human fallibility and economic organization doctrines concerning what is a good way to organize a society have influenced human societies more deeply than any other set of doctrines specifically beliefs that one way of organizing production and exchange is better than others have inspired a number of socioeconomic experiments leading to modern capitalist and socialist societies with far reaching implications yet surprisingly the central doctrines though a source of continuing ideological debate have been the subject of only limited scientific enquiry the major proposition the so called langelerner taylor theorem asserting the equivalence between competitive capitalist economies and decentralized socialist economies which make use of the price system made a point in stressing that the issue of the ownership of the means of production might not be central in the comparison of economic systems the theorem however was based on models both of capitalism and of market socialism in which the most important differences between the two systems were suppressed this paper describes a research program attempting to delineate some of the critical differences among alternative forms of economic organization we contend that central to an understanding of these differences is an understanding of differences in the organization of decision making of who gathers what information how it gets communicated and to whom and how decisions get made both concerning what actions to take and who should fill decision making positions this view should be contrasted with the traditional economic paradigm in which decision making plays no role the manager for instance simply looks up in a book of blueprints what the appropriate technique of production is for the given set of factor prices in the conventional paradigm moreover mistakes are never made either in gathering or transmitting information or in making decisions and indeed there are no costs associated with these activities by contrast the view we take here is that to err is human and that different organizational systems differ not only in what kinds of errors individuals make in them but also in how the systems aggregate errors as a result organizations differ systematically in the kinds of errors they make and thus in their overall economic performance organizations also differ in the costs associated with information collection with information communication and processing and with decision making indeed as we discuss below perfect decision making can be achieved by arranging enough decision makers in an appropriate manner no matter how fallible the decision makers are provided their decisions are not purely random or worse what prevents perfect decision making is the cost we refer to the specification of the structure of information gathering communication and decision making as an organization s architecture the objective of our research program has been to construct stylized models of an economic organization within which the consequences of alternative organizational architectures can be examined using these models not only can we compare the performance of particular organizational forms but we can also ask given a particular set of objectives and circumstances what is the optimal structure within tdiscussants david kreps stanford university paul milgrom yale university

the disaggregation of corporations selective intervention high powered incentives and molecular units a vast array of organizational innovations and changes are transforming us corporations large firms have dramatically downsized refocused and vertically disaggregated they increasingly obtain goods and services pursue complex development efforts and exploit horizontal synergies without the aid of formal hierarchy large firms are also internally disaggregating into smaller more autonomous units that are treated much like external subcontractors the authors argue that these organizational innovations share an important underlying commonalty economic activity is converging toward exchange involving either internal within firm or external between firm networks of small autonomous production or service units small units and small firms have become the basic building block the molecular units of these new forms further exchange among the small autonomous units is commonly a mix of both market like and hierarchical features the authors develop a theoretical explanation for these trends the

the origins of ethnolinguistic diversity this study explores the determinants of ethnolinguistic diversity within as well as across countries shedding light on its geographic origins the empirical analysis conducted across countries virtual countries and pairs of contiguous regions establishes that geographic variability captured by variation in regional land quality and elevation is a fundamental determinant of contemporary linguistic diversity the findings are consistent with the proposed hypothesis that differences in land endowments gave rise to location specific human capital leading to the formation of localized ethnicities jel j15 j24 z13

statehood democracy and preindustrial development this paper proposes a growth model linking state history to economic development it considers three state systems non statehood authoritarian statehood and democratic statehood these differ in the way a public good is provided which in turn determines growth rates under certain assumptions democratic states grow faster than authoritarian ones which in turn grow faster than non states all societies start with non statehood and transition into authoritarian statehood at some point but the timing is random when later given the opportunity only those societies that transitioned relatively recently to authoritarian statehood transition to democracy when they do they begin to grow faster eventually overtaking older and still authoritarian states this generates an inversely u shaped cross sectional relationship between development and state history consistent with modern cross country data

are modern financial systems shaped by state antiquity we demonstrate that existing differences in financial development between countries can be explained by the cumulative variations in their levels of state experience since 1 ad this dimension of early historical development has not been considered so far in studies that analyze the determinants of financial development the estimation allows for all major theories established in the literature as possible explanations for the disparity of financial development across the globe significance of state antiquity is robust to the use of alternative indicators of financial development the consideration of different lengths and periods of statehood and controlling for a range of variables or country characteristics our results highlight the important role of statehood in propelling financial system development and thus provide some support to the view that historically determined differences in the early start developmental advantage provide the basis for explaining the fundamental sources of variations in financial development between countries today

agriculture diffusion and development ripple effects of the neolithic revolution are the effects of the neolithic revolution still impacting on incomes across the world today i find strong support for this proposition using new country specific estimates of the timing of the agricultural transition and provide evidence that the differences are due to how technological diffusion is accounted for a correction for world migrations since 1500 significantly improves the fit transition year also helps to explain income in 1500 itself and an alternative measure of pre modern development state history has similar ability to predict income in 1500 and 1997

does adversity affect long term financial behaviour evidence from china s rustication programme abstract this paper examines the long term effects of adversity on financial behaviour it draws on the largest forced migration experiment in history china s rustication programme evidence from the chinese twins survey and chinese household income project shows that rusticated individuals behave conservatively with respect to finances over the long term compared with their age eligible but nonrusticated peers they reduce housing consumption and its share of total assets increase savings accumulate more safe assets and invest less in risky assets such patterns are consistent with evidence from manually collected county gazetteer data possible mechanisms include reduced productivity habit formation and psychological changes

post 1500 population flows and the long run determinants of economic growth and inequality we construct a matrix showing the share of the year 2000 population in every country that is descended from people in different source countries in the year 1500 using this matrix we analyze how post 1500 migration has influenced the level of gdp per capita and within country income inequality in the world today indicators of early development such as early state history and the timing of transition to agriculture have much better predictive power for current gdp when one looks at the ancestors of the people who currently live in a country than when one considers the history on that country s territory without adjusting for migration measures of the ethnic or linguistic heterogeneity of a country s current population do not predict income inequality as well as measures of the ethnic or linguistic heterogeneity of the current population s ancestors an even better predictor of current inequality in a country is the variance of early development history of the country s inhabitants with ethnic groups originating in regions having longer histories of agriculture and organized states tending to be at the upper end of a country s income distribution however high within country variance of early development also predicts higher income per capita holding constant the average level of early development

early starts reversals and catch up in the process of economic development early states like china and india have been experiencing more rapid economic growth in recent decades we show that more rapid growth by early starters has been the norm in economic history and that the reversal of fortune associated with the european overseas expansion was both exceptional and temporary not only was the post 1500 reversal in the process of being reversed after 1960 but also the advantage conferred by early development in the latter period was considerably greater than the growth rate disadvantage that it conferred during 1500 1960 implying a rapid undoing of the first reversal

agricultural transition and the adoption of primitive technology this paper tests jared diamond s influential theory that an earlier transition from a hunter gatherer society to agricultural production induces higher levels of technology adoption using a proxy for the geographic diffusion barriers of neolithic technology and an index of biogeographic endowments to isolate the exogenous component of the timing of agricultural transition the findings indicate that countries that experienced earlier transitions to agriculture were subsequently more capable of adopting new technologies in 1000 bc 1 ad and 1500 ad these results lend strong support to diamond s hypothesis jel 030 040 i introduction technology is the centerpiece of the literature on economic growth aghion and howitt 1992 2009 hsieh and klenow 2010 jones 1995 mokyr 1990 2005 nelson and phelps 1966 surprisingly little is known about what causes the wide disparity in the adoption levels of technology across the globe the importance of historical technology adoption for long run comparative economic development has recently been highlighted in the seminal contribution of comin et al 2010 they construct indicators to capture the ancient state of technology adoption in 1000 bc 1 ad and 1500 ad and show that the historical levels of technology adoption of a country crucially determines its current technology adoption levels and per capita income comin and hobijn 2010 provide further evidence that technology adoption lags explain more than 25 of per capita income differences across countries thus suggesting that a longer lag significantly lowers the present day standards of living see also comin et al 2008 however the issue of what accounts for differences in technology adoption levels across the world has so far not been addressed in the literature without a proper understanding of the sources of technology adoption the history of economic development will remain incomplete a prominent explanation for the cross country variations in technology adoption levels has been provided by diamond 1997 who links early agrarian development to the capability of adopting new technology the transition from a hunter gatherer society to agricultural production also known as the neolithic revolution that first occurred about 11 millennia ago is one of the most significant events in human history putterman 2008 the first neolithic transition occurred in the middle east where there was a shift from hunting and gathering to the cultivation of crops and animals diamond 1997 argues that following this transition food production was focused on domesticating rather than gathering wild plants and hunting animals the capacity of the agriculture sector to yield more and better food provide nourishment for more people and produce storable food led to the creation of a non food production class these specialists were responsible for the early development of writing education technology based military expertise and social and political structures which subsequently played a pivotal role in technological development along with this development agricultural settlements also facilitated more sedentary living which underlies the historical development of technology as it enabled the accumulation of technical know how this developmental head start built upon the foundations established during the transition enabled an economy to enter into the path of endogenous knowledge creation and lowered costs of adopting technologies which subsequently translated into greater technological sophistication furthermore significant improvements in farming techniques and the ensuing increases in agricultural productivity then partially contributed to the onset of the industrial revolution thus diamond s thesis proposes a fundamental link between an early start in agriculture and the subsequent sophistication in technology against this backdrop our aim is to shed some light on how the timing of agricultural transition affects technology adoption in different periods of human history

quality matters the expulsion of professors and the consequences for phd student outcomes in nazi germany i investigate the effect of faculty quality on phd student outcomes to address the endogeneity of faculty quality i use exogenous variation provided by the expulsion of mathematics professors in nazi germany faculty quality is a very important determinant of short and long run phd student outcomes a one standard deviation increase in faculty quality increases the probability of publishing the dissertation in a top journal by 13 percentage points the probability of becoming a full professor by 10 percentage points the probability of having positive lifetime citations by 16 percentage points and the number of lifetime citations by 6 3

remedying education evidence from two randomized experiments in india this paper presents the results of a two year randomized evaluation of a large scale remedial education program conducted in mumbai and vadodara india the remedial education program hires young women from the community to teach basic literacy and numeracy skills to children who reach standard three or four without having mastered these competencies the program implemented by a ngo in collaboration with the government is extremely cheap it cost 5 dollars per child per year and is easily replicable it has been implemented in 20 indian cities and reached tens of thousands of children we find the program to be very effective on average it increased learning by 0 15 standard deviations in the first year and 0 25 in the second year the gains are the largest for children at the bottom of the distribution children in the bottom third gain 0 2 standard deviations in the first year and 0 32 in the second year in math they gain 0 51 standard deviation in the second year the results are similar in the two grade levels and in the two cities at the margin extending this program would be up to 12 16 times more cost effective than hiring new teachers authors

students today teachers tomorrow identifying constraints on the provision of education with an estimated 115 million children not attending primary school in the developing world increasing access to education is critical resource constraints limit the effectiveness of demand based subsidies this paper focuses on the importance of a supply side factor the availability of low cost teachers and the resulting ability of the market to offer affordable education the authors first show that private schools are three times more likely to emerge in villages with government girls secondary schools gss identification is obtained by using official school construction guidelines as an instrument for the presence of gss in contrast there is little or no relationship between the presence of a private school and girls primary or boys primary and secondary government schools in support of a supply channel the authors then show that for villages that received a gss there are over twice as many educated women and that private school teachers wages are 27 percent lower in these villages in an environment with poor female education and low mobility gss substantially increase the local supply of skilled women lowering wages locally and allowing the market to offer affordable education these findings highlight the prominent role of women as teachers in facilitating educational access and resonate with similar historical evidence from developed economies the students of today are the teachers of tomorrow

entry and exit decisions in flexible teams the present study identifies a major limitation of current research on multinational enterprises mnes joint decision making in a distributed setting is of critical importance in practice but has received little attention in our theories to address this gap in knowledge we examine the effects of flexible decision teams when mnes assess turbulent markets remarkably flexible teams composed of fallible evaluators can outperform what is usually thought of as an optimal decision our main result supports the claims advanced in recent empirical studies structural flexibility can help mnes achieve high levels of performance even in conditions of turbulence

climatic fluctuations and the diffusion of agriculture this research examines the climatic origins of the diffusion of neolithic agriculture across countries and archaeological sites the theory suggests that a foraging society s history of climatic shocks shaped the timing of its adoption of farming specifically as long as climatic disturbances did not lead to a collapse of the underlying resource base the rate at which hunter gatherers were climatically propelled to experiment with their habitats determined the accumulation of tacit knowledge complementary to farming consistent with the proposed hypothesis the empirical investigation demonstrates that conditional on biogeographic endowments climatic volatility has a hump shaped effect on the timing of the adoption of agriculture

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

what drives the historical formation and persistent development of territorial states the importance of the length of state history for understanding variations in income levels and growth rates across countries has received a lot of attention in the recent literature on long run comparative development the literature however is silent about its origins this paper explores the determinants of statehood by considering the potential roles of an early transition to fully fledged agricultural production the adoption of state of the art military innovations and the opportunity for economic interaction with the regional economic leader the results demonstrate that only the association between economic interaction and the rise and development of the state is statistically robust

interdependency competition and the distribution of firm and industry profits coordination of interdependencies among firms productive activities has been advanced as a promising explanation for sustained heterogeneity in capabilities among firms in this paper we extend this line of research to determine the industry structures and patterns of expected firm profits for the case when difficulty optimizing interdependent activities does in fact generate and sustain capability heterogeneity among firms we combine a widely used agent based model where firms search to discover sets of activities that complement one another reducing overall costs or raising product quality with traditional economic models of competition among profit maximizing firms the agent based model produces a distribution of performance interpreted as variable cost or product quality among firms and the competition models determine resulting industry outcomes including patterns of entry exit and profits the integration of economic models of competition among firms with an agent based model of search for improvement by firms reveals a rich relationship between interdependencies in production functions and industry structure firm profits and industry average profitability

the architecture of economic systems hierarchies and polyarchies the authors present new ways of looking at economic organizations andsystems individuals judgments entail errors they sometimes reject good projects and accept bad projects the architecture of an economicsystem specifying how the decision making units are organized togetherwithin a system who gathers what information and who communicates what with whom affects its performance both because it influences thenature of errors that individuals make within the system and becauseit has a critical effect on the aggregation of individuals errors theperformance of two polar architectures decentralized polyarchical versus centralized hierarchical decision making authorities are analyzed and compared copyright 1986 by american economic association

the relationship between education and adult mortality in the united states prior research has uncovered a large and positive correlation between education and health this paper examines whether education has a causal impact on health i follow synthetic cohorts using successive u s censuses to estimate the impact of educational attainment on mortality rates i use compulsory education laws from 1915 to 1939 as instruments for education the results suggest that education has a causal impact on mortality and that this effect is perhaps larger than has been previously estimated in the literature copyright 2005 wiley blackwell

fragile states and development policy it is widely recognized that fragile states are key symptoms of under development in many parts of the world such states are incapable of delivering basic services to their citizens and political violence is commonplace as of yet mainstream development economics has not dealt in any systematic way with such concerns and the implications for development assistance this paper puts forward a framework for analyzing fragile states and applies it to a variety development policies in different types of states

institutions and the long run impact of early development we study the role of institutional development as a causal mechanism of history affecting current economic performance several indicators capturing different dimensions of early development in 1500 ad are used to remove the endogenous component of the variations in institutions these indicators are adjusted with large scale movements of people across international borders using the global migration matrix of putterman and weil 2010 to account for the fact that the ancestors of a population have facilitated the diffusion of knowledge when they migrate the exogenous component of institutions due to historical development is found to be a significant determinant of current output by demonstrating that the relationship between early development and current economic performance works through the channel of institutions and that better institutions can be traced back to historical factors the results of this paper shed some light on how history has played a role in shaping long run comparative development

arrival of young talent the send down movement and rural education in china this paper estimates the effects on rural education of the send down movement during the cultural revolution when about 16 million urban youth were mandated to resettle in the countryside using a county level dataset compiled from local gazetteers and population censuses we show that greater exposure to the sent down youths significantly increased rural children s educational achievement this positive effect diminished after the urban youth left the countryside in the late 1970s but never disappeared rural children who interacted with the sent down youths were also more likely to pursue more skilled occupations marry later and have smaller families than those who did not

policy uncertainty and the sequence of entry by japanese firms 1980 1998 we extend the stages model of internationalization to incorporate a sophisticated consideration of temporal and cross national variation in the uncertainty of the policy environment using a sample of 6465 international expansions of 665 japanese manufacturing firms in 49 countries we develop arguments from internationalization and bargaining power perspectives to show how japanese firms manage policy uncertainty in host country environments through the within country sequencing of investments although a distribution to manufacturing entry sequence tends to prevail in countries with low levels of policy uncertainty as uncertainty in the policy environment increases initial entry by distribution is increasingly likely to be eschewed in favor of an initial entry by a joint venture manufacturing plant we suggest that this change in investment sequence occurs as firms shift from an emphasis on developing knowledge about local markets and consumers in low hazards markets to an international expansion strategy in uncertain policy environments that places knowledge development of the policy environment at the forefront of a firm s strategy

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

the effect of national culture on the choice of entry mode characteristics of national cultures have frequently been claimed to influence the selection of entry modes this article investigates this claim by developing a theoretical argument for why culture should influence the choice of entry two hypotheses are derived which relate culture to entry mode choice one focusing on the cultural distance between countries the other on attitudes towards uncertainty avoidance using a multinomial logit model and controlling for other effects the hypotheses are tested by analysing data on 228 entries into the united states market by acquisition wholly owned greenfield and joint venture empirical support for the effect of national culture on entry choice is found

interdependency competition and industry dynamics asystematic understanding of industry dynamics is critical to strategy research because individual firm performance dynamics both reflect and affect change at the industry level descriptive research on industry dynamics has identified a dominant pattern where prices fall output rises and the number of firms rises and then falls over time several models have been advanced to explain these patterns with a particular focus on explaining why a shakeout in the number of firms occurs in the most prominent models shakeout is generated by rising realized heterogeneity among firms that either is assumed to be unrecognized but determined ex ante or is generated by stochastic innovation outcomes coupled with convex adjustment costs and scale advantages in innovation and learning in this paper we develop an alternative model where heterogeneity develops among firms over time leading to a shakeout because firms must make choices about highly interdependent productive activities where the ideal combinations cannot be easily deduced or imitated by combining two established models a cournot model of competition with an nk model of interdependency in production activities we are able to advance an alternative explanation for the observed patterns of industry behavior including shakeout we show that variation in the potential for interdependency in activities among industries is able to explain varying levels of shakeout as well as differing patterns of entry and exit among industries notably the model generates several empirical predictions not apparent in past research and several that directly conflict with the results of prominent alternative models of industry dynamics specifically we show that when the potential for interdependency within an industry is low entry slows down and incumbent survival is all but assured whereas in industries where the potential for interdependencies is high shakeouts are severe and the rates of entry and exit remain high over longer time periods with decreasing survival rates for incumbents

education and human capital externalities evidence from colonial benin colonial benin we investigate the effect of education on living standards occupation and political participation since both school locations and student cohorts were selected with very little information treatment and control groups are balanced on observables we can therefore estimate the effect of education by comparing the treated to the untreated living in the same village as well as those living in villages where no schools were set up we find a significant positive treatment effect of education for the first generation of students as well as their descendants they have higher living standards are less likely to be farmers and are more likely to be politically active we find large village level externalities descendants of the uneducated in villages with schools do better than those in control villages we also find extended family externalities nephews and nieces directly benefit from their uncle s education and show that this represents a family tax as educated uncles transfer resources to the extended family

school subsidies for the poor evaluating the mexican progresa poverty program abstract this paper evaluates how the progresa program which provides poor mothers in rural mexico with education grants has affected enrollment poor children who reside in communities randomly selected to participate in the initial phase of the progresa are compared to those who reside in other control communities pre program comparisons check the randomized design and double difference estimators of the program s effect on the treated are calculated by grade and sex probit models are also estimated for the probability that a child is enrolled controlling for additional characteristics of the child their parents local schools and community and for sample attrition to evaluate the sensitivity of the program estimates these estimates of program short run effects on enrollment are extrapolated to the lifetime schooling and the earnings of adults to approximate the internal rate of return on the public schooling subsidies as they increase expected private wages

information technology and organization design locating decisions and information we study the impact of information technology it on the profitability of individual organization designs and on the relative profitability of different organization designs we develop models where organization design is defined by the location of investment decision authority we consider global and local investment when there is an information asymmetry between a central authority and decentralized nodes decentralized nodes make better local investment decisions because of their local knowledge we define three separate organization designs a hierarchy where all investments are made by a central authority a market where all investments are made by the decentralized nodes and a mixed mode where global investments are made by a central authority and local investments are made by decentralized nodes because of complementarities between global and local investment we show that there is under investment relative to first best in all three organization designs we also find that it can be used to mitigate that underinvestment either by bringing information to the decision maker or by redesigning the monitoring and incentive structure we demonstrate that it does not necessarily favor decentralized organization designs and we show how the costs of coordination may resultin the mixed mode being dominated by one or both of the alternative organization designs thus collocation of investment decision rights and information that results in decisions that require coordination might not be optimal when the costs of not synchronizing global and local investment are high

adaptation as information restriction the hot stove effect individuals and social systems are often portrayed as risk averse and resistant to change such propensities are characteristically attributed to individual organizational and cultural traits such as risk aversion uncertainty avoidance discounting and an unwillingness to change this paper explores an alternative interpretation of such phenomena we show how the reproduction of successful actions inherent in adaptive processes such as learning and competitive selection and reproduction results in a bias against alternatives that initially may appear to be worse than they actually are in particular learning and selection are biased against both risky and novel alternatives because the biases are products of the tendency to reproduce success that is inherent in the sequential sampling of adaptation they are reduced whenever the reproduction of success is attenuated in particular when adaptation is slowed made imprecise or recalled less reliably the propensity to engage in risky and new activities is increased these protections against the error of rejecting potentially good alternatives on inadequate experiential evidence are costly however they increase the likelihood of persisting with alternatives that are poor in the long run as well as in the short run

culture legal origins and financial development this study proposes that countries with a cultural orientation toward individualism tend to enjoy a higher level of financial development estimates based on cross country data lend strong support to this hypothesis specifically the results indicate that existing disparity in the level of financial development is significantly correlated with variation in the extent of individualism across countries where a one standard deviation increase in individualism is associated with 0 631 standard deviations improvement in the level of financial development the results are robust to a number of considerations additional results provide some support to the notion that individualistic culture and legal origin may serve as complements rather than substitutes to each other jel o40 o50 z10

parent firm performance across international joint venture life cycle stages the benefits that firms obtain from investing in international joint ventures ijvs can be reinforced or reduced by the management of later stages of collaboration this paper presents an analysis of the shareholder wealth effects of ijv formation and five types of ijv termination the empirical findings challenge common assumptions in the ijv literature contrast prior evidence on the performance implications of market entry and exit through acquisitions and divestitures and demonstrate the value of integrating ijv life cycle stages in future research

dynamics and stagnation in the malthusian epoch this paper examines the central hypothesis of the influential malthusian theory according to which improvements in the technological environment during the pre industrial era had generated only temporary gains in income per capita eventually leading to a larger but not significantly richer population exploiting exogenous sources of cross country variations in land productivity and the level of technological advancement the analysis demonstrates that in accordance with the theory technological superiority and higher land productivity had significant positive effects on population density but insignificant effects on the standard of living during the time period 1 1500 ce

new organizational forms and strategies for managing in hypercompetitive environments strong forces of change globalization demographic shifts e g aging population and declining fertility rates advances in information technology demassification of society and hypercompetition are reshaping the competitive landscape worldwide as a result companies in most industries are not only undergoing rapid and radical change but are also experiencing a fundamental shift in the rules of competition and the way the game of competition is played the old genteel stable oligopolies that defined competition during the 20th century are rapidly restructuring in their place are emerging markets fraught with uncertainty diverse global players rapid technological change widespread price wars and seemingly endless reorganization that transition is occurring not only in the united states but also in europe latin america and asia in this issue we demonstrate that as predicted by those early researchers a dramatic and far reaching shift has occurred in the nature of competition in most ind

peer effects in science evidence from the dismissal of scientists in nazi germany this paper analyses peer effects among university scientists specifically it investigates whether the quality and the number of peers affect the productivity of researchers in physics chemistry and mathematics the usual endogeneity problems related to estimating peer effects are addressed by using the dismissal of scientists by the nazi government in 1933 as a source of exogenous variation in the peer group of scientists staying in germany to investigate localized peer effects i construct a new panel data set covering the universe of scientists at the german universities from 1925 to 1938 from historical sources i find no evidence for peer effects at the local level even very high quality scientists do not affect the productivity of their local peers

implementable mechanisms to coordinate horizontal alliances unprecedented changes in the economics of interaction mainly as a result of advances in information and telecommunication technologies such as the internet are causing a shift toward more networked forms of organizations such as horizontal alliances that is alliances among firms in similar businesses that have positive externalities between them because the success of such horizontal alliances depends crucially on aligning individual alliance member incentives with those of the alliance as a whole it is important to find coordination mechanisms that achieve this alignment and are simple to implement in this paper we examine two simple coordination mechanisms for a horizontal alliance characterized by the following features i firms in the alliance can exert effort only in their local markets to increase customer demand for the alliance ii customers are mobile and a customer living in a given alliance member s local area may have a need to buy from some other alliance member and iii the coordination rules followed by the alliance determine which firms from a large pool of potential member firms join the alliance and how much effort each firm joining the alliance exerts in its local market in this horizontal alliance setup we consider the use of two coordination mechanisms i a linear transfer of fees between members if demand from one member s local customer is served by another member and ii ownership of an equal share of the alliance profits generated from a royalty on each member s sales we derive conditions on the distribution of demand externalities among alliance members to determine when each coordination mechanism should be used separately and when the mechanisms should be used together

labor migration and returns to rural education in china this paper provides an answer to the following question why do empirical studies find low returns to schooling in rural china and yet the schooling rates are high i find that schooling played a significant role in raising the accessibility of urban formal employment to rural people in the late 1970s and early 1980s in the face of the government s restrictive policy on labor migration from rural to urban areas the large urban rural income difference provided a strong incentive for senior high school education the theory also explains the drop in the senior high school attendance in the mid 1980s

the power of tv cable television and women s status in india cable and satellite television have grown rapidly throughout the developing world the availability of cable and satellite television exposes viewers to new information about the outside world which may affect individual attitudes and behaviors this paper explores the effect of the introduction of cable television on gender attitudes in rural india using a three year individual level panel dataset we find that the introduction of cable television is associated with improvements in womens status we find significant increases in reported autonomy decreases in the reported acceptability of beating and decreases in reported son preference we also find increases in female school enrollment and decreases in fertility primarily via increased birth spacing the effects are large equivalent in some cases to about five years of education in the cross section and move gender attitudes of individuals in rural areas much closer to those in urban areas we argue that the results are not driven by pre existing differential trends these results have important policy implications as india and other countries attempt to decrease bias against women authors