bluuebunny/crossref_metadata_2025 huggingface dataset:
Mythmaking and Knowledge Sharing: Living organizational myths and the broadening of opportunity structures for knowledge sharing in a Scandinavian engineering consultant company
Authors: Röyrvik Emil Andre´ , Wulff Egil
Published: March 2003

With examples from Scandiaconsult, a Scandinavian engineering consultant company, this paper is an exploration of some of the constructive mythological aspects of living knowledge emerging in the symbolic interaction of organizational work life. Framed within the overall challenge of organizational knowledge sharing, and the approach of the communal resource as a (partial) solution to that, we more specifically look at ways of broadening the opportunity structures for knowledge sharing through the twin principles of organizational myths and rituals – as processes whereby people can identify and tap into the reservoir of living knowledge in the organization life, often in the realm of the informal or shadow organization. We explore in what ways the myths and rituals can leverage knowledge sharing especially in the face of distributed work environments inhabited by multiplex interested knowledge workers, and in our case with the additional challenge of mergers and acquisitions. We argue that active mythmaking is very far from manipulation or plain rhetoric, but rather a complex and interwoven processes of displaying cultural premises and transforming barriers and misbelieves into trustworthy relationships, and thus rendering possible conditions for lowering the costs of knowledge sharing. The mythmaking, of course, has to be deeply interwoven with the already existing mythic reservoir.
Art, Work and Art Work
Authors: Kavanagh Donncha , O’Brien Clodagh , Linnane Maurice
Published: March 2003

This paper introduces a novel method for investigating the interfaces between art work and managerial work in the creative industries. The method, which we are calling dispraxis, seeks to transcend the traditional divisions between the academic world and the world of practice. This particular dispraxis is a structured, iterative dialogue between an academic, a manager, and an artist on the themes identified in the call for papers. In this dispraxis the following four themes were elicited. The first theme centred on the explosion of management discourse into the creative industries. The second theme explored the difference between the creative industries and ‘normal’ business and introduced the metaphor of chelation to describe the primary need to manage and protect safe spaces for creativity to happen. The third theme was money and this theme explored how art is valued and funded, especially in a postmodern world where the notion of authenticity and Taste have been problematised. The fourth theme discussed how art is routinely identified as the highest expression of human achievement and yet is largely ignored in commercial discourse. One explanation for this is to consider artistic work as part of the abject. The metaphor of origami is used to gather together the various themes explored in the dispraxis.
Pain
Authors: Keefe Francis J. , France Christopher R.
Published: March 2003

Traditionally, pain has been viewed as a sensory event warning of tissue damage or illness. This explanation fails to account for many of the experiences of people suffering from clinically painful conditions. Over the past two decades, a new biopsychosocial perspective on pain has emerged. This perspective emphasizes that pain is a dynamic process that not only is influenced by biological, psychological, and social mechanisms of pain, but also produces biological, psychological, and social changes that can affect future responses to pain. This review presents findings from recent studies of the biological, psychological, and social mechanisms of pain and discusses the implications of these findings for pain research, assessment, prevention, and treatment, as well as for health care policy.
Reasoning Dialogues
Authors: Rips Lance J. , Brem Sarah K. , Bailenson Jeremy N.
Published: March 2003

When people argue with others in conversation, they make a variety of conversational moves: They make claims, ask for justification of others claims, attack claims, and attack claims justifications. The arrangement of these moves gives argumentation its characteristic shape. This article illustrates a proposed format for conversations of this type, and it reviews some findings about the way people understand and evaluate these conversations. The findings suggest that judgments of the arguers burden depend not only on the content of their claims, but also on the conversation s structure. In addition, judgments of the strength of a justification an arguer s evidence or explanation are a function of the argument s setting.
The Bulgar title KANAΣYBIΓI: reconstructing the notions of divine kingship in Bulgaria, AD 822–836
Authors: Stepanov Tsvetelin
Published: March 2003

This paper deals with the notions of divine kingship, formulated in the Bulgar title KANAΣYBIΓI. The author considers that ΣYBIΓI is the second part of the title and that it can be translated as ‘(ruler) from God’, from the Indo‐European *su‐and baga‐, i.e. *su‐baga, connected with notions such as ‘shining’, ‘glimmering’ etc., which were signs of the supreme celestial god.

The Bulgars used the Byzantine formula ‘ho ek Theou archon’ as a translation of their original title KANAΣYBIΓI, thus emphasizing the idea of God's approval of the sovereign. This was a typical strategy for the kings in early medieval Europe, both Christians and pagans. Probably the use of KANAΣYBIΓI (AD 822–36) has to be connected with the processes of centralization of power in Bulgaria during the first three decades of the ninth century and with the influence of the two mightiest states of that time in Europe, Byzantium and the Frankish Empire, and most of all with the Bulgar aims to equal and oppose the Rhomaioi (Byzantines) and their political ideology.
Accounting for crime
Authors: Shaw Stephen
Published: March 2003

New law and order legislation has a patchy record so far as crime reduction is concerned. Can economic analyses help decide between competing policies? Taking the current Crime (Sentences) Bill as an example, the author argues that as a first step new legislative proposals should be subject to more intensive fiscal examination.
No Antony Fisher, no IEA:‘The Case for Freedom’ after 50 years
Authors: Blundell John
Published: March 2003

Antony Fisher, a great entrepreneur, was inspired to found the IEA after Hayek had advised him that, to change society, the intellectuals must be persuaded by reasoned argument. He established many similar institutes around the world. 1998 is the fiftieth anniversary of his first book, The Case for Freedom, which still has lessons to teach us.
Raising the portcullis: repeal of the National Dock Labour Scheme and the employment relationship in the docks industry
Authors: Rayner Joe
Published: March 2003

The National Dock Labour Scheme (NDLS) was created because of the unsatisfactory nature of the employment relationship in the docks industry. The most strident criticisms and damaging effects of the mature operation of the NDLS also revolved around the nature of labour relations. This article concludes that following repeal there has been no simple ‘swing of the pendulum’ back to the casual, ill‐trained and unsafe working practices of the past.
The Australian waterfront: breaking monopoly power
Authors: Evans Ray
Published: March 2003

Waterfront unions in Australia, as in other countries, enjoyed considerable monopoly power for many years. But, after a ten‐week dispute in 1998, there is a ‘new and very different culture’ on the Melbourne waterfront where operations now ‘rank among the world's best’.
Global economic effects of the EU Common Agricultural Policy
Authors: Borrell Brent , Hubbard Lionel
Published: March 2003

Among distortions in international agricultural trade, those imposed by the European Union (EU) are the most disruptive. Under the Common Agricultural Policy (CAP), the EU has switched from being a large net importer of agricultural products to a large exporter. This has greatly altered world agricultural markets, imposing substantial costs on the EU itself and efficient agricultural exporters in the rest of the world. We show how the CAP has affected world agricultural markets and present estimates of the associated costs. First we assess the aggregate costs broken down by various product categories. Next we provide a specific example of one product, sugar.
The future of the CAP? Problems and Proposals
Authors: Harvey David R.
Published: March 2003

The CAP has been both a corner‐stone and stumbling‐block for the European Union. Agenda 2000 is proclaimed by the European Commission as a radical change in the policy to meet the challenges of the new millennium. However, this Agenda still does not resolve the fundamental problems facing the policy. It is time for some genuine leadership to be displayed through the development of a serious and relevant strategy of reform for one of the founding policies of the Union.
A note on redistribution
Authors: Tullock Gordon
Published: March 2003

A consequence of income redistribution may well be to make everyone (including lower‐income groups to which redistribution takes place) worse off after a period of years. Possibly income redistribution might gain consent because of risk aversion. The paper also draws attention to the tendency for people to be more concerned about poverty close at hand rather than far away.
Is the Stock Exchange a Casino?
Authors: Arthur Terry
Published: March 2003

‘Primary investment’ is the permanent addition to productive capacity which follows abstinence or saving. It is risky but the effects of uncertainty operate around the risk‐free interest rate, not around an average of nil or worse as in a slot machine. Investment, as opposed to gambling, implies that the investor ‘does his homework.’ Gambling via the stock exchange has increased, especially because of the expanding role of institutional investors as agents for savers.
Federal regulation and the American economy
Authors: Gray Thomas A.
Published: March 2003

This article begins by assessing the cost of Federal regulation in the United States and how it has changed over time. It shows that there have been periods when these costs have fallen but that the trend is upwards. Some regulations result in net benefits but many produce more costs than benefits and the costs bear most heavily on smaller firms. Various measures taken to control regulatory activities are reviewed. The article ends with a plea for Congress to take responsibility for the quality of regulation instead of leaving it to the regulatory agencies and the President.
Economics, slavery and Victorian reformers
Authors: Arthur Terry
Published: March 2003

The‘Governor Eyre controversy’about events in 1865 illustrates the views about slavery held by various opinion leaders of the time. Thomas Carlyle, John Ruskin, Charles Dickens and Charles Kingsley either supported black slavery or were lukewarm about its abolition. John Stuart Mill and other classical economists, however, were abolitionists, realising that slavery is not a free market institution.
UK pension policy: world leader turning laggard?
Authors: Arthur Terry
Published: March 2003

Too much is made of the ‘problem’ of an ageing population. The real problem in pensions provision is state pay‐as‐you‐go. Private assets of secure title are the best route to financial independence in retirement.
RENEWING BRITISH WELFARE
Authors: Marsland David
Published: March 2003

The historical development of the British Welfare State embodied a number of destructive faults which are now major impediments to reform. Devotees of state provision have a dogmatic antipathy to market forces and an ideological allegiance to state welfare as an instrument of egalitarian politics. There is also an active poverty lobby and a huge vested interest in the status quo among state employees. Wholesale denationalisation of the Welfare State apparatus remains imperative.
THE CZECH REPUBLIC: PROGRESS TOWARDS FREEDOM AND A MARKET ECONOMY
Authors: Klaus Václav
Published: March 2003

The Czech Republic has made good progress towards a market economy, though its experience shows that it is easier to change the political system than the economic system. It shows also that public expectations tend to be too high: economic transformation cannot be costless and rapid as is often assumed. The Czech Republic wishes to participate in European integration though it has reservations about the degree of regulation, harmonisation and bureaucratisation in the EU.
WHY HAS CRIME FALLEN? AN ECONOMIC PERSPECTIVE
Authors: Deadman Derek , MacDonald Ziggy
Published: March 2003

In this paper we consider the reasons why the general level of recorded crime has been falling in the United States and many European countries in the last ten years. We review the time‐series statistical evidence on the determinants of crime, and investigate the extent to which these determinants are matched with survey evidence on the offending behaviour of young people. This survey evidence is particularly revealing on the perceptions of young people to various sorts of deterrents, and it also highlights a strong association between illicit drug use and involvement in crime.
INNOVATION, PRICE COMPETITION AND THE ‘TILT’ OF COMPETITION POLICY
Authors: Stelzer Irwin M.
Published: March 2003

Innovation is the key to rising living standards; competition is the key to a rapid rate of innovation.
COMPETITION LAW AND COMMODITY MARKETS: THE CASE OF WHOLESALE ELECTRICITY
Authors: Decker Chris , Keyworth Tim
Published: March 2003

This paper considers some of the challenges that the exercise of market power in commodity markets poses for public policy, focusing on the case of wholesale electricity. The particular economic characteristics of electricity markets can give rise to market conditions where the price elasticities of both demand and supply are very low. Under such conditions, it may not be necessary for a supplier to have control over a large share of available capacity to be able to exercise substantial market power. This paper questions whether the two principal existing forms of supervision of these markets, Competition Law and financial regulation, are sufficient to address the types of problems that can be expected to arise given these characteristics. The answer to that question is in the negative.
RENT‐SEEKING: VALUING TULLOCK'S REJECTS
Authors: Brady Gordon L.
Published: March 2003

This paper demonstrates that Gordon Tullock's articles on rent seeking continue to be cited, often far more frequently than the papers which journals chose to publish when they rejected Tullock's submissions.
POLITICAL PROCESS AND THE FORMATION OF ECONOMIC POLICY
Authors: Johnson Robin
Published: March 2003

Institutional economics has some useful things to say about government policy‐forming processes. It focuses attention on the structural components of government institutions which shape the direction of policy formation and its delivery. In this article, the author discusses how institutional models of government decision‐making may be adapted to parliamentary systems of government. This approach has some merit because it rescues analysis of government processes from models based on the US constitutional system.
Manufacturing quality in the pre‐industrial age: finding value in diversity
Authors: Reynard Pierre Claude
Published: March 2003

When deployed on a large and rational scale and committed to high throughput levels, early modern manufacturing methods inevitably yielded a substantial proportion of non‐standard and defective items. This proportion could only increase as the pace of work accelerated in the eighteenth century. Manufacturers regained a degree of control over their marketing strategies through the more or less rigorous sorting of this output, in a pattern suited to their markets. In so doing, they forged a transitional definition of quality that moved away from the linear pursuit of excellence that motivated their predecessors towards a relative understanding of the needs of diverse groups of buyers.
The rural labour market in the early nineteenth century: women’s and children’s employment, family income, and the 1834 Poor Law Report
Authors: Verdon Nicola
Published: March 2003

This article revisits a familiar source–the 1834 Poor Law Report–to provide a fresh overview of the regional map of female and child labour in the early nineteenth–century countryside. Patterns of employment in domestic industry and agricultural labour (particularly haymaking, weeding, and harvesting) are investigated alongside labourers’ contributions to the annual family income. The results indicate that orthodox accounts of rural employment and wage patterns should not be accepted uncritically. Adopting an empirical approach to the qualitative evidence contained in the report offers a blueprint for future analysis of similar contemporary printed sources.
Irreversible Investment and Strategic Interaction
Authors: Fatàs Antonio , Metrick Andrew
Published: March 2003

This paper introduces an aggregate demand externality into a model of irreversible investment. The central result of the paper establishes the mechanism in which increases in uncertainty can lead to suboptimal recessions. These inefficient outcomes occur even if agents are allowed to coordinate to the best possible equilibria. The result is driven by the external effects of firms’ investment decisions.
Modelling Business Cycle Nonlinearity in Conditional Mean and Conditional Variance: Some International and Sectoral Evidence
Authors: Peel D. A. , Speight A. E. H.
Published: March 2003

This paper tests for the presence of output mean and variance nonlinearities in international industrial production and UK and US sectoral production growth rates using ARMA–GQARCH, bilinear (BL) and joint BL–GQARCH models. ARMA–GQARCH models confirm the presence of asymmetric variance effects in Italian, UK and US industrial production and in all sectors other than US nondurables, and such that the conditional variance of output is increased following negative shocks. BL models are identified for German, Italian and US industrial production and US manufacturing, while BL–GQARCH models of joint non‐linearity in both conditional mean and conditional variance are also found to hold for US industrial production and manufacturing. Moreover, with the exception of Italy, all BL and BL–QARCH models provide superior out‐of‐sample mean forecasts relative to forecasts from both naïve models and models of the ARMA–GQARCH class.
The Relative Burden of Monopoly on Households with Different Incomes
Authors: Creedy John , Dixon Robert
Published: March 2003

This paper examines the relative burden of monopoly, measured as the (static) loss of consumers’ surplus for different household income levels. Australian Household Expenditure Survey data are used to generate demand elasticities for 14 commodity groups and to obtain estimates of the relative welfare loss for households with different income levels. The welfare loss associated with monopoly power is found to be higher for low‐income households (such as households that depend on government pensions and benefits for their principal source of income) compared with high‐income households. The results provide an indication that, whatever the size of the absolute welfare loss arising from monopoly, there may be a substantial effect on the distribution of welfare.
Minimum Wage Legislation, Productivity and Employment
Authors: De Fraja Gianni
Published: March 2003

The effects of minimum wage legislation are analysed with the assumptions that firms are able to alter the working conditions of their employees, and that workers have different preferences about the characteristics of their job. The main findings tally with Card and Krueger’s (1995) recent somewhat puzzling empirical evidence about the effects of changes in minimum wage. I find that the effects of changes in the minimum wage on employment are limited, that there is a positive spillover on high‐wage workers, and that there is bunching of workers at the minimum wage.
Income Risk, the Tax‐benefit System and the Demand for Children
Authors: Fraser Clive D.
Published: March 2003

Because children represent an irreversible commitment, parents might hedge against higher income risk by having fewer children. We show that, under plausible assumptions, recent increases in income risk might have reduced prudent parents’ desired fertility. Responses to this via the tax‐benefit system are considered. Introducing an expected revenue‐neutral transfer‐cum‐child‐benefit system under proportional taxation, which lets the government share the household’s income risk, increases desired fertility for parents who would choose to have small families in this system’s absence. Pound for pound, the targeted child benefit enhances fertility more than the lump‐sum transfer.
Parents’ Discount Rate and the Intergenerational Transmission of Cognitive Skills
Authors: Agee Mark D. , Crocker Thomas D.
Published: March 2003

We use estimates of parents’ discount rate, inferred from their decisions to treat their children’s body burdens of lead, to test empirically a model of transmission of cognitive skills from parents to children. The development of a child’s cognitive skills depends in part upon the specific environment in which the skills are nurtured. The parental discount rate serves as a theoretically well defined index for a broad array of nurturing investments in the child. We find that children whose parents have a lower estimated discount rate exhibit higher assessed cognitive skills.
Why Do Poor democracies Collect a Lot of Tariff Revenue?
Authors: Moutos Thomas
Published: March 2003

Governments in developing countries typically collect a significantly higher proportion of their revenue in the form of trade taxes, than their developed country counterparts. This paper provides a political–economic explanation for this phenomenon. A model of trade in vertically differentiated products is used in order to determine the preferences of the households among different ways of raising government revenue. It is shown that the majority of households in poor countries will consume low‐quality, domestically produced varieties of differentiated products and would thus register a preference for the government to rely more on tariff rather than income tax revenue in order to finance its operations.
Costly Information Acquisition and Delegation to a “Liberal” Central Banker
Authors: Lagerlöf Johan
Published: March 2003

This paper develops a model of monetary policy in which the central banker can acquire costly information about a supply shock. It is shown that, with this assumption, it may be optimal for society to delegate to a “weight‐liberal” central banker, a result which contrasts with that of Rogoff (1985). This result points at a limitation of Rogoff's argument. It may also explain why the issue of delegating monetary policy to an independent and “weight‐conservative” central banker often is politically controversial.
A Theory of Poverty Aversion and Civil Society Development
Authors: Azam Jean–Paul
Published: March 2003

A simple model is used to discuss the political economy of the emergence of relative poverty as a foundation for redistribution policy in rich countries, as opposed to the dominant concept of absolute poverty, which prevails in the rest of the world. This issue is analyzed in connection with that of the development of civil society and its role relative to the state in fighting poverty.
Fiscal policy and structural reforms in transition economies
Authors: Pirttilä Jukka
Published: March 2003

This paper provides an empirical examination of the relationship between fiscal balance and structural reforms using panel data from 25 transition economies. The results indicate that privatization and restructuring, via unemployment, affect the fiscal balance negatively. This finding provides support for ideas in theoretical transition economics that maintain that fiscal pressures are most severe in fast‐reforming countries. In contrast, price liberalization has a robust positive impact on fiscal performance. In addition, the results differ somewhat over different countries and transition time.
Growth, income distribution and well‐being in transition countries
Authors: Grün Carola , Klasen Stephan
Published: March 2003

We apply several well‐being measures that combine average income with a measure of inequality to international and intertemporal comparisons of well‐being in transition countries. Our well‐being measures drastically change the impression of levels and changes in well‐being compared to a traditional reliance on income measures. Due to low inequality and moderate income levels, socialist countries enjoyed relatively high levels of economic well‐being. In the transition process, rising inequality and falling incomes have led to a dramatic absolute decline in well‐being and a considerable drop in relative well‐being vis‐à‐vis non‐transition countries. We also find a close correlation between income losses and inequality increases. While the transition has been successful in expanding political and civil rights, our indicators suggest that most transition countries are still below the level of economic well‐being of the late 1980s.

JEL classification: D6, O15, P27.
Inequality and income: The mediating effects of social spending and risk
Authors: Castronova Edward
Published: March 2003

This paper estimates models of social spending, income risk, and per capita income levels using data from a post‐war panel of OECD (Organisation for Economic Cooperation and Development) countries. The objective is to test two theories about the pathway from inequality to per capita income. According to one theory, inequality reduces incomes because it induces social spending, which acts as a drag on the economy. The results here suggest, however, that inequality does not seem to induce social spending, and social spending does not seem to lower per capita incomes. According to a second theory, inequality causes upheaval which adds to the volatility of per capita income, which may reduce the level of per capita income. The results suggest, however, that volatility, measured here as the standard deviation of per capita income, has little measurable impact on either per capita income or social spending. The mainsprings of per capita income are more likely to be the traditional factors: the work force, human capital, and physical capital.

JEL classification: E6.
Income mobility and risk during the business cycle: Comparing adjustments in labour markets in two Latin‐American countries
Authors: Wodon Quentin
Published: March 2003

This paper uses panel data from Argentina and Mexico and a new measure of mobility ‐ the Gini index of mobility ‐ to answer three questions. First, is there a trend towards rising labour income mobility over time in these two countries? Second, is there a relationship between income mobility and growth common to both countries, or does that relationship depend on the institutional features of each country’s labour markets? Third, do we observe more labour income mobility within some groups such as the young and the less educated than within other groups?

JEL classification: D31, E32, J63.
The effects of transition on the distribution of income in China
Authors: Gustafsson Björn , Shi Li
Published: March 2003

Using two large samples for 1988 and 1995 we decompose the Gini coefficient of household income according to type of income with the purpose of analyzing reasons for the rapid increase of inequality. The results show that the change in relative size of money income and its changed profile are found to be the major processes behind the rapid increase of income inequality in rural China. Changes in housing allocation and an increased number of retirees in combination with higher benefits have made inequality increase in urban China and in China as a whole.

JEL classification: D31, P27.
Restructuring as a signal: a simple formalization
Authors: Colombo Emilio
Published: March 2003

Several studies have stressed that, contrary to initial expectations, state‐owned firms at the beginning of the transition undertook painful measures to adjust to the new economic environment. This paper investigates this behaviour in a simple game theoretic framework. It is argued that the massive amount of lay‐offs created by state‐owned firms during the initial phase of the transition can be interpreted as a signal directed to the banking sector in order to obtain more favourable financing conditions for the subsequent process of restructuring. The conclusions are strongly supported by Polish firm‐level empirical evidence.

JEL classification: P31, C72.
Economic liberalization and welfare in a model with an informal sector
Authors: Chaudhuri Sarbajit , Mukhopadhyay Ujjaini
Published: March 2003

The paper reexamines the conventional results relating to inflow of foreign capital, removal of protectionism and structural reform programmes, in a small open economy in terms of a two‐sector general equilibrium model with an informal sector. The paper shows that in the presence of labour market distortion and a protectionist policy, inflow of foreign capital may be desirable irrespective of the pattern of trade of the economy due to its favourable impact on welfare. But the welfare implications of tariff reductions and/or structural adjustment programmes, such as deregulating the formal sector labour market, depend crucially on the economy's trade pattern. The paper provides an answer to the question as to whether in a developing economy labour market reform and tariff reform should go hand‐in‐hand or whether one should precede the other for welfare improvement.

JEL classification: F10, F13, F21, O17.
How efficient is the East German economy? An exploration with microdata
Authors: Funke Michael , Rahn Jörg
Published: March 2003

The purpose of this paper is to evaluate the efficiency of the East German economy at the firm level using an unbalanced panel over the transition period 1994 to 1998. We adopt a translog stochastic frontier model to estimate technical efficiency in eastern and western Germany. The results indicate that firms in eastern Germany are significantly less efficient than firms in western Germany. The paper also examines some of the possible correlates of regional variations in firm‐level efficiency.

JEL classification: D24, C33, J31, O52.
Costs and benefits of unilateral euroization in central eastern Europe
Authors: Nuti D. Mario
Published: March 2003

Countries unable or unwilling to join a monetary union can replicate most membership effects unilaterally through either a currency board or the formal replacement of domestic currency by that of the Union. Potential benefits include lower transaction costs, lower interest rates, and lower exposure to speculative attacks. Costs include initial reserves, inadequate response to asymmetric shocks, loss of seigniorage, no lender of last resort. Expected costs and benefits have probably been exaggerated. Net effects depend primarily on the degree of monetary, real, and institutional convergence. Positive net advantages will accrue to countries that are either already converging, or wish to use a single currency to speed up convergence — especially if small. There is no legal or economic justification for EU aversion to unilateral euroization in accession candidate countries.

JEL classification: F33, F36, E58, P33.
Institutional design and the closure of public facilities in transition economies
Authors: Jack William
Published: March 2003

As part of the reforms of their systems for financing and delivering health care, many transition economies, particularly in central and eastern Europe, have adopted national insurance funds that are institutionally separate from ministries of health. Most of these countries have also grappled with the problem of restructuring the delivery system, especially the need to reduce hospital capacity. Although improving the performance of medical care providers through a shift from passive budgeting to explicitly incentive mechanisms is important, why this change in financial relations between the government and providers could not be implemented simply by reforming the role of health ministries is not obvious. This paper presents an explicit rationale for the separation of powers between the regulator (the ministry of health) and the financing body (the insurance fund), based on the inability of a single agency to commit to closing hospitals.

JEL classification: L51, P20, P35, I18.
The relationship between policies and growth in transition countries
Authors: Radulescu Roxana , Barlow David
Published: March 2003

This paper combines Hendry’s general to specific procedure and Leamer’s Extreme Bounds analysis to assess the robustness of the relationship between growth in transition countries and a set of variables included in other studies. The results indicate a robust relationship between inflation and growth. A significant long–term effect of liberalization on growth is not found, which throws doubt on previous empirical studies of the relationship between liberalization and growth. However, the long–term benefits from liberalization may be indirect, via macro stability. Robustness tests also throw doubt on the effect of fiscal and exchange rate policies on growth.

JEL classification: P24, P41, C23.
Information–driven trading at the Prague Stock Exchange: Evidence from Intra–Day Data
Authors: Hanousek Jan , Podpiera Richard
Published: March 2003

Many observers argue that informed and insider trading is widespread in the emerging financial markets of transition countries, yet rigorous treatment of this issue has been virtually non–existent. The current paper estimates the extent of informed trading on the Prague Stock Exchange (PSE) using intra–day transaction data. Our estimates confirm that the average share of informed trading is equal to 0.32, which is high relative to developed markets and varies considerably among stocks. Using the Easley et al. (1996) approach on the very best segment of the PSE we obtained a high average probability of informed trading. Since data used in this study cover the period after the major attempts to improve market regulations, our results indicate that the PSE needs further strengthening to recover credibility and to become a real source of corporate financing.

JEL classification: G14, G15.
The price path due to order imbalances: evidence from the Amsterdam Agricultural Futures Exchange
Authors: Pennings Joost M. E. , Kuiper W. Erno , Hofstede Frenkel ter , Meulenberg Matthew T. G.
Published: March 2003

The lack of sufficient market depth particularly in many newly initiated futures markets results in relatively high hedging costs, and this inhibits the growth of futures contract volume. In this article the price path due to order imbalances is analyzed and a two‐dimensional market depth measure is derived.Understanding the underlying structure of futures market depth provides the management of the futures exchange with a framework for improving their market depth and gives hedgers a better understanding of market depth risk. The managerial implications of our findings are demonstrated empirically using data from the Amsterdam Agricultural Futures Exchange.
Macroeconomic Factors and the Asymmetric Predictability of Conditional Variances
Authors: Hasan Iftekhar , Francis Bill B.
Published: March 2003

This paper investigates the predictability of the volatilities of large versus small firms. Using AR‐GARCH models we show that there is symmetry in the ability of firms of different market values to predict conditional variances. Specifically, we show that volatility surprises of small (large) firms are important in predicting the conditional variance of large (small) firms. These results are different than those previously reported which indicate that there is an asymmetry in the predictability of the volatilities of large versus small firms. This predictive ability is still present when the equation of conditional variance includes state variables such as the default premium, dividend yield and the term premium. Finally, our results indicate that the pattern of symmetric predictability is present in both pre‐ and post‐war sample periods.
Interest Rate Risk of European Financial Corporations
Authors: Oertmann* Peter , Rendu Christel , Zimmermann Heinz
Published: March 2003

We investigate the interest rate exposure of large European financial corporations’ equity returns. For the period from January 1982 to March 1995 we estimate multifactor index models to examine the sensitivity of equity returns to market index returns and domestic as well as global interest rate movements. In addition, we specify an APT‐model to test whether an exposure to interest rate movements is rewarded in the cross‐section of expected returns. In the four European markets both domestic and global interest rate shifts constitute driving forces of stock returns beyond the influence of the domestic market indices. However, the exposure to interest rate movements does not seem to be rewarded in the same fashion among the markets.
Estimating Systematic Risk Using Time Varying Distributions
Authors: Koutmos Gregory , Knif Johan
Published: March 2003

This article proposes a dynamic vector GARCH model for the estimation of time‐varying betas. The model allows the conditional variances and the conditional covariance between individual portfolio returns and market portfolio returns to respond asymmetrically to past innovations depending on their sign. Covariances tend to be higher during market declines. There is substantial time variation in betas but the evidence on beta asymmetry is mixed. Specifically, in 50% of the cases betas are higher during market declines and for the remaining 50% the opposite is true. A time series analysis of estimated time varying betas reveals that they follow stationary mean‐reverting processes. The average degree of persistence is approximately four days. It is also found that the static market model overstates non‐market or, unsystematic risk by more than 10%. On the basis of an array of diagnostics it is confirmed that the vector GARCH model provides a richer framework for the analysis of the dynamics of systematic risk.
The Effect of VaR Based Risk Management on Asset Prices and the Volatility Smile
Authors: Berkelaar Arjan , Cumperayot Phornchanok , Kouwenberg Roy
Published: March 2003

Value‐at‐risk (VaR) has become the standard criterion for assessing risk in the financial industry. Given the widespread usage of VaR, it becomes increasingly important to study the effects of VaR based risk management on the prices of stocks and options. We solve a continuous‐time asset pricing model, based on Lucas (1978) and Basak and Shapiro (2001), to investigate these effects. We find that the presence of risk managers tends to reduce market volatility, as intended. However, in some cases VaR risk management undesirably raises the probability of extreme losses. Finally, we demonstrate that option prices in an economy with VaR risk managers display a volatility smile.
Stock Index‐linked Debt and Shareholder Value: Evidence from the Paris Bourse
Authors: Roberts Gordon S. , Vijayraghavan Vasumathi , Aintablian Sebouh
Published: March 2003

French banks and non‐financial companies issue index‐linked debt whose value at maturity is indexed to the CAC 40 or to a basket of European indices. This paper examines stock announcement effects associated with these bonds on three dates: the date the issuer’s General Assembly decides future capital needs, the publication in the journal of the COB (the stock market board), and the issue date. We find the issuance of index‐linked debt has significant positive announcement effects on the issue date, which we attribute to its market‐completion property. In order to examine further whether market completion is at play, we decompose the value of the bond at issue into its straight bond and option values. We determine that the bonds are overvalued again supporting market completion.
The Distribution of Information among Institutional and Retail Investors in IPOs
Authors: Keloharju Matti , Torstila Sami
Published: March 2003

This study examines investor performance in IPOs using a unique database comprising 85,384 investors and 29 offerings from Finland. The evidence indicates that on average institutional investors do not obtain larger initial returns than retail investors, as the incentive to acquire information is limited by allocation rules which favour small orders. This result is in contrast to findings by Aggarwal et al. (2002), who show that institutional investors perform better in a bookbuilding environment. Within each investor category, however, large orders are associated with the best performance, suggesting that information differences figure more importantly within rather than between categories.
Realism Detranscendentalized
Authors: Zalabardo José L.
Published: March 2003

John McDowell claims to find in Wittgenstein an approach to semantic notions which occupies a middle ground between antirealism and extreme forms of realism. The article sketches a proposal as to how to construe McDowell's Wittgensteinian position. The proposal exploits McDowell's suggestion that the position could be characterised as a combination of empirical realism and transcendental idealism concerning the status of semantic facts. The article argues that this combination is made possible by the fact that, when we attempt to characterise our own linguistic practices, the practice that we are trying to characterise is the very same practice that is supposed to yield the characterisation. One consequence of this is that commitment to antirealist principles requires embracing realism at the empirical level. Nevertheless, the contrast between this position and extreme realism remains problematic. The article ends by considering two proposals as to how this contrast could be rendered intelligble.
Beyond the Bundesverfassungsgericht: On the Necessary Cunning of Constitutional Reasoning
Authors: Everson Michelle
Published: March 2003

It has frequently been remarked that it seems to have been reserved to the people of this country, by their conduct and example, to decide the important question, whether societies of men are really capable or not of establishing good government from reflection and choice, or whether they are forever destined to depend for their political constitutions on accident and force.
The European Convention and the Relative Rights of Resident Aliens
Authors: Marin Rut Rubio , O‘Connell Rory
Published: March 2003

By virtue of conceptual abstraction, the notion of nationality plays a pivotal role in liberal democracies, governing distinctions in the allocation of ‘absolute’ and ‘relative’ rights, and determining that while national citizens, as full member of a sovereign political community, enjoy both human and political/social rights, resident aliens are excluded from the scope of these latter, community‐related, rights. Further, The European Convention upon Human Rights appears to countenance this dichotomy, allowing sovereign states to restrict the political activity of aliens. This paper nonetheless argues that such a distinction undermines the democratic imperative upon which liberal constitutional states are founded. A ‘social integration thesis,’ holding that individuals should enjoy, as a fundamental right, the possibility fully to develop their personalities though establishing and pursuing secure social contacts, as well as interpreting those contacts in the light of prevailing cultural perceptions, not only raises the right of stable residence to one of most fundamental attaching to the human condition, but also indicates that political rights—a mere extension of self‐expression and self‐fulfilment within civil society—should be recast as a universal entitlement. Article Three of the First Protocol ECHR may be construed in line with the social integration thesis, and consequently, in the matter of the definition of the members of the national community, the political sovereignty of the Nation State must be limited.
Der Philosoph als wahrer Rechtslehrer
Authors: Joerges Christian
Published: March 2003

Book reviewed in this essay:

Giandomenico Majone, Regulating Europe
Italian Courts, the ECJ and Transfers of Undertakings: A Multi‐Speed Dialogue?
Authors: Leccese Vito
Published: March 2003

The paper seeks to analyse certain paradigmatic cases of dialogue—or, indeed, non‐dialogue—between national judges and the ECJ, though within the (still possibly emblematic) limits of a focus on the law on the transfer of undertakings. The analysis is less concerned with portraying the detailed impact of the ECJ’s decisions on the domestic legal order, and is focused more upon the ‘modality’ of the dialogue to date carried out between Italian and European judges. The logic, which guides this dialogue (or, the lack of its evolution), furnishes us with a better understanding of the production, circulation and impact of ECJ jurisprudence. This dialogue seems to be characterised, by non‐uniform, or multi‐speed, developments. On the one hand, Article 177 references have been concentrated around the theme of undertakings in critical difficulties or subject to a creditors’ arrangement procedure. In this area, the Italian courts have engaged in explicit dialogue with the ECJ and have made the greatest effort to read—not without some technical‐juridical struggle—the national norm in the light of the provisions of the Acquired Rights Directive and its interpretation by the ECJ. By contrast, however, with regard to other specific issues (in particular, those concerning subcontracting) it is apparent that not only were the Italian courts (and the Corte di Cassazione in particular) loathe to enter into direct dialogue with the ECJ, but also that the ECJ’s jurisprudence, built up through dialogue with other national courts, was not even consulted in an effort to guarantee an interpretation of national norms, in conformity with Community law.
The Identity of European Law: Mapping Out the European Legal Space
Authors: Harding Christopher
Published: March 2003

The main purpose of this discussion is to supply some content to the concept of the ‘European legal space’ at the turn of the twentieth century. The term ‘legal space’ is used in preference to ‘legal system’ or ‘systems’ in order to convey a sense of the complex, non‐hierarchical, overlapping, interlocking and evolutionary character of contemporary European legal phenomena. A number of evident legal orders may be identified within the overall European space: those of the EC, the EU, the EEA, the Council of Europe and the OSCE, although to refer to some of these as ‘orders’ may be misleading, by implying too much in terms of a centrally determined structure. It is also possible to point to less evident legal ordering, such as the process of norm exportation contained in the Europe Agreements concluded between the EU and individual non‐Member States, or the kind of order resulting from transatlantic co‐operation in fields such as criminal justice (which also challenges the description of ‘European’). In juristic terms, the argument here confronts the primacy traditionally accorded to the sovereign state in the field of law‐making, and draws upon two non‐juridical models of analysis: that of multi‐level governance, as used by political scientists to indicate a shift away from the exclusive authority and legitimacy claimed by sovereign states; and the biological model of catalytic closure, used to indicate evolution through a process of spontaneous reactions within a body. Both models may be usefully employed to probe the dynamics of European legal ordering at the close of the Twentieth Century.