Transformation before the 'Transition' (Employment and Wage Setting in Hungarian Firms 1986-89)

The paper addresses the question why Hungarian state enterprises cut employment by two-digit percentages in the last years of state socialism. It argues that job destruction was a result of changing incentives and liberties (harder budget constraint, stronger insider power, loosening political restrictions on downsizing) rather than of market-related shocks. Changing the inherited combination of output, employment, and wages could be in the interest of workers, managers, or both parties. The implications for wages and profits were hard to predict but the concievable scenarios of adjustment unanimously implied lower employment. The hypotheses are tested against data on output, employment, wages and profits from a panel of 2666 firms observed in 1986 and 1989.

Agricultural Household Hedging With Off-Farm Income

Agricultural Finance, Risk and Uncertainty,

The determination of wages in socialist economies : some microfoundations

The authors address the issue of how wages are determined in socialist economies. They distinguish between different types of economic regimes, in terms of how much decentralization is permitted and how extensive are market-based features orrules. Wages are commonly assumed to be exogenously given in socialist systems, regardless of regime. They show that this assumption is not warranted, given the use of incentive-based systems in these economies. Both the classical planned economy and the partially reformed regime face the problem of motivating workers in the absence of monitoring and of such conventional penalties as unemployment. The authors show that in cooperative settings the outcome can be lower productivity than desired and that in noncooperative settings the outcome can be higher wages than warranted. They interpret the partially reformed socialist economy as an attmept to refine the motivational structure by introducing a manager between the planner and the workers. They also present a preliminary treatment of an economic regime such as the one that existed in Poland after January 1990, where market-based rules almost fully predominate. Their objective is to provide coherent foundations for wage equations that can be tested empirically. The authors show wages to be strongly associated with prices and rather less strongly associated with productivity.Economic Theory&Research,Environmental Economics&Policies,Banks&Banking Reform,Access to Markets,Markets and Market Access

Significance and Determination of Fees for Municipal Finance

The idea of fiscal decentralisation has become increasingly fashionable world-wide. But every country has unique features of the intergovernmental fiscal system. In general municipal expenditures are rapidly growing in European countries. On the other hand local tax increases are not easily enforceable at present, whereas the local fiscal autonomy is unlikely to be guaranteed as long as municipalities are strongly dependent on down-flow grants. In such a fiscal-stress situation an improvement of local fiscal capacity can be achieved from the increase of fees. Four European countries were chosen to survey the recent development of municipal finance: Britain, Germany, Poland and Switzerland. This paper firstly identifies and highlights the similarities and differences in municipal finance in an international context. Secondly it theoretically examines the possibility of enhancing fiscal autonomy of local governments through determining optimal fee level which leads to an increase of revenues from this revenue item.fiscal decentralisation, local expenditures and taxes, fees, shared taxes, intergovernmental transfers, municipal borrowings, Poland, Britain, Switzerland, Germany

The internationalization of the beer brewing industry

Economies of scale ; International trade ; Beer industry

Characterization of trade-off preferences between non-functional properties

Efficient design and evolution of complex software intensive systems rely on the ability to make informed decisions as early as possible in the life cycle. Such informed decisions should take both the intended functional and non-functional properties into account. Especially regarding the latter, it is both necessary to be able to predict properties and to prioritize them according to well-defined criteria. In this paper we focus on the latter problem, that is to say how to make trade-offs between non-functional properties of software intensive systems. We provide an approach based on the elicitation of utility functions from stake-holders and subsequent checks for consistency among these functions. The approach is exploitable through an easy-to-use GUI, which is also presented. Moreover, we describe the setup and the outcome of our two-fold validation based on exploratory elicitations with students and practitioners

Uncertainty and Resistance to Reform in Laboratory Participation Games

This paper presents a participation game experiment to study the impact of uncertainty and costly political participation on the incidence of reform. Fernandez and Rodrik (1991) show that uncertainty about who will ultimately gain or lose as a result of a reform can prevent its adoption. We introduce intra-group conflict into this framework by incorporating costly political participation, which creates a natural incentive for free-riding on fellow group members’ efforts to influence policy outcomes. An agent, however, may still be willing to participate if her participation is likely to affect the policy outcome given the probabilities of participation by others. Our experimental findings show that uncertainty reduces the incidence of reform even with costly political participation, and that an increase in the cost of participation reduces the participation of all agents, regardless of whether they belong to the majority and minority. This second result cannot be reconciled with the standard mixed strategy Nash equilibrium, but is consistent with the quantal response equilibrium.Reform, Uncertainty, Experiment, Participation Game, Bounded Rationality, Quantal Response Equilibrium

Hometown Investment Trust funds

There are different challenges a small- to medium-sized enterprise when they are gathering capital, especially if they carry a lot of risk. The banks have become more stringent because of the Basel Capital Adequacy Requirements, the investors prefer to invest in safer enterprises. Japan has tried to solve this problem by implementing Hometown Investment Trust funds. Hometown Investment Trust funds tries to reduce the risk of investing in small- to medium-sized enterprises by reducing information asymmetry, playing on the investors pride toward their local community. In Japan the Hometown Investment Trust funds are managed by the Financial Services Agency, which is government owned, and are sold by banks, credit rating offices and post offices. The government can reduce the scepticism towards Hometown Investment Trust funds, by having a government owned institution manage it. This is because these institutions do not have the same incentives as a private institution to profit from Hometown Investment Trust funds. Hometown Investment Trust funds do also try to incentivise investors to invest because of the social return they can receive. The local region can expect some economic growth if a Hometown Investment Trust fund becomes successful, because the total amount of investments have increased. The small- to medium-sized enterprise that received the funds would then be able to start the production and start selling the products. The income can be used to expand the enterprise, or to increase the wages of their employees, maybe both if the income was sufficient