Ben T. Yu’s research while affiliated with The California School of International Management and other places

The study of institutions and economic history was much influenced by Ronald Coase and Douglass North, in particular with Douglas North’s notion of government as an endogenous outcome of institution competition. Although Max Weber articulated a concept of government as a monopoly of violence in 1919, much subsequent modeling work on governments was built around the banditry notion of governments of Mancur Olson (1993, “Democracy, Dictatorship and Development.” The American Political Science Review 87(3) (September): 567–576). Examples are Usher (1989, “The Dynastic Cycle and the Stationary State.” American Economic Review 79: 1031–1044), Moselle and Polak (2001, “A Model of a Predatory State.” Journal of Law, Economics & Organization 17(N1)), and the like. A good summary is found in Dixit (2004, Lawlessness and Economics: Alternative Modes of Governance. Princeton, NJ: Princeton University Press). We called this collectively a Weberian/Olsonian view of governments. Building on the notion that a State is a monopoly of violence, these models are in line with the banditry idea of Olson, which, among many country historical studies, he used the Chinese example that governments are essentially stationary/roving bandits. Taking Olson’s ideas as a lead, this paper uses the counter-example of Feng Yu-hsiang (馮玉祥 1882–1948) (Feng), a Chinese “warlord”, to present an alternative analytical framework in terms of a supply-demand model for the emergence of governments. The level of generalization for a framework of such societal order is necessarily heuristic, and can be compared to such economic simplification of social reality by Hayek, Schumpeter and North. However, it should help constellate facts that can be gathered to evaluate refutable hypotheses that are of interest to political theorists and historians. The model formulated for this paper is not intended to justify violence, which the authors deplore, but is recognized as merely a statement about realpolitik.

This essay provides an explanation of the phenomenon of an apparent secular fall in captured fisheries outputs in Hong Kong transacted through the Fish Marketing Organisation. The latter is a government monopoly, with the power to compel sale of landed fish through its licensed buyers, established and protected by law. The institutional characteristic of this organisation can also explain the evolution of marine fish culture industry in the area that is not subject to the forced-sale regulation of the Organisation, and the diversity of species commonly observed in the consumer market of cultured fish. The observed reduction in fisheries output in Hong Kong can be the consequence of regulation rather than a lack of regulation, as the ‘the tragedy of commons’ would seem to imply. Our analysis also demonstrates why the Fish Marketing Organisation has suffered from a growing budgetary deficit in recent years.

This paper documents from an economic perspective the evolution of the fry market as part of the marine fish culture industry in Hong Kong, and related research efforts. The fry market, which involves a division of labour among fry import traders, local fry catchers and local culturists, has helped the adjustment of the industry in the face of foreign competition. Due to the success in artificial breeding of key cultured fish and keen product competition, the prices of fry have been falling. The contribution of the fry breeders to sustaining the culture industry is discussed

Sustainable development is argued to exist in weak and strong versions. Although the use of a property rights and contractual approach has been well understood in the case of weak sustainable development, the approach has been virtually ignored in the strong version. This paper formulates a property rights and contractual approach for the strong version of sustainable development. By reference to an analytical model and examples from Hong Kong and Taiwan, a Schumpeterian process and the institution of resource entitlements are shown to be the necessary ingredients to promote the strong version of sustainable development.

This paper presents a behavioral model of an inventor's contractual choice in which (a) newly established organized research is formulated to be an endogenous outcome of this choice, and (b) the value of the inventor's inventive ingenuity or ability is conceptually defined. We hypothesize that the difficulty of appropriating the returns to basic knowledge is a reason why inventors form research organizations. The main implication of the model is that inventors with a higher inventive ability have a greater incentive to organize research. The career patent records of sixty-three poineering inventors, profiled in Jewkes, Sawers and Stillerman's Sources of Invention, are examined. The data is consistent with the implication of our model: We find that inventors with a high index of inventive ability are more likely to be affiliated with organized research.