nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2014‒07‒21
four papers chosen by
Karl Petrick
Western New England University

  1. Poverty of Agency Theory and Poverty of Managerial Practice: The Royal Bank of Scotland Fiasco By Shanti Chakravarty; Anthony Dobbins; Lynn Hodgkinson
  2. A Young Tree Dead? The Story of Economics in Australia and New Zealand By William Coleman
  3. Politics, informality and clientelism – exploring a pro-poor urban politics By Diana Mitlin
  4. Moving to Greener Societies: Moral Motivation and Green Behaviour By Lorenzo Cerda Planas

  1. By: Shanti Chakravarty (Bangor University, UK); Anthony Dobbins (Bangor University, UK); Lynn Hodgkinson (
    Abstract: The divergence of ownership and management in modern capitalism gave rise to agency theory as a framework for analysing corporate governance. There is now an emerging body of literature questioning the wisdom of the focus on agency theory in business schools. We argue that the poverty of agency theory is compounded by the culture of deference to authority entailed in reliance on technocratic advice. By reference to the concept of hegemony, we conjecture that hegemonic pressures have produced a homogeneous managerial class with similar preference for maximizing short-term profit. The argument is illustrated empirically by the case example of the collapse of The Royal Bank of Scotland, where shareholder representatives followed management advice in pursuing a course of action that led to the demise of the bank.
    Keywords: Agency theory, Bank collapse, Corporate governance, Hegemony, Management and ownership, Royal Bank of Scotland, Technocracy.
    Date: 2013–12
  2. By: William Coleman
    Abstract: The key problem of economics in Australia and New Zealand is its marginality. The history of its economics will, then, be at bottom an account of the confrontation of that marginality. Thus any story of economic thought in Australia and New Zealand will necessarily tell of the attempt to plant and cultivate in uncleared ground the long developed vine of older societies. It will relate how the cultivators perforce pondered whether adapting the growth to local conditions would be more or less rewarding than simply perfecting their cultivation of the imported stem, and introducing its ever purer varieties. It will reveal that the adaptation of imported varieties to idiosyncratic condition was in the event limited, though not wholly without significance; and even leaving some trace of cross-fertilisation of the wider world. For all that, the story, I contend, will conclude today with the local strains being submerged by the benefits and snares of globalization. The history of economics in Australia and New Zealand has been written before, both in detail and synoptically, with considerable scholarship and some panache (Goodwin 1966, Groenewegen and McFarlane 1990, La Nauze 1949, King 2007, Cornish 2008, Blythe 2008, Hight 1939). The present history seeks to add through its focus on the predicament of any economics that rationally and usefully bears the adjective 'Australian'.
    Date: 2013–12
  3. By: Diana Mitlin
    Abstract: This paper explores what we have learnt about how to instigate, negotiate or otherwise secure pro-poor government in towns and cities of the global South. With competition for scarce resources, the processes of urban development, and specifically the acquisition of land and basic services, are intensely political. While the nature of urban poverty differs, there is a consistent set of needs related to residency in informal settlements; tenure is insecure and there is a lack of access to basic services, infrastructure, and sometimes other entitlements. Households and communities have to negotiate these collective consumption goods in a context in which political relations are primarily informal, with negotiations that take place away from the transparent and accountable systems of 'modern' government. Clientelist bargaining prevails. Much of the existing literature is polarised, either critiquing clientelism for its consequences, or arguing that it has been dismissed without any grounded assessment of what might take its place and any considered analysis of what it has managed to deliver. In this paper I explore how networks and federations of the urban poor seeking to access secure tenure and basic services have sought to advance their cause and the interests of their members. These organised collectives recognise that they have to challenge clientelist practice; however leaders also recognise that, given existing power relations, they have to work from within to change the realities of clientelism. Their own relative powerlessness means that confrontation is not an effective strategy. To strengthen their influence, they have to make common cause with those in need across the city building a unified and aware movement, and they have to establish their own legitimacy as agencies operating in the public interest and towards the common good. As and when they gain an increased influence, they seek greater flexibility from the city bureaucracy and to reduce the hierarchical highly vertical relations between the urban poor and the political elite. To maintain and extend their advances towards a pro-poor politics, they act to strengthen public accountabilities.
    Date: 2014
  4. By: Lorenzo Cerda Planas (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne)
    Abstract: This paper intends to provide an alternative explanation of why societies behave differently from an environmental point of view. To do so, I use a Kantian moral approach at a microeconomic level. Under this premise, I show that two identical societies (according to income and political system) might follow different paths with respect to their "green" behaviour. Additionally, I identify tipping points that could nudge a society from a polluting behaviour to a green one. I find that environmental perception as well as how governments are elected can be important factors in this shift.
    Keywords: Environmental motivation; Kantian morale; green behaviour; tipping points
    Date: 2014–01

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