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on Heterodox Microeconomics |
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Issue of 2019‒09‒30
eighteen papers chosen by Carlo D’Ippoliti Università degli Studi di Roma “La Sapienza” |
| By: | Frolov, Daniil |
| Abstract: | The paper proposes to abandon the one-sidedly negative interpretation of institutional anomalies (non-optimal, inefficient, dysfunctional institutions) and rethink them as the main products and manifestations of institutional complexity. The concept of extitutions is introduced, which are understood as models of social order that go beyond the bounds of institutions and are based on variations of norms. The extitutional interpretation of the nature of institutional anomalies allows a critical review of the traditionally associated dichotomies (e.g. opposition of ideal and dysfunctional, inclusive and extractive institutions), analytical approaches (functionalist, mechanistic, isolationist, static, etc.) and stereotypes (e.g. assessment of institutions from the standpoint of public interests, “presumption of guilt” of interest groups, stigmatization of hybrid institutional trajectories, etc.). The article proposed a set of conceptual shifts towards increasing the objectivity and realism of the analysis of institutional anomalies in line with the research program of post-institutionalism. |
| Keywords: | institutions; extitutions; inefficient institutions; institutional traps; institutional failures; institutional complexity; institutional anomalies; post-institutionalism |
| JEL: | B41 B52 |
| Date: | 2019–07–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:95960&r=all |
| By: | Gander, Sascha |
| Abstract: | This paper attempts to clarify how the European economic crisis from 2007 onwards can be understood from the perspective of a Marxian monetary theory of value that emphasizes in-trinsic, structural flaws regarding capitalist reproduction. Chapter two provides an empirical description of the European economic crisis, which to some extent already reflects the struc-tural theoretical framework presented in chapter three. Regarding the theoretical framework Michael Heinrich's interpretation of 'the' Marxian monetary theory of value will be presented. Heinrich identifies connections between production and realization, between profit and inter-est rate as well as between industrial and fictitious capital, which represent contradictory tendencies for which capitalism does not have simple balancing processes. In the context of a discussion of 'structural logical aspects' of Marx's Critique of the Political Economy, explana-tory deficits of Heinrich's approach are analyzed. In the following, it is argued that Fred Mose-ley's view of these 'structural logical aspects' allows empirical 'applications' of Marxian mon-etary theories of value. It is concluded that a Marxian monetary theory of value, with the characteristics of expansive capital accumulation and its limitations, facilitates a structural analysis of the European economic crisis from 2007 onwards. In this line of argument, expan-sive production patterns are expressed, among other things, in global restructuring processes, while consumption limitations are mitigated by expansive financial markets and shifts in ex-port destinations. |
| Keywords: | Marxian monetary theory of value,change in plan debate,ideal average,transfor-mation problem,European economic crisis,overproduction,Heinrich,Moseley |
| JEL: | B51 B59 D30 D46 E11 E21 E22 E23 E40 E50 F10 F21 G15 G18 G20 N10 N20 O52 P16 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ipewps:1252019&r=all |
| By: | Heise, Arne |
| Abstract: | [Introduction] Over the past three decades, a small but very productive Post-Keynesian and Marxian research community has engaged in the elaboration of a scientific research programme (SRP) that has come to be known as wage and profit-led regime research.1 In dozens of journal articles in almost every heterodox economic journal, particularly the Cambridge Journal of Economics, the primary aim has been to reiterate the classical political economy conception of functional income distribution as a major determinant of economic development and employment, from both a Keynesian (effective demand) and Marxian (class struggle) perspective. Only recently, the Review of Keynesian Economics (RoKE) dedicated - convening almost the entire 'wage and profit-led regime' community - an incredible four (consecutive) issues to delineating and discussing this Denkstil. The International Labour Office (ILO), meanwhile, commissioned a major research initiative investigating the relationship between functional income distribution and growth (see Lavoie/Stockhammer 2013a).2 Since only very few critical voices (such as Peter Skott (2017) joined this illustrious debate, I would like to re-open this discussion about the scientific and political merits of the 'wage and profit-led regime' approach. My intention is to examine whether this SRP can fill an obvious gap in Post-Keynesian theory. In accordance with Keynes' considerable neglect of distributional questions in his General Theory, most Post-Keynesians have underemphasised a phenomenon that has become one of the most socially and politically concerning problems of our times: growing income inequality. This article is structured as follows: in the next section, the main arguments of the wage and profit-led regime approach will be delineated and scrutinised with reference to the Bhaduri-Marglin model, which is regarded as 'a widely used workhorse model' (Stockhammer 2017: 25). I will subsequently question its theoretical bases, its empirical validity, and its policy applicability. Finally, I offer a number of concluding remarks on the merits of the distributional regime approach. |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cessdp:74&r=all |
| By: | Rothstein, Sidney A. |
| Abstract: | This paper analyzes discourse in the workplace in order to explain puzzling patterns of precarity in twenty-first century capitalism. Tech workers' central role in digital transformation endows them with labor market power reflected by their high wages, but during economic downturns, when demand for their skills decreases, even they are vulnerable to downsizing. Comparing workers' responses to downsizing at two sites of an American tech firm, this paper shows how management disempowers workers by framing the employment relationship in a financial discourse. Disposing workers to believe that their jobs are threatened by market forces beyond their control, rather than by managers' decisions, this financial discourse undermines labor's established power resources by persuading workers that mobilizing will be ineffective in protecting their jobs. Relying on detailed case study evidence, this paper demonstrates the importance of discourse to explaining variation in worker power. It argues that the workplace should play a larger role in comparative political economy, particularly in explaining labor market outcomes related to digital transformation. |
| Keywords: | capitalism,discourse,hegemony,knowledge economy,power,workers,Arbeitnehmer,betriebliche Diskurse,Hegemonie,Kapitalismus,Macht,Wissensökonomie |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:mpifgd:198&r=all |
| By: | Pierre Gosselin (IF); A\"ileen Lotz (IRMA); Marc Wambst (IRMA) |
| Abstract: | This paper presents a model of capital accumulation for a large number of heterogenous producer-consumers in an exchange space in which interactions depend on agents' positions. Each agent is described by his production, consumption, stock of capital, as well as the position he occupies in this abstract space. Each agent produces one differentiated good whose price is fixed by market clearing conditions. Production functions are Cobb-Douglas, and capital stocks follow the standard capital accumulation dynamic equation. Agents consume all goods but have a preference for goods produced by their closest neighbors. Agents in the exchange space are subject both to attractive and repulsive forces. Exchanges drive agents closer, but beyond a certain level of proximity, agents will tend to crowd out more distant agents. The present model uses a formalism based on statistical field theory developed earlier by the authors. This approach allows the analytical treatment of economic models with an arbitrary number of agents, while preserving the system's interactions and complexity at the individual level. Our results show that the dynamics of capital accumulation and agents' position in the exchange space are correlated. Interactions in the exchange space induce several phases of the system. A first phase appears when attractive forces are limited. In this phase, an initial central position in the exchange space favors capital accumulation in average and leads to a higher level of capital, while agents far from the center will experience a slower accumulation process. A high level of initial capital drives agents towards a central position, i.e. improve the terms of their exchanges: they experience a higher demand and higher prices for their product. As usual, high capital productivity favors capital accumulation, while higher rates of capital depreciation reduce capital stock. In a second phase, attractive forces are predominant. The previous results remain, but an additional threshold effect appears. Even though no restriction was imposed initially on the system, two types of agents emerge, depending on their initial stock of capital. One type of agents will remain above the capital threshold and occupy and benefit from a central position. The other type will remain below the threshold, will not be able to break it and will remain at the periphery of the exchange space. In this phase, capital distribution is less homogenous than in the first phase. |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1909.11635&r=all |
| By: | Frolov, Daniil |
| Abstract: | The transaction cost economics has accumulated a mass of dogmatic concepts and assertions that have received high stability under the influence of path dependence. These include the dogma about transaction costs as frictions, the dogma about the unproductiveness of transactions as a generator of losses, Stigler-Coase theorem and the logic of transaction cost minimization, the dogma about the priority of institutions providing low-cost transactions. The listed dogmas underlie the prevailing tradition of transactional analysis – the Coase-Williamson paradigm – which, in turn, is the foundation of neo-institutional theory. Therefore, the community of new institutionalists implicitly block attempts of a serious revision of this dogmatics. The purpose of the article is to substantiate a post-institutional (alternative to the dominant institutional discourse) perspective for the development of transactional studies based on rethinking and combining forgotten theoretical alternatives. We are talking about Commons’s theory of transactions, Wallis-North’s theory of transaction sector and Zajac-Olsen’s theory of transaction value. The article provides arguments and examples in favor of the broader explanatory possibilities of post-institutional transactional analysis. |
| Keywords: | institutions, institutional complexity, transactions, transaction costs, transaction value, post-institutionalism |
| JEL: | B4 B52 |
| Date: | 2019–07–19 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:95959&r=all |
| By: | Cailin O'Connor |
| Abstract: | Why are we good? Why are we bad? Questions regarding the evolution of morality have spurred an astoundingly large interdisciplinary literature. Some significant subset of this body of work addresses questions regarding our moral psychology: how did humans evolve the psychological properties which underpin our systems of ethics and morality? Here I do three things. First, I discuss some methodological issues, and defend particularly effective methods for addressing many research questions in this area. Second, I give an in-depth example, describing how an explanation can be given for the evolution of guilt---one of the core moral emotions---using the methods advocated here. Last, I lay out which sorts of strategic scenarios generally are the ones that our moral psychology evolved to `solve', and thus which models are the most useful in further exploring this evolution. |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1909.09198&r=all |
| By: | Seungwoo Shin; Eunjung Shin; Yoo Seonjong; Hyun Seok Lee |
| Abstract: | Although there are numerous research papers regarding the ethical climates of western countries (Victor and Gullen, 1987; Arnaud and Schminke, 2012), research findings regarding the ethical climate of Korea are relatively few or minute (Lee and Yoshihara, 1997). This paper is one of the pioneering efforts in the line of research on ethical work environment within the Korean property industry.We surveyed 322 certified Korean appraisers nationwide who are currently practicing their profession in 2018. We have three hypotheses: First, the older (and consequently, more experienced) the appraisers are, the more sympathetic they will be to clientele effects; Second, appraisers who have majored in management during their university years are more sensitive to profit than appraisers who have majored in other fields such as liberal arts, social science, engineering, and so on; Lastly, male appraisers value loyalty to people [Guanxi, as explained by Cheng and Wang (2015)] most highly, while female appraisers most highly value rationality, at least in Korea.We conjecture that certified Korean appraisers are clever enough to think of this survey as a sort of qualifying exam. They try their best to find the correct answers to obtain the perfect score as in a high school exam. Considering that there exists a “If I do it, it’s romance, but if you do it, it’s cheating” phenomenon in Korea as described by Lee and Yoshihara (1997), we need to improve our questionnaire to obtain credible and sound data of what we want to measure. |
| Keywords: | appraisers; ethical climate; guanxi; Survey |
| JEL: | R3 |
| Date: | 2019–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2019_34&r=all |
| By: | Frolov, Daniil |
| Abstract: | The paper on the example of blockchain demonstrates the possibilities of post-institutionalism – a new generation of institutional methodologies and theories, alternative to the new institutional economics. Based on the theory of transaction value, it has been proved that radical reduction of transaction costs by blockchain technologies will not lead to the elimination of intermediaries, but will redirect them to improving the quality of transactions and expanding the offer of additional (including hyperrelevant) transaction services. Using the theory of institutional assemblages, it is argued that it is impossible to form a homogeneous system of blockchain institutions based solely on the principles of decentralization, transparency and openness. The institutional system of blockchain will be organically hybrid, combining elements of opposing institutional logics – regulatory and algorithmic law, Ricardian and smart contracts, private and public systems, uncontrollability and arbitration. Thus, the conclusions of the neoinstitutional theory of blockchain (Davidson, De Filippi, Potts, 2018) are refuted from post-institutional positions. |
| Keywords: | blockchain; smart contracts; digital economy; transaction costs; transaction services; institutions; institutionalism |
| JEL: | B41 B52 O3 |
| Date: | 2019–01–17 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:95962&r=all |
| By: | De Haas, Ralph; Popov, Alexander |
| Abstract: | We study the relation between the structure of financial systems and carbon emissions in a large panel of countries and industries over the period 1990-2013. We find that for given levels of economic and financial development and environmental regulation, CO2 emissions per capita are lower in economies that are relatively more equity-funded. Industry-level analysis reveals two distinct channels. First, stock markets reallocate investment towards less polluting sectors. Second, they also push carbon-intensive sectors to develop and implement greener technologies. In line with this second effect, we show that carbon-intensive sectors produce more green patents as stock markets deepen. We also document an increase in carbon emissions associated with the production of imported goods equal to around one-tenth of the reduction in domestic carbon emissions. JEL Classification: G10, O4, Q5 |
| Keywords: | carbon emissions, financial development, financial structure, innovation |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20192318&r=all |
| By: | Guillaume Cheikbossian (CEE-M - Centre d'Economie de l'Environnement - Montpellier - FRE2010 - INRA - Institut National de la Recherche Agronomique - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier) |
| Abstract: | We provide an evolutionary explanation for the well-established evidence of the existence of in-group favoritism in intergroup conflict. Using a model of group contest, we show that the larger the number of groups competing against one another or the larger the degree of complementarity between individual efforts, the more likely group members are altruistic towards their teammates under preference evolution. |
| Keywords: | Indirect evolutionary approach,Evolutionary stability,Groups,Altruism,Conflicts |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpceem:halshs-02291876&r=all |
| By: | Brett Frischmann (Villanova University); Alain Marciano (MRE - Montpellier Recherche en Economie - UM - Université de Montpellier); Giovanni Ramello (Dipartimento di scienze giuridiche ed economiche, Universita degli studi del piemonte orientale - Universita degli studi del piemonte orienta) |
| Abstract: | Garrett Hardin's "The Tragedy of the Commons" (1968) has been incredibly influential generally and within economics, and it remains important despite some historical and conceptual flaws. Hardin focused on the stress population growth inevitably placed on environmental resources. Unconstrained consumption of a shared resource-a pasture, a highway, a server-by individuals acting in rational pursuit of their self-interest can lead to congestion and worse, rapid depreciation, depletion, and even destruction of the resources. Our societies face similar problems, not only with respect to environmental resources but also with infrastructures, knowledge, and many other shared resources. In this Retrospective, we examine how the tragedy of the commons has fared within the economics literature and its relevance for economic and public policies today. We revisit the original piece to explain Hardin's purpose and conceptual approach. We expose two conceptual mistakes he made, that of conflating resource with governance and conflating open access with commons. This critical discussion leads us to the work of Elinor Ostrom, the recent Nobel Prize in Economics Laureate, who spent her life working on commons. Finally, we discuss a few modern examples of commons governance of shared resources. |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-02288208&r=all |
| By: | Piotr Gabrielczak (University of Lodz); Tomasz Serwach (University of Lodz) |
| Abstract: | The article focuses on power laws and their growing popularity in science in general and in economics specifically. The theoretical mechanisms responsible for their generating are reviewed. We also empirically test whether firm-size distribution of companies in Poland has the characteristics of the Zipf’s law – a special case of a power law. This is confirmed based on an investigation within the sample of 2000 largest companies and a set of alternative estimators of the power law exponent. |
| Keywords: | power law, Zipf’s law, firm-size distribution, scaling |
| JEL: | C46 D39 L25 |
| Date: | 2019–09–20 |
| URL: | http://d.repec.org/n?u=RePEc:ann:wpaper:3/2019&r=all |
| By: | Elisabeth Paul; Oriane Bodson; Valéry Ridde |
| Abstract: | Introduction: Pay-for-performance is expanding in many health systems, both in high-income countries and in low- and middle-income countries (LMICs) where it is commonly known as “performance-based financing” (PBF). PBF results are mixed and it has been criticised for its potential perverse effects. Yet, PBF promoters fail to provide a clear and consistent explanation of why and how it is supposed to produce results and to perform better than alternative approaches. The literature on PBF-related approaches is fragmented across disciplines and much of the current cross-disciplinary research on PBF and similar schemes lacks a sound theoretical basis.1Aim: This study explores the theoretical justifications advanced to legitimate the choice of PBF.Methods: We performed a systematic review of the scientific papers and grey literature on PBF so as to identify the theories utilised to justify it, and critically analyse them.Results: The theoretical approach that has most often been advanced to justify PBF is the principal-agent theory – arguing that its objective is to better align healthcare providers’ incentives with populations’ interests. Surprisingly, while many PBF promoters refer to this theory, a correct utilisation of it leads to the conclusion that considering the specificities of the health sector in LMICs, high-powered incentives (as are inherent to PBF) are not recommended. There is now growing consensus on the fact that the principal-agent theory is not appropriate to justify PBF – notably because it rests on wrong assumptions and does not take context into consideration. Other related (New Institutional) Economics currents have also been used to justified PBF, including property right theory, transaction cost economics, political economy theories, or behavioural economics. Non-economic approaches, relating to organisations sciences and management, have also been used to justify PBF (management control theory, operations and supply management).Conclusion: PBF is actually not justified by any credible “grand theory”, and not yet by convincing theories of change. If PBF cannot be justified neither theoretically, nor empirically, one can only conclude it is promoted on an ideological ground.Reference(s):1. Selviaridis K. Wynstra F. Performance-based contracting: a literature review and future research directions. International Journal of Production Research 2015; 53:12, 3505-3540. |
| Keywords: | Performance-based financing; Theory; Low- and middle-income countries; Scoping review |
| Date: | 2019–09–18 |
| URL: | http://d.repec.org/n?u=RePEc:ulb:ulbeco:2013/293226&r=all |
| By: | S\'ergio Bacelar; Luis Antunes |
| Abstract: | The increasing difficulties in financing the welfare state and in particular public retirement pensions have been one of the outcomes both of the decrease of fertility and birth rates combined with the increase of life expectancy. The dynamics of retirement pensions are usually studied in Economics using overlapping generation models. These models are based on simplifying assumptions like the use of a representative agent to ease the problem of tractability. Alternatively, we propose to use agent-based modelling (ABM), relaxing the need for those assumptions and enabling the use of interacting and heterogeneous agents assigning special importance to the study of inter-generational relations. We treat pension dynamics both in economics and political perspectives. The model we build, following the ODD protocol, will try to understand the dynamics of choice of public versus private retirement pensions resulting from the conflicting preferences of different agents but also from the cooperation between them. The aggregation of these individual preferences is done by voting. We combine a microsimulation approach following the evolution of synthetic populations along time, with the ABM approach studying the interactions between the different agent types. Our objective is to depict the conditions for the survival of the public pensions system emerging from the relation between egoistic and altruistic individual and collective behaviours. |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1909.08706&r=all |
| By: | Lena Fahrner; Theresa Kotulla; Elisabeth Beusker |
| Abstract: | Cooperative housing systems vary depending on different aspects for example in which urban context they are formed, which country specific legislation they observe and which purpose they suit. In general, a housing cooperative is a coalition of people, who wants to be shareholders of real estate projects. On one hand, being member of such a legal corporation is a kind of home ownership. The cooperative corporation owns the land and the buildings. On the other hand, members pay a monthly amount to cover the running expenses of all real estates of the cooperative. Summarizing, they live in the cooperative and they run the cooperative. Today, members of housing cooperatives have different motivations to become part of a cooperation. The affordability of the dwelling is just one of the advantages. Urban structures and residential markets change constantly. Furthermore, the expectations of the population regarding their housing conditions change. These are some of the reasons why the motivations to become member of a housing cooperative vary widely. Within this paper different cooperative housing systems in Sweden, Germany and the USA are analyzed and compared. Thereby, the focus is on the motivations of the members. The aim of this research is to illustrate the different motives of people to become part of a housing cooperative in the selected countries. Sweden, |
| Keywords: | Motivations to become a member of a housing cooperative: Comparison of the national characteristics of Sweden, Germany and the USA |
| JEL: | R3 |
| Date: | 2019–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2019_118&r=all |
| By: | Hersch, Joni (Vanderbilt University) |
| Abstract: | A commonly held perception is that an elite graduate degree can "scrub" a less prestigious but less costly undergraduate degree. Using data from the National Survey of College Graduates from 2003 through 2017, this paper examines the relationship between the status of undergraduate degrees and earnings among those with elite post-baccalaureate degrees. Few graduates of nonselective institutions earn post-baccalaureate degrees from elite institutions, and even when they do, undergraduate institutional prestige continues to be positively related to earnings overall as well as among those with specific post-baccalaureate degrees including business, law, medicine, and doctoral. Among those who earn a graduate degree from an elite institution, the present value of the earnings advantage to having both an undergraduate and a graduate degree from an elite institution generally greatly exceeds any likely cost advantage from attending a less prestigious undergraduate institution. |
| Keywords: | returns to education, higher education, education and inequality, graduate degrees, professional labor markets, human capital, wage differentials, cost-benefit analysis, earnings benefit |
| JEL: | D61 I24 J24 J31 J44 |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12608&r=all |
| By: | Florence TOUYA |
| Abstract: | Aware of the high importance of consumers' private information concerning their willingness-to-buy fair trade goods and taking into account the superior price they are willing to pay for this kind of goods with respect to conventional ones, we choose to feed the debate relative to the appropriateness of the different potential retailing channels. We use a common agency game framework to analyze the changes in the price level according various forms or distribution organization : direct competition between upstream producers or manufacturers (or cooperatives of producers / manufacturers), creation of a cooperative at the downstream stage, delivery of the final good to classical retailing networks. It appears that the private information parameter as well as the nature of the relationship between suppliers on the one hand and the retailer on the other hand are the key variables that determine the price paid by consumers. The conventional retailing channel brings excessively high prices with respect to a distribution made by an entity likely to be assimilated to a cooperative because of a double margin effect that is lessened in the cooperative case since the latter objective function involves additional elements such as providing services to upstream actors. |
| Keywords: | Informational asymmetry, Common Agency, Nonlinear prices, Cooperatives, Cooperation, Pro-social preferences |
| JEL: | D72 D82 H23 H30 H32 H71 H77 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:tac:wpaper:2018-2019_10&r=all |