nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2014‒04‒05
twenty-two papers chosen by
Carlo D'Ippoliti
La Sapienza University of Rome

  1. Why firms avoid cutting wages: survey evidence from European firms By Philip Du Caju; Theodora Kosma; Martina Lawless; Julian Messina; Tairi Room
  2. From Monetary Theory of Production to Culture-Nature Life Process:Feminist-Institutional Elaborations of Social Provisioning By Todorova, Zdravka
  3. Identities and Ideals: Psychoanalytic Dialogues of Self and Leadership By Gazi Islam
  4. Institutions as game theory outcomes: toward a cognitive-experimental inquiry By Ambrosino, Angela
  5. The Economics of the Gift By David Reinstein;
  6. Reconsidering the Nature and Effects of Habits in Urban Transportation Behaviour By Olivier Brette; Thomas Buhler; Nathalie Lazaric; Kevin Marechal
  7. Juventud Sin Futuro By Trejo Mendez, P.
  8. The Institutionalization of Socio-Responsible Business: Global Trends and Regional Features By Frolov, Daniil; Shulimova, Anna
  9. Dependent and Independent social enterprises: a comparative study of organizations in international perspective By Oberemko, Oleg A.; Moskovskaya, Alexandra A.; Chernyshova, Marina V.
  10. Le trottoir comme hétérotopie : exploration d’une nouvelle utopie contemporaine dans la consommation By Roux, Dominique; Guillard, Valérie
  11. Workers' propensity to cooperate with colleagues and the general population: a comparison based on a field experiment By Ermanno Tortia; Martha Knox Haly; Anthony Jensen
  12. Land, assets, and livelihoods: Gendered analysis of evidence from Odisha State in India: By Savath, Vivien; Fletschner, Diana; Peterman, Amber; Santos, Florence
  13. Innovation in State-owned Enterprises: Reconsidering the Conventional Wisdom By Belloc, Filippo
  14. Closing the gender asset gap: Learning from value chain development in Africa and Asia: By Quisumbing, Agnes R.; Rubin, Deborah; Manfre, Cristina; Waithanji, Elizabeth; van den Bold, Mara; Olney, Deanna K.; Meinzen-Dick, Ruth Suseela
  15. Metaphors and Analogies in Institutional Economic Theory By Frolov, Daniil; Lavrentyeva, Anna
  16. GINI Policy Paper 2: A supplementary measure of income poverty including housing: advantages and risks, measurement challenges and policy implications By Virginia Maestri
  17. La critique du capital au XXIe siècle:à la recherche des fondements macroeconomiques des ingéalitéd By Guillaume Allègre; Xavier Timbeau
  18. Reform or Radicalism: Left Social Movements from the Battle of Seattle to Occupy Wall Street By Rowe, James K; Carroll, Myles
  19. Gender, control, and crop choice in northern Mozambique: By de Brauw, Alan
  20. Monitoring the European CDS Market through Networks: Implications for Contagion Risks. By Clerc, L.; Gabrieli, S.; Kern, S.; El Omari, Y.
  21. GINI Policy Paper 1: The inequality content of some of the Europe 2020 flagships By Bogliacino, F.
  22. GINI Policy Paper 4: Measuring material deprivation over the economic crisis: Does a re-evaluation of ‘need’ affect measures of material deprivation? By Abigail Mcknight

  1. By: Philip Du Caju (National Bank of Belgium); Theodora Kosma (Bank of Greece); Martina Lawless (Central Bank of Ireland); Julian Messina (World Bank and Universitat de Girona); Tairi Room (Eesti Pank)
    Abstract: The rarity with which firms reduce nominal wages has been frequently observed, even in the face of considerable negative economic shocks. This paper uses a unique survey of fourteen European countries to ask firms directly about the incidence of wage cuts and to assess the relevance of a range of potential reasons for why they avoid cutting wages. Concerns about the retention of productive staff and a lowering of morale and effort were reported as key reasons for downward wage rigidity across all countries and firm types. Restrictions created by collective bargaining were found to be an important consideration for firms in euro area countries but were one of the lowest ranked obstacles in non-euro area countries. The paper examines how firm characteristics and collective bargaining institutions affect the relevance of each of the common explanations put forward for the infrequency of wage cuts
    Keywords: labour costs; wage rigidity; firm survey; wage cuts; European Union
    JEL: J30 J32 J33 J51 C81 P5
    Date: 2014–01
  2. By: Todorova, Zdravka
    Abstract: The article seeks to contribute to the literature on social provisioning as an organizing concept in heterodox economics. Particularly, the article details social provisioning as an amalgamation of processes and as a part of a system of culture-nature life process. First, the article delineates a categorization of social provisioning activities with respect to motivation in their organization – monetary and non-monetary, emphasizing the differences, as well as links between those. Second, the article discusses valuation of social activities, applying institutional theory. Third, the concept of a social process is delineated. It is argued that the concept captures agency and structure without reducing one to the other, and allows for theorizing open-endedness of social provisioning. The fourth section offers a categorization of processes and briefly explains each one of those, conceptualizing social provisioning within a historical culture-nature life process. Finally, the article concludes.
    Keywords: Social Provisioning; Social Process; Institutions; Heterodox Economics; Feminist-Institutional Economics; Post Keynesian Economics; Monetary Theory of Production; Social Economics; Political Economy
    JEL: B41 B52 B54 E02 Z1
    Date: 2014–03–21
  3. By: Gazi Islam (MC - Management et Comportement - Grenoble École de Management (GEM))
    Abstract: The author contextualizes recent developments in socio-cognitive approaches to leadership by drawing on psychoanalytic conceptions of self-identity. It is argued that psychoanalytic views of the self are complementary to contemporary social-cognitive approaches, although historical divergences in these literatures have impeded mutual dialogue. This initiative at dialogue examines charismatic, schema, and self- identity theories of leadership within a psychoanalytic framework, arguing that when self-identity is viewed broadly, convergences between these approaches become apparent. A broad view of the self makes notions of authority central to the construction of personal identities, underscores the ambivalence and relationality of self-processes, and highlights the normative assumptions underlying followership that may be difficult to theorize with contemporary socio-cognitive approaches.
    Keywords: Identity; charisma; leadership; self-concept
    Date: 2014
  4. By: Ambrosino, Angela
    Abstract: The paper investigates two different approaches to the analysis of institutions using game theory and discusses their methodological and theoretical implications for further research. Starting from von Neumann and Morgenstern’s theory, we investigate how game theory has been applied to the analysis of institutions, these being considered, as in Hayek (1967, 1988a) as the unplanned outcomes of self-interested individual behavior. We focus on Schotter’s (1981) and Schelling’s (1960) alternative approaches. The different ways in which these authors use von Neumann and Morgenstern’s concepts of coalition and indeterminacy of solutions play an important role in explaining the spontaneous emergence of institutions from interaction. We argue that this issue is also of importance in explaining how Schotter and Schelling’s theories fit with the main features of Hayek's theory of institutions.
    Keywords: Institutions, Game Theory, Cognition, Hayek, Schotter, Schelling
    JEL: B40 B31 B52 B20
    Date: 2009
  5. By: David Reinstein;
    Abstract: This essay broadly considers gifts, giving and gift economies, modern and pre-modern, from a mainstream (and behavioural) economics perspective.
    Date: 2014–03–01
  6. By: Olivier Brette (INSA Lyon; CNRS Environnement Ville Société (EVS); University of Lyon); Thomas Buhler (University of Franche-Comté; CNRS ThéMA); Nathalie Lazaric (GREDEG CNRS; University of Nice Sophia Antipolis); Kevin Marechal (Université Libre de Bruxelles, CESSE-ULB; Belgian National Fund for Research (FNRS))
    Abstract: This paper adds to the growing empirical evidence on the importance of habits in governing human behaviour, and sheds new light on individual inertia in relation to transportation behaviour. An enriched perspective rooted in Veblenian evolutionary economics (VEE) is used to construct a theoretical framework in order to analyse the processes at play in the formation and reinforcement of habits. The empirical study explores more specifically the synchronic processes strengthening the car-using habit. In addition to underlining the shortcomings of a ‘decision theory’ perspective to address urban transportation behaviours, we find that synchronic habits can have a significant effect on behavioural inertia. Our results suggest the existence of positive feedback between the development of synchronic habits, qualitative perceptions of driving times and reinforcement of the car-using habit. The paper points out also that the diachronic dimension of habits would constitute another promising domain for further research on behavioural inertia in transportation.
    Keywords: Habit, Behaviour, Urban transportation, Mode choice, Synchronic, Diachronic
    JEL: B52 D01 D11 D12 R40 R49
    Date: 2014–03
  7. By: Trejo Mendez, P.
    Abstract: This paper looks at the subjective experiences of Spanish organized youth who are being affected by the economic crisis. This paper follows a standpoint epistemology. This research focuses on how their practices question the current dominant discourse depicting today’s Spanish youth as a “lost generation”. Theory on generation is used in order to denote the problematic idea of trying to identify today what can only be defined (in the future). Ideas from anarchist politics and autonomous movements are used to explore Spanish youth current ways of organizing and making politics. Post- structuralist theory is used to explore the influence of discourses in constructing reality. The theories used, together with the stories collected through fieldwork invite us to: First, consider other realities and possibilities of future. Specifically the ones that don’t follow the dominant way of being economically developed. Second, move from the event that defines a cohort (economic crisis) in order to focus on the experiences of those who are being affected by it. Finally, look at the ways these youth are resisting and organizing, creating alternatives within the context of economic crisis.
    Keywords: Spanish youth, economic crisis, autonomous movement, collective action, precariousness, anarchist politics, future, prefigurative politics, generation
    Date: 2014–02–27
  8. By: Frolov, Daniil; Shulimova, Anna
    Abstract: The article describes the dual nature of business social responsibility: global and regional. The increased pressure of globalization produces a new stakeholder expectations and efforts of companies to conform to it. As a result of return reaction the growing requirements of International standards of business ethics create common effect on corporate management and organizational behavior. However, the institutional conditions of the firm evolution are determined by regional basics of institutional environment. It sets up a local differentiation of socio-responsible activities of corporate sector. Focused on the possibilities of institutional transplantation we consider economic benefits of an importation and a further adaptation of business social innovations for developing countries and Russia.
    Keywords: business social responsibility; firm evolution; corporate management and marketing; institutions; institutionalization; transplantation
    JEL: B52
    Date: 2014
  9. By: Oberemko, Oleg A.; Moskovskaya, Alexandra A.; Chernyshova, Marina V.
    Abstract: The paper is dedicated to organizational dependence – independence of social enterprises (SEs) taking into account their multifaceted nature and complex business models shaping in line with the task of solving social problems at the crossroads of market, not-for-profit activity and state regulation
    Keywords: sociology of non-profit sector, social entrepreneurship, self-regulation
    JEL: L31 L39 L89
    Date: 2013–10–25
  10. By: Roux, Dominique; Guillard, Valérie
    Abstract: This article aims to confront Foucault’s (2001) concept of heterotopia (2001) – the physical location of an utopia – with a "new, "informal and non-institutionalized retail space for gleaning second hand items : the sidewalk during the time of bulky item collection. A qualitative survey conducted with 17 urban gleaners shows that this place may be indicative of some contemporary utopias. Drawing on six distinctive features that define an heterotopia, we show that the sidewalk 1) is both an heterotopia of crisis and deviation; 2) changed function over time in becoming now a place for provisioning; 3) is a juxtaposition of different places, places of transit and supply, but also of personal stories via those of objects and/or encounters; 4) is an heterochrony, i.e. a moment that suspends time and traditional practices; 5) is a closed space between the gleaner and the real and imagined gaze of the other; and finally 6) has a function of supply, but also of denounciation of the consumption system. The concept of heterotopia finally underscores the importance of space in the field of consumption, not only with places being the unit of the analysis, but also in the form of dialogics that these "counter-sites" maintain with more conventional forms.
    Keywords: Glanage urbain; hétérotopies; modes alternatifs d’approvisionnement; marges de la consommation; critique marketing; Urban gleaning; heterotopia; alternative modes of provisioning; margins of the consumption system; critical marketing;
    JEL: D11 D12 D19 E26 M31
    Date: 2014–01
  11. By: Ermanno Tortia (University of Trento, Department of Economics and Management); Martha Knox Haly (University of Sydney, Business School); Anthony Jensen (University of Sydney, Business School)
    Abstract: The current paper is a comparative analysis of employee participation in organisational governance in Italy and Australia. Cultural values determine the expression of institutional configurations, and to this end, we have adopted Hall and Soskice's Varieties of Capitalism and the Theory of the Firm as informing theoretical frameworks for our comparative study. Hall and Soskice represent Italy as a hybrid economy, and Australia as a liberal market lead economy. The main theoretical contribution of our paper is twofold. First, we hypothesize that the Australian Liberal Market Economic Configuration offers fewer opportunities for employee participation in organisational governance. Second, we critique mainstream Theory of the Firm on the ground that it is inadequate in explaining the phenomenon of employee participation across both economic configurations. We tested our hypotheses on some crucial institutional dimensions: (i) the role of the industrial relations system; (ii) the nature of corporate law; (iii) and the relative diffusion of different organisational forms with participative vis à vis exclusionary governance (although we acknowledge that participatory organisational forms are rare in both Italy and Australia) . We find support for differential facilitation of employee participation across Australian LME and Italian Hybrid economies.
    Keywords: worker cooperatives; worker control; third sector; neo liberal firm; industrial relations; labour law; corporate law; Australia; Italy
  12. By: Savath, Vivien; Fletschner, Diana; Peterman, Amber; Santos, Florence
    Abstract: Using data collected from the evaluation of two government land titling interventions in the Indian state of Odisha, this paper examines key relationships linking land and livelihood strategies. The investigation is one of the first to explicitly use the Gender, Agriculture, and Assets Project framework to gain additional insights on how gender–asset dynamics relate to household livelihood strategies.
    Keywords: Land, Livelihoods, Gender, assets, Ownership,
    Date: 2014
  13. By: Belloc, Filippo
    Abstract: A very well established economic literature maintains that State-owned enterprises (SOEs) are inefficient comparatively to privately-owned ones (POEs). In this paper we argue that SOEs' inefficiency is not due to the State ownership per se, rather it is caused by some conditions other than ownership which SOEs often, but not necessarily, relate to. In particular, we focus on dynamic efficiency - specifically, the production of technological innovation - of SOEs in manufacturing industries, where SOEs should contend with POEs in a competitive environment. We suggest that targeted measures aimed at increasing managers' commitment to long-term investment strategies and at reducing corruption and political interference, though being complex and difficult to implement, can be much more (positively) incisive on long-run technical progress than the simple privatization of companies. This leaves room for exploration and implementation of policies that might reconcile State ownership and market competition in industrial sectors.
    Keywords: State-owned enterprises; innovation; privatization.
    JEL: H11 L33 O31 P12
    Date: 2013–11–01
  14. By: Quisumbing, Agnes R.; Rubin, Deborah; Manfre, Cristina; Waithanji, Elizabeth; van den Bold, Mara; Olney, Deanna K.; Meinzen-Dick, Ruth Suseela
    Abstract: This paper explores initial findings from four case studies in the Gender, Agriculture, and Assets Project on changes in gender relations in different agricultural interventions. It documents the adaptive measures projects are taking to encourage gender-equitable value chain projects. Findings suggest that the dairy and horticulture value chain cases have successfully increased the stock of both men’s and women’s tangible assets and those assets they own jointly.
    Keywords: Gender, Women, assets, Agricultural development, evaluation, food security, Smallholders, Value chain,
    Date: 2014
  15. By: Frolov, Daniil; Lavrentyeva, Anna
    Abstract: The article presents the critical review of physical and biological metaphors in the institutional economic theory. It is proved that physical (including mechanistic) analogies are most adequate for the associative characteristic of a statics and kinetics of institutional systems, and biological – for the figurative description of their evolution. Efficiency of use of metaphors and analogies from the most developed, vanguard areas of natural-science researches is shown.
    Keywords: metaphors, institutionalism, institutions, path dependence, vacuum, field, impurities, niche construction, transplantation, genetics, evolution
    JEL: B52
    Date: 2014
  16. By: Virginia Maestri
    Abstract: The European Commission set a target for the reduction of poverty and social exclusion by 2020. Progress are monitored with the help of EU social indicators. Although the inclusion of imputed rent has been advocated by experts in the measurement of income, it has not been adopted in standard social EU2020 indicators. This paper considers the inclusion of housing in the concept of disposable income, put forwards measurement challenges and effect of different approaches. The paper shows that: • Housing wealth and expenditures increased in the last decades • EU2020 target and flagship initiative on the reduction of poverty and social exclusion pay partial attention to housing • Although expert advice the inclusion of imputed rent in the concept of disposable income, this is not part of EU social indicators, because of comparability, measurement and theoretical problems • Several methods are available for the inclusion of housing in disposable income: rental equivalence subjective and objective) and capital market method for imputed rent; out of pocket approach for housing expenses • While the inclusion of imputed rent generally reduces income inequality and poverty, the inclusion of housing expenses increases both; however, imputed rent generates considerable re-ranking and its importance diminished in the early phases of the Great Recession • The inclusion of housing expenses (out of pocket approach) seems more suitable for poverty analyses, while the inclusion of imputed rent estimated with the capital market approach seems more appropriate for tax analyses • Further improvement in EUSILC data are need for a correct measurement of housing returns and costs, in particular with reference to mortgage interest payments
    Date: 2013–06
  17. By: Guillaume Allègre (Ofce,Sciences-po); Xavier Timbeau (Ofce, Sciences-po)
    Abstract: Dans son ouvrage Le capital au XXIe siècle, Thomas Piketty propose une analyse critique de la dynamique de l’accumulation du capital. L’auteur montre que si le rendement du capital (r) est plus élevé que la croissance économique (g), ce qui a pratiquement toujours été le cas dans l’histoire, alors il est presque inévitable que les patrimoines hérités dominent les patrimoines constitués et que la concentration du capital atteigne des niveaux extrêmement élevés. Le livre cherche ainsi des fondements macroéconomiques (r>g) aux inégalités alors que les explications habituelles sont d’ordre micro-économique. Nous soulignons que l’on peut interpréter les faits décrits selon une causalité différente où les inégalités découlent du fonctionnement (imparfait) des marchés, des rentes de rareté et de l’établissement des droits de propriété. Selon cette interprétation, ce n’est pas r>g qui a transformé les entrepreneurs en rentiers, mais la mise en place de mécanismes permettant l’extraction d’une rente perpétuelle qui explique la constance historique r>g. Cette interprétation différente des mêmes phénomènes a des conséquences en termes de politique publique. L’imposition ex post du capital, si nécessaire, ne peut être qu’un choix de second rang : il faut d’abord lever les contraintes de rareté et se préoccuper de la définition des droits de propriété ainsi que des droits des propriétaires et des non-propriétaires.
    Date: 2014–03
  18. By: Rowe, James K; Carroll, Myles
    Abstract: We examine two recent cases of relative Left success—the Battle of Seattle and Occupy Wall Street—and argue that in each case an effective dynamism between radical and reform wings drove gains. This analysis is not meant to deny political difference and hawk false unity. Instead we want to challenge the luxury of mutual dismissal with the actually existing benefits of movement dynamism. By dynamism we mean contributions arising from different activist wings and productively interacting to increase overall movement power. Our ultimate claim is that the North American Left will yield greater success by becoming more self-conscious about the concrete benefits of movement dynamism.
    Keywords: Life Sciences, Social and Behavioral Sciences, Reform, Revolution, Battle of Seattle, Occupy Wall Street, Social Movements, Left politics
    Date: 2014–03–01
  19. By: de Brauw, Alan
    Abstract: This paper studies women’s empowerment in northern Mozambique as it relates to agriculture, considering in particular the factors that lead to women’s managing the plots that they nominally control. Women control about 30 percent of the plots in the data but manage only about 70 percent of those plots. Using a unique panel dataset, the study finds that women are more likely to manage plots when households have historically had access to off-farm labor, typically completed by men.
    Keywords: Gender, Women, Agriculture, Food production, crop choice,
    Date: 2014
  20. By: Clerc, L.; Gabrieli, S.; Kern, S.; El Omari, Y.
    Abstract: Based on a unique data set referencing exposures on single name credit default swaps (CDS) on European reference entities, we study the structure and the topology of the European CDS market and its evolution from 2008 to 2012, resorting to network analysis. The structural features revealed show bilateral CDS exposures describing growing scale-free networks whose highly interconnected hubs constitute both a strength and weakness for the stability of the system. The potential “super spreaders” of financial contagion, identified as the most interconnected participants, consist mostly of banks. For some of them net notional exposures may be particularly large relative to their total common equity. Our findings also point to the importance of some non-dealer/non-bank participants belonging to the shadow banking system.
    Keywords: Credit default swaps; Financial networks; Centrality measures; Contagion; Shadow banking.
    JEL: E17 E44 E51 G21 G28
    Date: 2014
  21. By: Bogliacino, F.
    Abstract: The European Commission put forwards the strategy for the 2010-2020 period in the Europe 2020 Communication, an ambitious and modern programme of policies aimed at achieving smart, sustainable and inclusive growth. Inequality should be seen as a cornerstone of both sustainable and inclusive growth. In fact, unequal societies are also more unstable societies (i.e. unsustainable) and more polarized (i.e. exclusive). The analysis of available data and the established consensus in the literature shows that: 1. Labour market effects of innovation are complex, but there is a consensus that technology increases inequality in labour market outcomes; 2. Technological output shows a high degree of persistence; organizational capabilities and accumulated knowledge are good predictors of innovativeness; 3. Financing of innovation is a bottleneck. However, innovativeness is not a good predictor of SMEs growth in terms of employees; although they play an important role in sustaining innovation, financial institutions may be driven and biased by stock market performances; 4. Although the single market is a strong asset, structural imbalances internal to the Euro Area are a serious problem that has not been solved yet. Four main recommendations came out from this analysis: 1. The focus on the educational system is necessary to accomplish equity in the labour market. At the same time, it is not sufficient, since despite the recent massive reduction of educational inequality, wage inequality and the steepness of educational gradient of access to employment increased. 2. Smart specialization does not solve the problem of persistence of income differences across regions and countries, because there is a hierarchy of sectors in terms of productivity growth due to the difference in maturity across technological trajectories. At the moment, it is difficult to obtain results in terms of cohesion indicators unless strong public involvement in basic science is envisaged, with fully open and appropriable results; 3. Solving the problem of access to financing by innovative companies should go hand in hand with a careful implementation of regulatory checks to avoid the excesses which occurred in the US in the last twenty years, where new corporate governance based on short term targets have contributed to the increase of top income shares and the worsening of inequality; 4. Finally, structural imbalances inside the Euro Area are a serious fault line that should be taken into account. Cumulative external deficits drove massive inflows of capital, increase in asset prices that did not reflect fundamentals and financial crises. Although further scrutiny on causality is needed, this has been associated with increase in top income share.
    Date: 2013–06
  22. By: Abigail Mcknight (London School of Economics, Centre for Analysis of Social Exclusion)
    Abstract: Measures of material deprivation attempt to capture enforced deprivation. To achieve this survey respondents are usually asked to indicate where non possession of an item of interest is due to not being able to afford it (classified as enforced deprivation) or for some other reason (such as not wanting or needed the item). The information presented in this paper shows that individuals are more likely to express that they do not want or need an item the lower their household income. In addition after 2007 as the economic crisis began to hit households there is some evidence of an increase in the share of households reporting that they lived without these items for a reason other than the fact that they couldn’t afford. These findings raise some important questions about what this category is capturing and that classifying these individuals as not materially deprived of an item may lead to an under recording of material deprivation. An explanation is required to understand why individuals living in lower income households are more likely to report that deprivation is not “enforced” than are individuals living in higher income households. Some preliminary model estimates suggest that the relationship cannot be explained by differences in age, gender or residential population density, at least for cars. In many European countries the impact of the recent economic and financial crisis hit households hard in 2011, 2012 and 2013 as unemployment increased. The EU-SILC microdata, used in this analysis, is currently available up to 2011 which will not capture the full impact of the crisis and its aftermath on material deprivation. More recent data may provide some further evidence on how individuals/households re-evaluate “need/want” as their income falls. It is shown that after 2007/2008 there have been annual increases in the share of individuals reporting that they are unable to meet unexpected financial expenses and an increase in the already steep income gradient. This suggests that as durables need repair or replacement there will be a further increase in the share of households going without these items unless household incomes increase.
    Date: 2013–09

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