Article

Dysfunctional institutions? Toward a New Agenda in Governance Studies

Authors:
To read the full-text of this research, you can request a copy directly from the authors.

Abstract

There is a wide-spread perception among academics and commentators that institutional dysfunction has become increasingly common in important social, political, and economics arenas. Opinion polls show a decline in trust and confidence in major actors and institutions, including inter-governmental organizations, governments, firms, NGOs, and religious organizations. For some, the core of the problem is that the hitherto well-functioning states have become less effective in aggregating and acting upon citizens' preferences. Many policy initiatives of the 1990s - deregulation, privatization, new public management, private regulation, regional integration, civil society, and so on - seemed to have failed to meet expectations. This symposium seeks to identify important theoretical and empirical questions about institutional failure, such as why do institutions fail, why are they not self-correcting, what might be a clear evaluative yardstick and analytic approach by which to measure performance, and to what extent contemporary theories of institutional evolution and design are useful in examining institutional restructuring and institutional renewal? Symposium essays by leading social science scholars offer important insights to inform future work on institutional performance and outline an agenda for institutional renewal and change.

No full-text available

Request Full-text Paper PDF

To read the full-text of this research,
you can request a copy directly from the authors.

... A agencificação implica a redução do protagonismo das autoridades políticas (SMITH, 1997;MAJONE, 1998), colidindo com a tendência de resistência das instituições às mudanças (MARCH; OLSEN, 1989;OSTROM, 1990;NORTH;1991). Essa perspectiva analítica é sintetizada nas três premissas que orientam este estudo: i) as reformas regulatórias foram imprescindíveis para lidar com a crise fiscal do Estado, que afetou a capacidade de prestação dos serviços públicos (ABRANCHES, 1999;BRESSER-PEREIRA, 2001;FARIAS;RIBEIRO, 2002); ii) a credibilidade é indispensável para que os atores privados substituam o Estado, especialmente quando da necessidade de investimentos com longo prazo de maturação e custos irrecuperáveis (SMITH, 1997;MAJONE, 1998;GILARDI, 2002;TRILLAS;MONTOYA, 2013;PRAKASH;POTOSKI, 2016); e, iii) novos desenhos institucionais são subordinados às dotações institucionais de cada setor e de cada país (LEVY; SPILLER, 1994;PEREIRA, 2002;LEVI-FAUR, 2003;TOMMASI, 2003). Diversos estudos inclusive no Brasil, investigaram os novos desenhos institucionais a partir da perspectiva dos níveis de independência de facto das agências reguladoras (LEVI-FAUR, 2003;CORREA et al., 2006CORREA et al., , 2017PÓ, 2009;BATISTA, 2010BATISTA, , 2011DE BONIS, 2016;FERNÁNDEZ-I-MARÍN;BIANCULLI, 2016;MEDIANO, 2018). ...
... A agencificação implica a redução do protagonismo das autoridades políticas (SMITH, 1997;MAJONE, 1998), colidindo com a tendência de resistência das instituições às mudanças (MARCH; OLSEN, 1989;OSTROM, 1990;NORTH;1991). Essa perspectiva analítica é sintetizada nas três premissas que orientam este estudo: i) as reformas regulatórias foram imprescindíveis para lidar com a crise fiscal do Estado, que afetou a capacidade de prestação dos serviços públicos (ABRANCHES, 1999;BRESSER-PEREIRA, 2001;FARIAS;RIBEIRO, 2002); ii) a credibilidade é indispensável para que os atores privados substituam o Estado, especialmente quando da necessidade de investimentos com longo prazo de maturação e custos irrecuperáveis (SMITH, 1997;MAJONE, 1998;GILARDI, 2002;TRILLAS;MONTOYA, 2013;PRAKASH;POTOSKI, 2016); e, iii) novos desenhos institucionais são subordinados às dotações institucionais de cada setor e de cada país (LEVY; SPILLER, 1994;PEREIRA, 2002;LEVI-FAUR, 2003;TOMMASI, 2003). Diversos estudos inclusive no Brasil, investigaram os novos desenhos institucionais a partir da perspectiva dos níveis de independência de facto das agências reguladoras (LEVI-FAUR, 2003;CORREA et al., 2006CORREA et al., , 2017PÓ, 2009;BATISTA, 2010BATISTA, , 2011DE BONIS, 2016;FERNÁNDEZ-I-MARÍN;BIANCULLI, 2016;MEDIANO, 2018). ...
... Essa hierarquização é sustentada por duas premissas: as privatizações cumprem o duplo papel de reduzir os custos de entrada para os novos empreendedores e o risco de interferência das autoridades políticas no mercado (JOSKOW, 2007;NUNES et al., 2015;PRAKASH;POTOSKI, 2016;VINING;WEIMAR, 2016); e, os contratos de concessão protegem os entrantes contra ações arbitrárias dos incumbentes e das autoridades políticas (GILARDI, 2002;TRILLAS;MONTOYA, 2013;VINING;WEIMAR, 2016). ...
Article
Full-text available
Este artigo contribui para a compreensão de fatores que podem afetar a efetividade de reformas administrativas baseadas na quebra do monopólio estatal na prestação de serviços públicos. O foco é o alcance das medidas para fomentar a entrada de novos empreendedores. O estudo compara os setores de eletricidade (segmento de geração de energia), telecomunicações (serviços públicos) e petróleo (segmentos de produção e de refino), precursores das reformas regulatórias no Brasil. Trata-se de uma pesquisa descritiva, que compreendeu as pesquisas bibliográfica e documental e a análise de conteúdo dos documentos orientadores, normativos e principais medidas voltadas para estimular a entrada de novos empreendedores. As análises foram orientadas pela premissa da perda de capacidade de investimento estatal. Os resultados demonstram que o aumento da oferta de produtos e serviços está diretamente associado à segurança jurídica oferecida para o investimento privado. Essa segurança jurídica é considerada maior quando há a privatização das estatais e a celebração de contratos de concessão com os novos prestadores.
... Why are some institutions without any policy capacity and output? Today there is a widespread perception that institutions are underperforming, and there is growing skepticism about multilateral initiatives (Finnemore 2014;Prakash and Potoski 2016). Major permanent institutions such as ASEAN do not seem to do anything, and governments make no efforts to reform them (Jetschke 2009). ...
... They find the causes of institutional mutation in the internal bureaucratic culture of organizations. Structured comparative studies attribute underperformance to several groups of factors: design failure due to imperfect rules, inadequate incentives for compliance, and lack of information (Ostrom 1990); institutional obsolescence and failure to adapt to evolving circumstances; and capture by special interest groups (Prakash and Potoski 2016). A recent special issue of the journal Regulation and Governance focused on dysfunctional institutions and also asked the question "Do institutions always work as intended?" ...
... A recent special issue of the journal Regulation and Governance focused on dysfunctional institutions and also asked the question "Do institutions always work as intended?" (Prakash and Potoski 2016). The volume examined institutions as diverse as the US Congress and international humanitarian organizations and identified problems with information processing and misallocation of property rights as some of the reasons for dysfunctionality. ...
Article
Full-text available
Abstract Why are some institutions without any policy powers or output? This study documents the efforts by governments to create empty international institutions whose mandates deprive them of any capacity for policy formulation or implementation. Examples include the United Nations Forum on Forests, the Copenhagen Accord on Climate Change, and the UN Commission on Sustainable Development. Research is based on participation in twenty-one rounds of negotiations over ten years and interviews with diplomats, policymakers and observers. The article introduces the concept of empty institutions, provides evidence from three empirical cases, theorizes their political functions, and discusses theoretical implications and policy ramifications. Empty institutions are deliberately designed not to deliver and serve two purposes. First, they are political tools for hiding failure at negotiations, by creating a public impression of policy progress. Second, empty institutions are “decoys” that distract public scrutiny and legitimize collective inaction, by filling the institutional space in a given issue area and by neutralizing pressures for genuine policy. Contrary to conventional academic wisdom, institutions can be raised as obstacles that pre-empt governance rather than facilitate it.
... Policy responses are institutional responses made by policy actors under their respective institutions -either independently or collectively via interaction and compromise with other institutions (Burns, 2004;North, 1991;Prakash & Potoski, 2015). Instead of examining the content and effectiveness of each individual policy response separately, this study takes a macro-governance perspective to ask the more fundamental question of what pillars or institutions of governance can mobilize, formulate and deliver the appropriate and necessary policy responses to fight a major crisis as severe as More specifically, this article examines the importance of bureaucrats and civil society in the fight against the COVID-19 crisis in cases of state failure by analysing the policy responses of Hong Kong under the combined framework of Political Nexus Triads (PNT) (Moon & Ingraham, 1998) and policy capacity (Wu et al., 2015). ...
... Hong Kong is one exception to this ideal model. Around the globe, similar cases that include one or more failed governance institutions are common (Prakash & Potoski, 2015). The integration of the theories of policy capacity and PNT opens up possibilities for analysing how politicians, bureaucrats and civil society interact under multiple configurations of state-society relations, within which they express different levels of strength and various types of interrelationships -conflictual or synergic, cooperative or confrontational. ...
Article
Full-text available
This article examines the importance of an autonomous bureaucracy and a strong civil society in the combat against COVID-19 by analysing the policy responses of Hong Kong under the combined framework of policy capacity and Political Nexus Triads (PNT). The case of Hong Kong underlines the importance of state–society interactions in constituting policy responses under a weak or failed state. From the perspective of collaborative governance, it is crucial for citizens to be engaged as partners in public policies, thus highlighting a certain degree of complementarity between state and non-state actors in the co-production of public policies.
... The results also suggest that IMF practice did little to change prevailing norms with a view to delegitimize corruption. To the contrary, the Fund long pushed for privatization even when existing institutions were weak, and despite such reforms requiring regulatory constraints to be successful (Dubash and Morgan 2012;Prakash and Potoski 2016;Stiglitz 2003). ...
... In developing countries, however, powerful IFIs have successfully pushed for deregulation because states lacked the capacity to resist such pressures and re-regulate markets (Babb and Kentikelenis 2018;Reinsberg et al. 2018). What is more, IFIs often transplanted 'regulatory innovations' from the developed world into developing countries, with insufficient embedding in local contexts (Dubash and Morgan 2012;Dunning 2004;Prakash and Potoski 2016). Confirming these arguments, our results caution against an overly optimistic view on the role of international organizations as facilitators of 'responsive regulators' (Abbott and Snidal 2013)-arguably because IFIs are not well-equipped to perform the role of orchestrators. ...
... Why are some institutions without any policy capacity and output? Today there is a widespread perception that institutions are underperforming, and there is growing skepticism about multilateral initiatives (Finnemore 2014;Prakash and Potoski 2016). Major permanent institutions such as ASEAN do not seem to do anything, and governments make no efforts to reform them (Jetschke 2009). ...
... A recent special issue of the journal Regulation and Governance focused on dysfunctional institutions and also asked the question "Do institutions always work as intended?" (Prakash and Potoski 2016). The volume examined institutions as diverse as the US Congress and international humanitarian organizations and identified problems with information processing and misallocation of property rights as some of the reasons for dysfunctionality. ...
... From a problem-solving perspective, proper understanding of processes and causes of failure-i.e. the negative and undesirable aspects of failure-may be necessary in order to avoid it in the future. Therefore, scholars have studied how failure erodes trust and confidence in major social actors and institutions, including governments and intergovernmental organisations (Prakash and Potoski 2016), how established political systems may degenerate (e.g. Farazmand 2012) and with them, their problem-solving and governance capacities (Alink et al. 2001). ...
... Discussions of governance failure, finally, focus strongly on procedural sources of failure, considering the failure of parties to coordinate and cooperate on an personal, organisational, and systemic level as an important source of meso-level failure (Jessop 1998;Peters 2015). Where institutions are insufficiently flexible to deal with new challenges or changing circumstances, they will be susceptible to rejection or replacement (Prakash and Potoski 2016;Mol 2009). ...
Article
Full-text available
Recognised as an integral part of the political process, the topic of institutional failure has recently received increased attention in the literature, particularly with respect to policy failure. Nevertheless, the difference between various types and aspects of failure is unclear conceptually, hampering the development of cumulative theory building into its causes and consequences. Furthermore, while ample attention has been paid to negative consequences, insights into the possibly ‘productive functions’ of failure are scattered and largely remain on the fringes of existing research. The present paper offers a systematic review of the failure literature, particularly its definitions, causes and consequences, setting existing research in the different scholarly fields in relation to each other. Special emphasis is placed on the ways failure may serve to advance the effectiveness and efficacy of public policy and the wider political system, opening ‘windows of opportunity’ as leverage points for institutional change. In doing so, we identify a number of factors which may facilitate or hinder the activation of this productive potential on an individual, institutional, and societal level.
... Een interessante ontwikkeling is de conceptualisatie van het begrip 'institutioneel falen', dat door sommige auteurs wordt aangedragen als overkoepelend concept om uiteenlopende vormen van falen te ondervangen. Prakash & Potoski (2016) omschrijven instituties als de regels die structuur geven aan het sociale, politieke en economische leven, en noemen verschillende vormen van institutioneel falen zoals gefaalde privatiseringsoperaties, gebrekkig markttoezicht en het problematische economische beleid van de Europese Unie. 5 Derwort, Jager & Newig (2019) hanteren een specifiekere benadering door institutioneel falen te formuleren als 'systeemfalen' in de institutionele structuur van de staat. Ze breiden de aandacht uit (ten opzichte van traditionele visies van beleidsfalen/governance-falen) van falen in beleid (policy) en politiek (politics) naar een derde dimensie: polity. ...
Book
Full-text available
The Dutch system of income-related benefits has attracted much criticism in recent years, aimed towards both the system’s underlying principles and the disproportionately harsh anti-fraud measures of the Tax Authority. From 2019 onwards, more and more stakeholders (eventually also the government itself) have characterized the pursued policy as a failure. But what is 'failure'? In this study, the Dutch government’s failures in the system of income-related benefits are systematically analyzed alongside a state-of-the art framework. The results indicate that the case under study demonstrates failure from various perspectives. Viewed from the policy program-perspective, the system has poorly realized its objectives and the policy design has disproportionately impaired a specific group of citizens. Moreover, the system was underpinned by a policy logic that lacks empirical feasibility. The analysis from the process dimension points out several errors related to three phases of the policy process (policy development, decision-making, and policy evaluation). Furthermore, the analysis of from the perspective of ‘governance failure’ portrays numerous administrative and managerial errors, many of which reach further than just the system of income-related benefits. Next to this, the observed mistakes have come with detrimental effects in the political dimension. The final - and perhaps most important - finding is that the observed failure of policy and governance is interwoven with a broader form of failure in the polity of the state (the separation of powers) that is not covered by the conventional scope of analysis in policy science. Based on these findings, two recommendations are made for future research. First, empirical studies should shed more light on the link between specific policy failures and problems of a systemic nature (governance failure), instead of merely applying an isolated focus at the level of one specific policy domain. Second, more research (both theoretically and empirically driven) is needed to unravel the as of yet abstract link between policy and governance failures and institutional failure at the level of polity.
... Besides, stakeholders, industry groups, and professional networks impact manufacturing businesses' SP adoption through normative pressure. When they observe peers and competitors embracing SPs, firms are more likely to do so (Prakash & Potoski, 2016). However, SP implementation may not always result from normative pressures. ...
Article
Full-text available
The purpose of this article is to establish whether all the dimensions of institutional pressure matter for sustainability practices of manufacturing medium and large firms using evidence from Uganda. The study was cross‐sectional and quantitative in nature. Data was collected through a questionnaire survey of 102 manufacturing firms. Data were analyzed using SmartPLS‐SEM version 3. This study fosters the understanding of sustainability practices, as it provides insights on whether all the dimensions of institutional pressure matter for sustainability practices of manufacturing firms in Uganda. Results revealed that all the institutional pressure dimensions (coercive pressures, mimetic, and normative pressures) do matter for sustainability practices of the manufacturing medium and large firms in Uganda. This implies that institutional pressures are a cornerstone for sustainability practices.
... Institutional function is mainly about how institutions serve people than the form it takes (Ho, 2018). Compliance and enforcement are indispensable for the proper functioning of institutions (North, 1990;Prakash and Potoski, 2016). Sometimes institutions are hardly enforced and therefore do not perform according to established rules. ...
Article
Ethiopia has an urban land lease policy in place to facilitate the transfer of land for residential, commercial and industrial purposes. Because of the lease policy, many cities have experienced significant expansion through massive conversion of agricultural land. Although the lease policy has been in place for nearly three decades, little is known about its effectiveness in promoting sustainable urban land use. This paper examines the effects of the lease policies on urban land use efficiency (ULUE). Building on the institutional credibility thesis, this paper investigated the performance of land institutions using the urban land use efficiency approach. Remote sensing data was used to investigate urban land use efficiency through spatiotemporal analysis of land use change. Analysis of satellite imagery was performed using ArcGIS. Moreover, quantitative and qualitative data from secondary sources were studied. The study findings show that in almost all study areas, urban land use efficiency is low, which is mainly reflected in the forms of land hoarding, land banking, illegal land grabbing, informal settlement, land use fragmentation and urban sprawl. A significant portion of the land transferred for various urban uses has remained vacant or underutilised for years, in direct violation of the provisions of the lease policy. This means that the lease policy has hardly been enforced to ensure efficient urban land utilization. This demonstrates the ineffectiveness (dysfunctionality) of the existing land institutions. It is concluded that some elements of the lease policy have evolved into an empty institution, i.e., a symbolic institutional arrangement that is largely ignored by socioeconomic and political actors.
... An individual's choice to engage in misconduct is, however, shaped by the organizational environment to a considerable extent. By setting and enforcing rules that govern the conduct of its management and employees, good organizational governance can mitigate organizational misconduct (Rost, 2017;Prakash and Potoski, 2016). Specifically, an organization can reduce the occurrence of opportunities for misconduct and increase the expected costs, e.g., by increasing the detection probability and by holding out the prospect of severe punishment. ...
Thesis
Full-text available
This cumulative dissertation contains three empirical essays on the effects of tax policies on different economic agents, namely, individuals, firms, and governments, in three distinct areas of taxation widely overlooked by prior empirical research. Specifically, the first essay studies firms’ responses to threshold-dependent tax enforcement policies. The second essay studies tax competition between local governments and profit shifting by firms to domestic tax havens. Finally, the third essay examines the effects of scandals on organizational affiliation and competition in a setting where organizations levy taxes on their members.
... This paper offers a theoretical synthesis of the literature on NGO failure and not methodological strategy to measure it. We recognize that measuring organizational dysfunction poses conceptual and empirical challenges (Prakash & Potoski, 2016). Failure is a continuum, not a binary concept. ...
Article
An extensive literature identifies conditions under which markets and states work efficiently and effectively towards their stated missions. When these conditions are violated, these institutions are deemed to show some level of failure. In contrast to the study of market and government failures, scholars have tended to focus on non-governmental organizations’ (NGOs) successes instead of failures. This is probably because they view NGOs as virtuous actors, guided by principled beliefs rather than instrumental concerns, not susceptible to agency conflicts, accountable to the communities they serve, and working cooperatively with each other. A growing literature questions this “virtue narrative.” When virtue conditions are violated, NGOs could exhibit different levels of failure. In synthesizing this literature, we offer an analytic typology of NGO failures: agency failure, NGOization failure, representation failure, and cooperation failure. Finally, given NGOs’ important role in public policy, we outline institutional innovations to address these failures.
... И чем выше уровень сложности экономики и общества, тем больше число институциональных аномалий и тем многообразнее их конкретные формы. Именно поэтому так называемые «дисфункциональные» и «патологические» институты сейчас становятся типичным явлением в экономике, политике и других сферах (Richards et al., 2014;Prakash, Potoski, 2016). Конечно, нормоцентризм не следует путать с вульгарным функционализмом, утверждающим, что все институты существуют в силу потребности в них, а в долгосрочной перспективе «выживают» только полезные обществу институты. ...
Article
Full-text available
В статье рассматривается внутренний дуализм институциональной экономики на современном этапе ее развития, связанный с разделением ортодоксального течения (мейнстримного институционализма, аксиоматика и догматика которого представлена Стандартной моделью) и его оппозиции, позиционирующейся как постинституционализм. Предлагается повестка дня перспективных постинституциональных исследований, затрагивающая широкий круг дискуссионных вопросов за рамками Стандартной модели – от перехода к интегративным трактовкам институтов до внедрения эво-дево-парадигмы анализа институциональной эволюции. Раскрыты ключевые для постинституционализма концепции институциональных ассамбляжей (полилогичных институциональных систем), бриколажа (процесса массовых ресурсно-ограниченных изменений институтов), клуджей (паллиативных институциональных решений сложных текущих проблем) и конфигураций (коэволюционирующих институтов, сообществ их акторов и конструируемых ими сред). Предложена переориентация трансакционного анализа институтов с минимизации трансакционных издержек на максимизацию генерируемой ими трансакционной ценности. Обсуждается нормоцентричная парадигма институциональных исследований, рассматривающая любые формы и траектории развития институтов вне оценочных критериев, отказываясь от традиции негативного маркирования институциональных аномалий. Показано, что в фокусе постинституционализма находится институциональная сложность, изучение которой требует преодоления редукционистских методологических подходов институционального мейнстрима. Ключевые слова: институциональная сложность, институты, институциональные системы, ассамбляжи, бриколаж, трансакционные издержки, трансакционная ценность, институциональная эволюция, постинституционализм.
... И чем выше уровень сложности экономики и общества, тем больше число институциональных аномалий и тем многообразнее их конкретные формы. Именно поэтому так называемые «дисфункциональные» и «патологические» институты сейчас становятся типичным явлением в экономике, политике и других сферах (Richards et al., 2014;Prakash, Potoski, 2016). Конечно, нормоцентризм не следует путать с вульгарным функционализмом, утверждающим, что все институты существуют в силу потребности в них, а в долгосрочной перспективе «выживают» только полезные обществу институты. ...
Article
Full-text available
The article discusses the internal dualism of modern institutional economics, manifested in division of orthodox or mainstream institutionalism (its axiomatics and dogmatics are represented by the Standard Model) and its opposition post-institutionalism. An agenda for promising post-institutional studies is proposed, covering a wide range of discussion issues beyond the Standard Model — from the transition to integrative interpretations of institutions to the introduction of the Evo-Devo-paradigm of analysis of institutional evolution. A reorientation of the transactional analysis from minimizing transaction costs to maximizing the transaction value generated by institutions is proposed. The normocentric paradigm of institutional theory is discussed, considering any forms and trajectories of institutional evolution outside of the evaluation criteria, abandoning the tradition of negative labeling of institutional anomalies. The article demonstrates that in the focus of post-institutionalism there is institutional complexity, which can only be comprehended by overcoming reductionist methodological approaches of the institutional mainstream.
... Findings from emerging markets can shed light, under certain conditions, on happenings in developed markets. In mature economies, public trust in governments declined in recent decades (Prakash and Potoski, 2016). This decline in trust raises the interesting idea that studies about political relationships in emerging markets might even foreshadow some future trends in North America and Europe. ...
Preprint
Full-text available
Non-profit organizations in emerging markets frequently have to manage relations with governments and for-profit firms. We advance a multi-stakeholder perspective and develop propositions about how the political ties of charities influence their success in raising funds from corporate donors. Evidence from 2,054 Chinese charities during 2005-2012 shows that organizational political ties, established through formal affiliation with the government, aid fundraising from corporate donors, whereas personal political ties, formed through personal political services of senior leaders of charities, have no such effect. The positive effect of government affiliation is relevant for both foreign and domestic donors, but stronger for domestic ones. These results highlight the differential impact and contingent value of political embeddedness for charities’ ability to acquire resources from for-profit business, contributing to both stakeholder theory and the political embeddedness perspective.
Article
Ethiopia's rapid urbanization over the past two decades has led to the conversion of agricultural land to urban use. However, this expansion has been largely unplanned, resulting in numerous urban land management challenges. These gaps have hindered efficient urban land use, a critical component of sustainable urban development. This study examines the impact of current institutional environment on urban land use efficiency (ULUE) in Ethiopia and explores why urban land policies have not been translated into effective land management and sustainable practices. Using a case study approach and qualitative method, the research identifies institutional factors that influence ULUE, drawing on the Institutional Analysis and Development (IAD) framework and the Institutional Credibility thesis. The study identifies several factors that contribute to low ULUE, including an inefficient land transfer market, tenure insecurity and land hoarding. These problems are exacerbated by gaps in policy formulation and implementation, including inadequate human and technical capacity, unrealistic spatial planning, and weak urban land governance. To improve ULUE, an effective land transfer market, tenure security and land policies that discourage land hoarding are essential. Addressing shortcomings in the legal framework and strengthening urban land governance and institutional capacity are key steps.
Chapter
Disability is a problematic term which is deliberated as an experience that hampers the participation of persons with disabilities in different areas of life. Disability has covered a long journey from being considered as a result of the sins of previous births under religious/moral model during the ancient times to being an individual medical problem under the Medical Model after industrial revolution to being a social construct under the social model of disability recently in the later part of twentieth century. Earlier, an individual with disabilities used to be cared for in informal institutions like family or the village community. But after the industrial revolution, certain formal institutions like workhouses and asylums were established especially for persons with disabilities so that their non-disabled relatives could work freely and participate for longer hours in the production process. These formal institutions are still in function to facilitate persons with disabilities as at times informal institutions like families, village communities, etc., cannot cater to their specific needs. The present paper is an attempt to explore the role played by formal institutions in the lives of persons with disabilities in particular and disability in general through the novel Good Kings, Bad Kings.
Article
Full-text available
Innovation is often an object of study in economics and management. However, the social and behavioral aspects of innovation acceptance are as important as the economics of product development. A significant portion of the literature considers innovation as a change in the way social actions are conducted, entailing a wide range of social, economic, behavioral, and institutional changes. Various approaches have given rise to the need for a typology. Sundbo (1998) divided innovation into three groups depending on the aspects of the phenomenon: theory of entrepreneurship, technological and social aspects, and strategic aspects. Adopting Sundbo's conceptual framework, this study supplemented and developed it based on recent literature that appeared after 1998. Moreover, this study added new directions at the second level of decomposition and the relationships between different aspects of innovation. In particular, this study analyzed phenomena such as open innovation, agile innovation, and “helix” models. Thus, this study developed a novel typology of innovation that expands the theoretical knowledge in this field. Based on these findings, this study proposed promising areas for future innovation studies.
Article
Full-text available
The article describes conceptual approaches, which are the basis of the state policy of overcoming the institutional dysfunctions of modern economic systems. The article’s topic is a relevant theoretical problem within the framework of research into the new institutional theory, as it substantiates practical ways of counteracting the negative impact of inefficient institutions on the process of developing economic systems. In the research process, the author applied the methods of interdisciplinary, comparative and statistical analysis, as well as a systematic approach together with the use of tabular and graphic data visualization methods. The author analyses the main features of the destructive impact of institutional dysfunctions on modern economic systems, the theoretical basis of the implementation of institutional choice by individuals between two alternatives. The practical experience of institutional reforming in various countries in the context of the implementation of state policy to overcome inefficient institutions is described, and the effectiveness of these measures is indicated based on additional analysis of statistical data from recent years. According to the results of the study, scientific and practical recommendations for overcoming institutional dysfunctions of national economies as an essential component of the strategy of national economies’ institutional reforming. The process of overcoming institutional dysfunctions by the economic system requires the active involvement of the authority, which not only monitors compliance with the ‘game rules’ established in society but also actively changes them based on its long-termed strategic goals. The author also warns that the described measures should not be carried out as an exception but purposefully in the form of implementing a long-term strategy with reforming all areas of social life.
Article
Full-text available
The COVID‐19 pandemic has highlighted the issue of mobilization policies, that is, government practices directed at making the mass public voluntarily perform various behaviors for the collective benefit during a crisis. As COVID‐19 vaccinations became accessible, governments faced the challenge of mass vaccination mobilization in order to achieve herd immunization. Aiming to effectively realize this goal, policy designers and regulators worldwide considered various mobilizing tools for vaccination compliance, including rewards and penalties, as they targeted vaccine opposers and hesitators, while trying to avoid the crowding‐out effect among individuals who were intrinsically motivated to get vaccinated. However, the unique circumstances of the Coronavirus pandemic may have eliminated the crowding‐out effect. Thus, our study explored the effect of regulation in the form of positive and negative incentivizing tools (i.e., rewards and penalties) during the coronavirus pandemic on vaccination intentions of 1184 Israeli citizens, prior to the national vaccination campaign. Results indicate that (1) both negative and positive incentives have a similar positive effect on individuals who declare they will not get vaccinated and those who hesitate to get the shot; (2) both positive and negative incentives induce the crowding‐out effect; and (3) negative incentives generate a larger crowding‐out effect in individuals who report preliminary intentions to get vaccinated, compared to positive ones. This emphasizes the need to avoid the crowding‐out effect during the current and similar crises, and suggests considering applying a gradual and adaptive policy design in order to maximize regulatory efficacy and compliance.
Book
Institutions are failing in many areas of contemporary politics, not least of which concerns climate change. However, remedying such problems is not straightforward. Pursuing institutional improvement is an intensely political process, playing out over extended timeframes, and intricately tied to existing setups. Such activities are open-ended, and outcomes are often provisional and indeterminate. The question of institutional improvement, therefore, centers on understanding how institutions are (re)made within complex settings. This Element develops an original analytical foundation for studying institutional remaking and its political dynamics. It explains how institutional remaking can be observed and provides a typology comprising five areas of institutional production involved in institutional remaking (Novelty, Uptake, Dismantling, Stability, Interplay). This opens up a new research agenda on the politics of responding to institutional breakdown, and brings sustainability scholarship into closer dialogue with scholarship on processes of institutional change and development. Also available as Open Access on Cambridge Core.
Article
The objective of this article is to re-examine the relationship between African institutions and the migration phenomena. Specifically, we analyze the relationship between business start-up regulations and the brain drain from sub-Saharan African (SSA) countries towards those in OECD. Using data from 33 countries, 7 of which belong to OECD, from years 2000, 2005 to 2010, and a gravity model, we firstly show that regulations which control enterprise creation in SSA countries make a positive and significant contribution to brain drain towards OECD countries. Secondly, given the strong association between high unemployment rates and corruption, the combined effect of all the variables is more important than when regulation is considered on its own. According to our results, setting up regulations for effective enterprise creation may retain qualified individuals in Africa, mainly those who are entrepreneurs and have in sight the creation of their own businesses. In addition, regulations, governance and the potential contribution of these entrepreneurs should be taken into account in the setting up of integrated national systems of innovation in African countries, especially in terms of the dynamic processes that occur at the meeting point of the university, industry and government institutional spheres.
Article
The invasion of Iraq and the subsequent laws of regime change were directed at the ‘purification’ of public sector employment. Such policies based upon removing transgressors from within the previous regime are commonly known as lustration. In Iraq, these were normatively presented as a required process for democracy building and victim recognition. However, in reality, lustration emerged problematically and essentially as a form of counter-insurgency aimed at removing those guilty of war crimes but also those opposed to neo-liberalism, federalism and the erosion of secularism. The misuse of laws of lustration was allied to external design and the relish of the new elite to use public resources to attempt state hegemony. Lustration, thus emerging as one of the few sites in which the new state could control and assert influence even if that led to new grievances and ethno-sectarian resentment.
Article
Research summary Non‐profit organizations in emerging markets frequently have to manage relations with governments and for‐profit firms. We advance a multi‐stakeholder perspective and develop propositions about how the political ties of charities influence their success in raising funds from corporate donors. Evidence from 2,054 Chinese charities during 2005‐2012 shows that organizational political ties, established through formal affiliation with the government, aid fundraising from corporate donors, whereas personal political ties, formed through personal political services of senior leaders of charities, have no such effect. The positive effect of government affiliation is relevant for both foreign and domestic donors, but stronger for domestic ones. These results highlight the differential impact and contingent value of political embeddedness for charities’ ability to acquire resources from for‐profit business, contributing to both stakeholder theory and the political embeddedness perspective. Managerial summary Non‐profit organizations have to maintain productive relations with multiple stakeholders, including government and business. We focus on Chinese charities that seek to raise funds to fulfill their mission. We identify how their political relations influence the behavior of corporate donors. Evidence from 2,054 charities from 2005‐2012 shows that political ties formed through organizational affiliation with a political body help charities attract corporate donors that seek legitimacy. In contrast, ties formed through personal connections with politicians have less influence on donors who perceive a high risk of connected insiders engaging in activities of dubious legality. The value of political ties is more pronounced for domestic corporate donors.
Article
Full-text available
Global health and environmental wellbeing are mutually reinforcing and interdependent. This mutuality invokes two major analytical orientations: it emphasizes a direct nexus between ecological strategies and global health outcomes. These in turn revitalize the essential quest for comprehensive policies and responsible strategies for enhancing both ecology and health within the discourse of sustainability. With orientation towards political conception of corporate responsibility, I problematize the root questions of the democratic embeddedness of the firm under conditions of weakened institutional structures. I highlight the inherent power relations in global health and ecological governance through literature mapping. I address the question: Why and how might ecological strategies be embedded in corporate day-to-day actions to produce optimal outcomes that have positive effects on global health and human dignity? Besides resource and ethical/political constraints, there are several micro-political, geopolitical, industrial, institutional and structural impediments to ecological and health sustainability. This grim diagnosis is clearly a description of a ‘disturbingly fascinating’ pathology of global capitalism whose industrial effects culminate in the accumulation of more profits for a few at the expense of the ecological sustainability of the majority. That notwithstanding, there are several grounds for optimism with a move from anthropocentrism to humanistic eco-centrism via deliberative democratic procedures. Here, the centrality of human dignity is emphasized. This study provides an interdisciplinary theoretical model that seeks to reorient strategies towards restoration, protection, mitigation, adaptation, harm avoidance and innovative sustainability of the whole economic gamut and biodiversity that supports global health. Thus, I rearticulate ecological sustainability in terms of its most fundamental means and end: sustainable global health and the tutelage of human dignity.
Article
Full-text available
A substantial section of nongovernmental organizations (NGOs) in the global South depend on foreign funds to conduct their operations. This paper explores how the availability of foreign funding affects their downward accountability, abilities to effect social change, and their relative influence in relation to traditional grassroots, membership‐based organizations (GROs), which tend not to receive such funding. Drawing on a case study of Nicaragua, we challenge the notion that foreign funding of domestic NGOs leads to the evolution of civil society organizations, which have incentives and abilities to organize the marginalized sections of society in ways to effect social change in their interests. Instead, we find that foreign funding and corresponding professionalization of the NGO sector creates dualism among domestic civil society organizations. Foreign funding enhances the visibility and prestige of the “modern” NGO sector over traditional GROs. This has grave policy implications because foreign funded NGOs tend to be more accountable to donors than beneficiaries and are more focused on service delivery than social change oriented advocacy.
Article
Full-text available
Although it is evident in routine decision-making and a crucial vehicle of rationalization, commensuration as a general social process has been given little consideration by sociologists. This article defines commensuration as the comparison of different entities according to a common metric, notes commensuration's long history as an instrument of social thought, analyzes commensuration as a mode of power, and discusses the cognitive and political stakes inherent in calling something incommensurable. We provide a framework for future empirical study of commensuration and demonstrate how this analytic focus can inform established fields of sociological inquiry.
Article
Full-text available
E. H. Carr's classic work on international relations, published in 1939, was immediately recognized by friend and foe alike as a defining work. The author was one of the most influential and controversial intellectuals of the 20th century. The issues and themes he developed continue to have relevance to modern day concerns with power and its distribution in the international system. Michael Cox's critical introduction provides the reader with background information about the author, the context for the book, and its main themes and contemporary relevance.
Article
Full-text available
Making the central bank an agency with the mandate and reputation for maintaining price stability is a means by which a government can choose the strength of its commitment to price stability. This article develops four measures of central bank independence and explores their relation with inflation outcomes. An aggregate legal index is developed for four decades in 72 countries. Three indicators of actual independence are developed: the rate of turnover of central bank governors, an index based on a questionnaire answered by specialists in 23 countries, and an aggregation of the legal index and the rate of turnover. Legal independence is inversely related to inflation in industrial, but not in developing, countries. In developing countries the actual frequency of change of the chief executive officer of the bank is a better proxy for central bank independence. An inflation-based index of overall central bank independence contributes significantly to explaining cross-country variations in the rate of inflation.
Article
Complex Contracting draws on core social science concepts to provide wide-ranging practical advice on how best to manage complex acquisitions. Using a strong analytical framework, the authors assess contract management practices, suggesting strategies for improvement and ways to avoid the pitfalls of managing contracts for large and sophisticated projects. An in-depth analysis of the US Coast Guard's Deepwater program is included to illustrate ways to respond to real-world contracting challenges. This high-profile and controversial case consisted of a projected 25-year, $24 billion contract through which the US Coast Guard would buy a system of new boats, aircraft, communications, and control architecture to replace its aging fleet. The authors explore the reasons why this program, launched with such promise, turned out so poorly, and apply the lessons learned to similarly complex contracting scenarios. This engaging and accessible book has broad applicability and will appeal to policymakers, practitioners, scholars and students. © Trevor L. Brown, Matthew Potoski and David M. Van Slyke 2013.
Article
Debates about the efficacy of private environmental regimes have been fueled by disparate research findings, such as when the same regime that has been effective in one setting is found to be ineffective in another. In this article, we show that the efficacy of ISO 14001, the most widely adopted voluntary environmental regime in the world, is conditioned by the stringency of countries’ domestic regulations. In doing so, we outline a model of strategic corporate environmentalism wherein firms strategically focus their International Organization for Standardization (ISO) certification to reduce emissions of visible air pollutants as opposed to less visible water pollutants. Our analyses of pollution levels for a panel of 159 countries (73 for water pollution) from 1991 to 2005 indicate that ISO 14001 certifications reduce air (SO2) emissions in countries with less stringent environmental regulations but have no effect on air emissions in countries with stringent environmental regulations. We also find that ISO membership levels are not associated with reductions in water pollution levels (Biochemical Oxygen Demand BOD), irrespective of stringency of domestic law. Our article suggests that the efficacy of global private environmental regimes is likely to be conditioned by the domestic regulatory context in which firms function
Article
In exploring the leadership practices of chief executives of intergovernmental organizations (IGOs), this article finds that IGO leaders recognize themselves as agents and as brokers. This article produces findings from a multiple-case study of the executive leadership of NATO from 1995 to 1999 and of the EU Common Foreign and Security Policy from 1999 to 2009. The relationship between member states and the IGO leader can be conceived as a principal–agent relationship where the agent plays a central role in framing a common vision and strategies, facilitating member states' involvement in the strategizing process, and mobilizing external and internal support. I depart from a restrictive princi-pal–agent conceptualization of the relationship because I do not envision it as conflictive, but rather as collaborative.
Article
What are state agencies required to do with respect to performance measurement and performance budgeting? This article addresses the trend toward improving performance in government. Past research on performance-based budgeting (PBB) in the states concentrates on anecdotal information and case analyses, usually including fewer than 10 states. This article provides national coverage of requirements for performance-based budgeting in the states. We survey the 50 states concerning existing or planned legislation related to performance-based budgeting as well as administrative requirements. We review legislation and budget guidelines to determine their scope and focus. Results show that all but three states have performance-based budgeting requirements, and most have established these requirements within the last few years. Thirty-one states have legislated performance-based budgeting to be conducted, while sixteen states have initiated this reform through budget guidelines or instructions. This research analyzes the foundations for conducting performance-based budgeting in the states. It serves as a stepping stone to determining effective methods to create and sustain this budget system in the states.
Article
How might domestic regulatory institutions influence the adoption of global private regimes? We focus on the ISO 9001 and 14001 certification standards, which obligate firms to establish quality and environmental management systems. Previous research highlights the roles of international commercial audiences and national regulatory pressures as unconditional drivers of adoption. However, we argue that domestic regulatory institutions condition their effects—in opposite directions. Where regulatory institutions function well, firms facing high levels of regulatory pressure are more likely to seek ISO certification, but firms facing pressures from international audiences are less likely to do so. In contrast, weak regulatory institutions make export-oriented and foreign-owned firms more likely to seek ISO certification, but render firms facing high levels of regulatory pressure less likely to do so. We find support for our claims using firm-level data from 10,000 firms in 30 countries in Eastern Europe and Central Asia.
Book
Why do institutions emerge, operate, evolve and persist? 'Institutional Choice and Global Commerce' elaborates a theory of boundedly rational institutional choice that explains when states USE available institutions, SELECT among alternative forums, CHANGE existing rules, or CREATE new arrangements (USCC). The authors reveal the striking staying power of the institutional status quo and test their innovative theory against evidence on institutional choice in global commerce from the nineteenth through the twenty-first centuries. Cases range from the establishment in 1876 of the first truly international system of commercial dispute resolution, the Mixed Courts of Egypt, to the founding and operation of the General Agreement on Tariffs and Trade, the World Trade Organization, and the International Accounting Standards Board. Analysts of institutional choice henceforth must take seriously not only the distinct demands of specific cooperation dilemmas, but also the wide array of available institutional choices.
Article
How do public regulations shape the composition and behavior of non-governmental organizations (NGOs)? Because many NGOs advocate for liberal causes such as human rights, democracy, and gender equality, they upset the political status quo. At the same time, a large number of NGOs operating in the Global South rely on international funding. This sometimes disconnects from local publics and leads to the proliferation of sham or “briefcase” NGOs. Seeking to rein in the politically inconvenient NGO sector, governments exploit the role of international funding and make the case for restricting the influence of NGOs which serve as foreign agents. To pursue this objective, states worldwide are enacting laws to restrict NGOs’ access to foreign funding. We examine this regulatory offensive through an Ethiopian case study, where recent legislation prohibits foreign-funded NGOs from working on politically sensitive issues. We find that most briefcase NGOs and local human rights groups in Ethiopia have disappeared, while survivors have either “rebranded” or switched their work from proscribed areas. This research note highlights how government can and do shape the population ecology of the non-governmental sector. Because NGOs seek legitimacy via their claims of grassroots support, a reliance of external funding makes them politically vulnerable. Any study of the NGO sector must include governments as the key component of NGOs’ institutional environment.
Article
There has been much talk in recent years of a "crisis of confidence in charities" in the United States. This article presents a conceptual framework for analyzing the issue and reviews attitudinal and behavioral data relevant to public confidence in the nonprofit sector generally and major nonprofit subsectors. The article concludes that the "crisis of confidence" hypothesis is not supported by the evidence.
Article
Examines the role that institutions, defined as the humanly devised constraints that shape human interaction, play in economic performance and how those institutions change and how a model of dynamic institutions explains the differential performance of economies through time. Institutions are separate from organizations, which are assemblages of people directed to strategically operating within institutional constraints. Institutions affect the economy by influencing, together with technology, transaction and production costs. They do this by reducing uncertainty in human interaction, albeit not always efficiently. Entrepreneurs accomplish incremental changes in institutions by perceiving opportunities to do better through altering the institutional framework of political and economic organizations. Importantly, the ability to perceive these opportunities depends on both the completeness of information and the mental constructs used to process that information. Thus, institutions and entrepreneurs stand in a symbiotic relationship where each gives feedback to the other. Neoclassical economics suggests that inefficient institutions ought to be rapidly replaced. This symbiotic relationship helps explain why this theoretical consequence is often not observed: while this relationship allows growth, it also allows inefficient institutions to persist. The author identifies changes in relative prices and prevailing ideas as the source of institutional alterations. Transaction costs, however, may keep relative price changes from being fully exploited. Transaction costs are influenced by institutions and institutional development is accordingly path-dependent. (CAR)
Article
Scholars have often remarked that Congress neglects its oversight responsibility. We argue that Congress does no such thing: what appears to be a neglect of oversight really is the rational preference for one form of oversight--which we call fire-alarm oversight--over another form--police-patrol oversight. Our analysis supports a somewhat neglected way of looking at the strategies by which legislators seek to achieve their goals.
Article
Much recent research has found that states generally comply with the treaties they sign. The implications of this finding, however, are unclear: do states comply because the legal commitment compels them to do so, or because of the conditions that led them to sign? Drawing from previous research in this Review on Article VIII of the IMF Treaty (Simmons 2000a), I examine the problem of selection bias in the study of treaty compliance. To understand how and whether international legal commitments affect state behavior, one must control for all sources of selection into the treaty—including those that are not directly observable. I develop a statistical method that controls for such sources of selection and find considerable evidence that the unobservable conditions that lead states to make the legal commitment to Article VIII have a notable impact on their propensity to engage in compliant behavior. The results suggest that the international legal commitment has little constraining power independent of the factors that lead states to sign.
Article
Debates about the efficacy of private environmental regimes have been fueled by disparate research findings, such as when the same regime that has been effective in one setting is found to be ineffective in another. In this article, we show that the efficacy of ISO 14001, the most widely adopted voluntary environmental regime in the world, is conditioned by the stringency of countries' domestic regulations. In doing so, we outline a model of strategic corporate environmentalism wherein firms strategically focus their International Organization for Standardization (ISO) certification to reduce emissions of visible air pollutants as opposed to less visible water pollutants. Our analyses of pollution levels for a panel of 159 countries (73 for water pollution) from 1991 to 2005 indicate that ISO 14001 certifications reduce air (SO2) emissions in countries with less stringent environmental regulations but have no effect on air emissions in countries with stringent environmental regulations. We also find that ISO membership levels are not associated with reductions in water pollution levels (Biochemical Oxygen Demand BOD), irrespective of stringency of domestic law. Our article suggests that the efficacy of global private environmental regimes is likely to be conditioned by the domestic regulatory context in which firms function, and given firm's strategic considerations, this efficacy could vary across pollution types.
Chapter
Evolution of the Market PatternThe Self-Regulating Market and the Fictitious Commodities: Labor, Land, and Money
Book
Can businesses voluntarily adopt progressive environmental policies? Most environmental regulations are based on the assumption that the pursuit of profit leads firms to pollute the environment, and therefore governments must impose mandatory regulations. However, new instruments such as voluntary programs are increasingly important. Drawing on the economic theory of club goods, this book offers a theoretical account of voluntary environmental programs by identifying the institutional features that influence conditions under which programs can be effective. By linking program efficacy to club design, it focuses attention on collective action challenges faced by green clubs. Several analytic techniques are used to investigate the adoption and efficacy of ISO 14001, the most widely recognized voluntary environmental program in the world. These analyses show that, while the value of ISO 14001's brand reputation varies across policy and economic contexts, on average ISO 14001 members pollute less and comply better with governmental regulations.
Article
Amid calls for NGOs to become more accountable, this work examines discrepancies between what NGOs say and do. Using a unique dataset of NGOs in Uganda it investigates the inaccuracies in reported financial transparency and community participation. We find that the threat of being caught reduces the likelihood of financial misrepresentation, while a desire to maintain a good reputation leads to misrepresentation of community consultation. Analysis provides indications that: NGOs with antagonistic relations with government may be more likely to hide information; and that unrealistic donor demands may be an obstacle to transparency. Findings caution against an overly naïve view of NGOs and a reliance on self-reported information.
Article
Why do majority congressional parties seem unable to act as an effective policy-making force? They routinely delegate their power to others—internally to standing committees and subcommittees within each chamber, externally to the president and to the bureaucracy. Conventional wisdom in political science insists that such delegation leads inevitably to abdication—usually by degrees, sometimes precipitously, but always completely. In The Logic of Delegation, however, D. Roderick Kiewiet and Mathew D. McCubbins persuasively argue that political scientists have paid far too much attention to what congressional parties can't do. The authors draw on economic and management theory to demonstrate that the effectiveness of delegation is determined not by how much authority is delegated but rather by how well it is delegated. In the context of the appropriations process, the authors show how congressional parties employ committees, subcommittees, and executive agencies to accomplish policy goals. This innovative study will force a complete rethinking of classic issues in American politics: the "autonomy" of congressional committees; the reality of runaway federal bureaucracy; and the supposed dominance of the presidency in legislative-executive relations.
Article
En esta obra, Douglass C. North, premio Nobel de Economía de 1993, expone un marco analítico para explicar las formas en que las instituciones y los cambios internos en ellas afectan a la economía.
Article
The paper develops an agency-theoretic approach to interest-group politics and shows the following: (1) the organizational response to the possibility of regulatory agency politics is to reduce the stakes interest groups have in regulation. (2) The threat of producer protection leads to low-powered incentive schemes for regulated firms. (3) Consumer politics may induce uniform pricing by a multiproduct firm. (4) An interest group has more power when its interest lies in inefficient rather than efficient regulation, where inefficiency is measured by the degree of informational asymmetry between the regulated industry and the political principal (Congress).
Article
This article reviews both the theoretical and empirical literatures on regulatory capture. The scope is broad, but utility regulation is emphasized. I begin by describing the Stigler--Peltzman approach to the economics of regulation. I then open the black box of influence and regulatory discretion using a three-tier hierarchical agency model under asymmetric information (in the spirit of Laffont and Tirole, 1993). I discuss alternative modelling approaches with a view to a richer set of positive predictions, including models of common agency, revolving doors, informational lobbying, coercive pressure, and influence over committees. I discuss empirical work involving capture and regulatory outcomes. I also review evidence on the revolving-door phenomenon and on the impact that different methods for selecting regulators appear to have on regulatory outcomes. The last section contains open questions for future research. Copyright 2006, Oxford University Press.
Article
This note uses information on a sample of sixteen OECD countries to assess the relationship between central bank independence and macroeconomic performance. As previous work suggests, politically controlled central banks are more likely to pursue policies that lead to high and variable inflation. However, the authors find little evidence that political control of central bank policy has any impact on measures of the level or variability of growth, unemployment, or the ex ante real interest rate. Copyright 1993 by Ohio State University Press.
Article
Predicting corporate distress can have a significant impact on the economy because it serves as an efficient early warning signal. This study develops distress prediction models incorporating both governance and financial variables and examines the impact of major corporate governance attributes, i.e., ownership and board structures, on the likelihood of distress. The two widely documented methods, i.e., logit and neural network approaches are used. For an emerging market economy where ownership concentration is common, we show that not only financial factors but also corporate governance factors help determine the likelihood that a company will be in distress. Our prediction models perform relatively well. Specifically, in our logit models that incorporate governance and financial variables, more than 85% of non-financial listed firms are correctly classified in our models. When we consider the Type I error, on average the models have the Type I error of about 9%. Likewise, the neural network prediction models appear to have good results. Specifically, the average accuracy of the neural network prediction models ranges from approximately 84% to 87% with the average Type I error raging from about 10% to 16%. Such evidence indicates that the models serve as sound early warning signals and could thus be useful tools adding to supervisory resources. We also find that the presence of controlling shareholders and the board involvement by controlling shareholders reduce the probability of corporate financial distress. This evidence supports the monitoring/alignment hypothesis. Finally, our results suggest evidence of the benefits of business group affiliation in reducing the distress likelihood of member firms during the East Asian financial crisis.
Article
This paper examines the volatility of capital flows following the liberalization of financial markets. Utilizing a panel data set of overlapping data, the paper focuses on the response of foreign direct investment, portfolio flows, and other debt flows to financial liberalization. The financial liberalization variable comes from the chronology and index developed by Kaminsky and Schmukler [Kaminsky, G.L. and Schmukler, S.L., 2003, Short-run pain, long-run gain: The effects of financial liberalization, IMF Working Paper WP/03/34.]. Different types of capital flows are found to respond differently to financial liberalization. Surprisingly, portfolio flows appear to show little response to capital liberalization while foreign direct investment flows show significant increases in volatility, particularly for the emerging markets considered.
Article
International institutions are central features of moderninternational relations. This is true of trade, international debt andnancial restructuring, and even national security, once the exclusiverealm of pure state action. It was certainly true of the two majormilitary engagements of the 1990s, the wars in Kosovo and the PersianGulf. As international institutions have gained prominence in thepolitical landscape, they have increasingly become prominent topics forstudy. The sharpest debate among researchers has been theoretical: Dointernational institutions really matter? Missing from this debate is asustained inquiry into how these institutions actually work. We shiftthe focus by posing researchable questions about how they operate andhow they relate to the problems states face.
The Institutional Structure of Production. Nobel Prize Lecture to the memory of Alfred Nobel Measuring the Independence of Central Banks and its Effect on Policy Outcomes
  • R Coase
Coase R (1991) The Institutional Structure of Production. Nobel Prize Lecture to the memory of Alfred Nobel, 9 December 1991. [Last accessed 22 November 2015.] Available from URL: http://www.nobelprize.org/ nobel_prizes/economic-sciences/laureates/1991/coase-lecture.html Cukierman A, Web SB, Neyapti B (1992) Measuring the Independence of Central Banks and its Effect on Policy Outcomes. The World Bank Economic Review 6, 353–398.
Rediscovering Institutions
  • J G March
  • J P Olsen
March JG, Olsen JP (2010) Rediscovering Institutions. Simon and Schuster, New York.
Public Confidence in Charitable Nonprofits
  • O Neill
O'Neill M (2009) Public Confidence in Charitable Nonprofits. Nonprofit and Voluntary Sector Quarterly 38, 237-269.
The Institutional Structure of Production Nobel Prize Lecture to the memory of Alfred Nobel Available from URL: http://www.nobelprize.org/ nobel_prizes/economic-sciences/laureates Measuring the Independence of Central Banks and its Effect on Policy Outcomes
  • R Coase
Coase R (1991) The Institutional Structure of Production. Nobel Prize Lecture to the memory of Alfred Nobel, 9 December 1991. [Last accessed 22 November 2015.] Available from URL: http://www.nobelprize.org/ nobel_prizes/economic-sciences/laureates/1991/coase-lecture.html Cukierman A, Web SB, Neyapti B (1992) Measuring the Independence of Central Banks and its Effect on Policy Outcomes. The World Bank Economic Review 6, 353-398.
Nobel Prize Lecture to the memory of Alfred Nobel
  • Coaser
Coase R (1991) The Institutional Structure of Production. Nobel Prize Lecture to the memory of Alfred Nobel, 9 December 1991. [Last accessed 22 November 2015.] Available from URL: http://www.nobelprize.org/ nobel_prizes/economic-sciences/laureates/1991/coase-lecture.html
Institutions, Institutional Change and Economic Performance. CUP, New York. North DC (1993) Economic Performance through Time. Nobel Prize Lecture to the memory of Alfred Nobel
  • D C North
North DC (1990) Institutions, Institutional Change and Economic Performance. CUP, New York. North DC (1993) Economic Performance through Time. Nobel Prize Lecture to the memory of Alfred Nobel, 9 December 1993 [Last accessed 22 November 2015.] Available from URL: http://www.nobelprize.org/ nobel_prizes/economic-sciences/laureates/1993/north-lecture.html
Nobel Prize Lecture to the memory of Alfred Nobel
  • Northdc