nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2012‒10‒13
sixteen papers chosen by
Frederic S. Lee
University of Missouri-Kansas City

  1. Path dependence research in regional economic development: Cacophony or knowledge accumulation? By Martin Henning; Erik Stam; Rik Wenting
  2. Mainstream Economics in the Early 21st Century: What, How and How Far By Hernán Vallejo
  3. Territorial Competition: Theories, arguments, policies and lessons of the last 25 years By Nikolaos Kapitsinis; Theodore Metaxas
  4. A New View of General Purpose Technologies By Uwe Cantner; Simone Vannuccini
  5. Spontaneous order and macroeconomic behaviour By Yong Tao
  6. Is microcredit targeted to poor people? Evidences from a Cambodian microfinance institution. By Alberto Lanzavecchia
  7. Branding Brazilian slums through 'freeware' cultural production: the case of Rio de Janeiro By Antonio Russo
  8. Towards associative meaningfulness: Maintaining social capital in community development By Ilari Karppi
  9. Manly rights and manly duties. Sexuality and birth control in Flanders 1900-1940 By Isabelle Devos; Christa Matthys
  10. Heterogeneidad estructural en el capitalismo: una mirada desde el marxismo de hoy By Samuel Jaramillo González
  11. Forecasting and simulation of the impact of public policies on industrial districts using an agent-based model By Federico Pablo-Marti; Juan Luis Santos; Antonio Gacía-Tabuenca; María Teresa Gallo; Tomás Mancha
  12. Vulnerability to Poverty in Italy By Nicola Amendola; Mariacristina Rossi; Giovanni Vecchi
  13. La green economy in Emilia-Romagna: a sostenibilità come fattore di sviluppo By Francesco Garibaldo; Nicole Orlando; Gianluca Parodi;
  14. The input-output table for the Alentejo Region in Portugal By José Belbute; António Caleiro; Gertrudes Guerreiro; Elsa Vaz; Ana Eduardo
  15. Do Entrepreneurial Goals Matter? Resource Allocation in New Owner-Managed Firms By William Dunkelberg; Carmen Moore; Jonathan Scott; William Stull
  16. Exploring the Talk-action Gap: a Qualitative Investigation of Foundation Practices over Three Regime Types By Stefan Einarsson; Jasmine McGinnis; Hanna Schneider

  1. By: Martin Henning; Erik Stam; Rik Wenting
    Abstract: The concept of path dependence has gained momentum in the social sciences, particularly in economic geography. In this paper, we explore the empirical literature on path dependence and path creation in regional economic development. We offer a critical reflection on these studies and outline commonalities and problems in research designs and empirical testing. Our review suggests that the popularity of the concept of path dependence in regional studies has led to a cacophony of studies rather than a purposeful accumulation of knowledge around the concept. To remedy this situation, we identify gaps and suggest guidelines for future empirical research on the role of path creation and path dependence in uneven regional development.
    Keywords: path dependence, path creation, regional development, economic geography
    Date: 2012–10
  2. By: Hernán Vallejo
    Abstract: This essay defines economics as a social science characterized by a particular and evolving way of thinking, and explores its scope and limitations. It is argued that economics has a strong normative nature and that it is ideological by construction. Thus, economics is better suited to improve our understanding of economic phenomena, contribute to solve better current problems and generate a sufficiently large and lasting consensus, than to prove anything for sure. Some reasons for persistent differences among economists are trade-offs, problems measuring economic variables and deficient definitions for key concepts. Thus, economics education should seek constructing explicitly the economics way of thinking and maintaining focus on optimal policy intervention, while its practice should aim at clarity, transparency, tractability, consistency, replicability, applicability, relevance and responsibility.
    Date: 2012–08–02
  3. By: Nikolaos Kapitsinis; Theodore Metaxas
    Abstract: Much of the current policy and scientific debate regarding territorial development focuses on territorial competition, which is a result of the outspread of competition (the centerpiece in classical and neoclassical political economy) over many aspects of other disciplines except economics, including geographical science. Territorial competition as a concept takes place among territorial units (states, regions or cities) in order to have the highest profits (mainly, economic) for the ¡winner¢ territorial unit. There are many scholars who have participated to the scientific discourse regarding territorial competition, some of them defending it and others dealing with it in a critical way. The basic difference and disagreement between these approaches is whether competition is a concept which is meaningful on both territorial and firm level or only on firm one and whether territories compete in the same way as firms do. These conflicting approaches differentiate in many issues including, among others, whether the determinant factors of firm performance are internal or both internal and external to the firm, whether the territory aims at development for its own sake or for competing to others and whether a territory can bankrupt like a firm. The debate over this issue is quite important since territorial policy over the last 20 years has focused on territorial competition. However, there are doubts regarding the extend to which this policy results in an equal way of territorial development, i.e. whether there is divergence or convergence. So, this situation, of the territorial competition existence in the centerpiece of territorial development policy, largely increases the significance of this study. This paper aims at studying the concept of territorial competition in depth by extensively reviewing the last 25 years of its development. In the first part this paper quotes the different approaches and their related arguments in an effort to investigate the theoretical context that the concept is introduced in the scientific and policy affairs. In the second part this study focuses on the way that territorial competition is applied on territorial development policy and its results in the territorial inequalities. In such a way it indicates the lessons that we could consider over this period, participating in the same time to the scientific dialogue regarding territorial competition.
    Date: 2012–10
  4. By: Uwe Cantner (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Simone Vannuccini (Graduate College "The Economics of Innovative Change", University of Jena)
    Abstract: The economic literature started to recognize the heterogeneity characterizing the nature of different technologies, introducing the concept of General Purpose Technologies. In this paper, we offer a "new view of General Purpose Technologies", building on the historical as well as on the recent literature, enquiring more in deep the definitional problems related to the GPTs and the conditions for their emergence, together with the characteristic for their prevalence and pervasiveness. A Schumpeterian and evolutionary view pointing at the micro and meso level of analysis - that of the dynamics of firms and industries -, is in our view the privileged perspective economists need to adopt in order to revitalize the theoretical and empirical study of GPTs. The similarities with the emergence of dominant designs and the relations with dynamics of increasing returns and path dependency in the choice between alternative technologies offer us a set of tools well suited to study the establishment of GPTs as a process unfolding in time, more than as a single homogeneous shock.
    Keywords: General Purpose Technologies, Long Waves, Business Cycles, Dominant design, Pervasiveness of technologies, Neo-Schumpeterian economics.
    JEL: E32 L16 O30 O33 O40
    Date: 2012–10–02
  5. By: Yong Tao
    Abstract: This paper presents a model of spontaneous economic order within the framework of general equilibrium theory. Our study shows that if a competitive economy is enough free and fair, then a spontaneous economic order shall emerge in long-period competitive equilibrium so that social members together occupy an optimally economic allocation. Despite this, the spontaneous order may degenerate in the form of economic crisis whenever an equilibrium economy approaches the extreme competition. Remarkably, such a theoretical framework of spontaneous order presents a bridge connecting Austrian economics and Neoclassical economics, where we indeed comprehend a truth: "Freedom drives economic development".
    Date: 2012–10
  6. By: Alberto Lanzavecchia (University of Padova)
    Abstract: This study extends research on the social performance of microfinance institutions. The research methodology is based on Grameen Progress out of Poverty IndexTM (PPITM) for Cambodia applied to a sample of borrowers randomly extracted from a Cambodian microfinance institutionÕs loan portfolio. Dataset has been directly collected through in-house interviews. Main questions discussed here are: (1) Is microcredit targeted to poor people? (2) Has the poverty rate of the sample changed in last six months? and (3) What percentage of male vs. female clients is poor? We found an average poverty likelihood of about 8.1%, estimated at the day of the interview, steady over a period of six months and not statistically different between male and female borrowers. This evidence might be related to business geographical location or targeting. Actually, PPI too much relies on asset ownership rather than on cash flows and saving capacity. Despite the general wisdom microcredit is targeted to the Òpoorest among the poor peopleÓ, this is utterly consistent with a sound and safe (micro)banking activity, aimed at sustainable results. Here comes a call for a triple bottom line performance evaluation on microfinance institutions: economic, social and environmental effects of their activities.
    Keywords: microcredit, social performance, poverty index, case study, Cambodia.
    JEL: G29 O16 I32
    Date: 2012–09
  7. By: Antonio Russo
    Abstract: This paper reflects on a “cultural industry model†with important potential for local development, which is the network of independent cultural producers of Brazilian slums. The landscape of favelas is unique: plagued by poverty and crime, they have come to encapsulate the worst aspects of chaotic urban growth in Latin American cities, and are consequently reified as spaces violating the “social norms†of sustainable urban development. Maybe more in Rio de Janeiro than in any other Brazilian or Latin-American cities, favelas are nevertheless important components of an urban cultural landscape of outstanding value, but just as difficult to conceptualise. They are also a unique form of informal urbanisation, and – as pointed out by a critical current of political scientists – they have affirmed as spaces of social emancipation and resistance. Recognising the social value of Rio’s favelas brings us to explore the way in which they have been developing as spaces of creative expression, according to a peculiar model anchored on freeware and hacker culture, and receiving the support of the federal government’s cultural policy. This model made a remarkable change in the way they came to be “legitimised†by the metropolitan society above the criminalising discourses of mainstream commercial media. The free cultural products of favelas promote community pride, recognition and visibility, and ultimately inclusion, but also job creation in its peculiar consumption filiere, especially when the potential as “tourist brand†is taken into account. For this reason, short-circuiting a “creative†creative industry development policy, UNESCO’s landscape protection strategy, and the (increasingly ambitious) Rio de Janeiro agenda of tourism development and place marketing, has become of paramount importance for making a giant step out of the poverty issue, and in this sense Rio could serve as a template for the whole Latin American continent, to say the least. Key words: Creative production, hackerism, slums, urban development, tourism, branding JEL codes: Z10, Z13, R30
    Date: 2012–10
  8. By: Ilari Karppi
    Abstract: The paper consists of three layers that converge on the development of urban communities. Firstly, and empirically it focuses on a particular local development process currently carried out in a rapidly growing urban region in Southern Finland. This process is studied in more detail in the last two sections of the paper with a view on a) what has been accomplished this far and b) what may follow on the basis of past development. The paper’s second layer is more conceptual. The scope of this discussion is set with a fair share of ingrained pragmatism, and it will be opened with a deliberatively quick philosophical cut on what may be argued about the potentials and desires of individual citizens in and endeavour to take active roles as co-designers of their living environments. After these introductory lines the focus will be shifted to more or less institutional preconditions that may allow citizens to have such an active role. Found in key positions in this instance is the evolution of institutions that have the capacity to effect in our ways to pursue good and meaningful life. The topic will be discussed within relational spaces set by these institutions – but keeping in mind the actually changing territorial contexts where our everyday experiences unfold. Historically the scope for this unfolding has been made with the help of various systems of belief and knowledge. They still hold a key role in the process of explaining it – and setting narratives for us to grasp how it takes place. The third layer is actually a diagonal that pierces the conceptual and empirical layers. Its core consists of mechanisms that facilitate the impacts that various actors need to use in order to leave their mark in community planning schemes. Not infrequently these mechanisms are something that the actors need to actively find – even if citizen and stakeholder participation is generally a standard feature in planning legislation in all highly developed economies. The planning case discussed in this paper includes a description of measures taken by the studied community planners as they seek to construct the interfaces with which the insights and creativity held by the community members can be embedded in the formal planning process.
    Date: 2012–10
  9. By: Isabelle Devos; Christa Matthys (Department of History, Ghent University)
    Abstract: During the first half of the twentieth century, discourses on distinct gendered sexual experiences were particularly powerful. Sexual lust was considered an invincible element of manly nature. Women had to channel this desire into permissible behavior: while they should not stimulate lust outside marriage, they were subjected to giving in to the manly rights within marriage. This encompasses a more general ideal of men as sexually active and women as passive recipients. In contrast, when it comes to the use of birth control, it is often assumed that women were the ones who took the initiative because the burden of large families weighed heavier on them. Before the existence of modern contraception however, women depended on the cooperation of their husbands since the most common ways to control fertility were temporary abstinence and coitus interruptus. In this perspective, family limitation occurs when women were in a position strong enough to convince the men. In Flanders, fertility levels dropped from about 1900. This creates an interesting paradox: at the moment when the emphasis on female sexual obedience was at its strongest, women’s negotiation power in the bed seems to have increased enormously. The answer to this apparent inconsistency may be found in a shift of focus from merely the content of the prevailing sexual ideologies to the way they were instructed to and experienced by common people. To this end, this paper analyses (1) how dominant discourses about sexuality were shaped into practical pedagogical literature for adolescents, (2) testimonies of men and women regarding sexual lust and inhibitions outside and within marriage and (3) their negotiation of the use of birth control methods. We argue that the ideal of male activeness versus female passiveness influenced the sexual practice and family planning of men and women in the first half of the twentieth century. When women were indeed more motivated than their partners to limit the family size, they exploited their passivity by faking sleep or illness. Yet, many couples agreed on family control. This suggests that the preferences of men and women alike had altered during this period. When this was the case, the use of contraceptive practices was considered the man’s duty: he was responsible for using coitus interruptus or purchasing of condoms. This shows that changing perceptions on family limitation were not necessarily linked with more egalitarian sexual experiences.
    JEL: J13 N33 N34
    Date: 2012–10
  10. By: Samuel Jaramillo González
    Abstract: En este texto se aborda el análisis del fenómeno de la heterogeneidad de las economías capitalistas, con la presencia de sectores denominados en diversas tradiciones teóricas como “informalidad", “marginalidad”, “economía popular”, etcétera, a partir de categorías marxistas, y desde la óptica de la corriente de la Teoría del Valor Trabajo Abstracto. El nodo del análisis parte del uso de dos nociones: la coexistencia de diferentes “formas de producción” en las economías dominadas por el Modo de Producción Capitalista y la asimilación, en términos analíticos, de estas formas alternas no capitalistas a la categoría marxista de Economía Mercantil Simple. Se analiza el papel de la producción mercantil simple en el funcionamiento básico de la economía capitalista, en especial en la operación del proceso de proletarización y en la fijación del salario, se analizan las condiciones requeridas para la coexistencia de productores capitalistas y mercantiles simples en un mismo mercado, y se hacen algunas exploraciones sobre la articulación del fenómeno del desempleo en una economía que incluya las dos formas de producción mencionadas.
    Date: 2012–08–09
  11. By: Federico Pablo-Marti; Juan Luis Santos; Antonio Gacía-Tabuenca; María Teresa Gallo; Tomás Mancha
    Abstract: The research in the topic of industrial districts has been focused on the identification of which industries are forming industrial districts and on the causes behind the development of the clusters. As well as there are historical and efficiency reasons that are behind the current configuration of the industrial districts, up to now it seemed not crucial to clarify how different public policies affect the structure and relationships between the enterprises that are included in the clusters. With the use of an agent-based model we can analyze and forecast how each enterprise will change in stochastic terms. Moreover, it make feasible to predict changes in the size and structure of clusters and possible spillovers. ABMs are based on the assumption in which the economy fluctuates according to the behaviour of agents, which react in a proactive way. This difference makes ABMs an accurate tool for forecasting during crisis taking into account both changes in expectations and in policy instruments. In conventional models interactions are indirect, but agent-based modeling (ABM) allow simulating a plenty of shifts in agents’ behaviour through imitation or in their strategies according to the behaviour of the majority. These capabilities applied to firms permit to modify many not explicit assumptions incorporated into the majority of conventional models with the objective of predicting changes in the size and structure of industrial districts. Moreover, ABM allow making simulations changing parameters included in one or several public policies and obtaining the effects of these policies on clusters, accordingly to their own characteristics. The starting point is the building, trough statistical matching techniques making use of microdata sources, of a general database that replicates the attributes and location of all individuals and companies located in a specific spatial context. Then, behaviours are established for both companies and individuals who are interacting according to their preferences and endowments. In addition to these agents we include a raster of locations, built through downscaling techniques and display the current situation of different policies, in order to measure properly the changes introduced for making simulations. Finally, it would be possible to identify with high accuracy each cluster and its different characteristics. This permits to forecast and simulate the impact of changes in public policies on clusters structure and performance in stochastic terms thus enabling a better assessment of policy outcomes taking into account the robustness of the effect, related to the stochastic nature of the aggregated results. That is, ABM will allow us a better assessment of both policy outcomes and the certainty about the results. JEL: L52, R12, R58 Key words: Agent-based model, policy evaluation, industrial districts
    Date: 2012–10
  12. By: Nicola Amendola (Department of Economics and Institutions, University of Roma "Tor Vergata", Italy); Mariacristina Rossi (Department of Economics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino, Italy); Giovanni Vecchi (Department of Economics and Institutions, University of Roma "Tor Vergata", Italy)
    Abstract: The article empirically analyses the phenomenon of vulnerability to poverty – meant as an individual’s likelihood of becoming poor in the future. On the basis of studies conducted by the Italian Institute of Statistics on the consumption of Italian households in the years 1985-2001 and whose data have been rearranged in a pseudo-panel form, the article estimates the incidence of vulnerability to poverty at national and regional level. We find that potential poverty concerns an unexpectedly high percentage of the population – even as much as 50% in some years. Regional differences are broad, persistent and on the rise: moving from north to south, the risk of becoming poor in the future triples. Vulnerability analysis turns out to be a useful tool which should complement the traditional analysis of poverty.
    Keywords: poverty, vulnerability, living conditions, wellbeing
    JEL: C21 D12 I3 I32 I38
    Date: 2012–05
  13. By: Francesco Garibaldo; Nicole Orlando; Gianluca Parodi (Università di Bologna); (Università di Bologna)
    Abstract: The aim of this work is to analyze the development of Green Economy in the Emilia-Romagna Region. Sustainability and efficiency are seen as springs of development to be pushed overall in a period of global economic crisis. Starting from the distinction of Green Production and Green Products, the authors have investigated the evolution of the sector in the last years, in particular analyzing the number of enterprises and products with environmental certifications and their economic performance. A special focus have been made regarding the production of Renewable Energy Sources and the EU objectives. Furthermore it has been explored the Agri-food sector, underlining its relationship with the environment and the threats given by Climate Change, and on the other side the opportunities linked to agro-energies and organic productions. The authors have made some on field interviews to operators and firms of different sector in order to better understand their perspective regarding Green Economy markets. Additionally to underline some strategic guidelines to be followed by governments to better implement structural changes to raise efficiency and to further green the economical production
    Keywords: Green Economy, Sviluppo Sostenibile, Produzioni Verdi, Prodotti Verdi, Fonti di Energia Rinnovabili, Settore Agroalimentare, Biologico Green Economy, Sustainable Development, Green Products, Green Production, Renewable Energy Sources, Agri-food sector, Organi
    Date: 2012
  14. By: José Belbute; António Caleiro; Gertrudes Guerreiro; Elsa Vaz; Ana Eduardo
    Abstract: Portugal is a not a homogenous territory even though it is a small country. Each region has different characteristics, which makes the country as an evident case for the need of an effective cohesion policy leading to a diminishment of regional disparities. This paper presents a preliminary version of the input-output table for Alentejo, a Portuguese region through the regionalization of the input-output national table, for the year 2008. As it is well known the input-output (IO) model is particularly appropriate for the analysis of the effects of demand on supply (possibly in territorial/regional terms). As such, from the descriptive point of view, the IO model is useful for the analysis of explanatory factors of (regional) growth. Moreover, from a decision-making point of view it allows to support (regional) policy making in order to change (in the most favorable possible way) the (regional) production structure. This is particularly important for the fragile region of Alentejo, while the largest one, where such instruments are scarce. Furthermore, the second quadrant, from which demand effects can be considered and extended to third quadrant, where a proper quantification of inter-regional imports is to be considered, complete the table. From the production perspective, our preliminary results suggest weak inter-sectors relations in the Alentejo region making it susceptible to lose a substantial part of the potential effects, which may spillover to other Portuguese regions. In particular, more than 75% of the indirect effects are below 0.05. Furthermore, tobacco, food, beverages, crude refineries, fishing & aquaculture, clothing and agriculture sectors have the most relevant type II multipliers. However, only clothing and beverages have higher aggregate indirect effects over all other industries as a result of an increase of one euro on their final demands. Regarding type I multipliers, our results suggests a different picture. Forestry, tobacco, leather, beverages, among other have important direct and indirect effect. These results have important policy implications in this fragile region. There is, however, another possible use of the model, based on the determination of how to alter the production structure, in order to potentiate the effect of drag of all sectors of production, which may have great potential for development of strategies for economic policy. Key words: Regional Input-Output Table, Alentejo, JEL Codes: C67, R12, R15, R58
    Date: 2012–10
  15. By: William Dunkelberg (Department of Economics, Temple University); Carmen Moore (Department of Business Administration, Morgan State University); Jonathan Scott (Department of Finance, Temple University); William Stull (Department of Economics, Temple University)
    Abstract: This paper focuses on how entrepreneurial goals affect the resource allocation of new firm owners. It connects research in psychology and management that examines the core motivations of entrepreneurs with research in economics that models the behavior of owner-managers as utility-maximizing rather than profit-maximizing. We hypothesize that new owners with nonmonetary goals allocate their resources differently than do owners with monetary goals and that the differences are meaningful in size. To test these hypotheses, we estimate firm level equations based on economic theories of factor demand that show how input quantities depend on owner goals. Data come from a national survey of new U.S. business owners. We find owner goals have both a statistically and substantively significant effect on resource allocation for new firms. Owners with nonmonetary goals put in more of their own and family hours rather than hiring outside employees. Implications for research and policy are discussed.
    Keywords: Entrepreneurship, Small Business, New Firms, Owner Goals, Resource Allocation
    JEL: L26 M12 M14
    Date: 2012–09
  16. By: Stefan Einarsson (Stockholm School of Economics); Jasmine McGinnis (Georgia State University); Hanna Schneider (Vienna University of Economics and Business)
    Abstract: For some scholars and practitioners the unique organizational characteristics of foundations allow them to play a major role in society as innovators and risk takers and as powerful agents of change (Anheier & Daly, 2007). For others, foundations are in theory thought to be powerful actors, but in practice do not live up to their potential due to the seemingly ad hoc nature of their grantmaking decisions (Arnove, 1982; Karl & Katz, 1987; Porter & Kramer, 1999; Frumkin, 2006). In this paper we ask who, what and why do foundations learn from and does this differ across countries? We seek to understand whether foundations grantmaking behaviors are or are not responsive to changes in their environments, their internal operational systems and/or changes in foundation leadership. To address these questions we conduct qualitative interviews with 9 foundations across three countries active in social services. We find that the ability of many foundations to change their grantmaking strategies is highly influenced by a set of ‘imprinting forces’ which constrain their future grantmaking flexibility. We also find that across countries board members play the strongest roles in changing grantmaking priorities.
    Keywords: grantmaking foundations, philanthropic strategy, Welfare regimes
    JEL: L10 L31
    Date: 2012–04

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