social norms and moral hazard the probability of income loss depends on talent and effort effort has positive externalities and therefore individuals are awarded status in proportion to their perceived diligence the social no

a refinement of the relationship between economic growth and income inequality there is mixed evidence in the literature of a clear relationship between income inequality and economic growth most of that work has focused almost exclusively on developed economies in what we believe to be a first effort our emphasis is solely on developing economics which we classify as high income and low income developing countries hidc and lidc we make such distinction on theoretical and empirical grounds empirically the world bank has classified developing economies in this manner since 1978 the data in our sample are also supportive of such classifications we provide theoretical scaffolding that uses asymmetric credit constraints as a premise for separating developing economies in such a way we find strong evidence of a negative relationship between income inequality and economic growth in lidc to be in stark contrast with a positive inequality growth relationship for hidc both correlations are statistically significant across multiple econometric specifications using international

altruism matching and nonmarket insurance incomplete market insurance gives rise to nonmarket arrangements for coinsurance we find that the effort altruistically linked individuals take to avoid an accident increases with the degree of altruism if the degree of altruism is sufficiently high an economy with nonmarket insurance yields higher social welfare than an economy without nonmarket insurance as altruism increases the equilibrium level of effort approaches the second best solution without the need for costly monitoring coinsurance is above below the socially optimal level if individuals place greater weight less weight on their own utility than on that of their partners

do sustainable companies have a better financial performance a study on brazilian public companies abstract increasingly companies are taking initiatives to mitigate the negative social and environmental impacts to address the emerging needs of society in the financial realm stock markets created indices to offer investors the option to prioritize sustainable companies in brazil the initiative came from the sao paulo stock exchange by releasing the corporate sustainability index in this paper we analyze the financial and economic performance of companies listed in the corporate sustainability index in comparison with the performance of companies listed in the sao paulo stock exchange index for that profitability and liquidity ratios were calculated and statistical tests specifically cluster and nonparametric analysis were performed to validate possible trends similarities or differences observed in each group of companies based on our analysis we found no evidence of economic and financial performance differences between companies from each of the studied indices in fact our findings show that other characteristics such as sectorial classification have more influence on firms economic and financial performance than their investments in sustainable initiatives the research contributes to the body of knowledge in the field of corporate sustainability by utilizing a different methodology than similar studies have used incorporating different accounting ratios and new statistical analyses of data from the emerging brazilian market

informal family insurance and the design of the welfare state we study unemployment benefit provision when the family also provides social insurance in the benchmark case more generous state transfers crowd out family risk sharing one for one an extension gives the state an advantage in enforcing transfers through taxes whereas families rely on self enforcement more generous state transfers lead to more than one for one reductions in intra family insurance so that total transfers to the unemployed fall as the state s generosity increases this does not imply that the optimal size of the welfare state is zero our results still hold when families are assumed to be better than the state at monitoring job search activities of unemployed

persistence of dollarization after price stabilization credit contracts in developing countries are often denominated in foreign currencies even after many of these economies succeeded in controlling inflation this paper proposes a new interpretation of this apparent puzzle based on the demand for insurance against real shocks the fact that devaluations occur more frequently in adverse states of the world provides a motive for holding dollar assets this approach implies a complementarity between the optimal monetary policy and the currency denomination of contracts when a large proportion of liabilities is denominated in a foreign currency the optimal exchange rate volatility is low which reinforces the demand for dollar assets

networks markets and inequality julien gagnon thanks the gates cambridge trust for financial support sanjeev goyal is grateful to the keynes fellowship and the cambridge inet institute for financial support

social capital human capital and the community mechanism toward a conceptual framework for economists abstract for facilitating the development of a consensus on the concept of social capital among economists this paper proposes its operational definition in a way consistent with the definitions of physical and human capital and discusses the relevance on the use of the metaphor of capital for social capital further the unique characteristics in the production and accumulation of social capital in comparison with physical and human capital are identified in relation with the community which is considered the central mechanism to produce social capital the merits and drawbacks of the community relative to the market and the state are examined with the aim of identifying the conditions under which social capital can be supplied efficiently in the direction of promoting economic progress

the price response to s p 500 index additions and deletions evidence of asymmetry and a new explanation we study the price effects of changes to the s p 500 index and document an asymmetric price response there is a permanent increase in the price of added firms but no permanent decline for deleted firms these results are at odds with extant explanations of the effects of index changes that imply a symmetric price response to additions and deletions a possible explanation for asymmetric price effects arises from the changes in investor awareness results from our empirical tests support the thesis that changes in investor awareness contribute to the asymmetric price effects of s p 500 index additions and deletions the long held assumption that stocks have perfect substitutes and the perfect elasticity of demand that follows from it is central to modern finance theory if securities have almost perfectly elastic demand then any supply or demand shocks that are devoid of information should have no effect on the prevailing price early empirical research on whether price changes occur in the absence of new information focused on block trades equity issues and stock splits but was unable to exclude information effects around these events since there is no obvious reason to believe ex ante that index changes contain new information they constitute a natural framework for testing whether stocks have almost perfectly elastic or horizontal demand curves a stock s excess return around such changes could be consistent with a downward sloping demand curve with the advent of indexed mutual funds in 1976 and the public announcement of s p index changes in the same year there is much evidence that such announcements are accompanied by an increase in price for firms added to the index if stocks have a short term downward sloping demand curve the price should be momentarily affected by a demand shock due to indexing but that effect

how does the market value corporate sustainability performance this study provides empirical evidence on how corporate sustainability performance csp as proxied by membership of the dow jones sustainability index is reflected in the market value of equity using a theoretical framework combining institutional perspectives stakeholder theory and resource based perspectives we develop a set of hypotheses that relate the market value of equity to csp for a sample of north american firms our preliminary results show that csp has significant explanatory power for stock prices over the traditional summary accounting measures such as earnings and book value of equity however further analyses suggest that we should not focus on corporate sustainability itself our findings suggest that what investors really do is to penalize large profitable firms with low level of csp firms with incentives to develop a high level of csp not engaging on such strategy are thus penalized by the market

inequality is bad for growth of the poor but not for that of the rich the paper assesses the impact of overall inequality as well as inequality among the poor and among the rich on the growth rates along various percentiles of the income distribution the analysis uses micro census data from u s states covering the period from 1960 to 2010 the paper finds evidence that high levels of inequality reduce the income growth of the poor and if anything help the growth of the rich when inequality is deconstructed into bottom and top inequality the analysis finds that it is mostly top inequality that is holding back growth at the bottom

symposium on organizations and economics m t r ost production in modern economies occurs within organizations and this production is regulated only to a limited extent by prices the size of some of the largest organizations like general motors or ibm or att if managers didn t they would be replaced and firms that didn t maximize value wouldn t survive accordingly what went on inside the black box was mere detail the behavior of the firm could be described completely without knowledge of those details

the corporate social performance financial performance link strategic managers are consistently faced with the decision of how to allocate scarce corporate resources in an environment that is placing more and more pressures on them recent scholarship in strategic management suggests that many of these pressures come directly from sources associated with social issues in management rather than traditional arenas of strategic management using a greatly improved source of data on corporate social performance this paper reports the results of a rigorous study of the empirical linkages between financial and social performance corporate social performance csp is found to be positively associated with prior financial performance supporting the theory that slack resource availability and csp are positively related csp is also found to be positively associated with future financial performance supporting the theory that good management and csp are positively related 1997 by john wiley sons ltd

group versus individual liability short and long term evidence from philippine microcredit lending groups abstract group liability in microcredit purports to improve repayment rates through peer screening monitoring and enforcement however it may create excessive pressure and discourage reliable clients from borrowing two randomized trials tested the overall effect as well as specific mechanisms the first removed group liability from pre existing groups and the second randomly assigned villages to either group or individual liability loans in both groups still held weekly meetings we find no increase in short run or long run default and larger groups after three years in pre existing areas and no change in default but fewer groups created after two years in the expansion areas

peer pressure and partnerships partnerships and profit sharing are often claimed to motivate workers by giving them a share of the pie but in organizations of any significant size the free rider effects would seem to choke off

a new and robust subgame perfect equilibrium in a model of triadic power relations abstract this note presents a new subgame perfect equilibrium in an infinitely repeated game which has basu s triadic model as the stage game oxford econ pap 38 1986 259 the payoff for the laborer is the same as in basu s model the equilibrium is more robust than the naqvi and wemhoner s solution j dev econ 47 1995 191 in the sense that the equilibrium does not require the same high degree of rationality simple well known strategies are applied and both the landlord and the merchant are better off than in the stage game in the equilibrium outcome the merchant receives a share of the extra profit from the extortionary labor contract

is inequality harmful for growth comment endogenous growth models have reignited interest in institutional and path dependencies in the economic growth process one reason for the interest in endogenous growth models is that they may explain why countries consistently grow at different rates in this vein it has been recently proposed that greater economic inequality reduces future economic growth an important paper in this literature is by torsten persson and guido tabellini 1994 who will be referred to as pt pt s model shows why it is reasonable to expect a negative relationship between inequality and future economic growth moreover their empirical evidence is consistent with their contention if pt s findings are robust to other data sets there would be important policy implications for example they imply that policy makers should not only be concerned with the distributional implications of government policies for political and social reasons but also because income distribution has long run effects on economic growth this indicates that greater u s income inequality since the early 1970 s may have resulted in lower subsequent economic growth however pt s results are somewhat fragile to various specifications suggesting that they should be replicated with different data sets and over different time periods pt p 617 with these implications in mind this study employs data from a panel of u s states to further explore the relationship between economic growth and income inequality in what follows section i summarizes pt s study and discusses how this comment extends their findings the empirical implementation and results in section ii directly examine the link between overall income inequality and growth section iii expands the analysis to alternative measures of income distribution and government policy one emphasis in section iii is the distinction between how the overall income distribution especially at the tails influences economic growth from how the relative well being of the median voter affects economic growth section iv provides some concluding discussion

releasing constraints to growth or pushing on a string policies and performance of mexican micro firms abstract using firm level data from mexico this paper investigates the firm characteristics associated with participation in credit markets access to training tax payments and membership in business associations we find that firms which participate in these institutions exhibit significantly higher profits moreover firms that borrow from formal or informal sources and those that pay taxes are significantly more likely to stay in business but firms that received credit exhibit lower rates of income growth these results persist when firm characteristics that are arguably correlated with unobserved entrepreneurial ability are controlled for our findings suggest that the significant within country differences in firm productivity observed in developing economies are due in part to market and government failures that limit the ability of micro firms to reach their optimal sizes

household consumption smoothing through ethnic ties evidence from cote d ivoire abstract this paper investigates the hypothesis that households in cote d ivoire take part in spatially diversified risk sharing arrangements with members of their own ethnic group empirical tests are presented using several estimation methods to deal with heteroscedasticity measurement error and extreme value problems to examine whether results are robust across estimation procedures the hypothesis of complete risk sharing within ethnic groups is rejected however there appears to be some partial insurance performed by individual households with other members of the same ethnic group particularly for the households residing in the regions least likely to have access to formal financial arrangements

surviving the great recession the influence of income inequality in us urban counties abstractsurviving the great recession the influence of income inequality in us urban counties regional studies while there has been extensive research on the role of income inequality in economic growth there has been less investigation as to the role of income inequality on economic resilience this paper addresses the relationship between income inequality and resilience by evaluating the vulnerability of urban counties in the united states entering recession between 2006 and 2010 and tests whether income inequality contributes to their probability of recession survival a cox proportional hazards model is used to determine factors contributing toward urban counties resilience to the external shock of the great recession the research is focused on the relationship between the level of income inequality in a county and its recession risk it is found that areas with increased income inequality entered recession earlier

progressive tax and inequality in a unionized economy in this paper we develop a heterogeneous agent endogenous growth model of a unionized economy with distinct progressive tax schedules on labor and capital income with time preference heterogeneity the effective labor force balanced growth and income inequality are endogenously determined and these interact with each other a reduction in the degree of progressive labor tax yields a double dividend in terms of reducing income inequality and boosting economic growth while capital income progressivity displays the usual growth inequality trade off particularly the double dividend effect becomes more pronounced when unionization is declined or trade unions become more wage oriented leading to the so called cheshire cat phenomenon

the contributions of the economics of information to twentieth century economics in the e eld of economics perhaps the most important break with the past one that leaves open huge areas for future work lies in the economics of information it is now recognized that information is imperfect obtaining information can be costly there are important asymmetries of information and the extent of information asymmetries is affected by actions of e rms and individuals this recognition deeply affects the understanding of wisdom inherited from the past such as the fundamental welfare theorem and some of the basic characterization of a market economy and provides explanations of economic and social phenomena that otherwise would be hard to understand i introduction the century coming to a close has seen vast changes in economics in both ideas and methodology upon ree ection it is remarkable however how many of the seeds of advances in this century were sowed in the previous i would argue that perhaps the most important break with the past one that leaves open huge areas for future work lies in the economics of information the recognition that information is imperfect that obtaining information can be costly that there are important asymmetries of information and that the extent of information asymmetries is affected by actions of e rms and individuals has had profound implications for the wisdom inherited from the past and has provided explanations of economic and social phenomena that otherwise would be hard to understand in this essay i wish to argue that information economics has had directly and indirectly a profound effect on how we think about economics today eighteenth and nineteenth century antecedents to be sure marshall and other nineteenth century economists talked about problems of imperfect information but with one exception discussions of information were obiter dicta caveats at the end of the analysis they were never at the center

inequality and growth in the united states evidence from a new state level panel of income inequality measures i introduction rising income inequality in the united states over the past quarter century is well documented see e g gottschalk 1997 krueger 2003 levy and murnane 1992 piketty and saez 2003 whether and by how much this change in inequality is associated with a change in economic performance is an important question yet recent empirical work has been largely inconclusive positive relationships between income inequality and economic growth have been found by partridge 1997 2005 using a panel of states and by forbes 2000 using a panel of countries empirical work by panizza 2002 and quah 2001 however has found little or no stable relationship between inequality and growth the results appear to be extremely sensitive to the econometric specification additionally barro 2000 has found evidence that the relationship is nonlinear with inequality being positively related to growth among wealthier countries like the united states but negatively related to growth among low income countries much of this recent empirical literature was initiated by the important work of deininger and squire 1996 who constructed a large cross national panel of inequality measures containing several time series observations for each nation spaced over multiple decades a parallel empirical literature also emerged using u s state level data with income inequality measures typically spaced at 10 yr intervals see e g panizza 2002 partridge 1997 2005 both the state level and the cross national empirical literatures benefited by exploiting the more advanced panel data econometrics afforded by the large n small t panel dimensions in this paper we offer a new more comprehensive panel of state level income inequality measures and use this panel to reevaluate the empirical inequality growth relationship 1 this panel has the unique feature of being large in both n and t with annual observations of the 48 contiguous states for the entirety of the postwar period 1945 2004 for nearly all the states in the panel the share of income held by the top decile experienced a prolonged period of stability after world war ii followed by a substantial increase during the 1980s and 1990s these state level trends appear to closely replicate the overall trends in aggregate u s inequality found by piketty and saez 2003 exploiting the large and balanced size of our inequality panel we explore the long run relationship between inequality and growth via three alternative dynamic panel error correction estimators the fixed effects fe estimator the mean group mg estimator of pesaran and smith 1995 and the pooled mg estimator of pesaran shin and smith 1999 the greater homogeneity of state level data helps mitigate the difficulty in adequately capturing structural differences across international panels of earlier studies such as forbes 2000 and barro 2000 corruption levels labor market flexibility tax neutrality tradition of entrepreneurship and many other factors are only poorly measured if at all barro 2000 1011 and these sources of heterogeneity are much more likely to contribute to omitted variable bias across countries than across states the results from our analysis indicate that the long run relationship between the top decile share of income and economic growth is positive in nature moreover an evaluation of several alternative income inequality measures suggests that this positive relationship is driven primarily by the concentration of income in the upper end of the income distribution the structure of the paper is as follows section ii presents the new panel of annual state level inequality measures and includes an important discussion of its key limitations section iii then offers an empirical investigation on the impact of income inequality on the growth rate of real income per capita finally section iv offers a brief set of conclusions

does income polarization affect economic growth the case of the european regions ezcurra r does income polarization affect economic growth the case of the european regions regional studies this paper examines the relationship between income polarization and economic growth in the regions of the european union over the period 1993 2003 the results indicate that the level of income polarization is negatively associated with regional growth this finding is in fact robust to various alternative specifications including a number of additional explanatory variables such as initial per capita gross domestic product industry mix human capital stock population density or market potential furthermore it should be noted that the observed negative correlation between polarization and economic performance does not depend on the number of groups used to analyse the degree of income stratification within the sample regions ezcurra r la polarisation des revenus affecte t elle la croissance economique le cas des regions europeennes regional studies cet article etudie les relations en

international credit and welfare a paradoxical theorem and its policy implications abstract this paper considers a developing nation that faces a foreign exchange shortage and hence its demand for foreign goods is limited both by its income and its foreign exchange balance availability of international credit relaxes the second constraint we develop a simple model of strategic interaction between lending institutions and firms and show that the availability of international credit at concessionary rates can leave the borrowing nation worse off than if it had to borrow money at higher market rates this paradox of benevolence is then used to motivate a discussion of policies pertaining to international lending and the southern government s method of rationing out foreign exchange to the importers

the multicontract organization this paper starts by discussing some nonstandard issues in organization theory bou nded rationality incomplete contracting and collusive behavior on which the rest of the paper focuses it then contrasts the comprehens ive contracting and game theoretic approaches to collusion and it li sts tentative conclusions and some unresolved issues

company interests and foreign aid policy playing donors off against one another abstract the evidence on conditionality indicates that this instrument sometimes works and sometimes does not work we suggest that third parties to the donor recipient relationship influence the aid disbursement the halt in aid that should follow non compliance could trigger the recipient to cancel contracts with companies from donor countries which creates incentives for the companies to put pressure towards aid disbursement we use a multi agent triadic model of the relationships between a recipient and two donors and two companies to illustrate that recipients may act strategically to make third parties like companies and others influence the disbursement decision failing to take account of third parties role yields the opposite result conditionality becomes successful

government relief for risk associated with government action a significant source of risk arises from uncertainty concerning future government policy government action tax reform deregulation judicial decisions budgetary shifts produces gains and losses for those who invested under preexisting rules the effects of government relief compensation grandfathering phase ins on ex ante incentives and risk bearing are examined using a model in which private insurance is available it is demonstrated that government relief is inefficient even when private insurance is subject to moral hazard because relief shields individuals from some of the effects of their actions i introduction a significant source of risk arises from uncertainty concerning future government action government action produces gains and losses for those who invested under preexisting rules government policy with regard to these effects transition policy varies widely full compensation for takings of real property in many jurisdictions partial relief through grandfathering and phase ins for tax reform and deregulation in some instances but not others and no relief for most budgetary shifts and

the political economy of growth a critical survey of the recent literature this article reviews the recent literature on the political economy of growth focusing on the research that has developed at the intersection of the endogenous growth literature and the new political economy it explores the relationship among four key variables economic growth and capital accumulation political instability political freedom and democratic institutions and income inequality

agreeing on efficient emissions reduction we propose a simple contest based mechanism providing incentives to reduce harmful emissions to their efficient level without infringing upon productive efficiency participation in the most stylized form of the scheme is voluntary and individually rational all rules are mutually agreeable and are unanimously adopted if proposed the scheme balances its budget and requires no principal in a perhaps more realistic stochastic output version which could potentially inform policy decisions we show that the transfers required by the efficient mechanism create a mutual insurance motive that can serve as an effective rationale for the gradual formation of international environmental agreements

kinship incentives and evolution we analyze how family ties affect incentives with focus on the strategic interaction between two mutually altruistic siblings the siblings exert effort to produce output under uncertainty and they may transfer output to each other with equally altruistic siblings their equilibrium effort is non monotonic in the common degree of altruism and it depends on the harshness of the environment we define a notion of local evolutionary stability of degrees of sibling altruism and show that this degree is lower than the kinship relatedness factor numerical simulations show how family ties vary with the environment and how this a ects economic outcomes

market reactions to corporate environmental performance related events a meta analytic consolidation of the empirical evidence research on the relationship between corporate environmental performance cep and corporate financial performance cfp has consistently grown and is gaining widespread attention given the vast body of cep cfp studies recently scholars have begun to take stock of the cumulative results however no study so far has meta analyzed the findings yielded by event studies assessing the stock market reactions to corporate environmental performance related events cep related events this paper sets out to close this gap by synthesizing previous empirical results regarding the stock market impact of positive and negative cep related events results indicate a positive relationship across studies in terms of positive market reactions to positive events and negative reactions to negative events furthermore the findings show that the market reactions are stronger for negative events than for positive events i e asymmetry in the stock market reaction finally this study examines whether methodological artifacts i e differences in the study designs may explain the differences in the findings of the analyzed event studies

a dark side of social capital kinship consumption and savings abstract we explore whether traditional sharing norms in kinship networks affect consumption and accumulation decisions of poor black households in kwazulu natal south africa using a proxy for the number of family dependents our results are consistent with the interpretation that households try to evade their sharing obligations by i accumulating durables that are non sharable at the expense of durables that may be shared and ii reducing savings in liquid assets by attenuating accumulation incentives kinship sharing may come at the expense of income growth if so a culturally induced poverty trap can possibly eventuate we demonstrate tentative evidence that more extensive kinship networks are associated with lower incomes

life is unfair in latin america but does it matter for growth summary i analyze the effect of inequality on economic growth in latin america where inequality is measured as the area of family farms as a percentage of the total area of agricultural holdings using data from 18 latin american countries during 1960 2004 i find that inequality has a nonlinear effect on economic growth overall for the countries included in this analysis the share of family farms has a positive significant effect on economic growth these findings are robust to controlling for several factors using a different indicator of inequality land gini and addressing for endogeneity

social security public education and the growth inequality relationship abstract we study how the relationship between economic growth and inequality depends upon the levels of funding of two of the largest government programs public education and social security we do this in the context of an overlapping generations economy with heterogeneous agents where the government collects a tax on labor income to finance these programs we show that in our model an increase in government spending on social security reduces income inequality and can have a non monotonic effect on growth when the initial level of social security funding is low as is the case in most poor economies then its increase will enhance growth when its funding level is high as is typical for developed countries we show that its further increase can slow down growth while reducing income inequality these results obtain regardless of whether the increase in social security funding is financed by a tax increase or by cutting the public education budget we also find that the effects of increasing the level of public education expenditures or the overall size of the government budget holding the budget composition fixed are characterized by similar non monotonic growth inequality relationships

sovereign debt and joint liability an economic theory model for amending the treaty of lisbon as the euro area crisis drags on it is evident that a part of the problem lies in the architecture of debt within the euro area this study argues that at least part of the debt problem could be addressed through limited cooperative action entailing appropriately structured contracts generating cross country liability for sovereign debt incurred by individual nations within the european union such agreements are currently proscribed by the treaty of lisbon we construct a game theoretic model demonstrating that there exist self fulfilling equilibria which are pareto superior to the existing outcome and which would come into existence if cross country debt liabilities were permitted

can group incentives alleviate moral hazard the role of pro social preferences abstract incentivizing unobservable effort in risky environments such as in insurance credit and labor markets is vital as moral hazard may otherwise cause significant welfare losses including the outright failure of markets ensuring incentive compatibility through state contingent contracts between principal and agent however is undesirable for risk averse agents we provide a theoretical intuition on how pro social preferences between agents in a joint liability group contract can ensure incentive compatibility two independent large scale behavioral experiments framed in an insurance context support the hypotheses derived from our theory in particular effort decreases when making agents payoff less state dependent but this effect is mitigated with joint liability in a group scheme where agents are additionally motivated by pro social concerns activating strategic motives slightly increases effort further particularly in non anonymous groups with high network strength the results support existing evidence on joint liability groups and further suggest that even if peer pressure to ensure effort provision is absent such group policies can improve efficiency when agents are pro social

incentives in principal agent relationships this article identifies some of the major issues that have been examined in the literature on incentives the article begins by discussing the frictions that lie at the heart of incentive problems next the principal s optimal response to these frictions is explored taking as given the characteristics of the agents with whom the principal interacts in a nonrepeated setting the design of individualized contracts contests and tournaments is analyzed then the principal s task of selecting the best agent is addressed and repeated agency relationships are considered

northwest coast indigenous institutions that supported resilience and sustainability abstract indians of the northwest coast of north america had cultural continuity for at least two millennia before contact with people from the old world this archeological fact suggests that their societies had achieved sustainability and resilience in relationships to their ecosystems and the salmon runs the governance principles used by northwest indians in managing fisheries and other resources provided resilience in addition to a land ethic these principles included exchange systems based on public reciprocity property rights were clear and trespass was a capital offense chiefs and titleholders had to be generous facilitators leadership authority over land was contingent upon adherence to ethical and generous behavior as well as good management these indigenous institutions were quite different from the rules currently governing the management of most ecosystems in critiquing current institutions many ideas similar to those in the indigenous systems have been proposed in isolation the example described in this paper suggests the importance of combining them

income inequality tax policy and economic growth we investigate how the reduction of income inequality through tax policy affects economic growth taxation at different points of the income distribution has heterogeneous impacts on households incentives to work invest and consume using us state level data and micro level household tax returns over the last three decades we find that reducing income inequality between low and median income households improves economic growth however reducing income inequality through taxation between median and high income households reduces economic growth these asymmetric economic growth effects are attributable both to supply side factors i e changes in small business activity and labour supply and to consumption demand

no condition is permanent middle class in nigeria in the last decade the economic debate on existence and definition of the middle class has become particularly lively in many developing countries despite this growing interest the identification of the middle class group in these countries remains quite challenging building on a recently developed framework to define the middle class this paper tries to estimate the nigerian middle class size in a rigorous quantitative manner by exploiting publicly available panel data the expenditure associated to a 10 percent probability of falling into poverty is estimated and this is used as the middle class threshold for nigeria the threshold expenditure for the middle class in nigeria is found to be 378 39 naira per capita per day 2010 ppp relying on this threshold and through survey to survey imputation the size of nigeria s middle class in 2003 is also estimated the results show that there has been considerable improvement on the size of the middle class and poverty reduction between 2003 and 2013 poverty decreased between 2003 and 2013 from 45 to 33 percent while the middle class increased from 13 percent to 19 percent nevertheless the results still paint a heterogeneous picture of poverty and the middle class in nigeria where the largest portion of the population although above the poverty threshold continues to live with average or high vulnerability to poverty

income inequality financial development and macroeconomic fluctuations we examine the relationship between income inequality and variability in aggregate consumption growth in high income countries greater income inequality appears to be associated with more volatility in consumption growth whereas in lower income countries higher levels of income inequality tend to be associated with less volatility we present evidence that variability in real gdp growth is also related to income inequality in the same way our results suggest that the level of financial development may help to explain why the distribution of income affects the short run variability of consumption and output differently in high income countries than in low income countries

do private income transfers increase labor market risk abstract in a two stage model of private income transfers with a labor market we find that the aggregate effect of such transfers induces labor market responses to the increase in moral hazard thereby increasing the volatility of wages and lowering welfare the equilibrium level of transfers exceeds the socially optimum level

new evidence on stock price effects associated with changes in the s p 500 index since october 1989 standard and poor s has when possible announced changes in the composition of the s p 500 index one week in advance because index funds hold s p 500 stocks to minimize tracking error index composition changes since this date provide an opportunity to examine the market reaction to an anticipated change in the demand for a stock using post october 1989 data the authors document significantly positive negative postannouncement abnormal returns that are only partially reversed following additions deletions these results indicate the existence of temporary price pressing and downward sloping long run demand curves for stocks and represent a violation of market efficiency copyright 1997 by university of chicago press

is income inequality harmful for regional growth evidence from the european union this article examines the relationship between income inequality and economic growth in the regions of several european union countries over the period 1993 2002 using the information provided by the european community household panel taking into consideration the relevance of spatial effects in this context different versions of a spatial econometric model are estimated the results indicate that the degree of income dispersion is negatively associated with regional growth this finding is in fact robust to various alternative specifications including a number of additional explanatory variables such as initial per capita gdp the sectoral composition of economic activity human capital stock population density and market potential furthermore the observed negative correlation between income inequality and economic performance does not depend on the specific measure used to quantify the degree of income dispersion

externalities in economies with imperfect information and incomplete markets this paper presents a simple general framework for analyzing externalities in economies with incomplete markets and imperfect infonnation by identifying the pecuniary effects of these externalities that net out the paper simplifies the problem of determining when tax interventions are pareto improving the approach indicates that such tax interventions almost always exist and that equilibria in situations of imperfect information are rarely constrained pareto optima it can also lead to simple tests based on readily observable indicators of the efficacy of particular tax policies in situations involving adverse selection signaling moral hazard incomplete contingent claims markets and queue rationing equilibria traditional discussions of externalities have emphasized the distinction between technological externalities in which the action of one individual or firm directly affects the utility or profit ofanother and pecuniary externalities in which one individual s or firm s actions affect another only through effects on prices while the presence of technological externalities imply in general that a competitive equilibrium may not be pareto efficient pecuniary externalities hy themselves are not a source of inefficiency the fact that prices change has of course important consequences there are both distributional and allocational effects but the distribution effects net out gains for example hy firms whose prices increase are precisely offset by losses e g to individuals who must pay higher prices and there are no welfare losses from the allocation effects as long as the price changes involved are small if firms are maximizing profits and individuals are maximizing utility both facing prices that correctly refiect opportunity costs then standard envelope theorem arguments imply that changes in profits or utility induced by changes in allocations resulting from any small change in prices are negligible

a comparison of international income inequality an ordered probit model analysis in this study the ordered probit model with marginal effect was applied to examine the key elements that influence changes in the gini levels the empirical results indicated that export incentives and poverty have a positive impact on the gini levels moreover the marginal effect revealed that export incentives increase income inequality for countries with higher inequality and reduce inequality for those countries with a relatively even income distribution likewise the study found that the asian pacific economic cooperation apec and the eu countries move from inequality to equality more efficiently than countries in the latin american integration association laia

a critical review of sustainable business indices and their impact most studies into the performance of socially responsible investment vehicles have focused on the performance of sustainable or socially responsible mutual funds this research has been complemented recently by a number of studies that have examined the performance of sustainable investment indices in both cases the majority of studies have concluded that the returns of socially responsible investment vehicles have either underperformed or failed to outperform comparable market indices although the impact of sustainable indices to date has been limited the recent launch of sustainable indices by dow jones and ftse suggests that more attention is being paid to the subject by financial markets investors and companies this development raises a number of important issues which are reviewed in this article a the performance of indices compared with their benchmark indices b the methodologies employed in compiling the indices and c the impact of the indices on companies and the investment community the article concludes with a number of suggestions for areas that merit future research

accounting in partnerships in 1914 an accounting professor named arthur andersen founded a public accounting practice that became the world s largest professional services firm for years preceding the enron debacle and andersen s collapse the firm had struggled to create incentives within the organization for partners to provide highquality service develop and sell new services and meet the compensation expectations of various factions of partners a years long dispute over the division of profits between the firm s consulting and accounting arms led to the 1998 separation of the consulting practice from the audit and tax practices the rise break up and fall of andersen underlines the importance of questions concerning incentive structures within public accounting firms in particular and partnerships of professionals in general this paper offers a perspective on partner compensation schemes and the accounting information systems that support them in partnerships ownership and control lie with the partners furthermore each member of a partnership is endowed with human capital that may be employed either within the firm or without every partner is simultaneously a principal who shares in the net output of the partnership and an agent who produces output ownership and control are diffused among many persons and partners are subject to moral hazard each must be motivated by his peers it is intuitive that the structure of professional partnerships is a function of the production and monitoring technologies available to the partners as oliver williamson 1975 p 43 points out group affiliation can provide income guarantees to buffer the effects of unanticipated contingencies on terms superior to that which market insurance can provide a group will have an advantage over the market to the extent it is better able to check malingering and other ex post manifestations of moral hazard this advantage requires that performance be accurately assessed

peer monitoring and credit markets a major problem for institutional lenders is ensuring that borrowers exercise prudence in the use of the funds so that the likelihood of repayment is enhanced one partial solution is peer monitoring having neighbors who are in a good position to monitor the borrower be required to pay a penalty if the borrower goes bankrupt peer monitoring is largely responsible for the successful financial performance of the grameen bank of bangladesh and of similar group lending programs elsewhere but peer monitoring has a cost it transfers risk from the bank which is in a better position to bear risk to the cosigner in a simple model of peer monitoring in a competitive credit market this article demonstrates that the transfer of risk leads to an improvement in borrowers welfare

price and volume effects associated with changes in the s p 500 list new evidence for the existence of price pressures attempts to identify price pressures caused by large transactions may be inconclusive if the transactions convey new information to the market this problem is addressed in an examination of prices and volume surrounding changes in the composition of the s p 500 since these changes cause some investors to adjust their holdings of the affected securities and since it is unlikely that the changes convey information about the future prospects of these securities they provide an excellent opportunity to study price pressures the results are consistent with the price pressure hypothesis immediately after an addition is announced prices increase by more than 3 percent this increase is nearly fully reversed after 2 weeks the efficient market hypothesis emh predicts that security prices reflect all publicly available information therefore one corollary of the emh is that you can sell or buy large blocks of stock at close to the market price as long as you can convince other investors that you have no private information 1 this statement assumes that securities are near perfect substitutes for each other if so the excess demand for a single security will be very elastic and the sale or purchase of a large number of shares will have no impact on price in contrast to the emh scholes 8 kraus and stoll 5 hess and frost 4 and others propose two hypotheses which predict that a large stock sale purchase will cause the price to decrease increase even if no new information is associated with the transaction the imperfect substitutes hypothesis ish also known as the distribution effect hypothesis assumes that securities are not close substitutes for each other and hence that long term demand is less than perfectly elastic under this hypothesis equilibrium prices change when demand curves shift to eliminate excess demand price reversals are not expected because the new price reflects a new equilibrium distribution of security holders the price pressure hypothesis pph assumes that investors who accommodate demand shifts must be compensated for the transaction costs and portfolio risks that they bear when they agree to immediately buy or sell securities which they otherwise would not trade these passive suppliers of liquidity are attracted by immediate price drops rises associated with large sales purchases they are compensated for their liquidity service when prices rise drop to their fullinformation levels the pph like the emh assumes that long run demand is

joint liability with endogenously asymmetric group loan contracts group lending is a common practice that microfinance institutions mfis utilize when lending to individuals without collateral we develop a multi agent principal agent model with costly peer monitoring and solve for the optimal group loan contract the optimal contract exhibits i a joint liability scheme and ii asymmetric loan terms which can be interpreted as appointing a group leader who has strong incentives to monitor her peer relaxing the joint liability scheme implies the breakdown of equilibrium monitoring when the contractual asymmetry is relaxed the peer monitoring game exhibits multiple nash equilibria a weak good equilibrium at which borrowers monitor each other and a strong bad equilibrium without monitoring this key result suggests that profit maximizing mfis should provide asymmetric group loan contracts even to a homogeneous group of borrowers to ensure stability in repayment rates

csr transparency and the role of intermediate organisations transparency is a crucial condition to implement a csr policy based on the reputation mechanism the central question of this contribution is how a transparency policy ought to be organised in order to enhance the csr behaviour of companies governments endorsing csr as a new means of governance have different strategies to foster csr transparency in this paper we discuss the advantages and disadvantages of two conventional policy strategies the facilitation policy and the command and control strategy using three criteria efficiency freedom and virtue we conclude that both strategies are defective most attention is paid to the facilitation strategy since governments nowadays mainly use this in evaluating this strategy we analyse the dutch case as an alternative we introduce a third government policy the development of a self regulating sub system by construing an analogy with the historical development of corporate financial disclosure we point out that the vital step in the creation of a self regulating subsys tem is the creation of strong informational intermediate organisations

economics of development and the development of economics the purpose of this paper is to restore some historical perspective by highlighting the many contributions of development economics to the rest of economics we will point out to the younger generations how some of the glittering ideas they currently play with originally came from that now neglected field and how in some cases they have rediscovered with great fanfare insights that were well known in the development literature familiarity with which would have enriched their own work

income inequality and growth does the relationship vary with the income level abstract for three different specifications of a cross country growth model the coefficient of initial income inequality is remarkably similar for high and low income countries contrary to some recent suggestions in the literature but varies markedly across models

cooperation status seeking and competitive behaviour theory and evidence we study whether a linear income sharing rule pooling system can achieve pareto efficiency in a problem of joint exploitation of fishery resources when agents are selfish the homogeneity of individual outputs in equilibrium is a necessary condition for the efficient pooling system when agents exhibit a preference for status i e for being among the well performing members of the group the pooling system can be efficient even without this condition this is because on the one hand relative status considerations enlarge the tolerable range of heterogeneity and on the other hand it generates an incentive structure that may homogenise individual output performances

sustainable development and corporate performance a study based on the dow jones sustainability index the goal of this paper is to examine whether business performance is affected by the adoption of practices included under the term corporate social responsibility csr to achieve this goal we analyse the relation between csr and certain accounting indicators and examine whether there exist significant differences in performance indicators between european firms that have adopted csr and others that have not the effects of compliance with the requirements of csr were determined on the basis of firms included in the dow jones sustainability index djsi and specific accounting indicators were applied to measure performance for the purposes of this study we selected one group of firms belonging to the djsi and another comprised of firms quoted on the dow jones global index djgi but not on the djsi the sample was made up of two groups of 55 firms studied for the period 1998 2004 empirical analysis supports the conclusion that differences in performance exist between firms that belong to the djsi and to the djgi and that these differences are related to csr practices we find that a short term negative impact on performance is produced

the value relevance of reputation for sustainability leadership this study investigates whether the market valuation of the two summary accounting measures book value of equity and net income is higher for firms with reputation for sustainability leadership when compared to firms that do not enjoy such reputation the results are interpreted through the lens of a framework combining signalling theory and resource based theory according to which firms signal their commitment to sustainability to influence the external perception of reputation a firm s reputation for being committed to sustainability is an intangible resource that can increase the value of a firm s expected cash flows and or reduce the variability of its cash flows our findings are according to expectations and show that the net income of firms with good sustainability reputation has a higher valuation by the market when compared to their counterparts

the introduction of formal insurance and its effect on redistribution abstract transfers motivated by altruism guilt and norms of giving play an important role in supporting individuals who suffer losses due to risk we present empirical evidence from an artefactual field experiment in ethiopia in which we introduce formal insurance in a setting where donors make redistributive transfers to recipients who experience losses we find that donors tend to reduce their transfers to recipients who are offered insurance whether or not they take it up when insurance is rejected by a recipient transfer reductions are larger for donors who firmly expect that the recipient would take up insurance the results are consistent with a framework in which the introduction of insurance erodes norms of giving by revealing differences in the extent to which individuals value precautionary behavior with respect to risk taking welfare calculations show that when formal insurance is introduced the welfare of those who fail to take it up may be reduced

inequality and growth in the united states why physical and human capital matter we investigate the relationship between economic growth and top income inequality under the influence of human and physical capital accumulation using an annual panel of u s state level data our analysis is based upon the unified framework offered by galor and moav 2004 while the empirics account for cross section dependence parameter heterogeneity and endogeneity in nonstationary series we conclude that changes in inequality do not influence growth neither in the short run nor in the long run in the united states as a whole in the 1929 2013 period our findings are robust to the inclusion of overall income inequality measures these findings provide support for the theoretical prediction of the unified theory of inequality and growth according to which the growth effect of inequality becomes insignificant in the latest stages of economic development that the united states experiences during our period of investigation therefore future policies aiming at moderating the concentration at the upper end of income distribution are not likely to have adverse growth consequences in developed countries such as the united states jel i21 o47 c23

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

symbiosis vs crowding out the interaction of formal and informal credit markets in developing countries abstract it is a common observation in many developing countries that enterprises are active borrowers in both formal and informal credit markets we propose a model in which the formal sector s superior ability in deposit mobilization is traded off against the informational advantage that lenders in the informal sector enjoy the formal sector can screen borrowers by providing only partial financing for projects thereby forcing borrowers to resort to the informal sector for the remainder of the loan we use the model to predict how the market structure responds to changes in the environment and we consider the policy implications of various forms of government intervention

joint liability versus individual liability in credit contracts abstract i offer an explanation for the coexistence of joint liability and individual liability microcredit contracts i show that both contracts maximize welfare when credit is rationed due to limited liability but for different borrowers borrowers monitor each other when liability is joint while the lender monitors individual loans joint liability offers poorer borrowers larger loans with less monitoring effort than would have to be exerted by the lender individual liability offers the wealthier among credit constrained borrowers larger loans even without monitoring the theory explains why individual loans serve the wealthier among poor borrowers and are larger and why businesses funded with individual loans grow more

multiple measurements of u s income inequality using 1980 state census data the gini ratio theil index coefficient of variation atkinson measure four values and nelson index as separate measurements of income inequality are regressed with nineteen ses variables traditionally found significant with gini in past research the standard deviation of educational attainment is dominant among all independent variables as the strongest predictor of inequality mean family income dominant in prior research is a distant second in predictiveness more diversity than commonality is evident among the nineteen ses variables as they predict income inequality measured by the eight different techniques copyright 1988 by mit press

income distribution and macroeconomics this paper analyzes the role of wealth distribution in macroeconomics through investment in human capital it is shown that in the presence of credit markets imperfections and indivisibilities in investment in human capital the initial distribution of wealth affects aggregate output and investment both in the short and in the long run as there are multiple steady states this paper therefore provides an additional explanation for the persistent differences in per capita output across countries furthermore the paper shows that cross country differences in macroeconomic adjustment to aggregate shocks can be attributed among other factors to differences in wealth and income distribution across countries

moral hazard and nonmarket institutions dysfunctional crowding out or peer monitoring the authors examine a situation in which insurance is characterized by moral hazard when market insurance is provided supplementary mutual assistance between family and friends unobservable to market insurers will occur when nonmarket insurers have no better information than market insurers the mutual assistance not only crowds out market insurance but is also harmful and therefore dysfunctional alternatively when nonmarket insurers can observe each other s effort perfectly mutual assistance is beneficial these results point to the potential importance of peer monitoring mechanisms in mitigating moral hazard copyright 1991 by american economic association

nonmarket institutions for credit and risk sharing in low income countries the design credit and risk institutions in low income countries provides one of the most exciting testing grounds for theories of contracting with imperfect information and limited enforcement this paper reviews some of the recent literature with a special focus on nonmarket institutions that cope with risk and provide credit this literature attempts to bring together insights from economic theory especially information economics contract theory and mechanism design theory however it is also applied being motivated by the circumstance of the poor countries that their authors have visited and studied

signaling sustainability leadership empirical evidence of the value of djsi membership we explore the relationship between corporate sustainability reputation and firm value by asking whether signaling sustainability leadership through membership on a recognized sustainability index is value generating increasingly stakeholders are demanding that firms demonstrate their commitment to sustainability one signal that companies can send to stakeholders to indicate that they are sustainability leaders is membership on a recognized best in class sustainability index this article explores both the short term and the intermediary impact on north american firms of being included or removed from the dow jones sustainability world index djsi our results provide evidence that being added to the djsi results in a sustained increase in a firm s share price suggesting that the benefits of being included on the djsi outweigh the costs associated with applying this article also notes a temporary decrease in the value of firms for the first 10 days after their removal from the djsi however this effect is eliminated within the next ten trading days

an inverted u relationship between inequality and long run growth abstract the relationship between income distribution and long run economic growth has been a popular topic in recent economic research existing theoretical works find either a positive or a negative relationship but not both in this paper we propose an inverted u relationship between initial income distribution and long term economic growth and estimate and test the relationship using cross country data

is informal risk sharing less effective for the poor risk externalities and moral hazard in mutual insurance abstract poor farm households are less keen to adopt high risk high return technologies than rich households yet the poor are more vulnerable to income shocks we develop a model of endogenous risk taking to explain these facts in autarky poor households adopt less risky production plans and obtain lower expected returns but face higher relative risk than the rich the introduction of risk sharing generates negative risk externalities between agents at the first best the social planner imposes a homogeneous level of risk taking in the group at the second best risk taking is not enforceable and increases with insurance generating moral hazard interestingly the poor s risk taking behavior is more sensitive to insurance the social planner thus mitigates risk taking by applying a lower insurance coverage in poor groups the introduction of risk sharing therefore reinforces the gap between rich and poor in terms of expected income and absolute risk while the effect on relative risk is ambiguous

global standards and ethical stock indexes the case of the dow jones sustainability stoxx index the increased scrutiny of investors regarding the non financial aspects of corporate performance has placed portfolio managers in the position of having to weigh the benefits of holding the market against the cost of having positions in companies that are subsequently found to have questionable business practices the availability of stock indexes based on sustainability screening makes increasingly viable for institutional investors the transition to a portfolio based on a socially responsible investment sri benchmark at relatively low cost the increasing share of socially responsible investments may play a role in providing incentives towards a continuous upgrading of sustainability standards to the extent that their performance is not systematically inferior to that of the other funds this article examines whether these incentives have been so far detectable with particular reference to the dow jones sustainability stoxx index djssi that focuses on the european corporations with the highest csr scores among those included in the dow jones stoxx 600 index the aim of the article is twofold first we analyse the performance of the djssi over the period 2001 2006 compared to that of the surrogate complementary index sci a new benchmark that includes only the components of the dj stoxx 600 that do not belong to the ethical index to evaluate more correctly the size of possible divergent performances second we perform an event study on the same data set to analyse whether the stock market evaluation reacts to the inclusion deletion in the djssi in both cases the results suggest that the evaluation of the csr performance of a firm is a significant criterion for asset allocation activities

weaving together the normative and regulative roles of government how the norwegian sovereign wealth fund s responsible conduct is shaping firms cross border investments based on institutional theory i extend research on the regulative role of national government in society and suggest that government exerts important influences on firms actions through the diffusion of norms i suggest that the norwegian government by instituting an ethical council that publicly censors and certifies the cross border investments of the norwegian sovereign wealth fund government pension fund global contributes to the professionalization of responsible investment principles and thus plays a normative role in shaping firms investments employing a quasi natural experiment i find that focal norwegian firms are more likely to make responsible cross border investments following the formation of the council on ethics in 2004 and its associated censorship announcements further i find that the normative pressure for responsible investments is mediated by firms imitation or overlap with the norwegian sovereign wealth fund s investments however the mediated effect of normative pressure on responsible investments becomes weaker for government owned firms these findings highlight the importance of normative mechanisms through which government can influence firms behavior especially in contexts where regulatory authority may not hold moreover these findings reveal the interplay among the normative mimetic and regulative pressures and the heterogeneity in the extent to which firms within the same country demonstrate institutional isomorphism

refitting the kuznets curve using a gender specific threshold model abstractprevious studies have reached mixed conclusions regarding the relationship between inequality and per capita income these studies however fail to consider gender differences in income inequality and how these may impact on the relationship between income inequality and per capita income using australian taxation statistics we derive three sets of gini coefficients i e female male and total for the period 1950 2013 we then examine the relationship between inequality and real per capita income and find that a gender specific threshold panel regression outperforms three other conventional models our findings suggest that one set of coefficients does not fit all in that the use of aggregate and constant coefficients may mask variations within and between gender inequality over time

bank firm relationships and allocative efficiency in northeastern and central italy and in the south abstract we make two contributions on the extent and impact of relationship banking based on close and long lasting bank firm customer relationships in the three sub systems in which italy may be subdivided first we show that relationship banking is more extensive in both sub systems where small businesses prevail the fast growing northeast and center nec and the south the marginal area of dependent development second we demonstrate that relationship banking improves the allocation of credit in the nec but worsens it in the south this evidence suggests that relationship banking may be beneficial or detrimental depending on the socio economic structure

event studies in management research theoretical and empirical issues we examined the use of event studies in management research and found that there was inadequate attention paid to theoretical and research design issues this lack of attention may lead to false in

distributive politics and economic growth a crude distinction between economics and politics would be that economics is concerned with expanding the pie while politics is about distributing it in this paper we analyze the relationship between the two we focus on how an economy s initial configuration of resources shapes the political struggle for income and wealth distribution and how that in turn affects long run growth our main conclusion is that inequality is conducive to the adoption of growth retarding policies we derive this result from a simple political economy model of growth and present cross country evidence consistent with it the key feature of our model is that individuals differ in their relative factor endowments we distinguish between two types of factors an accumulated factor called capital and a nonaccumulated factor called labor growth is driven by the expansion of the capital stock which is in turn determined by individual saving decisions long run growth is endogenous as the aggregate production function is taken to be linearly homogeneous in capital and productive government services taken together the provision of government services is financed by a tax on capital because government services are productive a small tax on

between state markets and households a neoinstitutional analysis of local organizations and institutions abstract the current and foreseeable trend toward a diminished role of the state in most economic activities including rural development activities offers new opportunities for local organizations and institutions lois at the same time many of the problems and shortcomings to which states and their activities have been vulnerable are also potentially applicable to lois to be successful in themselves as well as in fostering rural economic development rural lois and their activities must be carefully designed and appropriately integrated with markets other lois and the state this paper reviews the relevant literature on conditions for success and then goes on to derive from this review including some relevant experience some suggestions for policy and practice