control and performance of international joint ventures control is a critical concept for successful management and performance of international joint ventures ijvs this paper reviews and synthesizes prior studies addressing the conceptualization and operationalization of control within ijvs as well as the ijv control performance relationship the paper also presents a new conceptualization of ijv control as well as a conceptual frame work for studying control of ijvs

interlinked contracts and moral hazard in investment abstract in agricultural tenancy arrangements the tenant is often required to undertake effort aimed at maintaining and improving the productive stocks this paper investigate the design of contracts which induce optimal investment of such effort it is found that a long term contract which interlinks tenancy with a credit agreement is optimal in equilibrium the tenant obtains credit from the landlord at a rate of interest below the market and is perpetually indebted to the landlord

tension and trust in international business negotiations american executives negotiating with chinese executives the purpose of the study is to shed light on the antecedents and consequences of tension felt during international business negotiations a total of 176 american and chinese executives participated in simulated international business buyer seller negotiations the negotiations were videotaped and the participants completed questionnaires each participant was also asked to review his her videotaped negotiation rate the tension felt on a videotape review form and briefly describe the antecedents of the tension felt the data collected were then analyzed using first a structural equations approach and then a more exploratory content analysis both chinese and american executives felt tension during the negotiations for the chinese greater levels of tension led to an increased likelihood of agreement but also led to lower levels of interpersonal attraction and in turn lower trust for their american counterparts for the americans tension felt decreased marginally the likelihood of an agreement did not affect interpersonal attraction but did have a direct negative effect on trust a series of other cultural differences are also reported the measure of tension felt developed in the study appears to be useful methodologically theoretically and practically

national animosity and cross border alliances we extend the cross border strategic alliance knowledge base by introducing dyad specific antagonism animosity between nation pairs and hold that the formation and the type of firm level cross border alliances are nontrivially impacted by conflicting relations and animosity between their home nations we examine the formation of alliances between firms among nation dyads with and without a history of conflicts the frequency and magnitude of conflicts increase the perception of likelihood of opportunism and dyad specific risks materially affect the context in which firms make alliance decisions as animosity between two nations increases the number and the probability of forming alliances within the dyad the nations form decreases conditional on the expected number of alliances increased antagonistic actions of nations outside the dyad and dissimilarity in the historical conflicts that each nation has engaged in outside the dyad i increase the number of equity alliances and ii decrease the number of nonequity alliances as a proportion of total alliances we find positive main effects of learning to contract through prior experience only for equity vs nonequity alliances the reputation effects of antagonism based on relationships with nations outside of the dyad negatively moderate the positive learning effects of prior equity alliance experience abstract from author

politicians outside earnings and electoral competition this paper deals with the impact of electoral competition on politicians outside earnings in our framework politicians face a tradeoff between allocating their time to political effort or to an alternative use generating outside earnings the main hypothesis is that the amount of time spent on outside work is negatively related to the degree of electoral competition we test this hypothesis using a new dataset on outside earnings of members of the german federal assembly and find that politicians facing low competition have substantially higher outside earnings

ethics laws and the outside earnings of politicians the case of alabama s legislator educators this paper has reported evidence on the returns to legislating in particular we examined the distributional impact of a provision of alabama s code of ethics which allows sitting state legislators to be on the payroll of public institutions of higher education using salary and educational budget data for 1987 88 we found that public funding per student for the junior and senior colleges in the state which employ legislators as educators is significantly higher than that received by comparable institutions

the effect of the governance environment on marketing channel behaviors the diamond industries in the u s china and hong kong international differences in how market exchanges are conducted e g the mode of entry level of ownership and conflict resolution have been attributed mainly to national culture and cultural distance however the cultural arguments cannot explain why economies countries with similar cultural backgrounds e g hong kong and china exhibit differences in exchange arrangements thus the cultural arguments provide little strategic guidance to multinational corporations mncs in international marketing we propose that in addition to culture the governance environment in a country namely the political economic and social institutions that facilitate or constrain the choice of governance mechanisms influences the way organizations conduct market exchanges this important factor heretofore has been ignored specifically we introduce a typology of rule based and relation based governance environment to explain how the environment affects marketing channel behaviors such as barriers to entry channel exclusivity information access trust and dispute resolution we analyze the diamond industry in the rule based governance environment in the u s and in the relation based governance environment in china and using the diamond industry in hong kong as a validation to develop theoretical propositions and strategic implications for mncs

agriculture in recent development theory abstract this paper is a critical review of recent contributions to the literature on agriculture in development theory it considers and compares the main lines of advance made within neoclassical neo marxian and structuralist approaches recent neo marxian and structuralist studies of agrarian development reveal that traditional agriculture is neither stationary nor efficient that resource allocation cannot be separated from wealth distribution or production organization that forms of surplus appropriation do not necessarily follow the dictates of efficiency that the social relations of production may inhibit accumulation and determine the forms of technological change that the state s role in primitive accumulation is more economic than explicitly coercive political and that political and macroeconomic constraints preclude a simple get the prices right view of the intersectoral terms of trade the thrust of these developments is to challenge both neoclassical and some orthodox marxian formulations of agrarian development issues and add to the insights to be gleaned from a political economy of development

a framework for the analysis of evolving patron client ties in agrarian economies abstract this paper looks systematically at the various factors that can account for the disappearance or the transformation of the institution of patronage that used to structure labor and other relationships in many agrarian societies of the past it is an attempt to offer a unifying framework capable of guiding one s attention to the relevant variables and to the way they interact in this process the rather simplistic view according to which there is a unique linear path through which patronage evolves is called into question and a number of different scenarios are instead presented these alternatives are illustrated with reference to asia

cost sharing arrangements under sharecropping moral hazard incentive flexibility and risk this paper explains the rationale and describes the characteristics of cost sharing arrangements in rural developing economies focusing on the risk and incentive properties of alternative cost contracts and on their flexibility their ability to adapt to environmental changes it is shown that where labor inputs are difficult to monitor the rule that cost shares and output shares be equalized will not hold and is not constrained pareto efficient and that cost sharing contracts have a decided advantage over contracts which specify the level of inputs whenever there are asymmetries of information regarding production technology between the landlord and the tenant

a theory of interlinked rural transactions this paper argues that the interlinking of labor output and credit contracts often observed in rural economies can be regarded as an attempt to improve allocative efficiency in the face of moral hazard it advances an economic explanation of the phenomenon which is rooted in the view that prevalent modes of transaction of which interlinked contracts are an example are shaped by technological considerations interlinking is shown to be an efficient economic response to unequally distributed information arising from the uncertainty which characterizes subsistence agriculture all pareto efficient allocations require a combination of wage cum output sharing with consumption credit contracts the analytical framework set up to demonstrate the results is used to examine the response of the contractual parameters to changes in i the returns to alternative occupations available to tenant laborers ii the cost of credit to the village economy and iii the riskiness of cultivation the analysis concludes that public policy to alleviate rural poverty must recognize the relationships between technological considerations and modes of transaction in the absence of a complete set of markets

trust interlinking transactions and credit in the industrial district an essential feature of the industrial district is trust among individuals and firms within it this paper focuses mainly on trust based on investments in building up a good reputation that is a personal capital that can even substitute for collateral in obtaining credit informal credit often linked to other transactions and especially subcontracting is therefore an important way of financing economic development in the industrial district moreover the importance of trust as personal capital gives rise to a double financial intermediation in the industrial district this double intermediation constitutes a device to reduce information problems that are usually responsible for credit rationing c 1994 academic press inc copyright 1994 by oxford university press

labor tying in a poor agrarian economy a theoretical and empirical analysis in this paper we show how tied labor contrary to its common characterization as a feudal relic and as a symptom of economic stagnation may actually be strengthened by capitalist agricultural development we construct a simple two period theoretical model of a two tiered labor market to show how the proportional importance of voluntary labor tying contracts may increase with yield increasing improvements and with a tightening of the labor market we then provide in support of these hypotheses some general historical as well as more detailed econometric evidence from a variety of cross sectional data in rural india

theories of share tenancy a critical survey for the past 2 decades the problems of agricultural tenancy have attracted a great deal of attention not only from agricultural economists but also from economists in general as a typical example of agencyprincipal contract relations despite the prolific growth of literature both theoretical and empirical there has been little convergence in opinions on tenancy contracts the divergence has been especially great on the understanding of the causes and the effects of sharecropping tenancy much confusion underlying the widely divergent perspectives has stemmed from partial treatments of contractual choice which unduly limit the optimizing behavior of contracting parties and the options of contract forms this essay aims at clarifying the sources of the confusion by reviewing the past literature in light of the more general theory of agency principal relations the agency theory in order to examine the problems of various theoretical models in a unified framework in section ii we first develop the basic framework of a general model of tenancy contract in section iii we clarify in terms of the general model contradictions latent in the traditional marshallian theory which asserts that share tenancy is inefficient because of the disincentive effect of cropsharing on the tenant s work effort in section iv we attempt to show that recent efforts to reconstruct the theory based on the traditional assumption have not yet been quite successful section v draws implications and testable hypotheses from more general theories incorporating the aspects of risk and uncertainty section vi tests allocational and distributional implications of those alternative hypotheses based on the summary of evidence col

buyer seller negotiations around the pacific rim differences in fundamental exchange processes the determinants of buyer seller negotiations in four cultures are investigated in a laboratory simulation one hundred thirty eight american 54 chinese 42 japanese and 38 korean business people participated in a two person buyer seller intracultural negotiation simulation in negotiations between americans the use of more problem solving bargaining strategies positively influenced negotiation outcomes in negotiations between chinese more competitive strategies led to better results in japanese and korean negotiations buyers achieved higher economic rewards than sellers in all four cultures bargainers were more satisfied with negotiation outcomes when partners were rated more attractive

capture and the bureaucratic mafia does the revolving door erode bureaucratic integrity does the revolving door phenomenon erode bureaucratic integrity to answer this question we undertake a quantitative case study of a private university in south korea that recruited a former vice minister of education as its president specifically we investigate whether after employing this high ranking former public official the university received favorable treatment from the education ministry in terms of funding estimates from difference in difference triple difference and synthetic control methods all suggest that the high profile public official s recruitment is associated with financial benefits from the official s former employing agency no such advantage however was observed for benefits from other agencies this result offers suggestive but compelling evidence that the revolving door distorts the allocation of government resources the financial benefits the university received are due not to the recruited official s greater competence expertise or knowledge but rather to his implicit collusion with the government

efficiency and equity tradeoffs incentive compatible contracts revisited abstract while the efficiency of certain contractual choices has been well established less attention has been given to the distributional outcomes of contracting in natural resource based industries data from a case study of seed gatherers in honduras demonstrates that workers paid under a relative payment system receive an earnings premium of about 25 of which 40 cannot be explained by observed differences in worker productivity a theoretical agency model is outlined in the appendix to explain why workers under tournaments necessarily enjoy a higher return than those under piece rates implying a more skewed income distribution as suggested in the efficiency wage literature

india s informal trade with bangladesh a qualitative assessment the large and vibrant informal trade between india and bangladesh continues to thrive despite unilateral regional multilateral trade liberalisation in these two countries this calls for an in depth analysis of india s informal trade with bangladesh using insights from the new institutional economics informal and formal institutions engaged in cross border trade are contrasted to examine whether informal trading arrangements provide better institutional solutions the analysis carried out on the basis of an extensive survey conducted in india and bangladesh reveals that informal traders in india and bangladesh have developed efficient mechanisms for contract enforcement information flows risk sharing and risk mitigation further informal traders prefer to trade through the informal channel because the transaction costs of trading in the informal channel are significantly lower than the formal channel implying that informal trade takes place due to the inefficient institutional set up in the formal channel the principal policy implication from the study is that unless the transacting environment of formal traders improves informal trade will continue to coexist with formal trade even if free trade is established in the saarc region

credit markets in northern nigeria credit as insurance in a rural economy this article addresses the issues of imcomplete markets and imperfect information in the context of credit markets in rural northern nigeria in much recent theoretical literature the problems of moral hazard and adverse selection are assumed to be decisive for the organization of agrarian institutions in contrast it is found that in the four villages surveyed credit transactions take advantage of the free flow of information within rural communities information asymmetries between borrower and lender are unimportant and their institutional consequences the use of collateral and interlinked contracts are absent credit transactions play a direct role in pooling risk between households through the use of contracts in which the repayment owed by the borrower depends on the realization of random production shocks by both the borrower and the lender

making it underground comparative material on the informal sector in western market economies this paper examines the informal economy and its relationship to commonly held theories of industrial development although these theories stem from very different intellectual traditions their general assumption has been that widespread informal economic activities are primarily a feature of third world economies in which they function as a refuge from destitution such activities are presumably destined to desappear with the advance of modern industry led growth evidence is presented that indicates that these assumptions including the identification of informality with conditions in the less developed countries are wrong alternative interpretations of the resilience of these activities in third world countries despite rapid industrialization and their continuity and apparent revival in the advanced economies and discussed

forced commerce and agrarian growth abstract the paper explains why contractually interlocked agrarian markets differ from price and quantity adjustments under pressures of excess demand supply in neoclassical general equilibrium analysis such contractual interlocking arising say from the indebtedness of the peasants gives rise to a contrived system of forced commerce this commercial mode of exploitation not only exhibits unequal relations of economic power but more important it is also a mechanism for maintaining such unequal power structure often at the cost of retarding agrarian growth the paper thus emphasizes the need to understand the very notion of market exchange and commerce in backward agriculture from an unconventional viewpoint

how mncs choose entry modes and form alliances the china experience this study examine two dimensions of firms foreign market entry strategy mode of entry and formation of alliances based on the existing literature we propose a model that describes how host country home country and industry specific factors affect foreign firms decisions on how they enter the market and whether they will enter with a partner firm or not the model also describes how operation related factors i e the location and the level of local government affect these decisions seven major hypotheses were tested using a longitudinal sample of 2 998 foreign business activities in china between 1979 and 1993 our sample consists of foreign investing firms from the u s europe japan and other asian countries by choosing china as a host country the study offers insights into how firms of different regional groups adapted their strategies to a changing host environment

interlocking transactions obstacles precursors or instruments of agrarian capitalism abstract rural labor arrangements often change rapidly and in ways that prevailing theories cannot explain explicit understanding of the exercise of power in rural society sheds considerable light on how and why rural labor arrangements change in the course of economic development this paper shows how different labor tying arrangements embody exclusionary mechanisms that can serve as instruments of both labor management and social control macro political and economic conditions shape the ways in which these mechanisms operate and are in turn influenced by them viewing labor arrangements in this way helps resolve problems confronted by the prevailing theories and allows for a broader understanding of dynamic processes

partner contributions as predictors of equity share in international joint ventures the type of expertise that a company contributes to a joint venture may affect the amount of equity that it owns this research observes the ownership patterns associated with four common combinations of partner expertise in international joint ventures the results rank company assets with respect to the contributor s ability to negotiate majority ownership in the original joint venture contract and that company s tendency to buy up equity from the partner later on

density social networks and job search methods theory and application to egypt we first develop a theoretical model in which individuals are embedded within a network of social relationships we show that conditional on being employed the probability to find a job through social networks relative to other search methods increases and is concave with the size of the network the effects are stronger for the uneducated there is however a critical size of the network above which this probability decreases we then test empirically these theoretical findings for egypt using the 1998 labor market survey the empirical evidence supports the predictions of our theoretical model

the new institutional economics and its applicability to development abstract the several remarkable developments in the social sciences which have come to be known as the new institutional economics nie have not yet been fully exploited for analyzing the determinants and effects of institutional change in the context of development this paper identifies two important components of the nie and illustrates both a potential complementarities between them and b their applicability to various problems and policies in the long term development of developing countries

does remuneration affect the discipline and the selection of politicians evidence from pay harmonization in the european parliament we study the harmonization of the base pay for the members of the european parliament meps prior to this reform implemented in 2009 base pay was aligned with that of national parliamentarians causing large differences in pay between the meps representing 27 member states based on detailed information on individual meps between 2004 and 2011 we find that the reform which introduced an exceptional base pay increase of 200 per national delegation on average has a positive incentive effect on in office effort proxied by the number of speeches written declarations and reports drafted however more generous remuneration is associated with higher rates of absenteeism with respect to political selection we find that higher pay also raises reelection rates the composition of the pool of meps in terms of ex ante quality approximated by formal education previous political experience in elected office and occupational background is however unaffected if we restrict our attention to newly elected meps a salary increase is related to fewer meps with previous political experience at the highest national level

cross cultural interaction the international comparison fallacy international management studies have been based primarily on the comparison of managerial behavior in countries around the world often these studies have implied that business people behave similarly with their domestic colleagues as with their foreign counterparts in questioning that assumption this study tests whether intra cultural behavior accurately predicts cross cultural behavior using a negotiation simulation and a sample of 462 japanese american and canadian businesspeople behaviors in cross cultural negotiations were found to differ in some important ways from those in intra cultural negotiations

oligopsonistic landlords segmented labor markets and the persistence of tied labor contracts this article examines contractual labor arrangements in agrarian economies that persist as a consequence of market power on the part of landlords faced with output uncertainty we show that a segmented labor market characterized by tied labor contracts and involuntary unemployment in the lean season are optimal as compared to a labor hiring arrangement that guarantees full employment of labor in both seasons government intervention in the form of a specific subsidy targeted toward the hiring of permanent laborers may raise the welfare of all laborers while a specific subsidy directed toward the hiring of casual laborers or the institution of relief programs that absorb the rural unemployed in the lean season leads to the casual laborers in the economy being worse off copyright 2002 oxford university press

strategic determinants of partner selection criteria in international joint ventures prior studies are vague regarding determinants of criteria for selecting complementary partners for international joint ventures ijvs this paper first distinguishes task and partner related dimensions of selection criteria the paper then argues that relative importance of task related selection criteria is determined by the strategic context of the proposed ijv and the parent firm specifically the critical success factors of the venture s competitive environment and the parent s static and dynamic position vis a vis these factors

targeting child labor in debt bondage evidence theory and policy implications despite recent multilateral efforts to single out child labor in debt bondage as one of the worst forms of child labor several important questions have yet to be addressed how pervasive is the phenomenon are there systematic correlations between the incidence of children in debt bondage and the economic legislative and financial development indicators of the economy how does an understanding of these correlates affect the way national and international policy measures aimed at targeting this form of child labor are perceived this article addresses each of these questions the empirical findings suggest strong correlation between the likelihood of the incidence of child labor in debt bondage with the stage of development of an economy the stage of financial development and enforcement of core labor rights building on this evidence the article presents a theoretical model that highlights the drawbacks and merits of a number of policies aimed at putting checks on child labor in debt bondage

moral hazard and optimal commodity taxation abstract this paper demonstrates that in an economy with moral hazard and more than one commodity competitive equilibrium is not constrained efficient to correct the market failure differential commodity taxation is necessary a general optimal tax formula is derived and special cases of is discussed

is school the best route to skills returns to vocational school and vocational skills in egypt this paper tests the assumption that formal education is the best route to job skills the returns to formal vocational secondary schooling are compared to the returns to acquiring skills outside the education system such as undertaking an apprenticeship for male wage workers in egypt a unique longitudinal dataset with information on schooling and skills allows for causal inference about returns by comparing siblings for recent cohorts the estimated returns to formal vocational secondary education are the same as attaining no formal education however the returns to skills obtained outside of formal education are substantial

cultural influences on adaptation to fluid workgroups and teams we used structured questionnaires and interviews to explore cultural factors affecting adaptation to fluid workgroups and teams in taiwan and australia proxying for chinese and anglo american societies consistent with collectivist high power distance culture we find members of taiwanese organizations to have more difficulty adapting to fluid teams with changing membership and leadership the results have implications for the implementation of flexible organization structures and interaction patterns in different countries

formal and informal institutions in the labor market with applications to the construction sector in egypt abstract urban labor markets that are characterized by the absence or ineffectiveness of regulation by legal and bureaucratic institutions can nonetheless be subject to powerful institutional forces based on customary norms group cohesion kinship and social networks using insights derived from the new institutional economics this argument is illustrated with three examples from the construction labor market in egypt where formal and informal institutions performing similar functions are contrasted in each case the informal institution is found to be significantly more important in shaping labor market relations

the impact of natural culture and economic ideology on managerial work values a study of the united states russia japan and china this study assesses the impact of economic ideology and national culture on the individual work values of managers in the united states russia japan and china the convergence divergence crossvergence cdc framework was used as theoretical framework for the study while the schwartz value survey svs was used to operationalize over investigation of managerial work values across these four countries the findings largely support the crossvergence prospective while also confirming the role of national culture implications from the findings are drawn for the convergence divergence crossvergence of values as well as for the feasibility of multidomestic or global strategies for a corporate culture

credit and sharecropping in agrarian societies this paper considers a model of linkage between land labor and credit transactions in the context of sharecropping the paper s objectives are a to derive and characterize the equilibrium in a model of a land scarce labour abundant economy under sharecropping given an infinitely elastic supply of identical sharecroppers at a reservation utility and b to demonstrate that in an imperfect market a landlord may offer credit to his tenant sometimes even at a subsidized rate of interest without necessarily insisting that the sharecropper borrow only from him precluding an involuntary linkage between credit and land transations it has been demonstrated that regardless of the presence or absence of linkage or any other control by the landlord as long as he can vary the size of the plot given to a tenant and there are enough potential tenants in equilibrium contracts a tenants utility under sharecropping will be the same as that which he could have obtained as a full time wage laborer this result implies that policies other than land reform will not affect the welfare of tenants

connective power solar electrification and social change in kenya summary market based rural electrification with solar energy is increasingly common in developing countries this article revolves around three main claims about solar electrification in kenya s unsubsidized market 1 the benefits of solar electrification are captured primarily by the rural middle class 2 solar electricity plays a modest role in supporting economically productive and education related activities but connective applications such as television radio and cellular telephone charging often receive a higher priority 3 solar electrification is more closely tied to increased television use the expansion of markets more rural urban communication and other processes that increase rural urban connectivity than to poverty alleviation sustainable development or the appropriate technology movement

the role of affect in cross cultural negotiations this paper presents a model of cross cultural negotiations which describes how the affect negotiators experience during negotiations influences the character of the negotiation process and its outcomes three categories of determinants of negotiator affect are proposed individual differences cross cultural differences and contextual factors the ways in which negotiator affect influences information processing during negotiations are then described it is suggested that the influence of affect through substantive information processing may lead to either positive or negative spirals in negotiations influencing the ability of negotiators to reach an integrative solution finally the ways in which negotiators can break out of destructive negative spirals by engaging in motivated rather than substantive information processing are discussed

kinship ties social networks and segmented labor markets evidence from the construction sector in egypt abstract this paper tests for rationing of entry into craft occupations in the construction labor market in egypt and investigates whether entry is rationed according to regional origin and access to kinship and other social networks i use a modified version of roy s model of occupational choice which allows for the existence of costs of entry into craft occupations data from a 1988 survey of construction workers are used to estimate the model and test for rationing the results confirm the existence of rationing according to a worker s regional background but are inconclusive with respect to kinship ties and social networks

cooperative strategies between foreign firms in an overseas country in this paper we study the cooperative strategies between two firms in an overseas country in part 1 we examine the circumstances under which foreign firms would cooperate with another foreign firm in a third country market drawing upon existing literature we develop and test a set of hypotheses using a longitudinal data set from china the types of cooperative arrangements include all the major modes of operation in part 2 we further investigate what types of operation and level of control exist among the cooperative arrangements between two foreign firms in china we used a sample of 483 cooperative arrangements between two firms from hong kong the u s japan germany or britain this study offers interesting insight as to why foreign firms form cooperative arrangements in an overseas country and what types of cooperative arrangements these firms prefer

credit layering in informal financial markets abstract informal lenders with access to markets or capital often find it attractive to delegate loan provision to downstream lenders who have an information or enforcement advantage in dealing with particular borrowers in this paper we examine the conditions under which such an arrangement is preferred by two informal lenders a landlord and a merchant who compete in loan provision to tenant farmers differentiated by wealth we show that credit layering is preferred only when tenants are sufficiently poor in this case the trader lends to tenant farmers via a contract with their landlord otherwise only the trader lends as a consequence a pattern of borrowing emerges in which relatively wealthy tenants borrow from merchants while poor tenants borrow mainly from their landlords interlinkage between land and credit thus arises only for a subset of tenants and purely as a consequence of credit layering this pattern is shown to be supported empirically

moral hazard and marshallian inefficiency evidence from tunisia abstract we formalize the link between optimal cost sharing contracts and the production technology in the presence of moral hazard by appealing to several well known results from duality theory building on intuitions from the interlinkage literature we show that optimal contractual structure is determined by the i substitution possibilities that exist between different observable factor inputs as well as ii between these inputs and unobservable effort we endogenize contractual choice using landlord characteristics as instruments exploiting the fact that in our dataset landlords interact with several tenants and vice versa the approach is applied to an unbalanced plot level panel of cost sharing contracts in a tunisian village using a translog representation of the restricted profit function contractual terms are found to be a significant determinant of input use and therefore lead to marshallian inefficiency while the optimality of the underlying contractual structure is rejected

double moral hazard and resale price maintenance incentives for resale price maintenance rpm are studied in a wholesaler retailer relationship in which both firms make a nonprice choice subject to moral hazard the best attainable contract has vertical externalities in both nonprice choices and the choice of consumers price if delegated to the retailer rpm controls the latter externality but interacts with the other externalities as well as a consequence either minimum or maximum vertical price fixing can be optimal in spite of a successive monopoly specification similar incentives exist for writing other variables into contract such as the capital input of the retailer

cultural differences in conducting intra and inter cultural negotiations a sino canadian comparison a study on conflict resolution strategies of canadian and chinese peoples republic of china executives was conducted responses to two types of joint project conflicts task related and person related with potential partners from their own culture or from the other culture were examined neither group of executives altered its strategy when negotiating across cultures chinese executives were more likely to avoid conflicts but recommended more negative strategies discontinue negotiation withdraw negotiation when conflict emerged person related conflicts were found to generate more negative responses than task related conflicts especially for chinese executives both canadian and chinese executives preferred to negotiate with canadians than with chinese

interlinked contracts an empirical study this study investigates the contractual relationship between farmers and sugar mills in colonial taiwan our investigation is based on a model of interlinked contracts which is adapted from gangopadhyay and sengupta 1987 the validity of our model s predictions is verified by analyzing a data set consisting of contracts between taiwan s cane farmers and sugar mills during the period of japanese occupation our data suggest that the contractual relationship is consistent with a second best scenario where the interest rates charged by sugar mills on cash loans to farmers are set in order to prevent diversion of funds to non production uses

exclusionary labour arrangements interpreting evidence on employment trends in rural java intense controversy surrounds the interpretation of national survey and census data on employment trends in rural java the analysis of exclusionary labour arrangements developed in this paper helps resolve this controversy it also sheds light on the mechanisms that underlie different labour arrangements and the ways in which these mechanisms are connected with wider political and economic forces

common property and collective action in economic development abstract a fundamental issue in many ldcs is the degree to which natural resource mismanagement is caused by common property arrangements this view has led to widespread attempts to privatize forests rangelands and water resources many of these efforts have failed to stop overuse and have contributed to inequality in resource distribution this paper seriously questions this approach and describes a number of reasons why common property may continue to be both efficient and equitable complementing and combining with private rights in a way consistent with the resource endowments of village economies a theoretical approach is outlined showing that the tragedy of the commons is an unsatisfactory model of common property an alternative model is presented together with a call for research into institutional alternatives in resource management

attached farm labor limited horizons and servility abstract two facets of attached farm labor arrangements the servility often required of attached laborers and employers interest in maintaining such workers limited horizons are described and incorporated into an otherwise standard model of attached and temporary agricultural employment substantially modifying the model s predictions the dependence of workers preferences on reference group behavior which underlies employers interest in limiting horizons may enable employers to drive even freely mobile workers wellbeing below competitive levels may imply that abolishing servility arrangements would benefit all workers gives rise to multiple equilibria in community layout and culture and sheds light on some characteristics of agrarian revolts

the impact of the great migration on mortality of african americans evidence from the deep south the great migration the massive migration of african americans out of the rural south to largely urban locations in the north midwest and west was a landmark event in u s our paper shows that this migration increased mortality of african americans born in the early twentieth century south this inference comes from an analysis that uses proximity of birthplace to railroad lines as an instrument for migration

economic returns to social power merchants finance and interlinkage in the grain markets of bangladesh abstract the paper describes contrasting forms of interlinked transaction and the exchange regimes in which they are situated in two rural areas of bangladesh a fast growing green revolution area and a slow growing backward area some interlinkages fix output and finance prices for producers others establish personalized monopsony in trade the implication for rates of return and vulnerability of the different forms of interlinked transaction are explored perverse risk transfer from less to more vulnerable parties is found particularly when interlinkages are combined the market structures described appear to emerge not from government intervention but from the uneven distribution of local power and are thus unlikely to be improved by structural adjustment reforms or by price focused policies

sharecropping and the interlinking of agrarian markets one of the often noted features of less developed agrarian economies is the existence of interlinkages among the land labor credit and product markets the landlord is often the supplier of credit he frequently purchases and markets the output of the tenant farmers and often sells raw materials and even consumption goods to his tenant farmers how can this phenomenon be explained what are the welfare consequences of attempts to restrict these practices which often seem to constitute restraints on free trade these are the questions to which this paper is addressed a general set of arguments applicable to both competitive and noncompetitive environments are presented to situations where all the terms of the contract are determined in an optimal way as well as to situations where many of the terms are specified institutionally section i examines interlinked credit and tenancy contracts section ii examines interlinked marketing and tenancy contracts section iii points out the possible interlinking between labor contracts and consumption goods markets and section iv presents the different equilibrium frameworks discussed in the paper such as monopoly monopsony competition and equilibria with surplus labor

when in rome the effects of cultural adaptation on intercultural business negotiations drawing on social identity and similarity attraction theories as well as empirical studies in intercultural communication hypotheses were developed to test the effects of three degrees of adaptive behaviors during intercultural buyer seller negotiations hypotheses covered both the positive and negative effects of adaptation on the adjudged interpersonal attractiveness of the adaptor these hypotheses were tested in two experimental studies using scenario based manipulations the first study looked at american subjects responses to adaptive behaviors of japanese business people to test the generalizability of these findings to a less familiar culture a replication looking at american subjects responses to adaptive behaviors of korean business people was also conducted the findings partially support the notion that moderate adaptation may be the optimal strategy in intercultural negotiations moderate adaptation was found to improve the adjudged attraction of the japanese business people relative to no adaptation and substantial adaptation however this finding was not replicated with korean business people

the new institutional economics and development theory a brief critical assessment abstract in this paper we discuss strengths and weaknesses of transaction cost and imperfect information approaches to the economic theory of institutions particularly with reference to problems relevant to economic development

endogenous emergence of credit markets contracting in response to a new technology in ghana abstract access to credit is important for the productivity and overall welfare of farmers in developing countries we present a theoretical framework which shows that a change in the mode of shipping from air to sea in the ghanaian pineapple industry made it profitable for pineapple exporters to provide myopic farmers with both in kind loans to improve productivity and cash loans for consumption smoothing despite being unable to monitor farmers or enforce repayment the innovative theoretical result is that providing farmers with additional cash loans can enforce greater input use without compromising repayment we provide evidence in the form of a case study documenting the dramatic rise of informal credit through contract farming after the switch to sea freight between 1996 and 2001 using this anecdote we argue that credit arrangements can arise spontaneously absent non market interventions to meet market needs even in the absence of proper legal protections for creditors

do institutions affect citizens selection into politics traditional political economy has paid primary attention to the structuring of the principal agent relationship between citizens and politicians and the role of competition and institutions in disciplining political agents however as the electoral control of politicians and the credibility of policy commitments are limited this perspective needs to be complemented with an economics of political selection that takes into account the quality of those elected to political office we review the emerging literature which investigates institutional conditions that impact the selection of politicians we discuss pay in politics electoral rules institutions enhancing transparency in politics and institutions which govern dual office holding in different branches of government we argue that further comparative analyses are essential in order to gain an improved understanding of the impact that institutions have on political outcomes not only via the channel of accountability but also via the channel of selection

explaining legislators positions on outside income limits voting on honoraria ceilings in the u s senate 1981 1983 this article examines roll call voting by members of the u s senate on three proposals to limit members outside income in the 1980s i find that several factors influenced legislators votes on outside income limits legislation oill first financial self interest was an important constraint on members willingness to support oill members who earned more honoraria were less likely to vote yes but this opposition was neutralized when limits were attached to the compensating mechanism of a pay raise senators from poorer states were generally more likely to support honoraria limits alone but less likely to support limits linked to a pay raise suggesting a responsiveness to constituent interests in both cases finally when oill was linked to a pay raise electoral considerations became prominent in legislators vote decisions with electorally vulnerable members less likely to vote yes

work intensity gender and sustainable development abstract is labour intensive employment compatible with social justice and environmental sustainability this paper examines the question of how far small scale intermediate technology based on energy intensive human work which is central to prescriptions for poverty alleviation and sustainable development is compatible with development objectives emphasizing gender equity work intensity is a neglected characteristic of labour but significant in the determination of human well being and in the intra household distribution of welfare the intensification of energy expenditure does not affect men and women in a uniform way and needs to be gender disaggregated in order to reveal potential trade offs between development strategies based on labour intensive growth and the well being of men and women the paper draws upon the experience with treadle pumps for irrigation in bangladesh as an illustration of such potential trade offs and argues for more rigorous analyses of gender divisions of labour which include work intensity in combination with time allocation

targeting child labor in debt bondage despite recent multilateral efforts to single out child labor in debt bondage as one of the worst forms of child labor several important questions have yet to be addressed how pervasive is the phenomenon are there systematic correlations between the incidence of children in debt bondage and the economic legislative and financial development indicators of the economy how does an understanding of these correlates affect the way national and international policy measures aimed at targeting this form of child labor are perceived this article addresses each of these questions the empirical findings suggest strong correlation between the likelihood of the incidence of child labor in debt bondage with the stage of development of an economy the stage of financial development and enforcement of core labor rights building on this evidence the article presents a theoretical model that highlights the drawbacks and merits of a number of policies aimed at putting checks on child labor in debt bondage

organizational changes in emerging economies drivers and consequences organizational change in emerging economies although difficult is inevitable the authors study the drivers and consequences of organizational changes in an emerging economy china the results of a firm level survey show that organizational changes in technical vs administrative areas are differentially driven by firms motivation to change past performance opportunity to change firm location and market orientation and capability to change firm ownership managers change attitude and leader charisma furthermore technical and administrative changes affect firm performance through distinct paths technical changes have a direct positive impact on performance whereas administrative changes enhance firm performance indirectly through technical changes and the effect of administrative changes on performance is strengthened by the presence of a participative culture