economic deregulation days of reckoning for microeconomists economic deregulation of american industry is one of the most important experiments in economic policy of our time 1 in 1977 17 percent of u s gnp was produced by fully regulated industries 2 by 1988 following ten years of partial and complete economic deregulation of large parts of the transportation communications energy and financial industries that total had been cut significantly to 6 6 percent of gnp 3 the political forces behind the decision to change the market conditions under which roughly 600 billion of u s output is produced were strong and varied but according to political scientists martha derthick and paul quirk 1985 p 36 deregulation would never have occurred if economists especially microeconomists had not generally supported it through their research 4 in retrospect it is fair to ask were microeconomists able to develop a theoretical and empirical framework to explain regulation and its effects and to form predictions of deregulation s effects were they able to predict the actual effects of deregulation this paper surveys the evidence to address these questions and of

cooperation against theft a test of incentives for water management in tunisia water theft carried out by manipulating water meters constrains volumetric pricing in semi arid regions cooperative management can reduce theft and improve incentives for efficient water use by inducing peer monitoring using a theoretical model we show that theft is more likely when prices are high punishments are weak and cooperatives are large we also show how cooperative membership and punishment levels are determined endogenously by constraints on monitoring we test the model on data from tunisia for the years 2001 2003 relying on instruments that proxy for unobservable monitoring costs the results confirm that well designed incentives can reduce theft and that constraints on monitoring costs affect institutional design

achieving sustainability and development through collective action an empirical analysis of the impact of the bore pool sharing program on farm incomes and crop choices summary repeated droughts in agriculture have promoted intensive reliance upon groundwater resources thereby exacerbating the already stressed groundwater reservoir situations all across the globe this has also resulted in increased inequality among farmers by allowing those with better physical assets such as borewells to extract water at the cost of less affluent farmers as a response bore pool sharing collective arrangements were introduced in some parts of india with the intention of slowing down the rate of groundwater depletion and helping improve the livelihoods of the worst affected farmers such arrangements work through promoting collective management of groundwater resources by providing critical and timely irrigation to rain fed crops and through dis incentivizing the cultivation of high water consuming crops we investigate the impact of bore pool sharing programs on crop incomes and cropping patterns of the participating households in south india a probit 2sls model and propensity score matching method are used to evaluate the impact of such programs while controlling for self selection biases results indicate that farmers participation in bore pool sharing collectives is positively associated with their crop incomes however contrary to expectation the share of high water intensive crops also increases with participation in addition share of water intensive crops is higher for a collective group with a higher ratio of bore wells to number of participating households finally farmers within the pool with multiple past failed bore well sinking attempts tend to extract more water thereby threatening the sustainability of the groundwater as well as the livelihoods of the farming community

institutions and environmental governance a reconceptualization abstract this article presents the conceptual revisions needed to extend the new institutional approach to environmental governance from its current local and international domains of application to all governance solutions including national environmental and natural resource use policies and multi level governance solutions that are increasingly used to address global environmental change the article suggests that environmental governance is best understood as the establishment reaffirmation or change of institutions to resolve conflicts over environmental resources it also explains why the choice of these institutions is a matter of social justice rather than of efficiency the article suggests a way to understand formal and state centered governance solutions as forms of collective ownership not unlike common property the article demonstrates how institutional analysis can gain resolution by looking at the functional and structural tiers organization of governance functions and formulation of key institutional rules as key aspects of the design of governance institutions

determinants of conservation among the rural poor a charitable contribution experiment this paper examines how conservation decisions are affected by environmental degradation donations to an environmental ngo and participation in actual conservation activities capture individual preferences for environmental conservation environmental degradation is measured both through survey based data on experiences of deforestation and environmental shocks and through indices of deforestation constructed with gis data the results show that being exposed to environmental degradation is correlated both with higher donations and conservation behavior the relationship between conservation choices and individual social preferences is also explored experimental measures of individual altruism and inequality aversion and survey measures of trust time preferences and civic engagement are correlated with donations and real world conservation decisions respectively these findings show the role of environmental awareness in fostering environmental conservation even in very poor settings they also highlight the potential of experiments which closely mirror real world decisions to generate conclusions generalizable to individual behavior outside the laboratory

institutional pressures and ethical reckoning by business corporations prior studies have provided explanations for the presence use and dissemination of codes of corporate ethics or codes of corporate conduct of business corporations most such explanations are functional in nature and are descriptive as they are derived from the codes and their associated documents we search for more underlying explanations using two complementary theories first social contract theories explaining the exogenous and endogenous reasons of organizational behavior and then institutional theory explaining why organizations take similar measures in response to institutional pressures based on our explanations we contend that the codes and their use and dissemination are arising from underlying social and institutional pressures for firms to continuously validate their existence in the face of increasing changes and recurrent uncertainties

on monetary theory in this lecture i shall take up three topics the demand for money the implication of missing markets for the theory of asset pricing and lastly equilibrium with asymmetric information with special focus on the credit market all of these topics have been the subject of much recent work and my debt to that work will be obvious my manner of proceeding is somewhat abstract this is largely due to the circumstances of my intellectual past i simply find it easier and more likely to avoid mistakes however i shall attempt to bring out the main elements of my story without going through all of the algebra the main points derive from a single theme which in one way or another has interested me for a long time an economy which uses an intrinsically worthless means of exchange must be what radner called a sequence economy that is in contrast to an arrow debreu economy it must have trading at every date thus at the centre of monetary theory we require an economy which either makes it too costly or impossible to engage in all desirable arrow debreu trades in i97i and i973 this led me to study economies in which transaction costs were an essential element some of the results particularly on the constrained pareto inefficiency of such economies have recently re emerged in a different context and i shall discuss them later but there are other explanations for the absence of desired trading possibilities which turn on moral hazard and on adverse selection my discussion of these elements of an eventually satisfactory theory is the least satisfactory i have not found it possible either to formulate sharp propositions or to agree that those which have recently been proposed are satisfactory at the very end of this lecture i shall take a very brief look at one particular macro economic implication of my analysis much of what goes under the title of classical macro economics i find profoundly unsatisfactory i find it so not because of any keynesian pieties nor i hope because of political preferences it is the crudeness and incompleteness of the theoretical foundation which

a cognitive miser theory of cooperators advantage the aa propose a new model of cooperators advantage depending neither on supplementary incentives nor on cooperators capacity to recognize and play selectively with other cooperators it depends rather on players making the play no play decision by the heuristic of projecting their own cooperate defect choices onto potential partners cooperators offer to play more often and fellow cooperators will more often accept their offer when certain boundary conditions are met this results in a higher expected payoff for cooperators than for defectors empirical support for this heuristic is suggested by expectations data from related social dilemma experiments moreover its use can be justified in bayesean terms our model brings behavioral decision theory s cognitive miser paradigm to bear on interdisciplinary concern with the evolution of cooperative behavior and shows how if other mechanisms provide a suitable initial kick cooperation can evolve in the absence of iteration and in large mobile societies

some simple analytics of peak load pricing author s bergstrom ted mackie mason jeffrey k abstract consider a public utility that offers its service at two different times we study the effects of a change from uniform pricing throughout the day to peak load pricing we show that for a utility constrained to operate with a fixed rate of return on capital the introduction of peak load pricing can plausibly reduce the price of the service it both in peak and off peak times we also find that peak load pricing can lead to either greater or smaller capacity than uniform pricing we find a simple criterion for determining whether a particular individual gains or loses from peak load pricing

some notes on the misuse of classic writings in economics on the subject of common property abstract this paper aims to show how many economists have misunderstood the issues and language concerning the commons first they confuse the noun common property with the process of free and unregulated access second they explain the disappearance of common property resources as an unavoidable consequence of individual economic rationality this process supposedly is based on adam smith s use of selfishness but clearly is a misinterpretation of his basic writings ironically smith s writings which in toto advocate great legal political and moral restraint in economic action are most commonly used to advance opposite ends given that planet earth may be considered a common property the clarification and proper use of common property issues is of the utmost importance

the management of irrigation systems how to evoke trust and avoid prisoner s dilemma abstract the performance of canal irrigation systems depends partly on trust by farmers in the good faith and abilities of irrigation officials in india this trust is typically lacking there is instead a prisoners dilemma type syndrome of anarchy under the canals in which farmers lack the confidence that if they refrain from taking water out of turn they will get water on time and officials lack the confidence that if they work conscientiously to deliver the water on time farmers will refrain from rule breaking in east asia this syndrome of irrigation anarchy scarcely exists the reasons for the difference are partly to do with agro climatic conditions but they are also related to policy relevant variables of physical design and organizational arrangements within the constraints of agro climatic conditions features of east asian design and organization might usefully be transferred to indian conditions including break point reservoirs irrigation scheduling and monitoring separation of construction organization from operations and maintenance organization and catchment based operating agencies with their own revenue base

an evaluation of the welfare effects of reducing energy subsides in iran abstract energy prices in iran have traditionally been heavily subsidized by the government and as a result energy consumption per capita in iran is close to the european union level the welfare effects of efforts to raise energy prices closer to world levels are examined in this paper reform of energy prices is an important element of the economic reform plan 2010 2014 for iran we first analyze the relationship between energy consumption energy and non energy prices by estimating the household expenditure function the results show that a higher energy prices will decrease energy consumption by iranian households second we evaluate the impact of a rise of energy prices on the household welfare by measuring the compensating variation cv in five steps with a compensating payment the results show that iranian household welfare will increase with a 100 or 200 rise in energy prices if the government pays 20 30 or 50 of the 20 billion income resulting from removing energy subsidies while in contrast iranian household welfare will decrease with a 400 and 500 rise in energy prices if the government payment is 20 or 30 of 20 billion income

efficiency and equity in the transition to a new natural gas market through a series of regulatory decisions and legislative actions the natural gas industry has undergone a radical transformation wellhead prices have been deregulated interstate pipelines have been recast from merchants of bundled sales and transportation service to sellers of transportation and storage capacity and supply procurement responsibilities have been shifted downstream to local distribution companies and end users the transformation was made to foster efficiency improvements from wellhead to burner tip this paper reviews the policies that fostered the transition examines the likely outcomes of those policies and questions whether the transition has resulted in net benefits to all marketplace segments

the evolution of u s airline competition studies by academic economists were a significant force in the movement towards deregulation of the domestic airline industry in the early 1970s levine 1965 jordan 1970 keeler 1972 douglas and miller 1974 during the critical 1977 78 period in which deregulation was imposed first de facto by the civil aeronautics board cab and then de jure by congress the chairman and vice chairman of the cab were economists for the 14 years since deregulation economists have continued intensive study of the industry in part because of the unusual availability of reliable firm and transaction level data and in part because of the rare opportunity to observe an industry as it evolves from strict economic regulation to fairly unimpeded competition and strategic behavior the simplest prediction of economists about airline deregulation and one of the few on which nearly all economists agreed was that deregulation would improve consumer welfare in comparison to continued price and entry regulation fourteen years later nearly all economists still agree on this though the degree of enthusiasm for the deregulation outcome varies considerably there was substantial disagreement among economists about the market structure that would result because studies of scale economies in the airline industry had concluded that none existed beyond the scale of the smaller major airlines of the 1970s caves 1962 eads et al 1969 many economists argued that deregulation would result in more than the 11 major airlines that existed at the time of deregulation others predicted that only a few or possibly only one airline would survive at a large scale two noted university of chicago economists sam peltzman and lester telser made a bet in 1979 on whether

codes of ethics as contractarian constraints on the abuse of authority within hierarchies a perspective from the theory of the firm abuse of authority is an unsolved problem in the new institutional theory of the firm this paper attempts a double attack to this problem by developing a contractarian view of corporate codes of ethics from the ex ante standpoint the paper elaborates on the idea of a social contract based on co operative bargaining games and deduces from it the fair efficient constitution of the firm endorsed by means of a well devised corporate code of ethics from the ex post standpoint codes of ethics are proved to be self enforcing norms by showing how they put at work the mechanism of a repeated game of reputation within hierarchical transactions firms characterised by incomplete contracts and unforeseen events to accomplish this task a theory of rationality in the face of unforeseen contingencies is sketched by working out the idea that the domain of a principle of ethics defines a fuzzy event i e an event to which also the ex ante unforeseen unimaginable states of the world belong to a certain degree

a social contract account for csr as an extended model of corporate governance ii compliance reputation and reciprocity this essay seeks to give a contractarian foundation to the concept of corporate social responsibility csr meant as an extended model of corporate governance of the firm whereas justificatory issues have been discussed in a related paper sacconi l 2006b this journal in this essay i focus on the implementation of and compliance with this normative model the theory of reputation games with reference to the basic game of trust is introduced in order to make sense of self regulation as a way to implement the social contract on the multi fiduciary model of corporate governance this affords understanding of why self regulation meant as mere recourse to a long run strategy in a repeated trust game fails two basic problems for the functioning of the reputation mechanism are examined the cognitive fragility problem and the motivational problem as regards the cognitive fragilities of reputation which result from the impact of unforeseen contingencies and from bounded rationality the paper develops the logic and the structure that self regulatory norms must satisfy if they are to serve as gap filling tools with which to remedy cognitive limitations in the reputation mechanism the motivation problem then arises from the possibility of sophisticated abuse by the firm developed in this case is an entirely new application of the theory of conformism and reciprocity based preferences the result of which is that the stakeholders refuse to acquiesce to sophisticated abuse on the part of the firm

an inquiry into power and participatory natural resource management decentralised environmental governance based on community participation is increasingly replacing top down natural resource management there is increasing awareness however that such mechanisms might fail to ensure effective participation by all stakeholders and be prone to producing and or perpetuating power inequalities against this backdrop we claim that power should be positioned at the centre of analyses of natural resource management in this paper we provide a taxonomy of positions to analyse participatory decision making in natural resource management we operationalise this framework to analyse two failures of participatory natural resource management in turkey focusing on reasons for failure and the role of power asymmetries our results are based on case studies comprising in depth interviews focus groups and a survey administered to 944 individuals we conclude that participatory mechanisms are highly unlikely to bring democratic and equitable outcomes unless power relations are addressed at both institutional and local levels copyright oxford university press

common pool resources and contextual factors evolution of a fishermen s cooperative in calcutta abstract the cpr school has successfully rebutted hardin s pessimistic tragedy of the commons model however in recent years critics have focussed on the inward orientation and lack of contextual analysis characterising the writings of the cpr school oakerson a model for the analysis of common property problems working paper r86 13 workshop in political theory and policy analysis indiana university 1986 and ostrom governing the commons cambridge cambridge university press 1990 have detailed the list of variables that have to be studied to understand the mechanics of collective action however these factors are internal to the community recent critics point out that the actions of individual agents are also influenced by the alternatives embedded outside the system these variables are collectively labelled contextual factors in our paper we have analysed the case of a fishermen s cooperative in the calcutta metropolitan district to show how the historic and economic context shapes targets of resource users and affects the feasibility of alternative courses to achieve the target by determining opportunity and transaction costs of actions this indicates the importance of contextual factors in explaining the formation and evolution of the resource regime

british bus deregulation it is always of interest to observe the sharp divisions which arise in professional economic opinion on major policy issues bus deregulation is just such a case when the british government published its proposals to deregulate the bus industry in a white paper in i984 dot i984 considerable debate ensued with members of the profession on both sides beesley and glaister i985 gwilliam nash and mackie i985 even now six years after implementation the debate continues whilst both parties would admit that some of their forecasts were wrong the fact that the measure has proved neither as good as its proponents expected nor as bad as its opponents feared simply makes reaching a conclusion on the merits of bus deregulation more difficult the layout of this paper is as follows in the next section we describe the background to the decision to deregulate the british bus industry and the changes that were involved the next two sections look at the theoretical arguments for and against bus dereg ulation we then turn to a brief review of what actually happened before reaching our conclusion

power in a theory of the firm transactions take place in the firm rather than in the market because the firm offers power to agents who make specific investments past literature emphasizes the allocation of ownership as the primary mechanism by which the firm does this within the contractibility assumptions of this literature we identify a potentially superior mechanism the regulation of access to critical resources access can be better than ownership because i the power agents get from access is more contingent on their making the right investment and ii ownership has adverse effects on the incentive to specialize the theory explains the importance of internal organization and third party ownership

pricing and regulating affect environmental ethics effluent charges and tradeable permits are economically efficient but rarely used a new explanation for this discrepancy is offered pricing may crowd out environmental ethics in the pricing and via spillovers also in non pricing sectors pricing may therefore increase pollution providing a reason why decision makers tend to reject environmental pricing five propositions showing the conditions for counterproductive effects are advanced they are consistent with available empirical evidence regulation by setting standards and subsidies damage environmental ethics less than pricing because pollution is condoned damaging environmental ethics may prevent political action in favor of the environment

an analysis of technology productivity and regulatory distortion in the interstate natural gas transmission industry 1977 1985 the purpose of this paper is to provide the first comprehensive firm level analysis of cost structures and production in the interstate pipeline industry during the transition from price regulation to partial deregulation 1977 85 the regulatory changes during this period were numerous and complex we do not attempt to isolate the impact of any single change in regulation rather we examine how the regulatory environment as a whole affected the industry our study is based on a newly constructed panel of twenty four interstate pipeline firms we give particular attention to the impact of output change technical change scale economies and non optimal input allocation on total factor productivity growth and the implication of the 1978 natural gas policy act partial price decontrol relative to total wellhead price decontrol for residential commercial utility and industrial consumers of natural gas and for the transport industry itself 1998 john wiley sons ltd

design principles for managing coastal fisheries commons in present day japan abstract ostrom 1990 challenged the traditional belief that commons management inevitably requires state ownership or privatization and instead established the notion of user self governance this notion a third policy option for managing the commons entails little or no state involvement under this notion ostrom developed eight design principles to which self governing institutional arrangements adhere while the role of the state is minimal this article seeks to establish whether design principles characterize such institutional arrangements when the role of the state is accommodated explicitly within the principles drawing on a case study of present day management of japan s community based coastal fisheries commons our study shows that the design principles can better characterize self governing institutional arrangements when the state adopts a pro user self governance role that provides strategic support for users but neither takes ownership of the commons nor participates in engineering the institutional arrangements

the effects of migration on collective action in the commons evidence from rural china summary over the past three decades scholars have studied the effects of more than three dozen factors on collective action in the commons but little is known about the effects of rural to urban migration we examine this question with the case of china which has the world s most extensive levels of rural to urban migration using ols logit and probit models and data from a survey of 1 780 households from 18 provinces we find that migration has a statistically significant adverse effect on collective irrigation controlling for a large number of theoretically relevant variables the effects of migration on collective action in the commons are possibly mediated by a number of factors frequently identified in the literature including leadership social capital sense of community economic heterogeneity and dependence on resources we speculate that massive out migration partly explains the significant drop in the use of collective canal irrigation and exacerbated the significant increase in groundwater irrigation since the start of reforms in 1980s these findings have important policy implications for commons governance in china given that massive rural to urban migration will continue in the next decade because of the increasing rural to urban migration worldwide especially in developing countries the findings could also partly explain the deteriorating state of rural village infrastructure natural common pool resources and ecological systems in many developing countries

is environmental governance substantive or symbolic an empirical investigation the emergence of environmental governance practices raises a fundamental question as to whether they are substantive or symbolic toward that end we analyze the relationship between a firm s environmental governance and its environmental management as reflected in its ultimate outcome environmental performance we posit that substantive practices would bring changes in organizations most notably in terms of improved environmental performance whereas symbolic practices would portray organizations as environmentally committed without making meaningful changes to their operations focusing on a sample of environmentally sensitive firms results are consistent with environmental governance mechanisms being predominantly part of a symbolic approach to manage stakeholder perceptions on environmental management having little substantial impact on organizations statistical analyses show mostly that there is no relation between environmental governance mechanisms and environmental performance measured in terms of regulatory compliance pollution prevention and environmental capital expenditures however there is some indication that environmental incentives are associated with pollution prevention interviews with corporate directors shed further light on these results by underlining that environmental governance mechanisms are employed at the board level to protect the organization from reputational and or regulatory harm but are not necessarily intended to proactively improve environmental performance

behavior of the firm under regulatory constraint a recent article by akira takayama discusses an earlier paper by harvey averch and leland l johnson on fair rate of return regulation of public utilities although takayama p 255 agrees with averch and johnson s general conclusions that a firm will tend to increase its investment with the introduction of an active constraint on its rate of return he criticizes the a j argument as being confusing ambiguous and in error takayama then attempts a clarification and presents a new formulation which leads to the a j result quoted above this comment will discuss several of takayama s criticisms in addition to showing that the so called a j effect cannot be derived from the basic assumptions made by both averch and johnson and takayama 1 we will show that the very assumptions used to prove the a j effect by defining the region of x require an assumption that the a j effect exists in the first place

management of common property resources limits to voluntary collective action this paper finds that the voluntary collective action may be an alternative to market and government in the management of common property resources in developing countries the people s capabilities to harness the preserved commons and the fairness in the appropriation of benefits from them are the limits on the voluntary collective action it shows that collective action is possible if an outside agency plays the role of a catalyst in mitigating these limits it also shows that there can be mutually beneficial sharing arrangements between government and village communities for the management of local forest resources the standard result that common and state property resources turn into open access resources as population grows also holds good for the natural resources jointly managed by government and people

estimating the long run equilibrium relationship the case of city gate and residential natural gas prices this paper examines market cointegration of city gate and residential natural gas prices cointegration of gas prices across different segments of the industry provides evidence that deregulation has resulted into a more integrated competitive natural gas industry where gas prices converge into a long run equilibrium our results indicate prices further down the distribution line the final two points of consumption are cointegrated for a majority of the us states post open access and retail unbundling although we find little evidence of perfect market integration the two price series likewise converge to the long run equilibrium faster post open access and retail unbundling results relative to state level unbundling choice programs reveal mixed outcomes with a few states without retail unbundling exhibiting market integration while some states with full unbundling exhibiting non cointegration

the emergence of cooperation among egoists this article investigates the conditions under which cooperation will emerge in a world of egoists without central authority this problem plays an important role in such diverse fields as political philosophy international politics and economic and social exchange the problem is formalized as an iterated prisoner s dilemma with pairwise interaction among a population of individuals results from three approaches are reported the tournament approach the ecological approach and the evolutionary approach the evolutionary approach is the most general since all possible strategies can be taken into account a series of theorems is presented which show 1 the conditions under which no strategy can do any better than the population average if the others are using the reciprocal cooperation strategy of tit for tat 2 the necessary and sufficient conditions for a strategy to be collectively stable and 3 how cooperation can emerge from a small cluster of discriminating individuals even when everyone else is using a strategy of unconditional defection

justice and corporate governance new insights from rawlsian social contract and sen s capabilities approach by considering what we identify as a problem inherent in the nature of the firm the risk of abuse of authority we propound the conception of a social contract theory of the firm which is truly rawlsian in its inspiration hence we link the social contract theory of the firm justice at firm s level with the general theory of justice justice at society s level through this path we enter the debate about whether firms can be part of rawlsian theory of justice showing that corporate governance principles enter the basic structure finally we concur with sen s aim to broaden the realm of social justice beyond what he calls the transcendental institutional perfectionism of rawls theory we maintain the contractarian approach to justice but introduce sen s capability concept as an element of the constitutional and post constitutional contract model of institutions with special reference to corporate governance accordingly rights over primary goods and capabilities are constitutionally granted by the basic institutions of society but many capabilities have to be turned into the functionings of many stakeholders through the operation of firms understood as post constitutional institutional domains the constitutional contract on the distribution of primary goods and capabilities should then shape the principles of corporate governance so that at post constitutional level anyone may achieve her his functionings in the corporate domain by exercising such capabilities in the absence of such a condition post constitutional contracts would distort the process that descends from constitutional rights and capabilities toward social outcomes

intertemporal substitution and the role of monetary policy new classical macroeconomists have asserted that once one ignores the consequences of sustained expected inflation or what is normally referred to as the tobin effect or inflation tax monetary policy is invariably ineffective both in the long and short run this view is not correct it will be shown that inflation tax free monetary policy rules can have strong stabilisation effects in rational expectations models with intertemporal substitution the best way to eliminate possible inflation tax effects of monetary growth is to assume that as in barro s i976 model the long run expected rate of growth of the money supply is zero more generally if one were concerned exclusively with the effectiveness of stabilisation policy in the new classical sense i e the capability of influencing deviations of actual equilibrium output from its full information level it would be sufficient to postulate that money transfers are simply proportional to pre existing money holdings the a priori exclusion of the tobin effect as a pre requisite for the new classical doctrine is clearly stated in lucas i98i

socio ecological explanations for crowding out effects from economic field experiments in southern africa abstract economic and psychological literature mentions three conditions under which the crowding out effect of pro social behaviour is likely to occur and to crowd out citizens moral obligations to behave co operatively i use a framed field experiment on joint extraction from a common pool resource cpr where the crowding out effect has already been reported before in combination with the trust game carried out in farming communities of namibia and south africa to replicate these conditions the research design and the cross cultural setting enable to explicitly control for these effects the results of the experiments support that the crowding out effect depends on the nature of the external intervention controlling vs supportive external intervention the degree of participants self determination high vs low self determination in the group a society s norms of trust and reciprocity high vs low trust within the society the results imply that outside regulations aiming to conserve natural resources risk worsening the situation when neglecting democratic legitimization as well as local community norms

rural forest management in sierra leone the role of economic in equality in facilitating collective action while significant theoretical developments have been made in the research on common pool resources heterogeneity remains a contested issue focusing on economic inequality one particular aspect o

russian gas exchange a new indicator of market efficiency and competition or the instrument of monopolist abstract russian government sanctioned the first gas trade at the saint petersburg international mercantile exchange spimex in 2012 as a part of the gas industry national strategy federal antimonopoly service fas proposed a reform aimed to boost competition among producers and to increase consumer welfare the proposal included lifting of price floor regulation for gazprom that supposed to be a vital element of transition from the government price regulation to spimex benchmark for over the counter otc segment structural reform of this scale has never happened in russia furthermore there are only descriptive studies in the existing literature this paper aims to fill this gap by testing market efficiency in spimex based on fama s theory with the well established model we test the consistency of gas futures and spot prices for unbiasedness we imply this methodology because in transition to exchange benchmark it is necessary that price is formed under market forces and is not influenced by players who have market power or dominance to make a reasonable conclusion we supplement the simulation by relevant qualitative analysis of liquidity price differentials between contracts and market concentration in the exchange the goal of the paper is to answer whether the exchange price today can be a benchmark and substitute for the state regulated price combined with qualitative analysis we argue that the scheduled deregulation counterintuitively may improve the dominance of gazprom in the domestic market

rethinking economics the potential contribution of the classics mainstream views only admit two solutions to social order separation and coercion understanding why association as a principle of order came to be excluded calls for an incursion into the history of economic ideas association was dismissed because it depends on commitment a human capacity that cannot be accommodated within the rational choice framework the classics were aware of that we argue that rational choice as it was originally conceived was not meant to be applied to contexts charged with moral force and social dilemmas we next highlight sympathy in the work of adam smith as the basis for normative commitment and association finally we discuss association in the light of several classic contributions and stress the relevance of these contributions to present day debates and socio economic challenges

a bargaining model with incomplete information about time preferences etude d un jeu de negociation strategique sequentiel avec information incomplete caracterisation d une classe d equilibres sequentiels appeles equilibres sequentiels de negociation et demonstration de l unicite de cet equilibre

bibliography of james m buchanan s publications 1949 1986 1 prices income and public policy with c l allen and m r colberg new york mcgraw hill 1954 second edition 1959 2 public principles of public debt homewood richard d irwin 1958 3 the public finances homewood richard d irwin 1960 second edition 1965 translated into spanish as hacienda publica 1968 third edition 1970 translated into japanese 1972 fourth edition with marilyn flowers 1975 fifth edition with marilyn flowers 1980 sixth edition with marilyn flowers 1986 4 fiscal theory and political economy chapel hill university of north carolina press 1960 translated into turkish 1965 translated into japanese 1972 5 the calculus of consent logical foundations of constitutional democracy with gordon tullock ann arbor university of michigan press 1962 paperback edition 1965 translated into japanese 1979 translated into spanish 1980 6 public finance in democratic process chapel hill university of north carolina press 1966 translated into japanese 1971 translated into spanish 1973 7 demand and supply of public goods chicago rand mcnally 1968 translated into italian 1968 translated into japanese 1974 8 cost and choice an inquiry in economic theory chicago markham publishing co october 1969 out of print reprinted by university of chicago press midway reprint 1979 9 academia in anarchy an economic diagnosis with nicos devletoglou basic books 1970 english edition 1971 10 theory of public choice political applications of economics edited with robert tollison university of michigan press 1972 11 lse essays on cost edited with g f thirlby london wiedenfeld and nicholson 1973 12 the limits of liberty between anarchy and leviathan chicago university of chicago press 1975 translated into japanese 1977 translated into italian 1979 translated into german 1984 13 democracy in deficit the political legacy of lord keynes with richard e wagner new york academic press 1978 translated into japanese 1979 translated into korean 1981 14 freedom in constitutional contract perspective of a political economist college station texas a m university press 1978 15 whatshould economistsdo indianapolis indiana liberty press 1979

water allocation under distribution losses comparing alternative institutions abstract the distribution of water resources is characterized by increasing returns to scale distribution links water generation to its end use standard economic analysis overlooks the interaction among these micro markets generation distribution and end use we compare water allocation when there is market power in each micro market these outcomes are compared with benchmark cases social planning and a competitive business as usual regime simulations suggest that institutions with market power in generation and end use generate significantly higher welfare than the distribution monopoly and the competitive regime however if the policy goal is to maximize the size of the grid a distribution monopoly is preferred

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

assessing consumer benefits in the ontario residential retail natural gas market ontario residential retail natural gas market why marketer entry did not help abstract when the institutions governing transactions in the energy sector changed in canada thirty years ago the changes were heralded as pro competitive for natural gas markets and subsequently authorities and some stakeholders have suggested that households would benefit from gas commodity marketer entry using an analysis of the institutions together with a model of the cost pass through regulatory process i show that households as a group would not benefit from purchasing the gas commodity from unregulated commodity marketers rather than buying it bundled with delivery from the regulated utility i next use monthly price data collected from the public web pages of these unregulated sellers to confirm the theoretical prediction depending on the time period five year natural gas contract commodity prices average more than 75 higher than the utility s regulated cost of gas on average over the sample period signing up meant paying over c 400 more for the gas commodity annually the analysis suggests that claims about the effects of policy change should be informed by a careful assessment of the specific institutional arrangements and the new incentives created by institutional evolution

effects of social norms and fractionalization on voting behaviour in japan this article uses prefecture level panel data from japan spanning the period 1989 2003 to examine the influence of social norms and fractionalization on voting behaviour the key findings obtained from analysis via the fixed effects estimation which controls for unobserved prefecture specific fixed effects are as follows 1 the voter turnout is higher in close knit communities indicating that social norms enhance voting 2 fractionalization from both economic and generational standpoints lowers the voter turnout and 3 a lack of social capital can lead to the distribution of votes being spread thinly among the competing parties

stakeholder s preference and rational compliance a comment on sacconi s csr as a model for extended corporate governance ii compliance reputation and reciprocity lorenzo sacconi s recent re statement of his social contract account of business ethics is a major contribution to our understanding of the normative nature of csr as the expression of a fair multi party agreement supported by the economic rationality of each participant however at one crucial point in his theory sacconi introduces the concept of stakeholders conformist preferences their disposition to punish the firm if it defects from the agreement refusing to abide by its own explicit csr policies and norms we take issue with him over this concept we show that the assumption of conformist preferences is a moral premise and it arguably weakens the normativity of the theory as a whole as an alternative we propose an evolutionary game theoretic approach we draw upon recent applications of evolutionary game theory to moral philosophy skyrms danielson and we use a computer simulation of the trust game according to this approach the failure of the logic of reputation which is the problem conformist preferences were introduced to solve is overcome through the dynamics of interaction

motivation crowding in environmental protection evidence from an artefactual field experiment abstract this paper examines how motivation crowding and social image affect environmental conservation decisions an artefactual field experiment conducted in bolivia is used to reproduce the trade off between individual and social benefits in natural resource use and test the effect of non monetary and non regulatory incentives on pro social behavior for environmental conservation the results show the presence of a social norm prescribing positive contribution towards environmental protection and that external incentives have heterogeneous effects on pro social behavior depending on how they influence reputation and self image the experimental results differ from those of analogous experiments conducted in the laboratory and are instead consistent with those from field experiments on common pool resource management this fact suggests caution in generalizing conclusions reached in the laboratory to different settings and populations

an ex post welfare analysis of natural gas regulation in the industrial sector the current structure of the us natural gas industry is a result of the evolution of regulatory policy over the past three decades which began with the deregulation of natural gas prices at the wellhead ngpa of 1978 and culminated with the deregulation of interstate transportation of natural gas ferc order 636 focusing on the industrial sector this paper estimates the welfare and price effects associated with the changes in regulatory policy overtime actual prices converge towards estimated equilibrium prices consequently deadweight losses diminished an estimated 15 47 billion 2003 dollars of welfare loss had been incurred from 1977 to 2000

small business owner managers perceptions of business ethics and csr related concepts recent academic articles point to an increased vagueness and overlap in concepts related to business ethics and corporate responsibility further the perception of these notions can differ in the small business world from the original academic definitions this article focuses on the cognition of small business owner managers given the impact of small business owner managers on their ventures corporate responsibility and ethical issues can take a different route in smes the small business owner manager is able to shape the corporate culture and to enact values other than profit adopting a cognitive perspective we have identified how the small business owner manager makes sense of notions linked to corporate social responsibility csr and business ethics the concept of sensemaking has recently been applied to csr basu and pallazzo 2008 cramer et al 2006 applying a cognitive perspective to small business owners may help in explaining specific phenomena found within small business ownership for this research the repertory grid technique rgt is used a method that has not previously been widely applied in the business and society field

the social contract in the laboratory an experimental analysis of self enforcing impartial agreements social contract theories are based on the idea of the consent of the governed according to which norms rules and institutions constitutions in particular must be based on the general consensus or unanimous consent of the individuals who are subject to the regulation the article reports the results of an experiment aimed at identifying the conditions for the emergence of a self enforcing social contract in the laboratory our main result is that spontaneous compliance with a non self interested norm of distribution is likely to occur if individuals have been part of the same process of ex ante agreement on the distributive norm under a veil of ignorance to which the emergence of reciprocal expectations of conformity is also related this is in line with rawls s idea of an endogenous sense of justice stabilizing ex post institutions that would have been ex ante chosen in the original position

optimal monetary policy with missing markets in real business cycle models with spot markets agents respond optimally to fluctuations by varying their labor supply while this is individually optimal the employment volatility that results is efficient the inefficiency is due to the lack of forward markets for labor and the consequent inability of the young to insure against future shocks a real business cycle model is constructed in which an active monetary policy accommodating past price shocks to prevent the expectation of price reversion pareto dominates a stable moeny stock by stabilizing employment over the cycle stable employment approximates the outcome with complete insurance markets the young would like to sell a fixed volume of labor forward allowing less risk averse agents to bear the volatility in the spot labor market these results undermine the use of the full information competitive equilibrium as a benchmark for policy analysis in spot market models copyright 1989 by the london school of economics and political science

the management of common property resources collective action as an alternative to privatisation or state regulation can locally based collective action be a viable way to manage common property resources many writers on collective action and common property are sweepingly pessimistic about the ability of the people who face problems of common property to organize sustainable patterns of use for themselves this paper shows with reference to prisoners dilemma garett hardin s tragedy of the commons and mancur olson s logic of collective action that the analytical basis for this pessimism is weak in many situations of village based common property resource use there can thus be no general presumption that the collective action route to common property resource management will fail any more than there can be a general presumption that it will work the paper suggests a number of general factors to do with the characteristics of the resources the user group and group state relations on which chances of success depend

coordination versus prisoners dilemma implications for international cooperation and regimes the study of political institutions in general and international cooperation in particular has been beneficially influenced by the prisoners dilemma pd game model but there is a mistaken tendency to treat pd as representing the singular problem of collective action and cooperation by relaxing the assumptions of 2 2 games and developing an alternate model of the coordination game i show how some cooperation problems have very different properties from those found in pd the analytical results of the two games are compared across several important dimensions number of strategies available number of iterations of the game numbers of players and the distribution of power among them the discussion is illustrated with specific problems of international cooperation and the implications of alternative cooperation problems for the formation and performance of international regimes are explored the basic solutions for pd and coordination have divergent ramifications for the institutionalization stability and adaptability of regimes and for the role of hegemony in the international system however the coordination model does not replace the pd model but complements and supplements it as a way to understand the diversity of political institutions these results are widely applicable to areas of politics beyond international relations

social contract i harsanyi and rawls this paper analyzes the bargaining problem faced by two individuals in the rawlsian original position along strictly rawlsian lines the resulting model closely resembles that used by j harsanyi in defending utilitarianism three difficulties with harsanyi s version of the model are identified these concern the underlying symmetry assumption the origin of the necessary interpersonal comparison of utility and the reasons why individuals should be regarded as committed to the social contract negotiated in the original position the paper seeks to resolve the first two difficulties by supposing that the extended sympathy preferences required in harsanyi s model are chosen strategically by evolutionary forces

a critical assessment of transaction cost theory and governance of public services with special reference to water and sanitation this is a pre copyedited author produced version of an article accepted for publication in cambridge journal of economics following peer review the version of record hulya dagdeviren and simon a robertson a critical assessment of transaction cost theory and governance of public services with special reference to water and sanitation cambridge journal of economics vol 40 6 1707 1724 january 2016 is available online at https doi org 10 1093 cje bev079

price and productivity change following deregulation the u s experience no real world market is likely to be perfectly contestable anymore than it is to be perfectly competitive yet like its predecessor the contestability benchmark proves highly useful as a framework for evaluating policies and outcomes under the contestability framework entry and price regulation is deemed inappropriate in industries which do not have system wide natural monopoly characteristics on this criterion brokerage airline trucking long distance telephone and terminal equipment should not be regulated true these industries may be characterised by some elements of scale economy such as economies of vehicle size so that at some level city pair routes only a few firms may serve but industry performance need not suffer in such an unregulated environment impediments to entry and exit not concentration or scale of operations may be the primary source of prices that are not welfare optimal even in the presence of natural monopoly characteristics it is important to isolate those markets which are not yet structurally competitive as in the case of coal shipments over which the railroads are judged to possess market dominance or in local telephone service it can be argued that the latter should continue to be overseen by regulators while markets which are controlled by competitive forces deriving from actual or potential competition or taking other indirect but effective forms should be free from traditional regulation thus unlike privatisation policy in the united kingdom described in the companion article by kay and thompson i985 us deregulatory policy can be construed as having a coherent rationale the nature and extent of deregulation match remarkably well with the policy prescription of the theory this paper analyses the consequences that have emerged under deregulation in terms of the following behavioural properties predicted by multi product competition and contestability theory a variety of products will emerge each of which will yield zero economic profit the revenues from any subset of the products must exceed the incremental costs of those products so that no cross subsidy can exist prices for each product will equal or exceed marginal costs and an equilibrium market structure will minimise costs for the industry see baumol

governance of the commons a role for the state the paper examines property regimes and common pool resources using examples and case studies the relative merits of private community and state based rights are detailed the insights from the case studies and an analysis of institution costs provide a tentative framework for understanding the role of the state in the governance of the commons

social benefit certification as a game tourism ecocertification programs persist and proliferate despite low market penetration and apparent consumer indifference this has been viewed simply as an early adoption phase a two decade historical analysis of development patterns for 17 programs however suggests that they can be analysed as a multi move political game between corporate and civic advocates where neither can quit without losing the political game framework yields predictions which are testably different from a pure market early adopter framework it also draws a key distinction between consumer benefit and social benefit measures applicable to corporate social responsibility initiatives in many industry sectors

shareholder theory and kant s duty of beneficence this article draws on the moral philosophy of immanuel kant to explore whether a corporate duty of beneficence to non shareholders is consistent with the orthodox shareholder theory of the firm it examines the ethical framework of milton friedman s argument and asks whether it necessarily rules out the well being of non shareholders as a corporate objective the article examines kant s distinction between duties of right and duties of virtue the latter including the duty of beneficence and investigates their consistency with the shareholder theory the article concludes that it is possible within the ethical framework of shareholder theory for managers to pursue directly the happiness of non shareholders furthermore shareholders have a duty to hold management to account for the moral consequences of the firm s activities on non shareholding stakeholders

property relations and economic development the other land reform abstract continued concern for development has led to the suggestion that private property rights should be created to stimulate economic development this suggestion derives from an incomplete understanding of the property relations on the public domain lands in the arid tropics and from a confusion of cause and effect between property and economic productivity a model of the private public boundary in land is developed that challenges the view that wealth would increase if land at the extensive margin were privatized the various types of property regimes in land are defined and explained

informational diversity over time and the optimality of monetary equilibria abstract the temporal realizations of a random state variable in an overlapping generations model create an informational diversity between members of different generations and require a reexamination of the optimality that competitive equilibria might display in such an environment using an optimality criterion that reflects this informational diversity we prove the optimality of competitive equilibrium in a model with a fixed stock of fiat money a single spot market and good endowments that follow a markov process the need for an optimality criterion that incorporates informational diversity is further motivated by studying the same model with the operation of complete contingent commodities markets

who should control a corporation toward a contingency stakeholder model for allocating ownership rights a number of companies allocate ownership rights to stakeholders different from shareholders despite the fact that the law attributes these rights to the equity holders this article contributes to an understanding of this evidence by developing a contingency model for the allocation of ownership rights the model sheds light on why companies despite pressures from the law vary in their allocation of ownership rights the model is based on the assumption that corporations increase their chance to survive and prosper if the stakeholders supplying critical contributions receive the ownership rights according to the model critical contributions involve 1 contractual problems due to specific investments long term relationships and low measurability 2 the assumption of the uncertainty resting on the company and 3 the supply of scarce and valuable resources the model is dynamic because it also provides a basis for understanding why the allocation of ownership rights changes with time finally the article presents the strategies companies can use to realize an efficient distribution of ownership rights among their stakeholders

optimal wage indexation foreign exchange intervention and monetary policy this paper deals with the design of optimal monetary policy and with the interaction between the optimal degrees of wage indexation and foreign exchange intervention the model is governed by the characteristics of the stochastic shocks which affect the economy and by the information set that individuals possess because of cost of negotiations nominal wages are assumed to be precontracted and wage adjustments follow a simple indexation rule that links wage changes to observed changes in price the use of the price level as the only indicator for wage adjustments may not permit an efficient use of available information and may result in welfare loss the analysis specifies the optimal set of feedback rules that should govern policy aiming at the minimization of the welfare loss these feedback rules determine the optimal response of monetary policy to changes in exchange rates interest rates and foreign prices the adoption of the optimal set of feedback rules results in the complete elimination of the welfare cost arising from the simple indexation rule and from the existence of nominal contracts since optimal policies succeed in the elimination of the distortions issues concerning the nature of contracts and the implications of specific assumptions about disequilibrium positions become inconsequential the analysis then proceeds to examine the interdependence between the optimal feedback rules and the optimal degree of wage indexation it is shown that a rise in the degree of exchange rate flexibility raises the optimal degree of wage indexation one of the key conclusions is the proposition that the number of independent feedback rules that govern a policy must equal the number of independent sources of information that influence the determination of the undistorted equilibrium thus it is shown that with a sufficient number of feedback rules for monetary policy there may be no need to introduce wage indexation it is also shown that an economy that is not this abstract was borrowed from another version of this item

optimal departures from marginal cost pricing focuses on departures from marginal cost pricing optimal allocation or resources level of tax revenue that will be collected by the government theorems developed for resource allocation ebsco

a social contract account for csr as an extended model of corporate governance i rational bargaining and justification this essay seeks to give a contractarian foundation to the concept of corporate social responsibility csr meant as an extended model of corporate governance of the firm it focuses on justification according to the contractarian point of view leaving compliance and implementation problems to a related article sacconi 2004b forthcoming in the journal of business ethics it begins by providing a definition of csr as an extended model of corporate governance based on the fiduciary duties owed to all the firm s stakeholders then by establishing the basic context of incompleteness of contracts and abuse of authority it analyses how the extended view of corporate governance arises directly from criticism of the contemporary neo institutional economic theory of the firm thereafter an application of the theory of bargaining games is used to deduce the structure of a multi stakeholder firm on the basis of the idea of a constitutional contract which satisfies basic requirements of impartial justification and accordance with intuitions of social justice this is a sequential model of constitutional bargaining whereby a constitution is first chosen and then a post constitutional coalition game is played on the basis of the unique solution given to each step in the bargaining model the quest for a prescriptive theory of governance and strategic management is accomplished so that i am able to define an objective function for the firm consistent with the idea of csr finally a contractarian potential explanation for the emergence of the multi fiduciary firm is provided