Post-Crisis Experiments in Development Finance Architectures: A Hirschmanian Perspective On ‘Productive Incoherence’

Abstract

The Asian and especially the global crisis of 2008 have catalyzed decentralization of the developing world’s financial governance architecture. I understand this state of affairs via the concept of “productive incoherence” which is apparent in a denser, multilayered development financial architecture that is emerging as a consequence of heterogeneous practical adjustments to changing circumstances rather than as the embodiment of a coherent doctrine. Drawing on Albert Hirschman, I argue that the absence of an encompassing theoretical blueprint for a new economic system—i.e. a new “ism” to replace neoliberalism—is in fact a vitally important virtue. If we cannot live without a new “ism,” I propose “Hirschmanian Possibilism” as a new doctrine—one that rejects an overarching theoretical framework from which to deduce the singly appropriate institutional structure of the economy. Hirschmanian Possibilism asserts instead the value of productive incoherence as a framework for pursuing democratic, ethically viable development institutions.     

Taxation of International Private Capital Flows and Securities Transactions in Developing Countries: Do Public Finance Considerations Augment the Macroeconomic Dividends?

This paper examines policies to tax international private capital flows and securities transactions in developing countries. Many recent studies focus on the macroeconomic dividends associated with these policies (namely, their contribution to macroeconomic and financial stability and lengthened investor time horizons). In this paper I explore whether the potential of these policies to raise much‐needed tax revenues in developing countries augments their well‐known macroeconomic benefits. To my knowledge, there has been no effort to examine systematically the public finance issues related to the taxation of international private capital flows or securities transactions in the developing country context. I conclude that the public finance implications of these policies in middle‐income developing countries offers additional support to the macroeconomic case for them. To different degrees, taxation of international private capital flows and securities transactions has the potential to raise modest revenues in middle‐income countries. However, far more important is the potential of these policies to offer valuable macroeconomic dividends on the national level. These national macroeconomic dividends have the potential to bear fruit globally. This is because experiences with financial contagion over the last decade suggest that global financial stability can be enhanced via the promotion of domestic financial stability in developing countries.     

Fetal protection: Law,ethics and corporate policy

Corporate fetal protection policies are designed to protect unborn children from exposure to harmful substances in the workplace. In recent years, a number of corporations have instituted fetal protection policies which excluded all fertile female employees from jobs which exposed them to hazardous substances. Critics argued that these policies discriminated against women, and several lawsuits were filed.The United States Supreme Court recently decided a case involving the fetal protection policy of Johnson Controls, Inc. This article will analyze the impact of the Supreme Court decision from a legal and ethical perspective. Practical guidelines for policies which protect the unborn and comply with the law will also be addressed.Ira Sprotzer, J. D., is an Associate Professor and Chairman of the Department of Business Policy and Environment at Rider College, Lawrenceville, N.J. Professor Sprotzer is a member of the New Jersey Bar and publishes research in the field of Employment Law.Ilene V. Goldberg, J. D., is an Assistant Professor in the Department of Business Policy and Environment at Rider College, Lawrenceville, N.J. Professor Goldberg is a member of the New Jersey and Pennsylvania Bars and publishes research on topics related to Health Law.     

Averting crisis? Assessing measures to manage financial integration in emerging economies

The Asian crisis provides heterodox economists with the opportunityto investigate counterfactually whether the financial policiesthey have proposed would have averted the crisis. The paperargues that neo-liberal financial integration introduces distinctrisks to emerging economies—currency, flight, fragility,contagion and sovereignty risks. The paper presents the financialpolicies endorsed by the heterodoxy—transactions taxes,trip wires and/or speed bumps, convertibility restrictions,the Chilean model and a publicly managed mutual fund. The paperconsiders whether these policies mitigate risks, and whetherthey could have prevented the Asian crisis (and the transmissionthereof). The paper concludes with policies to avert futurecrises.     

Measurement error in discrete health facility choice models: An example from urban Senegal

We use individual‐level health facility choice data from urban Senegal to estimate consumer preferences for facility characteristics related to maternal health services. We find that consumers consider a large number of quality‐related facility characteristics, as well as travel costs, when making their health facility choice. In contrast to the typical assumption in the literature, our findings indicate that individuals frequently bypass the facility nearest their home. In light of this, we show that the mismeasured data used commonly in the literature produces biased preference estimates; most notably, the literature likely overestimates consumer distaste for travel.     

Delineating a forum for business policy scholars

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.     

Industrial Migration: A Case Study of Destination by City-Surburban Origin within the New York Metropolitan Area*

Since the early stages of industrial development, the outflow of jobs from central city to suburb has been discernable. This intrametropolitan dispersion process, slowed by depression and war, gained impetus following World War II and accelerated during the ensuing decades. By the 1970s, however, a new dimension had been added to the dispersion process—especially in the mature urban areas of the North-east and Midwest—that being the outflow of jobs from suburbs themselves to other regions of the U.S. Given this new interregional dimension, a multi-jurisdictional strategy to stem the job outflow is in order. This paper provides an input into the framework for developing such a strategy through an examination of destination patterns of jobs by intrametropolitan point of origin using New York City and Nassau-Suffolk as a case study.     

Speculation-led economic development: a post-Keynesian interpretation of financial liberalization programmes in the Third World

The paper presents a post-Keynesian interpretation of the consequences of financial liberalization (FL) programmes in less developed countries (LDCs). The interpretation advanced here incorporates the new-Keynesian concepts of adverse selection and credit rationing into a post-Keynesian framework. It is argued that FL can lead to a particular kind of development, ‘speculation-led economic development’, which is characterized by a preponderance of risky investment practices and shaky financial structures. In addition, FL is likely to induce an increase in directly unproductive profit-seeking activities, a greater likelihood of financial crises, a misallocation of credit and, ultimately, diminished rates of real sector economic growth. Given the likelihood of these outcomes (as well as their realization in LDCs that have implemented FL), FL programmes are argued to be a poor foundation for stable and sustained real-sector economic growth, especially in the context of resource-scarce LDCs.