The Moral Economy and Operationalising Trust

The objective of this paper is to make a conceptual contribution to the analysis of projects through an exploration of the moral economy and trust. The moral economy is defined and trust is then explored in relation to the moral concepts of dignity and respect. An evaluation is made of the importance of understanding the moral economy as an additional means to operationalise trust.The analysis will be placed in the context of the theoretical importance of the moral economy to the operation of the market and hence to management and economics, which poses a challenge to many of the ways in which management and economics are conceived

The Moral Economy and Research on Projects: neglect and relevance to social capital and competencies

This paper makes a theoretical contribution to the understanding of management and of projects. The paper adopts an analysis of the moral economy, which poses a conceptual challenge to the way in which management generally, and specifically concerning projects, is understood. The paper also poses an indirect methodological challenge, particularly to positivism, empiricism and some interpretative analysis.Project management and the management of projects have tended to focus upon task and function respectively, which has relegated or excluded the role of morality in relationships in both research and practice. A similar position is adopted in economics with a focus upon closed systems. The combined result is an exclusion of the moral economy. This paper argues for a theoretical reappraisal of management generally, and specifically with regard to projects, to include the moral economy. The moral economy is not only foundational to the operation of the market economy, but also contributes to its performance.The conclusion summaries the main points and makes recommendations concerning theoretical development, methodology and practice

Hidden insurance in a moral hazard economy

We consider an economy where individuals privately choose effort and trade competitively priced securities that pay off with effort-determined probability. We show that if insurance against a negative shock is sufficiently incomplete, then standard functional form restrictions ensure that individual objective functions are optimized by an effort and insurance combination that is unique and satisfies first- and second-order conditions. Modeling insurance incompleteness in terms of costly production of private insurance services, we characterize the constrained inefficiency arising in general equilibrium from competitive pricing of nonexclusive financial contracts

A Note on Walrasian Equilibria with Moral Hazard and Aggregate Uncertainty

In a fundamental contribution, Prescott and Townsend (1984) [PT] have shown that the existence and efficiency properties of Walrasian equilibria extend to economies with moral hazard, when agents' trades are observable (exclusive contracts can be implemented). More recently, Bennardo and Chiappori (2003) [BC] have argued that Walrasian equilibria may (robustly) fail to exist when the class of moral hazard economies considered by Prescott and Townsend is generalized to allow for the presence of aggregate, in addition to idiosyncratic, uncertainty and for preferences which are nonseparable in consumption and effort. We re-examine here the existence and efficiency properties of Walrasian equilibria in the moral hazard economy considered by Bennardo and Chiappori. We show that Walrasian equilibria always exist in such economy and are incentive efficient, so the results of Prescott and Townsend continue to hold in the more general set-up considered by Bennardo and Chiappori

The moral economic man

Economic behavior is multifaceted and context-dependent. However, the so-called Homo Oeconomicus model states that agents are perfectly rational, self-interest-maximizing beings. This model can be criticized on both empirical and normative grounds. Understanding economic behavior requires a more complex and dynamic framework. In the "I & We" paradigm developed by Amitai Etzioni, economic behavior is co-determined by utility calculations and moral considerations. Two major factors can explain the ethicality of economic behavior; namely, the moral character of the agents and the relative cost of ethical behavior. Economic agents are moral beings, but the ethical fabric of the economy determines which face of the Moral Economic Man predominates

Capital Accumulation in an Economy with Heterogeneous Agents and Moral Hazard

This paper studies a closed economy with a continuum of agents and moral hazard. Economic agents in the economy operate a stochastic production technology with capital and labor inputs in which the latter is private information. I characterize efficient allocations of capital, labor, and consumption in a stationary recursive equilibrium for a decentralized economy with component planners. Allocation and accumulation of capital are facilitated by a 'capital planner' who serves as a financial intermediary for the component planners. In equilibrium, private information lowers the equilibrium interest rate below agents' discount rate and I show that contrary to the private-information endowment economies, a moral-hazard productive economy can exhibit both endogenous lower and upper bounds on the stationary distribution of utility entitlements.

Capital Accumulation in an Economy with Heterogeneous Agents and Moral Hazard

This paper studies a closed economy with a continuum of agents and moral hazard. Economic agents in the economy operate a stochastic production technology with capital and labor inputs in which the latter is private information. I characterize efficient allocations of capital, labor, and consumption in a stationary recursive equilibrium for a decentralized economy with component planners. Allocation and accumulation of capital are facilitated by a 'capital planner' who serves as a financial intermediary for the component planners. In equilibrium, private information lowers the equilibrium interest rate below agents' discount rate and I show that contrary to the private-information endowment economies, a moral-hazard productive economy can exhibit both endogenous lower and upper bounds on the stationary distribution of utility entitlements.

Moral Economy Theory

Peer reviewe

The moral and political economy of producers and consumers

There appears to be a kind of master discourse of consumption, consumers and consumer society, generated and sustained, primarily, by discourses of consumer sovereignty, and the customer-driven firm. To the extent that we, as consumers, accept (all or some of) this master discourse then we are partly responsible for the negative consequences that befall many workers producing the goods and services we consume - e.g. we often see relatively inexpensive commodities in terms of a 'bargain' rather than the result of someone else's low pay. There is, however, a contradiction at work because we often do not accept all (or some) of this master discourse. We often do care about the plight of those who produce the goods and services we consume. The problem is the master discourse does nothing to encourage these ethical predispositions or to challenge us to probe our ignorance. The aim of this paper is to explore this contradiction. After reminding ourselves, in part one, of some fundamental facts of political economic life, part two introduces moral economy. Part three uses this political and moral economic perspective to focus attention on the negative consequences that can arise for workers, when consumers accept (all or some of) this fetishized master discourse. Part four explores the contradiction by considering cases where consumers do care about the plight of those who produce the goods and services they consume

Islam and the Moral Economy: the Challenge of Capitalism

This is a book review on Islam and the moral economy that highlights the challenge of capitalism