nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2021‒06‒28
thirteen papers chosen by
Carlo D’Ippoliti
Università degli Studi di Roma “La Sapienza”

  1. Market Power and the Volatility of Markups in the Food Value Chain: The Role of Italian Cooperatives By Hyejin Lee; Johan Swinnen; Patrick Van Cayseele
  2. Islamic economics: morality, rationality, and research By Hasan, Zubair
  3. Culture, Collectivism and Empowerment: The Role of Feminist Ideologies in Women’s Work and Organization By Punita Bhatt; Supriya Garikipati
  4. Capitalism, Populism and Democracy: Revisiting Samuelson’s Reformulation of Schumpeter By Emilio Ocampo
  5. Personal income distribution and the endogeneity of the demand regime By Tonni, Lorenzo
  6. COVID-19 in South Africa: An Intersectional Perspective based on Socio-economic Modeling and Indigenous Knowledge Base By Khan, Haider
  7. An Evolutionary Analysis of Transformative Change in LDCs: the cases of Kenya and Rwanda By Jan Fagerberg; Erika Kraemer-Mbula; Edward Lorenz
  8. Shareholder Value or Public Purpose? From John Maynard Keynes and Adolf Berle to the Modern Debate By Suzanne J. Konzelmann; Victoria Chick; Marc Fovargue-Davies
  9. Economic Complexity Analytics: Country factsheets By PUGLIESE Emanuele; TACCHELLA Andrea
  10. Costs, incentives, and institutions in bridging evolutionary economic geography and global production networks By Rodríguez-Pose, Andrés
  11. The Future of Democracy and Work: The Vote in our Economic Constitution By Ewan McGaughey
  13. Economía formal y economía informal: un estudio sobre la dinámica del crecimiento económico en un modelo de inspiración clásica By Tobón, A

  1. By: Hyejin Lee; Johan Swinnen; Patrick Van Cayseele
    Abstract: Agricultural cooperatives have often been promoted as a way to increase their market power and to obtain stability of profit against uncertainty. This paper estimates the firm-level markups and markup volatility to identify the countervailing market power of cooperatives in the Italian fruits and vegetable sector and the dairy sector. We use the firm-level data of Italian firms for the period 2007-2014. We find that, overall, there is a tradeoff in cooperatives’ role between obtaining market power and stability. Farmer cooperatives in both sectors gain stability in their markups but their markups are lower, on average, than those for non-cooperatives. For processor cooperatives, the fruits and vegetable sector obtains more market power. This appears to arise from the product differentiation strategy of the processors cooperative.
    Keywords: Cooperatives, market power, firm-level markups, volatility
    JEL: L44 Q13 D23
    Date: 2021
  2. By: Hasan, Zubair
    Abstract: The lead paper of Asad Zaman (2021) – Islamic alternatives to the secular morality embedded in modern economics– under review, is lucid and well documented; it speaks of his scholarship. The author talks of secular moral values ingrained in secular economics. Among them, the learned author focuses on ‘pleasure and profit’ as the goals of modern economics and scarcity buried in its foundations. He regards these two as definitional for secular rationality leading to positivism and what it implies. Since this view, in his opinion, is devoid of human traits like compassion, equity, and altruism, he proposes an Islamic alternative as a replacement. While some observations of the author in this regard are well-meaning and well taken, we shall evaluate the author’s critique of mainstream positions to see if they need rejection or reform for compatibility with Islamic norms. We shall argue that reform is a better alternative than refusal.
    Keywords: Morality, Rational behavior, Positivism, Islamic norms, Research issues.
    JEL: B4 C0 Z1
    Date: 2020–07–01
  3. By: Punita Bhatt; Supriya Garikipati
    Abstract: In this paper we analyze the role of ideologies in developing a culture of work and organization among disadvantaged women in societies entrenched in structures of patriarchy. We draw on evidence from Lijjat, a women’s cooperative in India. Through a careful consideration of the context and relations in which marginalized women were able to initiate, develop, and successfully operate a business we draw two key conclusions. First, we find that pragmatist feminist ideologies are particularly supportive of women’s economic activities in patriarchal contexts. Second, we introduce a tiered approach to the study of ideological influences on women’s work arguing that these exist both at the individual level (motivation) and at the collective level (organizational practices). Studying the intersection of these tiers enables a better understanding of how poor women’s work and organization can be supported in maledominated cultures.
    Keywords: gender, entrepreneurship, organizational practices, patriarchy, feminist ideologies, pragmatism, collectivism, cooperative, Lijjat, India
  4. By: Emilio Ocampo
    Abstract: In the 1970s and early 1980s Paul Samuelson reformulated the conditional prediction made by Joseph Schumpeter in Capitalism, Socialism and Democracy by replacing socialism with populism. According to Samuelson, “populist democracy” had attained its fullest development in the Southern Cone. He viewed Argentina as the paradigmatic case that proved his theory. Samuelson’s thesis was that a strong electoral demand for equality and antipathy to business had hindered sustained economic growth. At the time, Samuelson also believed the advanced Western economies could follow the same path as Argentina. The Reagan and Thatcher revolution proved him wrong. However, the emergence of populism in Europe and the US in recent years makes his reformulation of Capitalism, Socialism and Democracy seem more plausible. The objective of this paper is to review and critique Samuelson’s theory and to assess its relevance and usefulness today. Its main conclusions can be summarized as follows. First, Samuelson’s theory is incomplete and therefore has limited power to explain current or past populist waves. Secondly, his analysis of the Argentine case was based on an erroneous interpretation of Argentine history. Third, despite being an outlier, Argentina’s addiction to populism offers a cautionary tale.
    Keywords: Samuelson, Schumpeter, Capitalism, Socialism, Democracy, Populist Democracy, Argentina, Chile, Uruguay.
    JEL: B20 B30 N16 O54 P48
    Date: 2021–06
  5. By: Tonni, Lorenzo
    Abstract: This paper deals with two intrinsically linked issues: the endogeneity of the demand regime and the personal distribution impact on aggregate demand. By microfounding the savings function, the aggregate savings rate is an increasing function of the Gini index, which in turn is decomposed as a function of the functional income distribution and the Gini indices for wages and profits. By assuming that saving is a function of personal rather than functional income distribution, an increase of the labour share is effective in boosting consumption and aggregate demand, not per se, but only as long as it reduces personal inequality. As the labour share increases, depending on the distribution of wages and profits, both the demand regime type – the sign of the slope of the demand schedule - and its strength- the size of the slope of the demand schedule - can endogenously change. Concerning the former, there can be a threshold value for the wage share beyond which there is a shift from wage-led to profit-led demand. The analysis shows that, unlike most Kaleckian models, profit inequality is just as important as wage inequality in determining the demand regime type and its strength.
    Keywords: Personal distribution, functional distribution, wage-led, profit-led, non-linear demand, endogenous demand regime
    JEL: B50 D31 D33 E11 E12
    Date: 2021–06
  6. By: Khan, Haider
    Abstract: Abstract This paper examines pandemic relief and development policies through the case study of South Africa during COVID-19 in order to create a broader understanding about problems facing developing countries during such crises. Specifically, it evaluates the strengths and limits of the government’s current policy approach. Furthermore, it proposes a more socially relevant quantitatively derived package through a model based counterfactual policy experiment that can connect immediate relief with long-run development policies from a socially embedded capabilities perspective. The paper uses an intersectional approach and utilizes Social Accounting Matrix (SAM) to identify the production sectors that are not only the most impacted and are the most vulnerable, but also have room for maximal future development. It also makes a preliminary attempt to posit possible improvements in people’s well-being based on indigenous knowledge. Indigenous knowledge systems can be integrated with modified existing public health models. Our multisectoral analysis highlights the importance of the indigenous knowledge base in evaluations of people’s well-being. Our study finds specific production activities such as agriculture, construction, land transport, mining and real estate sectors to be labor-intensive and vital to the economy. With proper modifications, the methodology and framework used for South Africa will be applicable for other developing countries. This will help direct immediate resources strategically and efficiently to key areas of the developing economies for optimal development from a capabilities perspective.
    Keywords: Keywords: Covid-19, socially embedded capabilities, intersectionality, Social Accounting Matrix, Development, South Africa
    JEL: A1 A2 O1
    Date: 2021–06–16
  7. By: Jan Fagerberg (INTRANSIT, Centre for Technology, Innovation and Culture (TIK), University of Oslo); Erika Kraemer-Mbula (DST/NRF/Newton Fund Trilateral Chair in Transformative Innovation, the Fourth Industrial Revolution and Sustainable Development, College of Business and Economics, University of Johannesburg); Edward Lorenz (College of Business and Economics, University of Johannesburg and Aalborg University Business School, Aalborg University)
    Abstract: This paper draws on insights from evolutionary economics to enrich our understanding of the prospects for development in low-income countries. Drawing on analysis Freeman and Perez (1988) of the basis for changes in technological economic paradigms, the paper argues that the current process of digitalization in combination with developments in renewable energy are providing a ‘window of opportunity’ for accelerated economic growth and catch-up in low-income countries. The argument is illustrated with reference to the cases of Kenya and Rwanda both which stand out for their governments’ foresight in pursuing policies designed to promote a transformation based on the opportunities offered by the revolutionary changes in technology from the early to mid-2000s. Transformative change requires innovations in business models, in products and process and in modes of marketing and distribution. Drawing on innovation systems theory, the paper considers to what extent the problems firms face in Kenya and Rwanda in accessing resources in terms of needed knowledge, skills and finance have constrained the development of their innovation capabilities. The paper concludes by assessing the policies governments have enacted in attempting to respond to these constraints.
    Date: 2021–06
  8. By: Suzanne J. Konzelmann; Victoria Chick; Marc Fovargue-Davies
    Abstract: The debate about corporate purpose is a recurring one that has re-emerged today. What should be the guiding principles of business: the pursuit of profit or a contribution to public well-being? We trace key elements in this debate in the UK and the US from the interwar years, when John Maynard Keynes and Adolf Berle made important contributions, to the present. Both the earlier and the current debates are centred around whether we see business institutions as strictly private entities, transacting with their suppliers, workers and customers on terms agreed with or imposed upon these groups, or as part of society at large and therefore expected to contribute to what society deems to be its interests. Whether current developments will ultimately produce a shift in corporate purpose akin to the one that followed the Second World War remains to be seen. But the parallels to the interwar debates, and the uncertain economic, political and social environment in which they took place, are striking. Our objective is to see what might be learned from the past to inform the current direction of thought concerning capitalism and corporate purpose.
    Keywords: Corporate purpose, shareholder primacy, John Maynard Keynes, Adolf Berle
    JEL: B31 L21 P16
    Date: 2020–06
  9. By: PUGLIESE Emanuele (European Commission - JRC); TACCHELLA Andrea (European Commission - JRC)
    Abstract: In these factsheets we provide an overview of quantitative facts for the 27 EU member countries resulting from the Economic Complexity analysis. The analyses range from forecasts of countries’ economic performances, over a breakdown into industrial sectors, to an analysis of innovation capabilities down to the regional level with a product by product resolution.
    Keywords: economic complexity, country factsheet, innovation and industrial policy
    Date: 2021–06
  10. By: Rodríguez-Pose, Andrés
    Abstract: Two of the most influential strands in economic geography and regional studies – evolutionary economic geography and global production networks – have run on parallel tracks with limited cross-fertilization. The Regional Studies Annual Lecture 2020 paper by Henry Yeung proposes building bridges across both strands to improve our understanding of the uneven distribution and evolution of economic activity across the world. He puts forward the concept of strategic coupling as the foundation of such bridges. In this reply I argue that strategic coupling will not suffice, unless the variations in costs and incentives for engaging in networks and the different capacity of cities and regions to assimilate the benefits of innovation diffusion through networks are taken into consideration.
    Keywords: evolutionary economic geography; global production networks; strategic coupling; institutions; Taylor & Francis deal
    JEL: F23 L22 R58
    Date: 2021–06–03
  11. By: Ewan McGaughey
    Abstract: What should be the future of democracy? COVID-19 has exposed a desperate need, not just for a green recovery, and a social recovery, but a political recovery, to remake our institutions for the future, for justice on living planet. Today we are seeing that the vote, ‘a most transcendent thing’, is becoming an essential part of our economic constitution: votes at work, votes in capital and votes in public services. This is already practised, however imperfectly, however forgotten, in universities like Toronto, Cambridge, Oxford or Harvard, and the movement is growing, as it should. The evidence shows we are more productive, innovative, happy, and less unequal, when we have voice. Having moved ‘from status to contract’ in the industrial revolution, the future of work involves a move ‘from contract to membership’. The ‘right to take part in the government’ of our societies is depending less and less on holding money, or ‘other people’s money’, but is becoming universal. The days where shareholders monopolize the votes in the economy, and asset managers or banks monopolize votes on shares, are numbered. The true investors in the wealth of nations, people at work, savers for retirement, and all members of our society, are the future of democracy.
    Keywords: Democracy, work, capital, economic democracy, industrial democracy, universities, governance, contract, membership, property, human rights, vote, green recovery, social recovery, political recovery
    JEL: K00 D00
    Date: 2021–04
  12. By: Silva, Sheyla Gorayeb
    Abstract: This article seeks to contribute to the discussions on labor reform approved in 2017 in Brazil, conducting a critical reflection of the consequences of these neoliberal policies, through statistical and bibliographic data on the subject, in order to demonstrate the various social impacts that this reform exerts on women, the world of work and society in the present times.
    Keywords: Labor Reform; Social Impacts; Neoliberal Policies
    JEL: J53
    Date: 2020–11–01
  13. By: Tobón, A
    Abstract: El objetivo de este documento de trabajo es mostrar las consecuencias de introducir el fenómeno de la informalidad en una modelo de inspiración clásica. La informalidad se introduce considerando un dualismo entre un sector formal que paga el impuesto sobre el beneficio bruto, y un sector informal que evade el pago de dicho impuesto, ante la incapacidad de enforcement por parte del gobierno. A medida que se imponen diferentes hipótesis sobre los impuestos, se puede estudiar la dinámica de la tasa de crecimiento de cada sector, de la tasa de beneficio de los empresarios y de los precios relativos de los bienes. Bajo ciertas condiciones, el modelo muestra una independencia entre las tasas de crecimiento sectoriales y la informalidad, razón por la cual un cambio en los impuestos no necesariamente altera la dinámica del crecimiento económico.
    Keywords: informalidad; sector informal; sector formal; impuestos; crecimientoeconómico
    JEL: E11 E26 E62 H26 H32
    Date: 2021–05–03

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