumar and Russell [American Economic Review (2002) Vol. 92, pp. 527–548] growth‐accounting procedure to examine cross‐country growth during the 1990s. Using a data set comprising developed, newly industrialized, developing and transitional economies, we decompose the growth of output per worker into components attributable to technological catch‐up, technological change and capital accumulation. In contrast to the study by Kumar and Russell, which concludes that capital deepening is the major force of growth and change in the world income per worker distribution over the 1965–90 period, our analysis shows that, during the 1990s, the major force in the further divergence of the rich and the poor is due to technological change, whereas capital accumulation plays a lesser and opposite role. Finally, although on average we find that transitional economies perform similar to the rest of the world, the procedure is able to discover some interesting patterns within the set of transitional countries.     

DYNAMIC MECHANISM DESIGN FOR A GLOBAL COMMONS

We model dynamic mechanisms for a global commons. Countries value both consumption and conservation of an open access resource. A country's relative value of consumption to conservation is privately observed and evolves stochastically. An optimal quota maximizes world welfare subject to being implementable by Perfect Bayesian equilibria. With complete information, the optimal quota is first best; it allocates more of the resource each period to countries with high consumption value. Under incomplete information, the optimal quota is fully compressed: Identical countries receive the same quota even as environmental costs and resource needs differ. This is true even when private information is negligible.     

Social risks and challenges in post-disaster resettlement: the case of Lake Nyos,Cameroon

This paper examines contemporary challenges in post-disaster resettlement in Cameroon. The focus is on the ongoing post-disaster experiences of survivors who were resettled in seven camps after the Lake Nyos Disaster in 1986. Empirical data obtained at the Ukpwa Waindo resettlement camp were used for analysis of impoverishment due to relocation and resettlement. Cameroon’s weak macroeconomic situation that started a quarter century ago had serious consequences for the country’s socio-economic trends, which is partly responsible for the slow recovery of disaster survivors. However, an analysis of social vulnerability using Cernea’s Impoverishment Risk and Reconstruction model shows how the involuntary resettlement of disaster survivors has itself created deep seated socio-economic and cultural consequences. By analysing their socio-economic situation, this article shows that resettlement is not merely a housing solution, but a complex, multi-dimensional process, with potentially very high negative impact if not properly planned and implemented. Therefore, the lessons learnt from this resettlement experience can be applied to ensure that resettlement becomes an opportunity to improve resilience and living conditions of the stricken population, and reduce exposure to disaster risk. There is urgent need for the government to tackle these long-term socio-economic problems faced by the disaster survivors, and to develop an effective policy to reconstruct, protect, improve or at least restore the livelihoods of those subject to resettlement.     

The three Is of public schools: irrelevant inputs,insufficient resources and inefficiency

We examine the educational production function and efficiency of public school districts in Illinois. Using non-parametric kernel methods, we find that most traditional schooling inputs are irrelevant in determining test scores (even in a very general setting). Property tax caps are the only relevant factor that is related to districts’ financial constraints and have predominantly negative associations with test scores. Therefore, insufficient resources may be partially responsible for the lack of growth in test scores. For most other relevant inputs, we find substantial heterogeneity in the returns, which helps reconcile some of the puzzling results in the literature. We further find that there exist inefficiencies in school districts. Moreover, the level of test scores, commonly used as a measure of school effectiveness, (while related) differs substantially from our efficiency scores, and standard parametric approaches drastically underestimate school efficiency. We discuss the policy implications of our results.