explaining modern economics as a microcosm of society the persistence of mainstream economists with methods of mathematical deductive modelling that most agree do not perform well is something of a puzzle here i show this phenomenon to be a special case of gendered tendencies in play in society at large and i offer a psychological explanation copyright the author 2008 published by oxford university press on behalf of the cambridge political economy society all rights reserved oxford university press

rationality in the analysis of behavioral simulation models an important task in the analysis of a behavioral simulation model is to explain clearly how the model s organizational assumptions lead to its simulated behavior all too often model based arguments involve an uncomfortable leap of logic between equations and consequences this paper proposes two methods of analysis premise description and partial model testing which provide stepping stones between model equations and their simulated consequences premise description examines the bounded rationality of policies or decision functions in the model pointing out the process and cognitive limitations assumed in decisionmaking partial model tests expose the intended rationality of smalt combinations of policies showing that policies produce sensible actions with respect to their premises the application of those methods is illustrated with a simulation model of a sales organization in which sales force productivity is prone to decline the behavior of productivity is traced to dysfunctional interact

marshall and complexity a necessary balance between process and order according to alfred marshall economics is a complex science which deals with a very compound matter the concept of equilibrium is very widely referred to in his writings not only as a tool to be used in the analytical apparatus as is usually stressed but also and more important as an element that characterises the evolutionary framework of his analysis in the marshallian investigation of economic and social matters the term equilibrium indicates an indispensable degree of order whereas evolution denotes a vital continuous process that characterises every economic and social body the particular relation between equilibrium and evolution which characterises marshall s approach allows us to better understand the balanced interplay between order and process two categories that in marshall pervade every aspect of society considered as a highly complex body

path dependence competition and succession in the dynamics of scientific revolution what is the relative importance of structural versus contextual forces in the birth and death of scientific theories we describe a formal dynamic model of the birth evolution and death of scientific paradigms based on kuhn s structure of scientific revolutions the model represents scientific activity as a changing set of coupled institutions a simulated ecology of interacting paradigms in which the creation of new theories is stochastic and endogenous the model captures the sociological dynamics of paradigms as they compete against one another for members solve puzzles and recognize anomalies we use sensitivity tests and regression to examine the role of intrinsic versus contextual factors in determining paradigm success we find that situational factors attending the birth of a paradigm largely determine its probability of rising to dominance while the intrinsic explanatory power of a paradigm is only weakly relatedto the likelihood of success for those paradigms surviving the emergence phase greater explanatory power is significantly related to longevity however the relationship between a paradigm s strength and the duration of normal science is also contingent on the competitive environment during the emergence phase analysis of the model shows the dynamics of competition and succession among paradigms to be conditioned by many positive feedback loops these self reinforcing processes amplify intrinsically unobservable microlevel perturbations in the environment the local conditions of science society and self faced by the creators of a new theory until they reach macroscopic significance such path dependent dynamics are the hallmark of self organizing evolutionary systems we consider the implications of these results for the rise and fall of new ideas in contexts outside the natural sciences such as management fads

democracy and social spending in latin america 1980 92 what is the effect of regime type on public expenditures for social programs we investigate the relationship between democracy and the change in social spending controlling for gdp the debt inflation and age structure of the population through a time series cross sectional panel data set for 17 latin american countries from 1980 to 1992 the results show that especially in poor countries during economic crisis democracies increase the allocation of resources to social programs relative to authoritarian regimes this suggests that the latter are more constrained by economic forces whereas democracies are more constrained by popular demands hence calls to abandon broad categorizations of regime type appear to be premature democracy can matter in systematic and substantial ways

confronting the science value split notes on feminist economics institutionalism pragmatism and process thought what changes must economics undergo if it is to become a more adequate discipline furthering of survival and flourishing this essay argues that a break must be made from contemporary mainstream economics at the level of ontology i e about the nature of reality drawing on neglected traditions of pragmatist philosophy and process metaphysics some elements of old institutionalist economics and late twentieth century natural science it demonstrates that ample argument exists for a view of the world as open evolving and permeated with value furthermore feminist scholarship offers an explanation for why such a worldview faces an uphill battle for acceptance copyright 2003 oxford university press

from groundless universalism to grounded generalism improving ecological economic indicators of human environmental interaction abstract ecological economics occasionally makes universal claims about how to understand and measure change in systems of human environmental interaction in terms of environmental policy one of the most influential universal concepts that has come out of the ecological economics literature recently is ecological efficiency or eco efficiency this article uses eco efficiency as a vehicle to illustrate that universal indicators of human environmental interaction are theoretically unfounded and practically problematic population ecology and neo classical economics are identified as two theoretical approaches that have contributed to the emergence of universal concepts such as eco efficiency the limited applicability of the approaches is highlighted by putting them in comparative context with approaches that make less universal claims namely systems ecology and institutional economics investigating indicators of human environmental interaction from disciplinary perspectives that are rarely found in indicator literature offers novel insights on what indicators are for and how they should be applied the article concludes with a call for scale sensitive generalization in the development of future indicators

a policy approach to the environmental impacts of technological lock in abstract the broadening spectrum of environmental problems the uncertainty regarding their scale and duration and their possible irreversibility in the context of the growing social preference for environmental quality make it necessary to undertake an ex ante approach to the link between productive activity and environmental quality this link lies in technology and the right approach is to understand how the process of technological change can lead towards sustainability the added value of evolutionary economics in the context of environmental policy resides mainly in the fact that it warns that certain inferior environmental technologies may be locked in to the economic system the results of our model show that it would be advisable to undertake policies expressly aimed at the process of sustainable technological change applying an ex ante precautionary approach in a way that is complementary to the conventional equilibrium oriented environmental policies the nature of these policies and how they might be implemented are questions we will address from this novel approach to the concept of sustainable development in short the main objectives of this paper are to understand more fully the dynamics of the process of technological change its role in sustainable development and to assess the implications of this dynamic approach to techno environmental policy to achieve these goals we have developed an agent based model abm using distributed artificial intelligence dai concepts drawn from the general methodology of social simulation

biased perceptions of income distribution and preferences for redistribution evidence from a survey experiment abstract individual perceptions of income distribution play a vital role in political economy and public finance models yet there is little evidence regarding their origins or accuracy this study examines how individuals form these perceptions and explores their potential impact on preferences for redistribution a tailored household survey provides original evidence on systematic biases in individuals evaluations of their own relative position in the income distribution the study discusses one of the mechanisms that may generate such biases based on the extrapolation of information from endogenous reference groups and presents some suggestive evidence that this mechanism has significant explanatory power the impact of these biased perceptions on attitudes toward redistributive policies is studied by means of an experimental design that was incorporated into the survey which provided consistent information on the own ranking within the income distribution to a randomly selected group of respondents the evidence suggests that those who had overestimated their relative position and thought that they were relatively richer than they were tend to demand higher levels of redistribution when informed of their true ranking

economics and the self organisation approach alfred marshall revisited the economics of alfred marshall is reassessed in the light of new developments in the natural sciences whereby a nonequilibrium thermodynamic approach is adopted to analyze self organization in dissipative structures it is argued that there is a clear correspondence between marshall s treatment of time irreversibility and this modern approach particularly when the latter is set in an informational context thus his principles is viewed as a very useful starting point in adapting the self organization approach for application in economics the main features of such a post marshallian approach to economics are discussed and compared with the mechanical approach of neoclassicism copyright 1993 by royal economic society

unequal societies income distribution and the social contract this paper develops a theory of inequality and the social contract aiming to explain how countries with similar economic and political fundamentals can sustain such different systems of social insurance fiscal redistribution and education finance as those of the united states and western europe with imperfect credit and insurance markets some redistributive policies can improve ex ante welfare and this implies that their political support tends to decrease with inequality conversely with credit constraints lower redistribution translates into more persistent inequality hence the potential for multiple steady states with mutually reinforcing high inequality and low redistribution or vice versa

the origins of state capacity property rights taxation and politics economists generally assume that the state has sufficient institutional capacity to support markets and levy taxes this paper develops a framework where policy choices in market regulation and taxation are constrained by past investments in legal and fiscal capacity it studies the economic and political determinants of such investments demonstrating that legal and fiscal capacity are typically complements the results show that among other things common interest public goods such as fighting external wars as well as political stability and inclusive political institutions are conducive to building state capacity some correlations in cross country data are consistent with the theory

efficiency analysis of german electricity distribution utilities non parametric and parametric tests this study applies non parametric and parametric tests to assess the efficiency of electricity distribution companies in germany traditional issues in electricity sector benchmarking are addressed such as the role of scale effects and optimal utility size as well as new evidence specific to the situation in germany labour capital and peak load capacity are used as inputs and units sold and the number of customers as output the data cover 307 out of 553 german electricity distribution utilities a data envelopment analysis dea is applied with constant returns to scale crs as the main productivity analysis technique whereas stochastic frontier analysis sfa with distance function is the verification method the results suggest that returns to scale play but a minor role only very small utilities have a significant cost advantage low customer density is found to affect the efficiency score significantly in particular in the lower third of all observations surprisingly east german utiliti

different ways of knowing a communicative turn toward sustainability abstract despite the urgency of the ecological crisis the steady continuation of environmental degradation suggests that new ways of interpreting problems and acting with environmental integrity may need to be considered this paper draws on a broad range of contemporary theory to argue that the conventional conceptualization of environmental problems has remained a largely disciplinary based exercise that has relied on abstracting the environmental issues from their real world complexity a practical articulation of the main environmental narratives reveals self referential discourses whose disciplinary based practices have insulated these approaches from a broad range of contemporary theorising and different ways of knowing the dominance of these approaches in environmental policy development has led to the continued acceleration of environmental degradation despite widespread political and social interest in its abatement this paper provides a critique of methodologies derived from the assumptions of instrumental rationalism and contemplates the potential for alternative communicative approaches and strategies for dealing with environmental policy development and implementation it is argued that a communicative approach to planning for sustainability represents a more appropriate strategy for mobilising a currently impotent environmental movement a communicative approach by explicitly dealing with the assumptions and motivations of contested positions in the sustainability debate it is argued offers the most pragmatic way of developing change strategies to deal with the complex issues surrounding environmental policy development and implementation

making and breaking social capital the impact of welfare state institutions since the debate about the importance of social capital and civil society for the quality of democracy began scandinavia has caused problems observers have been bewildered by an allegedly paradoxical coexistence of a wealth of social capital and extensive welfare state arrangements some theorize that large welfare states make engagement in voluntary associations unnecessary making the production of social capital more difficult however empirical research shows scandinavia to have comparatively high levels of social capital to solve this paradox the authors address how the causal mechanism between variation in the design of welfare state institutions and social capital works the empirical analysis based on swedish survey data suggests that the specific design of welfare state policies matters for the production of social capital contacts with universal welfare state institutions tend to increase social trust whereas experiences with needs testing social programs undermine it the policy implic

shackle on time uncertainty and process this paper is intended both as a contribution to the conceptual work on process in economic thought and as an attempt to connect a non institutionalist non evolutionary thinker to it the paper has two principal objectives i to delineate a broad philosophically grounded conception of what an economic process theory ept is and ii to locate the contributions of george shackle within this broad conception of ept in pursuing these two objectives i hope to draw out the originality and significance of shackle s economics with a particular emphasis on what he adds to process conceptions developed within other heterodox traditions such as institutional and evolutionary economics i will also highlight some of the perceived limitations of shackle s approach and link them to the limitations of process philosophy

do conditional cash transfers affect electoral behavior evidence from a randomized experiment in mexico this article reexamines the argument that targeted programs increase pro incumbent voting by persuading beneficiaries to cast ballots against their first partisan choice the evidence comes from the randomized component of progresa the pioneering mexican conditional cash transfer cct program experimental data show that early enrollment in the program led to substantive increases in voter turnout and in the incumbent s vote share in the 2000 presidential election the experiment also reveals that opposition parties vote shares were unaffected by the program thus the electoral bonus generated by ccts may be best explained by a mobilizing rather than persuasive mechanism these findings are difficult to reconcile with the notion that the electoral effects of ccts are a result of prospective concerns triggered by threats of program discontinuation or endogenous program enrollment instead the evidence in this article suggests that ccts mobilizing effects are compatible with programmatic politics

social mobility and redistributive politics just like economists voters have conflicting views about redistributive taxation because they estimate its incentive costs differently we model rational agents as trying to learn from their dynastic income mobility experience the relative importance of effort and predetermined factors in the generation of income inequality and therefore the magnitude of these incentive costs in the long run left wing dynasties believing less in individual effort and voting for more redistribution coexist with right wing dynasties this allows us to explain why individual mobility experience and not only current income matters for political attiitudes and how persistent differences in perceptions about social mobility can generate persistent differences in redistribution across countries

economy and environment a theoretical essay on the interdependence of economic and environmental systems preface notation guide 1 introduction part i the physical economy environment system 2 closed physical systems a model 3 structure and time in the physical system 4 technological change and the environmental constraints to physical growth part ii the economic system 5 the price system 6 prices property and the environment 7 economic conflict and environmental change part iii environmental strategies in an evolutionary economy environment system 8 time uncertainty and external effects 9 the market solution 10 the stationary state 11 conclusions references index

how to pay for the peace a theoretical framework with references to african countries this paper analyses a simple game theoretic model to highlight the choice of the government between raising its defence expenditures or giving away some gifts to his opponents as a means to defend his position in power if the government is a cournot nash player then there is no gift in equilibrium and any increase in the budget will lead to more inefficient defence expenditures however if the government is a stackelberg leader then he will use the gift as a tool in his policy for staying in power

the impact of technological and organizational innovations on employment in european firms by using firm level data provided by the fourth community innovation survey cis4 for a selected number of eu countries this article explores the employment impact of innovation extending the analysis to organizational change the empirical evidence presented shows that both technological and organizational innovation exert a positive impact on employment mainly indirectly that is by improving growth performances in firms the strength of these indirect effects have been found to vary across different types of innovations despite the limits imposed by data at our disposal the evidence presented seems to somewhat diminish the relevance of the labor displacing effects of the process innovation the latter being strong and clearly visible only within the manufacturing industry and only when process innovations are combined with organizational changes copyright 2012 the author 2011 published by oxford university press on behalf of associazione icc all rights reserved oxford university press

state capacity conflict and development the absence of state capacities to raise revenue and to support markets is a key factor in explaining the persistence of weak states this paper reports on an ongoing project to investigate the incentive to invest in such capacities the paper sets out a simple analytical structure in which state capacities are modeled as forward looking investments by government the approach highlights some determinants of state building including the risk of external or internal conflict the degree of political instability and dependence on natural resources throughout we link these state capacity investments to patterns of development and growth

network access charges vertical integration and property rights structure experiences from the german electricity markets abstract after the deregulation of the german electricity markets in 1998 the german government opted for a regulatory regime called negotiated third party access which would be subject to ex post control by the federal cartel office network access charges for new competitors are based on contractual arrangements between energy producers and industrial consumers as the electricity networks are incontestable natural monopolies the local and regional network operators are able to set monopolistic charges at their own discretion restricted only by the possible interference of the federal cartel office bundeskartellamt in this paper we analyze if there is evidence for varying charging behaviour depending on the supplier s economic independence structure of property rights or its level of vertical integration for this purpose we hypothesise that incorporated and vertically integrated suppliers set different charges than independent utility companies multivariate estimations show a relation between network access charges and the network operator s economic independence as well as level of vertical integration on the low voltage level for an estimated annual consumption of 1700 kw h vertically integrated firms set in accordance with our hypothesis significantly lower access charges than vertically separated suppliers whereas incorporated network operators charge significantly higher charges compared to independent suppliers these results could not have been confirmed for other consumptions or voltage levels

politics and inequality in latin america and the caribbean this article presents the first pooled time series analysis of the impact that politics and policy have on inequality in latin america and the caribbean the authors build on models consisting of sociological and economic variables adding the strength of the democratic tradition long term legislative partisan political power distribution and social spending to explain variation in inequality they analyze an unbalanced pooled time series data set for income distribution in 18 latin american and caribbean countries from 1970 to 2000 they show that the political variables add explanatory power a strong record of democracy and a left leaning legislative partisan balance are associated with lower levels of inequality as are social security and welfare spending under democratic regimes thus they replicate some and modify other well established findings from studies of organization for economic cooperation and development oecd countries in the very different context of latin america and the caribbean

evolution of economy and environment an application to land use in lowland vietnam abstract this paper analyses the interactions between land use institutions and culture in the context of climatic extremes in vietnam although there has been a long history of examining the evolutionary nature of markets and institutions within an institutional economics framework developing the institutional economic approach to include society environment interactions allows examination of processes which facilitate and constrain economic development for example this approach is used here to explain adaptation processes whereby climatic risk affects collective responses these responses form an evolutionary link between institutions culture resources and the physical environment the paper argues that historically climatic risks have been a factor in technological and political response within the agrarian society of vietnam in the sense that climatic extremes have acted as triggers to some significant social upheavals in the past century the impacts of colonialism political change and related changes in social organisation have significantly altered the social basis of resilience to climate extremes

just another niche in the wall how specialization is changing the face of mainstream economics there is considerable discussion on so called mainstream pluralism that is on the co presence of a variety of research programmes in today s mainstream economics that 1 significantly deviate from the neoclassical core 2 are pursued by different often separate communities of researchers and 3 have their origins outside economics the literature tends to regard mainstream pluralism as a transitory state towards a new post neoclassical mainstream this paper advances a new interpretation it suggests that the changing and fragmented state of mainstream economics is likely to persist over time under the impact of specialization as a self reinforcing mechanism and the creation of new specialties and approaches also through collaboration with researchers from other disciplines

feminist and post keynesian economics challenges and opportunities there are significant areas of difference between feminist and post keynesian economics some feminist contributions to discussions about ontology and critical realism suggest strong reluctance to adopt realist philosophies and these provide a marked contrast with post keynesians frequent appeals for economics to reflect reality at the same time however some post keynesians are calling for a more inclusive pluralist approach to economic research a discussion that has areas of commonality with various feminist discussions of epistemology continued productive dialogue between the two traditions may be facilitated through an understanding of their contrasting ontological and epistemological debates it may be further accommodated by growing recognition of the potential advantages of utilising plural methods to address specific research questions copyright the author 2007 published by oxford university press on behalf of the cambridge political economy society all rights reserved oxford university press

aid under fire development projects and civil conflict we estimate the causal effect of a large development program on conflict in the philippines through a regression discontinuity design that exploits an arbitrary poverty threshold used to assign eligibility for the program we find that barely eligible municipalities experienced a large increase in conflict casualties compared to barely ineligible ones this increase is mostly due to insurgent initiated incidents in the early stages of program preparation our results are consistent with the hypothesis that insurgents try to sabotage the program because its success would weaken their support in the population

technological innovations and sectoral change transformative capacity adaptability patterns of change an analytical framework following up on recent debates about sectoral systems of innovation and production the paper introduces a heuristic framework for analyzing and explaining distinct patterns of technology based sectoral change the concept is based on two interrelated influencing factors the first is the sectoralspecific transformative capacity of new technologies themselves that is their substantial or incremental impact on socioeconomic and institutional change in a given sectoral system the second is the sectoral adaptability of socioeconomic structures institutions and actors confronted with the opportunities presented by new technologies the first factor the sectoral transformative capacity of new technologies enables us to identify the technology based pressure to change and adjust the structural institutional and organizational architectures of the sectoral system the second complementary factor sectoral adaptability helps us to discern the distinct social patterns of anticipating and adopting this technology based pressure the specific interplay between the two influencing factors creates distinguishable modes of sectoral transformation ranging from anticipative and smooth adjustments to reactive and crisis ridden patterns of change even processes of radical sectoral change continue over longer periods of mismatch and are characterized by numerous and mostly gradual organizational structural and institutional transformations

steps towards indicators of sustainable development linking economic and ecological concepts abstract conceptions of defining and measuring sustainable development can broadly be placed in two categories weak and strong sustainability the concept of weak sustainability is based on neo classical economic theory and assumes that manufactured and natural capital are close substitutes this means that costs of environmental deterioration e g forest damage can be compensated by benefits from manufactured capital e g income thus environmental damages are valued in monetary units the concept of strong sustainability denies the degree of substitution that weak sustainability assumes at least for some critical elements of natural capital this paper pledges for strong sustainability indicators especially for critical loads and critical levels since the costs and benefits of avoiding critical impacts have to be taken into account a combination of strong and weak sustainability indicators means a linkage of ecological physical and economic monetary approaches should be suggested

development of ecological economics in australia and new zealand abstract this paper reviews the development of ecological economics in australia and new zealand since its beginnings in the late 1970s a historical account is presented that focuses particularly on the activities of the australia new zealand society for ecological economics and key ecological economics research activities achievements of ecological economics in australia and new zealand are assessed using a range of quantitative and qualitative data the main areas of expertise developed by australian and new zealand ecological economists were found to be theoretical foundations and visions for ecological economics biodiversity and resilience input output analysis heterodox valuation approaches analysis of economy environment interactions sustainability indicators sustainable agriculture fisheries and oceans and energy thermodynamics both countries are ranked at the top or near the top of the world rankings in terms of per capita isee membership and publication rates in ecological economics a defining feature of ecological economics in australia and new zealand has also been its practical and problem solving focus and the level of end user engagement the paper concludes by discussing the challenges that face the future development of ecological economics in australia and new zealand

population pressure horizontal inequality and political violence a disaggregated study of indonesian provinces 1990 2003 all parts of a country are rarely equally affected by political violence yet statistical studies largely fail to address sub national conflict dynamics we address this gap studying variations in routine and episodic violence between indonesian provinces from 1990 to 2003 within a grievance framework the article focuses on the violence potential of resource scarcity and population pressure as well as inter group dynamics related to polarisation and horizontal inequality demographic pressure and inequality seem to have little effect in isolation however in provinces where population growth is high greater levels of inequality between religious groups appear to increase the violence risk

consumer s surplus without apology the purpose of this paper is to settle the controversy surrounding consumer s surplus and by so doing to validate its use as a tool of welfare economics i will show that observed consumer s surplus can be rigorously utilized to estimate the unobservable compensating and equivalent variations the correct theoretical measures of the welfare impact of changes in prices and income on an individual i derive precise upper and lower bounds on the percentage errors of approximating the compensating and equivalent variations with consumer s surplus these bounds can be explicitly calculated from observable demand data and it is clear that in most applications the error of approximation will be very small in fact the error will often be overshadowed by the errors involved in estimating the demand curve the results in no way depend upon arguments about the constancy of the marginal utility of income consequently this paper supplies specific empirical criteria which can replace the apologetic caveats frequently employed by those who presently apply consumer s surplus moreover the results imply that consumer s surplus is usually a very good approximation to the appropriate welfare measures to preview below i establish the validity of these rules of thumb for a

why did the west extend the franchise democracy inequality and growth in historical perspective during the nineteenth century most western societies extended voting rights a decision that led to unprecedented redistributive programs we argue that these political reforms can be viewed as strategic decisions by the political elite to prevent widespread social unrest and revolution political transition rather than redistribution under existing political institutions occurs because current transfers do not ensure future transfers while the extension of the franchise changes future political equilibria and acts as a commitment to redistribution our theory also offers a novel explanation for the kuznets curve in many western economies during this period with the fall in inequality following redistribution due to democratization i introduction the nineteenth century was a period of fundamental political reform and unprecedented changes in taxation and redistribution britain for example was transformed from an oligarchy run by an elite to a democracy the franchise was extended in 1832 and then again in 1867 and 1884 transferring voting rights to portions of the society with no previous political representation the decades after the political reforms witnessed radical social reforms increased taxation and the extension of education to the masses moreover as noted by kuznets inequality which was previously increasing started to decline during this period the gini coefficient for income inequality in england and wales had risen from 0 400 in 1823 to 0 627 in 1871 but fell to 0 443 in 1901 two key factors in the reduction in inequality were the increase in the proportion of skilled workers williamson 1985 and the redistribution of income toward the poorer segments of the society for example taxes rose from 8 12 percent of national product in 1867 to 18 8 percent by 1927 and the progressivity of the tax system increased substantially see lindert 1989

inequality and insurgency maldistribution of land in agrarian societies is commonly thought to be an important precondition of mass political violence and revolution others argue that because of the difficulty of mobilizing rural populations for political protest land maldistribution is irrelevant except as part of an inegalitarian distribution of income nationwide these rival inequality hypotheses have significant implications with respect to the kinds of reforms likely to reduce the potential for insurgency in a society they are tested using the most comprehensive cross national compilation of data currently available on land inequality landlessness and income inequality support is found for the argument that attributes the greater causal import to income inequality moreover the effect of income inequality on political violence is found to hold in the context of a causal model that takes into account the repressiveness of the regime governmental acts of coercion intensity of separatism and level of economic development

kleptocracy and divide and rule a model of personal rule many developing countries have suffered under the personal rule of kleptocrats who implement highly inefe cient economic policies expropriate the wealth of their citizens and use the proceeds for their own glorie cation or consumption we argue that the success of kleptocrats rests in part on their ability to use a divide and rule strategy made possible by the weakness of institutions in these societies members of society need to cooperate in order to depose a kleptocrat yet such cooperation may be defused by imposing punitive rates of taxation on any citizen who proposes such a move and redistributing the benee ts to those who need to agree to it thus the collective action problem can be intensie ed by threats which remain off the equilibrium path in equilibrium all are exploited and no one challenges the kleptocrat kleptocratic policies are more likely when foreign aid and rents from natural resources provide rulers with substantial resources to buy off opponents when opposition groups are shortsighted when the average productivity in the economy is low and when there is greater inequality between producer groups because more productive groups are more dife cult to buy off jel o12 h00

violent crime does social capital matter this paper examines empirically the effect of some commonly used indicators of social capital such as the prevalence of trust on community members and the participation in voluntary secular and religious organizations on the incidence of violent crimes this is a cross country study whose basic sample consists of 39 developed and developing countries and whose dependent variable is the national intentional homicide rate the paper identifies and deals with three challenges in the empirical estimation of the effect of social capital on the incidence of violent crimes the omittedvariable problem is dealt with by including income inequality and economic growth as additional determinants of a country s violent crime rate the joint endogeneity or reverse causation problem is accounted for by using instrumental variables for social capital in the crime regression the specificity problem that is the potentially opposite effects of group specific and society wide social capital is noted and addressed only indirectly by emphasizing the results applied to the social capital indicators that have application for society as a whole the main result of the paper is that only the component of social capital measured by trust on community members has the effect of reducing the incidence of violent crimes the results regarding measures of other indicators of social capital are rather unclear this may be due to a combination of limited samples inability to fully control for reverse causation and most likely the opposite effects that society wide and group specific social capital may have on violent crime lederman and menendez are economists with the office of the chief economist for latin america and the caribbean of the world bank loayza is a senior economist with the research department of the central bank of chile and he is currently on leave from the development economics research group of the world bank the opinions expressed herein should not be attributed to the world bank the authors are grateful to ed glaeser jeff grogger gale johnson sanjay marwah steve messner nicholas sambanis and an anonymous referee for invaluable comments and suggestions the authors are responsible for any remaining errors

globalization domestic politics and social spending in latin america a time series cross section analysis 1973 97 this study examines the effects of globalization democratization and partisanship on social spending in fourteen latin american countries from 1973 to 1997 using a pooled time series error correction model the authors examine three sets of issues first following debates in the literature on oecd countries they want to know whether social spending has been encouraged or constrained by integration into global markets within this context they examine the extent to which such outcomes might be influenced by two additional sets of domestic political and institutional factors discussed in work on developed countries the electoral pressures of democratic institutions and whether or not popularly based governments are in power the authors show that trade integration has a consistently negative effect on aggregate social spending and that this is compounded by openness to capital markets this is the strongest and most robust finding in the study neither democratic nor popularly based governments consistently affect overall social spending the authors then disaggregate spending into social security transfers and expenditures on health and education they find that popularly based governments tend to protect social security transfers which tend to flow disproportionately to their unionized constituencies but they have a negative impact on health and education spending conversely a shift to democracy leads to increases in health and education spending which reaches a larger segment of the population the authors conclude by emphasizing the contrasting political logics of the different types of social spending

prospective voluntary agreements for escaping techno institutional lock in the paper looks for evolutionary policy responses to techno institutional lock in a persistent state that creates systemic market and policy barriers to technological alternatives we address the coordination role for authorities rather than corrective optimisation and elaborate three evolutionary policy objectives including fostering of i the diversity of technological options ii common vision for the implementation of technological alternatives and iii changes in social and physical networks we use these objectives to analyse documented experiences from environmental voluntary agreements and foresight activities we argue that combining the virtues of these tools into a new policy tool named prospective voluntary agreement can help facilitate an escape from techno institutional lock in the merit of the prospective voluntary agreement lies with the enhancement of collaborative policy cultures and inter sectoral and interdisciplinary stakeholder learning that creates commitment to desired action for escaping lock in d 2005 elsevier b v all rights reserved

live long and prosper collective action social capital and social vision abstract to understand the social driving forces that lead to environmental change we must account for the role of social interactions the development of norms of behavior and the institutionalization of rules and norms the development of social capital this paper demonstrates the utility of social capital theory by articulating linkages between human decision making at individual and collective levels and social vision an important research focus within the emerging ecological economics research tradition social capital theory clarifies relationships between social interactions and outcomes that contribute to the production of environmental quality public peace and economic prosperity necessary factors for long term social and ecological sustainability

us food aid and civil conflict we study the effect of us food aid on conflict in recipient countries our analysis exploits time variation in food aid shipments due to changes in us wheat production and cross sectional variation in a country s tendency to receive any us food aid according to our estimates an increase in us food aid increases the incidence and duration of civil conflicts but has no robust effect on interstate conflicts or the onset of civil conflicts we also provide suggestive evidence that the effects are most pronounced in countries with a recent history of civil conflict jel d74 f35 o17 o19 q11 q18 we are unable to determine whether our aid helps or hinders one or more parties to the conflict it is clear that the losses particularly looted assets constitutes a serious barrier to the efficient and effective provision of assistance and can contribute to the war economy this raises a serious challenge for the humanitarian community can humanitarians be accused of fueling or prolonging the conflict in these two countries medecins sans frontieres amsterdam 1

repression or civil war perhaps the crowning achievement of mature democracies is the peaceful acceptance of the ballot box as the primary instrument for deciding who should hold power in society we do not have to go far back in the history of most democratic states however to find a distinct role for political violence moreover many inhabitants of the globe still remain at risk of falling prey to widespread violence in the struggle for political office forms of political violence differ a great deal we focus on two important manifestations repression and civil war distinguished by whether violence is one sided or two sided we present a unified approach to studying these forms of political violence with common roots in poverty natural resource rents and weak political institutions first we lay out rudimentary model to analyze whether violence will occur and if so manifest itself as repression or civil war three regimes peace repression and civil war emerge as alternative equilibrium outcomes in the interaction between an incumbent government and an opposition group moreover the theory suggests a natural ordering of these regimes we then construct empirical measures of repression and civil war which we map into ordered variables as suggested by the theory we investigate how the regime depends on economic and political variables using an ordered logit model defined over the three regimes our estimation results indicate a strong correlation between low incomes weak political institutions and both forms of political violence

welfare spending and political conflict in latin america 1970 2010 abstract we study an age old question in political economy does government spending on welfare ensure peace this question was at the heart of the european welfare state model of the early 20th century and remains relevant today in face of rising inequalities and political conflict yet there is limited empirical evidence about this question we make use of a panel of 12 latin american countries over the period 1970 2010 to show that welfare spending has led to substantial reductions in conflict across the region this effect is more pronounced when associated with reductions in inequality and increasing social and institutional trust

institutions in economics the old and the new institutionalism 1 definitions and issues 2 formalism and anti formalism 3 individualism and holism 4 rationality and rule following 5 evolution and design 6 efficiency and reform 7 conflicts and complementarities

the three p s of total risk management current risk management practices are based on probabilities of extreme dollar losses e g measures like value at risk but these measures capture only part of the story any complete risk management system must address two other important factors prices and preferences together with probabilities these compose the three p s of total risk management this article describes how the three p s interact to determine sensible risk profiles for corporations and for individuals guidelines for how much risk to bear and how much to hedge by synthesizing existing research in economics psychology and decision sciences and through an ambitious research agenda to extend this synthesis into other disciplines a complete and systematic approach to rational decision making in an uncertain world is within reach

planning for sustainability as a learning concept abstract the major theme of the following discussion is the importance of a transdisciplinary approach to guide sustainability related planning and management activities the proposed approach involves much more than the usual interaction between partners from different disciplines a revised process is needed to allow real cooperation in sustainability planning this process will require a more open recognition of the subjective priorities that become the framework of sustainable development issues of various interest groups and disciplines the sustainable development agenda should be more geared towards learning processes than projected future outcomes learning is enhanced through a participatory framework inclusive of stakeholder interests insights from a broad range of disciplinary areas including the science of complexity sociology philosophy law economics and management are presented to support this position the conventional stranglehold of disciplinary thinking in policy circles limits the capacity of our decision makers to unravel the complexity of all real world environmental policy and management problems policy making needs to embody respect for that complexity and allow flexibility to promote perpetually evolving learning as a fundamentally transdisciplinary framework ecological economics has some prospect to represent these interests in a purposeful and necessarily pragmatic way

toward prospective voluntary agreements reflections from a hydrogen foresight project abstract there is substantial interest in promoting the emergence of a hydrogen based energy economy if successful this would represent a policy led discontinuous transition away from existing fossil fuel based systems such a move has few precedents and few policy tools exist to manage such a complex and uncertain endeavour furthermore existing hydrocarbon energy systems can be considered techno institutional complexes tic which have developed through the path dependent co evolution of physical technologies and social institutions these complexes have numerous structures that ensure their perpetuation and create important barriers to the implementation of alternatives like hydrogen based systems the authors explore the application of prospective voluntary agreements pva as a policy tool process that can help facilitate a move towards a hydrogen based economy through foresight and negotiation from this perspective we look at the recent case of the nordic hydrogen energy foresight project for evidence

a culture theory commentary on meyer and peng s theoretical probe into central and eastern europe meyer and peng s decade award article and retrospective integrate economic and sociological theories of transaction costs firm resources and institutions and apply them to firms in central and eastern europe in ways that can inform and be informed by culture theory culture theorizing in ib typically uses dimensions of values and norms to analyze the ib implications of the underlying logics that characterize patterns of thought action and interaction of countries and other large societies transaction cost theorizing helps explain the social forces that link cultural group boundaries with country boundaries firm resource theory can be informed by the toolbox metaphor to understand cultural patterns in the resources that firms in a particular locale have most readily available neo institutional theory particularly its political science thread cautions ib scholars to represent governmental arrangements and policies as arising from cultural norms and values rather than as independent variables that spring de nova from government leaders integrative analyses like the decade award article and retrospective point out links and complementarities among diverse theories but need to take care lest superficial similarities in how terms like institution and culture are used in different theories mask fundamental conceptual differences