multiple communities and controlling corruption corruption presents an assurance problem to businesses all businesses are best off if none act corruptly but in the event that corruption occurs are better off if they act corruptly than if they do not and because there is no assurance that other actors are not cheating a business does not know how to act the usual solution to an assurance problem criminal sanctions imposed on cheaters does not work in a corrupt system integrative social contract theory suggests a solution to the assurance problem application of integrative social contract theory to corruption demonstrates that in the case of corruption it has advantages over international law and that the theory s elegance lies in its recognition of norms generated by multiple communities

corruption south african multinational enterprises and institutions in africa we examine the responses of south african multinational enterprises mnes to corruption in african markets in the context of institutional voids corruption is a source of uncertainty and additional transactional costs for mnes and it necessitates a strategic response the research employs a qualitative study of a sample of mnes with experience in internationalising into africa the results indicate that corruption in african markets is pervasive and closely associated with the institutional voids in these countries mnes see themselves as institution takers responding to countries institutional makeup at the organisational and individual level but fail to fully appreciate their impact on institutions both positively and negatively rather mnes focus on strategic responses at the organisational level to address corruption operationally in the host country we add to the existing literature by providing a dynamic framework of the complex webs of association between institutions mnes and corruption in conditions of economic underdevelopment the research suggests that mnes do not need to get caught in a vicious cycle whereby they perpetuate corruption in conditions of underdevelopment and institutional voids but instead can contribute towards a virtuous cycle through which they institutionalise ethical foundations

an institution based view of international business strategy a focus on emerging economies leveraging the recent research interest in emerging economies this perspective paper argues that an institution based view of international business ib strategy has emerged it is positioned as one leg that helps sustain the strategy tripod the other two legs consisting of the industry and resource based views we then review four diverse areas of substantive research 1 antidumping as entry barriers 2 competing in and out of india 3 growing the firm in china and 4 governing the corporation in emerging economies overall we argue that an institution based view of ib strategy in combination with industry and resource based views will not only help sustain a strategy tripod but also shed significant light on the most fundamental questions confronting ib such as what drives firm strategy and performance in ib

are emissions permits regressive grandfathered emissions permits redistribute income to wealthy households by creating firm rents that ultimately accrue to shareholders consequently they can be highly regressive even if the poor do not have large budget shares for polluting goods using an analytical model this paper estimates the burden of emissions permits borne by different income groups under control of power plant emissions of carbon so2 and nox we also compare the burden borne by poor households under permits with that under emissions taxes performance standards technology mandates and input taxes and we show how the social costs of policies differ from efficiency costs when society has aversion to inequality

factors influencing the incidence of bribery payouts by firms a cross country analysis this article explores micro and macro level variables that influence the incidence of bribery payouts by firms a rich data set with information from 55 countries was utilized to achieve this objective results of logit regression models indicate that there are a number of micro and macro level factors that significantly affect the incidence of bribery payouts this suggests that it is not only the characteristics of a firm but also the environment of doing business that affect the firm s bribery decision the results of this study provides information that may help firms develop strategies to reduce corruption in their respective industries and thereby improve their image of corporate social responsibility the analysis also points to possible policy directions that governments could undertake in order to reduce the incidence of bribery in their country

optimal tax transfer systems and redistributive policy in this paper we develop optimal yardsticks to gauge the effectiveness of given tax and benefit policies in reducing inequality we show that the conjunction of the optimal tax and optimal benefits policies constitutes the optimal tax and benefit policy given the tax and benefit budget sizes a decomposition formula enables trends in the inequality impact of taxes and benefits to be explained in terms of changing policy effectivess targeting and budget size effects the analysis incorporates a distributional judgement parameter for sensitivity analysis and concludes with an examination of the finnish case for the period 1971 1990

bureaucracy infrastructure and economic growth evidence from u s cities during the progressive era recent work in the sociology of economic development has emphasized the establishment of a professional bureaucracy in place of political appointees as an important component of the institutional environment in which private enterprise can flourish i hypothesize that establishment of such a bureaucracy will lengthen the period that public decision makers are willing to wait to realize the benefits of expenditures leading to allocation of a greater proportion of government resources to long gestation period projects such as infrastructure this hypothesis can be tested using data generated by a natural experiment in the early part of this century when a wave of municipal reform transformed the governments of many u s cities controlling for city and time effects adoption of civil service is found to increase the share of total municipal expenditure allocated to road and sewer investment other estimates imply that this increased share raises the growth rate of city manufacturing employment by one half percent per year this abstract was borrowed from another version of this item

ethical social index numbers and the measure ment of effective tax benefit progressivity in this paper we propose a general method for constructing measures both relative and absolute of effective tax benefit progressivity from social welfare functions relative measures compare the after tax or benefit distribution of income with the distribution that would result if the burden were imposed proportionally absolute measures use the equal taxation of individuals as a benchmark these indices are related to relative and absolute indices of inequality our relative indices are generalizations of the gini index based musgrave thin measure of effective progressivity we compare our general indices to the proposals of kakwani khetan and poddar and suits

indexing government programs for changes in the cost of living this article presents social cost of living indexes constructed from an econometric model of aggregate consumer behavior the econometric price index has the same average inflation rate as a tornqvist price index over the period 1947 1995 but rises less rapidly after 1973 group cost of living indexes are presented for white and nonwhite male and female headed and elderly and nonelderly households elderly households have experienced a slightly higher rate of inflation than the nonelderly since 1980 we recommend indexing government programs such as social security by social and group cost of living indexes rather that the consumer price index

ethical reflections on the opportunities and challenges for international business in china this essay provides a brief overview of ethical issues and challenges relevant to international firms doing business in china those issues include the uncertainties of further economic liberalization within an authoritarian government framework the impacts of bribery and low transparency on competitiveness and profitability uncertainty about what ethics and values within the chinese cultural ethos will prevail in shaping economic behavior questions about the rights and status of chinese workers and significant challenges of environmental sustainability

bribery in international business transactions globalization leads to cross border business transactions between societies with very different norms and regulations regarding bribery bribery in international business transactions can be seen as a function of not only the demand for such bribes in different countries but the supply or willingness to provide bribes by multinational firms and their representatives this study addresses the propensity of firms from 30 different countries to engage in international bribery the study incorporates both domestic economic development culture and domestic corruption in the supplying country and international factors those countries patterns of trade and involvement in international accords in explaining the willingness to bribe abroad the propensity to provide bribes was the lowest when corruption was not tolerated in the multinational firms home countries when the firms countries were signatories of the organization for economic cooperation and development oecd anti bribery convention and when those countries traded heavily with wealthier nations further these findings are maintained when controlling for levels of economic development and cultural values in the supplying country in terms of culture firms from high power distance countries showed a somewhat greater propensity for providing bribes in transactions with less developed nations

aggregate consumer behaviour and the measurement of inequality this paper presents an approach to inequality measurement based on an econometric model of aggregate consumer behaviour the novel feature of this model is that systems of individual demand functions can be recovered uniquely from the system of aggregate demand functions we present methods for evaluating social welfare based on an explicit social welfare function this social welfare function incorporates measures of individual welfare based on indirect utility functions for all consumer units we develop indexes of inequality based on actual and potential levels of social welfare

perceptions of country corruption antecedents and outcomes globalization has increased the need for managers and future managers to predict the potential for country corruption this study examines the relationship between hofstede s cultural dimensions and how country corruption is perceived power distance individualism and masculinity were found to explain a significant portion of the variance in perceived corruption a significant portion of country s risk trade flow with u s a foreign investment and per capita income was explained by perceived corruption

rationalization overcompensation and the escalation of corruption in organizations an important area of business ethics research focuses on how otherwise normal and law abiding individuals can engage in acts of corruption key in this literature is the concept of rationalization this is where individuals attempt to justify past and future corrupt deeds to themselves and others in this article we argue that rationalization often entails a process of overcompensation whereby the justification forwarded is excessive in relation to the actual act such over rationalization provides an impetus for further and more serious acts of illegality using a number of high profile cases it is argued that this dynamic gap between the act and excessive rationalization can explain why corruption often escalates in severity and scope in the organization

corporate social responsibility theories mapping the territory the corporate social responsibility csr field presents not only a landscape of theories but also a proliferation of approaches which are controversial complex and unclear this article tries to clarify the sit uation mapping the territory by classifying the main csr theories and related approaches in four groups 1 instrumental theories in which the corporation is seen as only an instrument for wealth creation and its social activities are only a means to achieve economic results 2 political theories which concern themselves with the power of corporations in society and a responsible use of this power in the political arena 3 integrative theories in which the corporation is focused on the satisfaction of social demands and 4 ethical theories based on ethical responsibilities of corporations to society in practice each csr theory presents four dimensions related to profits political performance social demands and ethical values the findings suggest the necessity to develop a new theory on the business and society relationship which should integrate these four dimensions

consumer expenditures and inequality an analysis based on decomposition inequality in u s consumption expenditures is examined using the lerman and yitzhaki covariance method for decomposing the gini coefficient by factors from the decomposition nonparametric estimates of elasticities with respect to total expenditures are derived using data from the 1987 u s consumer expenditure interview survey the overall gini based on total annual consumption expenditures is 0 33 consistent with parametric expenditure elasticities the gini expenditure elasticities for household operations apparel and services and entertainment are relatively high an implication of this result is that taxing such goods and services will increase the progressivity or reduce the regressivity of the tax system copyright 1993 by mit press

the redistribution of income in canada this original study challenges the widely held belief that government policies to redistribute income have made canada a more egalitarian state the author bases his conclusions on extensive documentation of the real effect of changes in taxes transfers and government expenditures

anchoring inflation expectations in the face of oil shocks in the proximity of zlb a tale of two targeters this paper applies a n ardl framework to two longstanding inflation targeting policy regimes in order to assess the relation between oil prices dynamics and inflation expectations and the further consequences created by a proximal zlb situation the application is based on data from january 1994 to june 2018 for new zealand and the uk we focus on oil price shocks as a variable of interest and this was found to have an asymmetric effect on inflation expectations one further key finding is that the real effective exchange rate has significant impacts on inflation expectations and this is indicative of an exchange rate pass through to inflation via an inflation expectations channel in general we find that inflation exchange rate money supply output growth unemployment and fiscal deficit surplus have significant implications for inflation expectations inflation expectations are also influenced by their past behaviour indicating adaptive inflation expectations this study contributes to the debate on the inflation targeting at zlb

understanding the demand side issues of international corruption in global business business organizations and their representatives frequently encounter corruption and may be the perpetrators victims or simply participants in such acts while international corruption has existed in multiple forms for several years many individuals companies nations and international organizations are currently attempting to reduce or eliminate corrupt acts because of their harmful effects on local economies and the quality of life of citizens several of these corruption curtailment efforts have been directed toward the supply side of corruption i e those who make corrupt payments in developing an understanding of corruption however and formulating strategies for its reduction consideration must also be given to the demand side of corruption i e those who demand and accept corrupt payments accordingly this study examined the demand side of corruption and several related factors in the categories of government economy and poverty education geography and culture analysis of these factors employed the corruption perceptions index cpi formulated annually by transparency international ti and other sources several factors in each of the five categories were found to correlate significantly with perceived corruption and strategies for addressing these issues were developed and discussed

the equal absolute sacrifice principle revisited abstract we summarize the literature on equal absolute sacrifice income taxes and make some extensions we adapt the utilitarian equal sacrifice criterion to a wide class of rank dependent social welfare functions and find that liabilities depend on both income and position in the distribution we investigate whether such taxes need be progressive using a combination of analytics and simulation and in the process uncover tax functions not previously recognized as equating sacrifices finally out of horizontal equity considerations a new concept of the equal treatment of equals by an income tax emerges with implications for future work whose significance is discussed

the social cost of living index abstract household cost of living indexes reflect household preferences analogous indexes for groups of households require a corresponding concept of group preferences in this paper i investigate the social cost of living index a group index based on the bergson samuelson social welfare function i first define the index and examine its properties under the assumption that the investigator constructing it expresses his distributional judgments in an explicit bergson samuelson social welfare function i then examine the maximizing society and the independent society two cases in which the index can be constructed from the information contained in the market demand functions in these two cases a laspeyres index i e the fixed weight index based on the reference consumption pattern is an upper bound on the exact social cost of living index in general however the assumptions required to place bounds on the social cost of living index are much more likely to be satisfied than those required to place analogous bounds on a household s cost of living index

the impact of corruption on investment predictability matters abstract this paper argues that it is not only level of corruption that affects investment but also the nature of corruption corruption regimes that are more predictable in the sense that those seeking favors from government do obtain those favors have less negative impact on investment than those that are less predictable using the data collected by world bank in preparing the world development report of 1997 we provide empirical support for the conjecture

between corruption and development the political economy of state robbery in nigeria the study is based on the hypothesis that there is a link between corruption and underdevelopment and that corruption is responsible for the shortcomings and poor performance of the nigerian political economy in addition to examining the historical trajectory of corruption in nigeria this paper delves into the underlying causes of corruption as well as its cumulative impact on national development in the country lastly the paper assesses some public and private sector initiatives that have been taken and that might stem the tide of corruption

inflation forecast targeting implementing and monitoring inflation targets abstract inflation targeting is shown to imply inflation forecast targeting the central bank s inflation forecast becomes an explicit intermediate target inflation forecast targeting simplifies both implementation and monitoring of monetary policy the weight on output stabilization determines how quickly the inflation forecast is adjusted towards the inflation target money growth or exchange rate targeting is generally inferior than inflation targeting and leads to higher inflation variability commitment to target rules may be better than commitment to instrument rules

the impact of corruption on entry strategy evidence from telecommunication projects in emerging economies with globalization and the growth in emerging economies multinational enterprises mnes now frequently confront challenges associated with corrupt governments already a growing body of research has demonstrated that corruption significantly reduces a countrys aggregate inflows of foreign direct investment through its effects on firm performance we move the analysis of corruption from aggregate financial flows toward managerial theory and practice by examining how firms adjust their strategy for entering foreign markets in corrupt environments and how different types of corruption affect firms choices building on institutional theory we predict that mnes will respond to pervasive and arbitrary corruption in a host country by selecting particular types of equity and nonequity modes of entry using data on 220 telecommunications development projects in 64 emerging economies we find that firms adapt to the pressures of corruption via short term contracting and entry into joint ventures we also find that the arbitrariness surrounding corrupt transactions has a significant impact on firms decisions in addition to the overall level of corruption in contrast to extant research we show that mnes use nonequity entry modes or partnering as an adaptive strategy to participate in markets despite the presence of corruption

investor perceptions of financial misconduct the heterogeneous contamination of bystander firms we suggest that when one firm reveals financial misconduct others in the industry suffer lower valuations but do so heterogeneously to understand this heterogeneity we conceptualize such contamination as a generalization instantiation process investors generalize the culpability to the industry category and perceive the instantiation of generalized culpability within the industry bystander firms this theoretical separation allows us to hypothesize the factors that affect the degree to which both of these elements of the contamination process occurs specifically we predict that characteristics of the misconduct firm or event factors that lend to investors familiarity with the misconduct firms or that prompt attributions of blame for the misconduct affect the potency of the generalization of culpability to the industry while characteristics of the industry bystander firms investors familiarity with such firms or factors that lend to investors perceptions that they have strong governance affect the firms vulnerability to being perceived as instantiating the generalized culpability we tested our hypotheses on a sample of 725 firms across 84 financial misconduct events and the results of our event analyses broadly support our predictions our study thus has implications for future research on the social view of financial markets organizational misconduct and corporate governance

consumption needs and inequality most empirical studies demonstrating a u turn in inequality in the united states are based on the distribution of income however utility is derived from the consumption of goods and services and there are many reasons to expect the distribution of expenditure to be different from the distribution of income the author demonstrates that consumption based inequality indexes actually decrease over the postwar era this conclusion differs from the stylized facts because of differences in the income and expenditure distributions differences also arise from the inclusion of equivalence scales to account for the different needs of heterogeneous households copyright 1994 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

catalyzing corporate commitment to combating corruption this article considers what policy reforms may help catalyze corporate commitment to combating corruption the starting point for this discussion is a voluntary corporate principles approach to self regulation such an approach should seek to encourage corporations to implement effective compliance and ethics programs and to disclose information related to their anti corruption activities to relevant stakeholders although a corporate principles approach is a private initiative there is a significant role for the public sector this article discusses some of the ways that the public sector can support and further the goals of a corporate principles approach to combating corruption the reforms discussed in this article include amnesty programs for corporations that self disclose corrupt payments the use of corporate monitors in the enforcement of anti corruption laws expanding the definition of corruption in criminal laws sustainability reporting indicators related to bribery and the implementation of multi stakeholder initiatives to support a corporate principles approach

did we lose the war on poverty was the war on poverty a failure or a success official u s poverty statistics based on household income imply that the war on poverty ended in failure according to the bureau of the census the proportion of the u s population below the poverty level of income reached a minimum of 11 1 percent in 1973 this ratio rebounded to 15 2 percent in 1983 and has fluctuated within a narrow range since then giving rise to the widespread impression that the elimination of poverty is difficult or even impossible 1 however poverty estimates based on household consumption imply that the war on poverty was a success jorgenson and slesnick 1989 showed that the proportion of the u s population below the poverty level of consumption fell to 10 9 percent in 1973 only slightly below the poverty incidence as measured by income in that year the poverty ratio for consumption declined further reaching 6 8 percent in 1983 slesnick 1993 presents estimates of poverty ratios incorporating consumption data from the consumer expenditure survey conducted by the bureau of labor statistics the poverty rate for consumption fell to 9 7 percent in 1973 and reached a low of 8 7 percent in 1978 before rising to 12 0 percent in 1980 the consumptionbased poverty rate then declined to a new low of 8 3 percent in 1986 ending at 8 4 percent in 1989 calibrating consumption to levels reported in the u s national income and product accounts slesnick obtained a poverty rate of 4 1 percent in 1978 and a postwar low in 1989 of only 2 2 percent 2 1 the persistence of poverty as reflected in the official statistics is discussed by sawhill 1988 2 slesnick 1993 presented a detailed decomposition of the differences between estimates of poverty rates based on consumption and the official estimates based on income neither measures of consumption from the consumer expenditure survey nor measures of income used by the bureau of the census include in kind transfers slesnick 1996 discussed the effects of these transfers on measures of poverty

the impact of central bank independence on the performance of inflation targeting regimes abstract this paper examines the effects of inflation targeting on inflation in both advanced and emerging economies we do not detect significant effects in advanced economies and only find small benefits in emerging economies in line with previous studies however when we differentiate the impact of inflation targeting based on the degree of central bank independence we find large effects in emerging economies with low central bank independence our results therefore suggest that central bank independence is not a prerequisite for countries to experience significant declines in inflation following the adoption of inflation targeting furthermore we provide evidence that one channel through which inflation targeting lowers inflation more in countries with low central bank independence is the reduction of budget deficits following the adoption of an inflation target

an evolutionary approach to understanding international business activity the co evolution of mnes and the institutional environment this paper examines the co evolution of mne activities and institutions external and internal to the firm we develop a theoretical framework for this analysis that draws on the more recent writings of douglass north on institutions as a response to complex forms of uncertainty associated with the rise in global economic interconnectedness and of richard nelson on the co evolution of technology and institutions we link historical changes in the character of mne activities to changes in the institutional environment and highlight the scope for firm level creativity and institutional entrepreneurship that may lead to co evolution with the environment we argue that the main drivers for institutional entrepreneurship are now found in the increasing autonomy of mne subsidiaries thus mne agency derives from more decentralized forms of experimentation in international corporate networks which competence creating nodes of new initiatives can co evolve with local institutions unlike most other streams of related literature our approach connects patterns of institutional change in wider business systems with more micro processes of variety generation and experimentation within and across individual firms this form of co evolutionary analysis is increasingly important to understanding the interrelationships between mne activities and public policy

corruption and development a review of issues in this paper we start with a discussion of some of the different denotations of the problem of corruption we then consider the ways in which the damaging consequences of corruption operate in a developing economy while not ignoring its possible redeeming features in some cases we pursue the question of why corruption is perceptibly so different in different societies and also persistent finally we examine the feasible policy issues that arise in this context

a comparison of nigerian to american views of bribery and extortion in international commerce this study investigates the differences in the way bribery and extortion is perceived by two different cultures american and nigerian two hundred and forty american business students and one hundred and eighty nigerian business students were presented with three scenarios describing a businessman offering a bribe to a government official and three scenarios describing a businessman being forced to pay a bribe to an official in order to do business the reidenbach robin instrument was used to measure the ethical reactions of the two samples to these scenarios results indicate that ethical reactions to bribery and extortion vary by a the nationality of the person offering the bribe and b the country where the bribe is offered in addition nigerians perceived some of the scenarios as being less unethical than did americans

does participation in the conservation reserve program impact the economic well being of farm households this study uses u s farm household survey data to examine how participation in the conservation reserve program crp affects farm household economic well being further the study also examines the effects of crp participation on farm household consumption income and imputed savings in contrast to previous studies that assume the relationships are homogenous across the population quantile regression is used to investigate the association between crp participation across the entire distribution of farm household consumption and income empirical findings suggest that the effect of crp participation on household economic well being differs across the income and consumption distribution for households in the lower percentiles of the distribution the crp participation is associated with an increase in household consumption but a decrease in farm household income and savings in contrast farm households at the median and higher income and consumption quantiles participation in crp is associated with lower levels of household consumption and income but with higher levels of savings

the foreign corrupt practices act the failure of the self regulatory model of corporate governance in the global business environment the american regulatory model of corporate governance rests on the theory of self regulation as the most effective and efficient means to achieve corporate self restraint in the marketplace however that model fails to achieve regular compliance with baseline ethical and legal behaviors as evidenced by a century of repeated corporate debacles the most recent being enron worldcom and refco seemingly impervious to its domestic failure congress imprinted the same self regulation paradigm on legislation restraining global business behavior the foreign corrupt practices act this anti bribery initiative prohibits unethical and illegal payments made to foreign public officials in an effort to eradicate bribery as a rational choice global market entry strategy however this paper illustrates using newly complied statistics from 1977 to 2008 that the fcpa has not had a dramatic impact on u s global corporate behavior despite its recent high profile coverage and the tough regulatory rhetoric about corporate compliance the paper also extends the prior cragg and woof fcpa efficiency study and provides current empirical evidence to resolve several unanswered questions raised by that earlier study

consumption technology and the intrafamily distribution of resources adult equivalence scales reexamined adult equivalence scales are supposed to measure differences in the needs of households of different demographic composition formally they purport to measure the change in the cost of attaining a certain welfare level when the family composition varies this paper shows that the definition and the measurement of these scales depend crucially on the concept of welfare used when welfare is the utility parents derive from their own consumption one has to assume separability of parents and children s consumption this assumption implies that the only way of imputing the intrafamily allocation of resources is by observing the consumption patterns of adult goods regardless of the definition used one cannot separate the factors reflecting home technology i e needs from those determining the intrafamily distribution rule i e wants out of consumption data

high level politically connected firms corruption and analyst forecast accuracy around the world the international business ib literature has widely recognized political forces as major factors that complicate the strategic decisions of multinational enterprises mnes analyses by financial intermediaries can help to reduce the risk of information asymmetry caused by such factors using firm level data from 17 jurisdictions between 1997 and 2001 this study investigates the association between a firm s high level political connections and earnings forecasts made by financial analysts an important group of financial intermediaries we find that after controlling for other determinants of forecast accuracy analysts experience greater difficulty in predicting the earnings of firms with political connections than those of firms with no such connections however in jurisdictions in which corruption level is relatively high earnings forecast accuracy is influenced more by a firm s political connections our findings contribute to the ib literature by demonstrating that political connections exacerbate the information asymmetry between investors and managers and also that anti corruption measures can curb the adverse effect of political connections on the corporate information environment these findings bear the practical implication that mnes must consider political issues when making resource allocation decisions

eight questions about corruption this paper will discuss eight frequently asked questions about public corruption 1 what is corruption 2 which countries are the most corrupt 3 what are the common characteristics of countries with high corruption 4 what is the magnitude of corruption 5 do higher wages for bureaucrats reduce corruption 6 can competition reduce corruption 7 why have there been so few recent successful attempts to fight corruption 8 does corruption adversely affect growth

the impact of the changing us family structure on child poverty and income inequality this paper analyses links between rising income inequality child poverty and one parent families in the united states from 1971 to 1989 one test reallocated weights so that 1989 proportions of children by mothers marital status resembled the 1971 distribution a second method used 1 simulated marriages among unmarried men and unmarried mothers in 1989 to reproduce 1971 marital patterns and 2 earnings responses induced by the simulated marriages the results indicate that the trend away from marriage accounted for almost half the increase in child income inequality and more than the entire rise in child poverty rates excerpt

the ethics of commercial bribery integrative social contract theory meets transaction cost economics this article provides an isct analysis of commercial bribery focused on transaction cost economics in the language of antitrust commercial bribery is a form of vertical arrangement subject to the same efficiency analysis that has found other vertical arrangements potentially beneficial to consumers my analysis shows that actions condemned as commercial bribery in the honda case 1996 may well have benefited honda s dealer network once promotional free riding and other forms of rent seeking by dealers are considered i propose that the term commercial bribery should be avoided until after an isct analysis shows that the community is likely to have been harmed the term third party payments is a more ethically neutral term with which to begin the analysis

household equivalence scales and welfare comparisons abstract the ratio of cost functions of different households facing the same prices and attaining the same utility level is a true cost of demographic characteristics index this index is independent of a base level of income or utility ib if and only if it equals a ratio of household equivalence scales that are themselves ib applied cost index and equivalence scales specifications are usually ib this paper describes the general restrictions on cost functions and social welfare functions required for ib scales and for their use in welfare analysis

fluidity of regulation csr nexus the multinational corporate corruption example corporate social responsibility csr is a relatively undeveloped concept despite its increasing importance to corporations one difficulty is the possible inexactness of csr another is the apparent reluctance by regulatory authorities and policy makers to intervene in the area this is largely a result of inhibitions created by traditional approaches to company law with emphasis on shareholder protection and financial disclosure the consequence is the stultification of independent development of csr by tying social issues to financial performance this attitude might not be unconnected to the theoretical and practical challenges in justifying csr and defining its scope the underlying impediment is a factual and theoretical failure to distinguish instrumental and pure ethical csr this article demonstrates that ethical csr highlights the role of regulation and a principal stance is that regulation is neither incompatible nor irreconcilable with ethical csr the article argues that cognizance of the intrinsic moral justification of pure csr is required for delineating the scope of csr as well as for clarifying the desirability and extent of its regulation it argues that the dynamic history and visage of multinational corporate corruption illuminates the fluidity of the regulation csr relationship the current and widening backlash against transnational corporate corruption is arguably a demonstration of the position that regulation and csr are not mutually exclusive and absolute concepts this article submits that recognition and application of this ethical and instrumental csr distinction is fundamental to the development of csr and resolution of connected questions of regulation

the retirement consumption conundrum evidence from a consumption survey abstract recent studies have shown that food consumption declines at retirement we use broader definitions of consumption from the consumer expenditure survey and find that the so called retirement consumption puzzle is solved by using comprehensive consumption data

consumption inequality between farm and nonfarm households in taiwan a decomposition analysis of differences in distribution consumption has been recognized as a more reliable indicator of household well being than income although a considerable body of literature has examined income inequality between farm and nonfarm households little is known about inequality in consumption this research aims to fill this knowledge gap by investigating consumption disparity between farm and nonfarm households using a nationally representative household survey from taiwan we apply an unconditional quantile regression based decomposition method to decompose the differences in the distribution of household expenditure between these farm and nonfarm households the results indicate that differences in the observed characteristics between these two types of households explain most of the consumption inequality moreover the difference in the education level of the farm operator household income and the degree of urbanization are particularly important jel classifications q10 q12

corporate reputation s invisible hand bribery rational choice and market penalties drawing upon rational choice and investor attention theories we examine how accusations of corporate bribery and subsequent investigations shape market reactions using event study methodology to measure loss in firm value for public firms facing bribery investigations from 1978 to 2010 we found that total market penalties amounted to 60 61 billion we ran moderated multiple regression analysis to examine further the degree to which the unique characteristics of bribery explain variations in market penalties companies committing bribery in less corrupt host countries and with the involvement of compromised executives experienced greater market penalties than did other companies after partitioning share value losses into components for regulatory penalties class action settlements and loss to reputation we found that reputational penalties account for 81 8 of every dollar of share value loss omission of reputational penalties in rational choice calculus underestimates bribery costs by 4 5 times the results suggest that firms should not underestimate the importance of market imposed reputational penalties by merely considering regulator imposed fines and sanctions

inflation targeting in emerging economies panel evidence abstract this paper shows there is no evidence that the inflation targeting regime it improves economic performance as measured by the behavior of inflation and output growth in developing countries the control of common time effects results in less negative and less significant it impacts on inflation inflation volatility and output growth volatility than previously found in the literature additionally our analysis shows robust evidence of lower output growth during it adoption on balance although lower long run mean inflation signals that the central banks of emerging economies with inflation targeting are more inflation averse the costs of disinflation have not been lower than under other monetary regimes

the duality of crony corruption in economic transition toward an integrated framework in order to shed light on the issue of crony corruption in the context of economic transition i focus on the puzzle of china s unique experience of economic transition characterized by the duality forms and effects of crony corruption underlying local corporatism in a dual track i e market and political tracks transition i argue that the duality of local corporatism derives from the duality of crony corruption first the early form of local corporatism as state business public alliance is embedded in informal crony corruption as positive for the purpose of wealth growth in the initial phase of economic transition with public and private interests aligned as compatible second the later form of local corporatism as official manager private collusion is embedded in quasi formal crony corruption as negative for the purpose of wealth transfer in the later phase with public and private interests in conflict as incompatible the duality of crony corruption in the two phases of economic transition is caused by the interplay between formal and informal factors and between economic and political factors my contribution is twofold first i explain china s transition in terms of crony corruption underlying local corporatism second i develop an integrated framework of crony corruption concerning its content process antecedent and consequence

inflation targeting genuine effects or publication selection bias abstract this paper uses a meta regression analysis mra to evaluate the impact of publication selection bias as for the macroeconomic effects of inflation targeting it a popular approach to implementing monetary policy documented in the existing literature using 8 059 point estimates from 113 studies we show that a significant part of the documented positive effects of it on inflation and to some extent output growth volatility is in fact due to publication selection bias in particular results pointing to lower inflation volatility and higher real gdp growth tend to be favored by researchers as well as those pointing to statistically significant macroeconomic effects however even after controlling for these two types of biases we find it to be correlated with lower inflation and higher real gdp growth differently the evidence on the it inflation volatility relationship is found to be less clear

international experiences with different monetary policy regimes any views expressed in this paper are those of the author only and not those of columbia university or the national bureau of economic research abstract this paper examines the international experiences with four basic types of monetary policy regimes 1 exchange rate targeting 2 monetary targeting 3 inflation targeting and 4 monetary policy with an implicit but not an explicit nominal anchor the basic theme that emerges from this analysis is that transparency and accountability are crucial to constraining discretionary monetary policy so that it produces desirable long run outcomes because the devil is in the details in achieving transparency and accountability what strategy will work best in a country depends on its political cultural and economic institutions as well as on its past history

institutions and inflows of foreign direct investment a fuzzy set analysis this study addresses the essential question of causal complexity and diversity related to the influence of institutions on the direct investments fdi of multinational enterprises using a relatively new methodological approach of fuzzy set analysis and 47 host countries from the period 1999 to 2003 the paper analyses how and why countries with different degrees of membership in different institutional constraints either attract or do not attract fdi the findings show that institutional factors have diverse influences similar institutions may even be associated with different outcomes if different regional categories of countries are examined countries may neither be attractive nor unattractive owing to the presence or absence of a single institutional factor instead the outcome usually results from a combination of institutional conditions moreover there typically are several possible paths to a specific outcome the study confirms some of the propositions of previous theory but most importantly it explains why earlier research has provided conflicting conclusions related to institutional factors the study also offers an approach for future international business research to apply fuzzy set methods and develop mid range theories

integration oriented strategies host market corruption and the likelihood of foreign subsidiary exit from emerging markets extant research has found that more pronounced levels of corruption in foreign host emerging markets increase the likelihood that subsidiaries established by multinational enterprises mnes from developed countries will exit we synthesize insights from the organizational perspective of corruption and the integration responsiveness paradigm to propose that integration oriented strategies will weaken the positive relationship between corruption and the likelihood of exit at high levels of host market corruption we develop and test hypotheses pertaining to the main effect of corruption on the likelihood of subsidiary exit as well as the moderating impacts of a firm s equity ownership strategy and its expatriate staffing strategy upon this relationship we theorize that uncertainty operates as the mechanism that underpins the corruption market exit relationship and that an mne s strategic choices with respect to its subsidiary investments contribute to reducing this uncertainty we find that an increase in the foreign investing mne s equity ownership share negatively moderates the positive relationship between corruption and the likelihood that foreign subsidiaries established by developed market mnes will exit host emerging markets when corruption is high however the marginal effects results do not support the expatriate staffing strategy hypothesis our work provides guidance to developed country mnes that seek insights with respect to the utility of strategies that might be implemented in host emerging markets characterized by more pronounced levels of corruption

the benefit corporation and corporate social responsibility in the wake of the most recent financial crisis corporations have been criticized as being self interested and unmindful of their relationship to society indeed the blame is sometimes placed on the corporate legal form which can exacerbate the tension between duties to shareholders and interests of stakeholders in comparison the benefit corporation bc is a new legal business entity that is obligated to pursue public benefit in addition to the responsibility to return profits to shareholders it is legally a for profit socially obligated corporate form of business with all the traditional corporate characteristics combined with societal responsibilities considering the history and perception of shareholder primacy in united states law it is argued that this new business structure is an ethical step toward empowering socially committed commercial entities the contribution of this research is to provide a fundamental base of knowledge about the new legal form of business the bc upon which further study may rely first the legal history of the corporation is briefly reviewed in order to provide context to the relationship of the corporate form to society including exploration of the premise that shareholder wealth maximization is its best and only purpose second the bc is described in detail and state statutes are compared third the bc is placed within the context of corporate social responsibility finally opportunities for future research are discussed

the price of international business morality twenty years under the foreign corrupt practices act last year marked the 20th anniversary of the foreign corrupt practices act fcpa of 1977 the fcpa is the first and only statute prohibiting bribery and other corrupt business practices by u s citizens and companies conducting business overseas this paper provides an overview of the fcpa during the two decades of its existence more specifically the objectives of this paper are four fold first the paper provides background information about the fcpa of 1977 and subsequent amendments in 1988 second the paper discusses the enforcement of the fcpa since its passage by examining the number of cases prosecuted under the fcpa and the respective penalties imposed third the paper discusses the economic impact of the fcpa by addressing whether the fcpa places u s firms at a competitive disadvantage fourth the paper provides public policy recommendations to expand the reach and scope of the fcpa it covers efforts to criminalize bribery through multilateral organizations such as the organization for economic cooperation and development oecd the world trade organization wto and the organization of american states oas it also covers bilateral arrangements and efforts by non governmental organizations such as transparency international

does inflation targeting make a difference in developing countries we evaluate the treatment effect of inflation targeting in thirteen developing countries that have adopted this policy by the end of 2004 using a variety of propensity score matching methods we show that on average inflation targeting has large and significant effects on lowering both inflation and inflation variability in these thirteen countries however the effectiveness of inflation targeting on lowering inflation is found to be quite heterogeneous the performance of a given inflation targeting regime can be affected by country characteristics such as government s fiscal position central bank s desire to limit the movements of exchange rate its willingness to meet the preconditions of policy adoption and the time length since the policy adoption

measurement of inequality by components of farm household consumption expenditures inequality in consumption levels of families both nationally and internationally has been studied by theil however empirical studies that measure inequality in farm household consumption to our knowledge have not been performed this study measures inequality in farm household consumption in addition the study also measures inequality in consumption based on farm typology and farming region results from this analysis show consumption inequality among farm households is lower than consumption inequality among all other households results indicate that other expenditures component has the highest inequality and food and household supplies component has the lowest inequality further farm typology has information about difference in consumption expenditures the typology is informative when it comes to the components of consumption while the regional decomposition is not

children and household economic behavior this paper looks at some of the methodological issues that arise in modeling the effects of children on household behavior and presents some estimates for selected areas for our purposes household behavior will be taken to refer to household decisions on labor supply the allocation of expenditure to different periods and the decision as to what to do with the difference between income and expenditure i shall be concerned mainly with the effects of dependent children and i restrict attention largely to western societies excerpt

foreign investment and ethics how to contribute to social responsibility by doing business in less developed countries do foreign direct investment fdi and international business ventures promote positive social and economic development in emerging nations this question will always prove contentious first the impacts differ according to context second the social consequences and spillover effects of knowledge diffusion and technology sharing may be limited and hard to measure third contributions to enhancing social responsibility and improving living standards in host countries are delayed in effect causally complex and also hard to measure outcomes often critically depend on collaboration of governments international institutions the business world and non governmental organizations ngos research in this area is challenging and requires interdisciplinary collaboration between economists financial experts sociologists ethicists and other specialists this paper explores 1 the evidence to support the proposition that fdi and international business improve social conditions in less developed countries and 2 how these improvements are linked to strategies of corporate social responsibility csr and ethical business practice the paper draws insights from development fdi poverty alleviation and bottom of the pyramid bop literature applications are demonstrated using examples from poverty stricken areas of sub saharan africa the paper attempts not only to argue theoretically but also to provide practical evidence the approach is simultaneously descriptive analytical and prescriptive in order to address a wide audience it also highlights issues and trends for further academic research and presents the viewpoint that some limitations lie in the nature of ethics frameworks widely referenced in business and that these often fail to consider the compatibility of ethical constructs with relevant incentives in this vein we explore the application of homann s framework for advantage and incentive based ethics

determinants of bribery in international business the cultural and economic factors corruption perceptions index cpi scores for 47 countries reported by transparency international were used to ascertain determinants of bribe taking in international business two sets of independent variables economic and cultural were used in a multiple regression analysis results indicate that bribe taking was more likely to be prevalent in countries with low per capita income and lower disparities in income distribution cultural factors such as high power distance and high masculinity in a country were also likely to be associated with high level of bribe taking both economic and cultural factors were important explanatory factors of bribery implications of the findings for combating bribery are discussed

are corruption indices a self fulfilling prophecy a social labeling perspective of corruption rankings of countries by perceived corruption have emerged over the past decade as leading indicators of governance and development designed to highlight countries that are known to be corrupt their objective is to encourage transparency and good governance high rankings on corruption it is argued will serve as a strong incentive for reform the practice of ranking and labeling countries corrupt however may have a perverse effect consistent with social labeling theory we argue that perceptual indices can encourage the loss of needed investment and thus contribute to higher rates of corruption within unfavorably ranked countries in effect corruption indices may inhibit foreign direct investment the effect of which is to encourage the status quo in terms of corruption ranking using an experimental study design we test the effects of country corruption rankings on the assessment of country investment desirability and find ranking exposure causes shifts in country investment desirability for 10 of 12 countries studied these findings suggest that corruption rankings which are based on perceptions of corruption may cause country isolation and a reduction in legitimate means of investment

collective strategies in fighting corruption some intuitions and counter intuitions this article explores the plausibility of some intuitions and counter intuitions about the anti corruption efforts of mdbs and international organizations leveraging the power of the private sector regulation of a sizable percentage of global private sector actors now falls into a new area of international governance with innovative institutions standards and programs we wrestle with the role and value of private sector partnerships and available informal and formal social controls crafting proportional informal controls e g monitoring evaluations and sanctions and proper incentives to cooperative games across networks are the lynchpins of successful collective action programs ambivalence with informal social controls or effective incentives we argue risks far too much deference to private sector interests

fostering corporate social responsibility through public initiative from the eu to the spanish case should csr be approached only on a voluntary basis or should it be complemented with a compulsory regulatory framework what type of government intervention is more effective in fostering csr among companies this paper is an attempt to answer these questions reviewing the debate between proponents of the voluntary case and the obligatory case for csr and critically analysing current international government led initiatives to foster csr among companies and national government led initiatives in the eu area finally the paper focuses on the spanish case as an example of the failure of an exclusively voluntary approach despite the rapid uprise of csr spain is still far behind late in csr promotion strategies most action has been undertaken by companies themselves with no common guidelines governmental support or independent verification the lack of a regulatory framework for csr or ethical investment issues and the virtual absence of other indirect incentives explains the misbalance between private public and third sector initiatives based on the spanish context which is quite similar to other non oecd countries the authors call for a more proactive government position in csr related issues the conclusions of the paper detail the features of this regulatory framework and other policies to promote csr in spain as well as in other oecd countries

aggregate poverty measures the way poverty is measured is important for an understanding of what has happened to poverty as well as for anti poverty policy evaluation sen s 1976 pathfinding work has motivated many researchers to focus on the way poverty should be measured a poverty measure argued by sen should satisfy certain properties or axioms and the desirability of a poverty measure should be evaluated by these axioms during the last two decades many researchers have adopted the axiomatic approach pioneered by sen to propose additional axioms and develop alternative poverty measures the objective of this survey is to provide a clarification on the extensive literature of aggregate poverty measures in this survey we first examine the desirability of each axiom the properties of each poverty measure and the interrelationships among axioms the desirability of an axiom cannot be evaluated in isolation and some combination of axioms may make it impossible to devise a satisfactory poverty measure some axioms can be implied by other axioms combined and so are not independent some others are ad hoc and are disqualified as axioms for poverty measurement based on the interactions among axioms we identify the core axioms which together have a strong implication on the functional form of a poverty measure we then review poverty measures that have appeared in the literature evaluating the interrelationships among different measures and examining the properties of each measure the axioms each measure satisfies violates are also summarized in a tabular form several good poverty measures which have not been documented by previous surveys are also included

gaining ground poverty in the postwar united states official measures of poverty in the united states are compiled by the bureau of the census by comparing a household s income level to a prespecified threshold from a theoretical perspective it is more appropriate to evaluate the level of poverty using a consumption based measure of household welfare in this paper i evaluate the level of poverty using expenditure data from the consumer expenditure survey i find that consumption based poverty rates are much lower than those based on income the trend in the poverty rate in the united states is sensitive to the price index and equivalence scales used to adjust the poverty thresholds

equity and policy effectiveness with imperfect targeting abstract we propose a general approach that jointly integrates horizontal and vertical equity criteria in the assessment of poverty alleviation programs with the strength of each criterion being captured through its own inequity aversion parameter this contrasts with the assessment of poverty alleviation programs done with simple under coverage and leakage ratios or with other methods that do not take into account the heterogeneity of the poor and that do not address directly the social benefits of achieving normative criteria our methodology is illustrated using tunisian data and two alternative poverty alleviation policies we find inter alia that the social ranking of commodity and socio demographic targeting in tunisia depends on the policymaker s comparative preference for vertical and horizontal equity

dollarization exchange rate regimes and government quality abstract the dollarization of the domestic banking system represents a source of vulnerability for emerging market countries and a debate has emerged over whether the exchange rate regime has an impact on dollarization this paper argues that the regime is far less important than the literature has previously claimed unofficial dollarization results from a lack of faith in the domestic currency which ultimately stems from the belief that the government will not follow policies that promote long run currency stability empirical results indicate that improved government quality reduces unofficial dollarization while the exchange rate regime plays no direct role in promoting dollarization

do corrupt governments receive less foreign aid critics of foreign aid programs argue that these funds often support corrupt governments and inefficient bureaucracies supporters argue that foreign aid can be used to reward good governments this paper documents that there is no evidence that less corrupt governments receive more foreign aid on the contrary according to some measures of corruption more corrupt governments receive more aid also we could not find any evidence that an increase in foreign aid reduces corruption in summary the answer to the question posed in the title is no