Organizational routines and cognition: an introduction to empirical an analytical contributions

This article introduces this special issue on routines. It offers some suggestions as to why the concept of routines is considered central in methodological considerations of capabilities and organizational evolution. The contributors to this special issue propose various analytical tools, and provide some missing pieces from the puzzle related to the prominent role of routines. Issues discussed in the papers include methodological individualism. Routines lie between the individual and the firm levels of analysis because they are enacted by individuals in a social context. It is also suggested that a multilevel research agenda provides a finer grained analysis because organizational routines are not isolated units but are entangled among the various organizational layers.Orgaizational Routines

Country-level impact of global recession and China’s stimulus package

A dynamic computable general equilibrium model is developed to assess the impact of the recent global recession and the Chinese government’s stimulus package on China’s economic growth. The model is first used to capture the actual sector-level economic growth in 2008 and the possible economic performance in 2009 without the intervention of the Chinese government through its stimulus package. Under this global recession scenario, the GDP growth rate in 2009 falls to 2.9 percent mainly as a result of the sharp drop in exports of manufactured goods, while the agricultural sector is more crisis-resilient. Because export-oriented manufacturing sectors are often import-intensive, the weakened economy is accompanied by a reduction in Chinese firms’ import demand for materials, intermediates, and capital goods. The model also shows that without government intervention, the negative effect of a one-year shock on the Chinese economy would last for many years. Also, over the next five to six years, China is unlikely to replicate its strong economic performance of the past two decades. China’s stimulus package is modeled through increased investment financed by government resources. With additional demand on investment goods, growth in the investment-related production sector is stimulated. Through the cross-sector linkages in a general equilibrium model, the demand for other noncapital goods increases, thus stimulating growth in these sectors. As production of more industrialized sectors starts to grow, so will households’ income and consumption, providing market opportunities for those agricultural and service sectors that mainly produce for the domestic market. Under the stimulus scenario, the Chinese economy is expected to grow 8–10 percent in 2009 and the succeeding years. The growth engine in this case differs from that before 2008: growth is led by domestic demand, while trade still falls significantly in 2009 (instead of the double-digit growth before 2008). Domestic demand-driven stimulus growth creates jobs, and hence it increases income for both urban and rural households. The model is also used to measure the overall gains of the stimulus package by comparing GDP between the two scenarios. Without considering the productivity-enhancing role of public investment as part of the stimulus package (which is important for long-term growth but unlikely to happen in the short run), the cumulative difference of the GDP between the two scenarios over the next seven years is about RMB76 trillion, which is about three times more than the GDP in 2007.China stimulus package, Development strategies, general equilibrium modeling, global financial crisis,

Lessons from World Bank Research on Financial Crises

The benefits of financial development and globalization have come with continuing fragility in financial sectors. Periodic crises have had real but heterogeneous welfare impacts and not just for poor people; indeed, some of the conditions that foster deep and persistent poverty, such as lack of connectivity to markets, have provided a degree of protection for the poor. Past crises have also had longer-term impacts for some of those affected, most notably through the nutrition and schooling of children in poor families. As in other areas of policy, effective responses to a crisis require sound data and must take account of incentives and behavior. An important lesson from past experience is that the short-term responses to a crisis -- macroeconomic stabilization, trade policies, financial sector policies and social -- cannot ignore longer-term implications for both economic development and vulnerability to future crises.Financial crisis; macroeconomic response; social protection; poverty; safety nets

Innovating Toward Excellence: Education Entrepreneurs and the Transformation of Public Education

Summarizes discussions among education entrepreneurs, funders, policy makers, and experts at a May 2009 summit on innovations in ideas, processes, and products for reform. Includes a case study review of a successful turnaround of a failing school

Transfers and Development: Easy Come, Easy Go?

Contrary to the popular notion that money that is easily earned, is also easily spent, economic theory holds that income is fungible. Drawing on the concept of mental accounting, this study theoretically explores when such a link between spending behaviour and the effort dispensed in obtaining income is plausible. Empirically, it is found that the marginal propensity to consume from unearned income is about three times larger than that from earned income, based on household panel data from rural China, with the difference more pronounced when unearned income is transitory and smaller than earned income. The policy implications are real

Transfers and Development: Easy Come, Easy Go?

Contrary to the popular notion that money that is easily earned, is also easily spent, economic theory holds that income is fungible. Drawing on the concept of mental accounting, this study theoretically explores when such a link between spending behaviour and the effort dispensed in obtaining income is plausible. Empirically, it is found that the marginal propensity to consume from unearned income is about three times larger than that from earned income, based on household panel data from rural China, with the difference more pronounced when unearned income is transitory and smaller than earned income. The policy implications are real.transfers, saving, mental accounting, permanent income hypothesis, China

"The Social Wage, Welfare Policy, and the Phases of Capital Accumulation"

This paper addresses two broad questions. The first one relates to the economic rationale for the existence of the welfare state. To address this question, we review the marginalist arguments and then counterpose a historical and institutional analysis of the rise of the U.S. welfare state. The second question concerns the macroeconomic impacts of welfare spending. We examine the standard neoclassical macroeconomic arguments for and against welfare cutbacks and then propose an alternative growth framework, rooted in the classical and Harrodian traditions, to evaluate social policy. We argue that the alternative framework provides both demand-side and supply-side mechanisms whereby social spending can be supported without harmful long-run macroeconomic effects. Our analysis suggests that, in general, because growth and crises are endogenous, there may be no tension between social policy and economic performance. Specifically, the recent cutbacks in the U.S. are hard to justify on purely economic grounds.

Finance in a Classical and Harrodian Cyclical Growth Model

This paper addresses two broad questions. The first one relates to the economic rationale for the existence of the welfare state. To address this question, we review the marginalist arguments and then counterpose a historical and institutional analysis of the rise of the U.S. welfare state. The second question concerns the macroeconomic impacts of welfare spending. We examine the standard neoclassical macroeconomic arguments for and against welfare cutbacks and then propose an alternative growth framework, rooted in the classical and Harrodian traditions, to evaluate social policy. We argue that the alternative framework provides both demand-side and supply-side mechanisms whereby social spending can be supported without harmful long-run macroeconomic effects. Our analysis suggests that, in general, because growth and crises are endogenous, there may be no tension between social policy and economic performance. Specifically, the recent cutbacks in the U.S. are hard to justify on purely economic grounds.