COMPARING PPP WITH TRADITIONAL PROCUREMENT: THE CASE OF SCHOOLS PROCUREMENT IN IRELAND

Advocates of public‐private partnerships (PPPs) argue that they can deliver public infrastructure more efficiently than traditional procurement through timelier completion and superior value for money. Despite these claims comparative analysis of the performance of both procurement methods has received scant attention in the PPP literature to date. This paper addresses this issue by providing an in‐depth, case‐based comparison of PPP versus traditional procurement in the schools sector in Ireland. Through detailed semi‐structured interviews with key stakeholders and an examination of the available documentation, we assess whether the key objectives of using PPP have been achieved. Overall, we find no evidence that PPP leads to faster delivery of infrastructure when the overall procurement process from contract notice to delivery is accounted for. In addition, we find only limited evidence to suggest that PPP results in better value for money.     

WHAT ACCOUNTS FOR THE DECLINE IN CRIME?*

In this article we analyze recent trends in aggregate property crime rates in the United States. We propose a dynamic equilibrium model that guides our quantitative investigation of the major determinants of observed patterns of crime. Our main findings can be summarized as follows: First, the model is capable of reproducing the drop in crime between 1980 and 1996. Second, the most important factors that account for the observed decline in property crime are the higher apprehension probability, the stronger economy, and the aging of the population. Third, the effect of unemployment on crime is negligible. Fourth, the increased inequality prevented an even larger decline in crime. Overall, our analysis can account for the behavior of the time series of property crime rates over the past quarter century.     

Overlapping Generations or Infinitely-Lived Agents: Intergenerational Altruism and the Economics of Global Warming

Do we need an overlapping generations model for the economics of global warming? To answer this question, an infinitely-lived agent (ILA) approach and an overlapping generations (OLG) model are contrasted. ILA and OLG can be viewed as polar representations of intergenerational altruism. With ILA an immortal agent acts through his investment/savings decisions as trustee on the behalf of the future generations. With OLG, agents need not behave altruistic. They simply save during working years and dissave completely during retirement. Nevertheless, ILA and OLG must not differ in their implication for greenhouse policy. Greenhouse gas abatement is a straightforward alternative to physical capital formation and, even without altruism, each age cohort has an incentive to provide current abatement in order to reduce future damages attributable to climate change. Indeed, under reasonable assumptions and parameter values, our simulations reveal such an invariance result. Provided carbon taxes are the only policy tool and tax revenues are recycled through socially mandated rules, projections of economic growth, climate change and energy consumption are only insignificantly affected by the choice of approach.     

Privatization Policy and Enterprise Performance: the case of Ireland

Abstract Compared to other industrialized economies Ireland has been slow to privatize state‐owed enterprises. The first divestitures in 1991 failed to trigger a systematic programme of sell‐offs due to fears of job losses in an economy characterized by low rates of growth and high levels of unemployment. Where subsequent sales occurred they took place on a pragmatic and case‐by‐case basis with the reasons for privatization varying across companies. Some of the earlier sales took place because the enterprises were financially unviable whereas more recent sales can be attributed to the influence of EU policy on competition and restrictions on state aids. Since the privatization of the state telecommunications company in 1999 there has been a significant increase in privatization activity and most of the remaining public enterprises are candidates for divestiture. By 2001 total revenues amounted to €8.1 bn (9 per cent of GNP for 2001). A consistent justification for privatization has been that a change in ownership will lead to improved performance. The analysis in this paper fails to support this argument. At this early stage of the programe the experience has been for cost‐cutting measures to lead to improved performance prior to privatization with little evidence of continued improvements after divestiture .     

Reserve Requirements,Liquidity Risk,and Bank Lending Behavior

Although reserve requirements (RR) have been used in emerging markets to smooth credit cycles, the transmission mechanism remains blurry. Using bank‐level data, we unveil the interaction of RR with bank lending. We identify a new channel that works through a decline in banks’ liquid assets and loan supply due to an increase in RR. “Quantitative tightening” through RR raises the short‐term funding needs of the banking system, which is met by collateralized central bank lending, thus depleting banks’ unencumbered liquid assets. Our results suggest that such a shift in bank liquidity is associated with a significant change in lending.     

Stakeholder Returns of Islamic Banks Versus Conventional Banks

Sharia principle shaping the Islamic banking model is most determinant on collection and deployment of funds with its ban on interest. This study aims to look at the results of funded activities in isolation for a healthier comparison between Islamic and conventional deposit banks with respect to their financial stakeholders. The differences are reflected as lower asset returns and lower returns for depositors of Islamic banks. These differences sustain throughout normal and crisis periods. Our findings show that despite differences in asset structures and returns, Islamic banks retain similar returns for shareholders to position themselves close to and in competition with their conventional counterparts.     

Persistent mispricing in a recently opened emerging index futures market: Arbitrageurs invited

The purpose of this study is to analyze the persistent, typically negative, mispricing in the new stock index futures market in Turkey, which has amounted to 5–8%, several multiples of transaction costs. The observations suggest that it is the outcome of a combination of practical difficulties of shorting in the spot stock market, behavioral effects, and insufficient arbitrage. The magnitude of the mispricing and the absence of arbitrage make behavioral effects more visible and provide a unique opportunity to examine extant behavioral hypotheses. Results confirm effects such as disposition and/or conservatism with the mispricing negatively related to past returns, but unrelated to future returns. Finally, an orderly weakening of the negative relation to past returns and behavioral effects is observed, suggesting that such effects will diminish as the market matures. © 2009 Wiley Periodicals, Inc. Jrl Fut Mark 29:218–243, 2009     

PRIVATIZATION,EMPLOYEE SHARE OWNERSHIP AND GOVERNANCE: THE CASE OF EIRCOM

ABSTRACT: Sizeable employee share ownership plans (ESOPs) have been a unique feature of Ireland's privatization programme. Since the sale in 1999 of the national telecommunications operator, Eircom, the norm has been to allocate 14.9 per cent of equity to employees. We examine the role of the Eircom ESOP in the post‐privatization governance of the company. We find that the ESOP sought to maximize returns to employees as shareholders rather than behave in the interests of a wider set of stakeholders. This is explained in terms of the internal governance of the ESOP, namely its structure and rules, as well as the composition and motivations of the board of the ESOP Trustee.     

Financialization and Vested Interests: Self-Regulation vs. Financial Stability as a Public Good

I propose an institutionalist analysis of financialization through the lens of Thorstein Veblen, built on some peculiar characteristics of money and related financial instruments in a market-based capitalist economy. Following the case of the overcapitalization of farmlands, studied by Veblen (1919), I argue that modern capitalism is a financialized society dominated by vested interests that rely on financial liberalization-led speculative overcapitalization, often leading to a perverse accumulation process and resulting in systemic catastrophes. Consequently, one of the major constituent institutions of liberal finance, market-dependent selfregulation, proves unable to deal with society-level issues like financial stability. This latter issue must be handled at a systemic level, as a public good. Therefore, specific public regulation and action mechanisms must be designed to maintain society (and dominant vested-interests) within some viability limits to ensure a smooth functioning of the economy.