Productivity Gains from Offshoring: an Empirical Analysis for the Netherlands

A major question in the globalization debate is whether outsourcing and offshoring activities are beneficial to the home country. This paper investigates the effects on productivity and trade from the perspective of transaction costs, using a recent theory on trade in tasks. A production function is estimated for the Netherlands for the period 1972-2001. It suggests that the effect of offshoring manufacturing and services on total factor productivity (TFP) is positive and larger than the effect of R & D on productivity

The industrial organisation of economic policy preparation in the Netherlands

In the institutional set-up of (economic) policy preparation in the Netherlands there is ample interaction between scientific insights and policy proposals. This Dutch polder model lays much emphasis on the social dialogue to come to an agreement on, and have public support for policy proposals. It was very much the idea of Jan Tinbergen winner of the first Nobel price in economics to have a clear separation in policy preparation between (i) trying to reach consensus on the working of the economy, as formalised in econometric models; (ii) come to a compromise on policy goals between the various minority parties of the government; and (iii) rely on independent and undisputed data collection by an autonomous Central Bureau of Statistics (CBS). The aim of this separation of responsibilities is to guarantee, as much as possible, the scientific quality of policy preparation and at the same time to gain public support for policy measures so that implementation costs are kept low. This paper discusses the working of this institutional set-up, its historical background and the mechanisms of quality control and reputation which are essential for the interaction between scientific knowledge and policy preparation to remain fruitful

The Transaction Costs Perspective on Standards as a Source of Trade and Productivity Growth

This paper discusses the design, implementation and use of standards from the perspective of transaction costs economics. A proper design and implementation of standards may lead to a considerable reduction of transaction costs, which enhances trade and, consequently, economic welfare. A major example is the use of containers, which has drastically changed the worldwide transport infrastructure, and lowered the costs of transport of goods considerably. The example of containers also shows that network externalities play a major role in the use of standards, and that, on the other hand, worldwide standards with large sunk investment costs may lead to a lock-in. This may call for government intervention in the design and use of standards, and in the transition processes to new standards. The paper provides ample further examples of standards and on the role of the government, or clubs, with respect to these standards

A Cointegration Model for Search Equilibrium Wage Formation

In flow models of the labor market, wages are determined by negotiations between workers and employers on the surplus value of a realized match. From this perspective our study presents an econometric analysis of the influence of labor market flows on wage formation as alternative to the traditional specification of wage equations where unemployment represents the Phillips-curve or wage curve-effects. We estimate a dynamic wage equation for the Netherlands using a cointegration approach. We find that labor flows, and notably flows from outside the labor market, are important determinants for both short run and long run wage settin

The Macroeconomics of the Credit Crisis: In Search of Externalities for Macro-Prudential Supervision

In the analysis of the credit crisis of 2007-2010 a clear distinction should be made between (i) the initial shock; (ii) the propagation and amplification of the initial shock to the systemic crisis of the financial markets; and (iii) the transmission of the credit crisis to the real economic sector causing a major cyclical downturn now known as the great recession. This paper argues that banking supervision failed to anticipate and repair the market failure that caused the huge amplification of the relatively small initial shock. As the repair of market failure is the only sound economic argument for regulation, banking supervisors should now focus on the externalities that caused the amplification of the shock and use that knowledge for adequate macro-prudential supervision in the future. Macro-economic models can be helpful in this search for externalities. The character and timing of future shocks are unpredictable, but contagion in the propagation mechanisms should be mitigated as much as possible.credit crisis, externalities, macro-prudential supervision, contagion, fallacy of composition

Kosten/Baten analyse als bestuurlijk baken in het milieubeleid

Een maatschappelijke kosten/baten analyse (KBA) kan ook bij complexe, wereldwijde "wicked" milieuproblemen met grote kennisleemten en onzekerheden van nut zijn. Wel verliest de KBA dan iets van de gebruikelijke functie als rekenmethode. Naarmate de problematiek complexer is en de onzekerheden groter zijn, is het nut van de maatschappelijke KBA vooral gelegen in het feit dat deze een bestuurlijk kader biedt om kennis over de aard van de milieuproblemen en de daarbij geldende belangen te verkrijgen. Deze kennis betreft niet alleen technisch-wetenschappelijke kennis over de processen en systemen die ten grondslag liggen aan de milieuproblematiek, maar ook de kennis over voorkeuren van de verschillende belanghebbenden en over eventuele belangentegenstellingen. Bij extreme onzekerheden en risicomijding kan het voorzorgbeginsel als rationele strategie bij de afweging van kosten en baten gelden.kosten-baten analyse; milieubeleid; milieu

Procurement: The Transaction Costs Perspective in a Globalising World

Fragmentation of production into more and more complex supply chains is a prominent feature of globalisation. It implies that transaction costs as part of total costs of ownership carry a large weight in procurement decisions. An analysis of the various types of transaction costs is also essential in the “make or buy” and location decisions in global sourcing. A distinction can be made between “hard” and “soft” transaction costs. Soft transaction costs are difficult to quantify but become more important in strategic business decisions now that formal trade barriers gradually disappear and transport costs are reduced. Business strategies to keep transaction costs low in the long run can also, to a considerable extent, explain socially responsible business conduct from the perspective of rational economic behaviour.procurement; outsourcing; transaction costs; managing transactions; orchestrating the supply chain

Kosten/Baten analyse als bestuurlijk baken in het milieubeleid

Een maatschappelijke kosten/baten analyse (KBA) kan ook bij complexe, wereldwijde "wicked" milieuproblemen met grote kennisleemten en onzekerheden van nut zijn. Wel verliest de KBA dan iets van de gebruikelijke functie als rekenmethode. Naarmate de problematiek complexer is en de onzekerheden groter zijn, is het nut van de maatschappelijke KBA vooral gelegen in het feit dat deze een bestuurlijk kader biedt om kennis over de aard van de milieuproblemen en de daarbij geldende belangen te verkrijgen. Deze kennis betreft niet alleen technisch-wetenschappelijke kennis over de processen en systemen die ten grondslag liggen aan de milieuproblematiek, maar ook de kennis over voorkeuren van de verschillende belanghebbenden en over eventuele belangentegenstellingen. Bij extreme onzekerheden en risicomijding kan het voorzorgbeginsel als rationele strategie bij de afweging van kosten en baten gelden.kosten-baten analyse; milieubeleid; milieu