An Exploratory Study of Regulatory Failure in the Australian Home Mortgage Market

Regulators have long been interested in protecting consumers borrowing for a home as it is likely the single greatest financial obligation they will undertake. In this paper we examine the approach taken in Australia to mandating the disclosure of simple comparison data to reduce the complexity involved in the home loan decision. This article highlights that while the form of the legislated disclosure significantly improves decision accuracy, the failure of the regulator to account for the consumer's purchase behavior and lenders' motivations has undermined its effectiveness. We provide a number of recommendations for how to rectify these failings, principally that regulators need to consider the role of borrower information search and lender motivation as part of any regulatory reform.     

The Merits of Dual Pricing of Russian Natural Gas

Our analysis reveals that, from Russia's perspective, there is no economic rationale to unify the price of natural gas it sells domestically and in Europe. We argue that pipelines allow Gazprom to segment the Russian market from the European (including Turkey) market and that Russia has market power in the European market. If Russia were to fail to exploit this market power in its European market, by selling its natural gas to Europe at only full long‐run marginal cost plus transportation costs, Russia would lose between $5 billion and $7.5 billion per year (almost two per cent of its GDP). If, instead, Russia were to raise its domestic prices to the prices it charges in Europe, Russian industry would incur very large investment adjustment and unemployment costs in the short run – adjustment costs that cannot be justified on the basis of comparative advantage. We estimate that the efficient world price would be achieved if Gazprom were to employ its optimal ‘two‐part tariff’. The optimal two‐part tariff would double Gazprom's annual profits in Europe, but it involves significant long‐term risks for Gazprom of lost market share.     

Multiple perspectives analysis for integrating technology into a business : A knowledge systems case study

The increasing rate of technological change has pushed the management of technology to the forefront of today's leading organizations. This paper examines an increasingly important aspect of technology management: the integration of a selected technology into the organization. In this paper, I describe the issues of technology integration, give a brief synopsis of the multiple perspective research methodology, summarize a technology integration case study in the domain of knowledge systems (expert systems), present and describe the technology integration model, and state observations and lessons learned from my research.     

Reforming Hungarian agricultural trade policy: A quantitative evaluation

Reforming Hungarian Agricultural Trade Policy: A Quantitative Evaluation. — In this paper, the authors quantitatively assess the consequences for Hungary of: (i) removing its quantitative import restraints in agriculture, (ii) removing the export subsidy program in agriculture, and (iii) adopting an EU-type “CAP” system in Hungary. The consequences are estimated through the use of a small open economy computable general equilibrium model for Hungary, calibrated to the year 1990. The tariff equivalent of the import licenses was estimated through a detailed price comparisons study, the first of its kind for Hungary. Import protection, export subsidies and a potential CAP system would contribute significantly to the Government's fiscal problems.     

The Welfare Costs of Price Controls for Cars and Color Televisions in Poland: Contrasting Estimates of Rent-Seeking from Recent Experience

The welfare costs of price controls can vary enormously, dependingon the method of allocating the good in shortage and the possiblerent-seeking costs that may result. With full rent dissipation,the welfare loss from price controls on Polish color televisionsin 1989 was about ten times the standard estimates of distortioncosts, which ignore rent-seeking, and was more than 100 percentof the value of domestic producers' sales. The methods of allocatingcars, however, did not result in rent-seeking costs. The domesticprice controls were an unintended implicit subsidy to imports.Subsidies for cars were estimated at 43 percent and for colortelevisions at 22 percent.     

Performance measurements for a continuous improvement strategy

In many organizations, performance measurement systems have not appreciably changed to reflect organizational and environmental changes. The objective of this article is to analyze the results of an inappropriate performance measurement system, define the characteristics required of a performance measurement system in a continuous improvement (CI) organization, and give some examples of more appropriate performance measures in a CI company.     

Second-Best Foreign Exchange Policy in the Presence of Domestic Price Controls and Export Subsidies

Poland, like many developing countries, has required its exportersto surrender a share of their foreign exchange earnings to thegovernment at an overvalued exchange rate. During the late 1980s,it progressively increased the share which exporters were allowedto retain (the retention ratio), but other distortions to thetrade regime remained. A model developed here estimates theeffects of these policies on welfare under different foreignexchange elasticities, export and import subsidies, officialexchange rates, and policies on exporter retention of foreignexchange earnings. The retention ratios in effect in early 1989were equivalent to a 51 percent tax on exports or an importtariff of 130 percent. As economic theory would suggest, maximumsocial benefit would derive from removal of the full range ofdistortions. Full retention of foreign exchange by exportersin the absence of other distortions would provide social benefitsequivalent to 8 percent of gross domestic product. But the neteffect of the other policies together is a bias toward tradables,so that a policy of somewhat less than full retention of foreignexchange is optimal in this second-best world.     

Modeling services liberalization: The case of Kenya

This paper employs a 55 sector small open economy computable general equilibrium model of the Kenyan economy to assess the impact of the liberalization of regulatory barriers against foreign and domestic business service providers in Kenya. The model incorporates foreign direct investment in business services and productivity effects in imperfectly competitive goods and services markets endogenously, through a Dixit–Stiglitz framework. The ad valorem equivalent of barriers to foreign direct investment have been estimated based on detailed questionnaires completed by specialists in Kenya. We estimate very substantial gains to Kenya from regulatory liberalization in business services, and additional gains from uniform tariffs. The estimated gains increase to 50% of consumption in the long run steady state model, where the impact on the accumulation of capital from an improvement in the productivity of capital is taken into account. Decomposition exercises reveal that the largest gains to Kenya will derive from liberalization of costly regulatory barriers that are non-discriminatory in their impacts between Kenyan and multinational service providers.