Theory and Test on the Corporate Governance of Financial Cooperative Systems: Merger vs. Networks

This paper presents a study of the economic organization of systems of financial cooperatives (FC). The first part presents a theoretical framework rooted in principles of transaction cost economics (TCE) that seeks to explain empirical regularities observable in systems of FC worldwide. The second part is an empirical study that compares X-efficiency between members of the Quebec Desjardins movement (DM) and the United States Credit Union system (USCU), the first organized as a tight network of institutions and the second composed largely by independent institutions with few ties. The fundamental proposition is that networks, are a superior form of governance mechanism (over markets and mergers) for relatively wide and relevant ranges of contractual hazard and size of the institutions. Further, that networks provide substitute, hierarchy based, control mechanisms when size of the institution dilutes internal governance mechanisms, discouraging subgoal pursuits and expense preferences by agents, both occurring in large FC. The theory allows us to generate a set of testable hypothesis of which we highlight three: i) For small FC, differences in efficiency will be relatively small, if any. ii) Large institutions should display systematically lower efficiency than similar sized FC members of strategic networks. iii) Networks should display lower variance in the size as well as in performance indicators. Throughout, empirical results are consistent with our central theoretical proposition.Transaction cost economics, financial cooperatives, credit unions, networks, corporate governance, technical efficiency, X-efficiency

What counts as good evidence

Making better use of evidence is essential if public services are to deliver more for less. Central to this challenge is the need for a clearer understanding about standards of evidence that can be applied to the research informing social policy. This paper reviews the extent to which it is possible to reach a workable consensus on ways of identifying and labelling evidence. It does this by exploring the efforts made to date and the debates that have ensued. Throughout, the focus is on evidence that is underpinned by research, rather than other sources of evidence such as expert opinion or stakeholder views.Publisher PD

The Power of Networks: Integration and Financial Cooperative Performance

The purpose of this paper is to perform a cross-country survey of the level of integration of systems of financial cooperatives (FC) and its effect on measures of performance. We develop a classification scheme based on a theoretical framework that builds on published work using transaction cost economics (TCE) to explain integration of large numbers of financial cooperatives into networks. We identify three critical level of increasing integration we call respectively atomized systems, consensual networks and strategic networks. Further, we test some of the propositions that result from the theoretical framework on an international sample of financial cooperative systems. Based on this analysis we can conclude that: i) Integration is less (more) important is developing (more developed) countries and for very small (large) financial cooperatives as a determinant of efficiency. However, integration tends to reduce volatility of efficiency and performance regardless of development. ii) Integration appears to help control measure of managers' expense preferences that tend to affect performance of FC. iii) Despite high costs of running hub-like organizations in highly integrated system, these systems economize in bounded rationality and operate at lower costs that less integrated systems.Transaction cost economics, financial cooperatives, credit unions, networks, corporate governance, technical efficiency, x-efficiency

MORPH: A Reference Architecture for Configuration and Behaviour Self-Adaptation

An architectural approach to self-adaptive systems involves runtime change of system configuration (i.e., the system's components, their bindings and operational parameters) and behaviour update (i.e., component orchestration). Thus, dynamic reconfiguration and discrete event control theory are at the heart of architectural adaptation. Although controlling configuration and behaviour at runtime has been discussed and applied to architectural adaptation, architectures for self-adaptive systems often compound these two aspects reducing the potential for adaptability. In this paper we propose a reference architecture that allows for coordinated yet transparent and independent adaptation of system configuration and behaviour

Fine Grained Component Engineering of Adaptive Overlays: Experiences and Perspectives

Recent years have seen significant research being carried out into peer-to-peer (P2P) systems. This work has focused on the styles and applications of P2P computing, from grid computation to content distribution; however, little investigation has been performed into how these systems are built. Component based engineering is an approach that has seen successful deployment in the field of middleware development; functionality is encapsulated in ‘building blocks’ that can be dynamically plugged together to form complete systems. This allows efficient, flexible and adaptable systems to be built with lower overhead and development complexity. This paper presents an investigation into the potential of using component based engineering in the design and construction of peer-to-peer overlays. It is highlighted that the quality of these properties is dictated by the component architecture used to implement the system. Three reusable decomposition architectures are designed and evaluated using Chord and Pastry case studies. These demonstrate that significant improvements can be made over traditional design approaches resulting in much more reusable, (re)configurable and extensible systems