Political independence, accountability, and the quality of regulatory decision-making

Recent decades have seen a considerable increase in delegation to independent regulatory agencies, which has been justified by reference to the superior performance of these bodies relative to government departments. Yet, the hypothesis that more independent regulators do better work has hardly been tested. We examine the link using a comprehensive measure of the quality of work carried out by competition authorities in 30 Organisation for Economic Co-Operation and Development (OECD) countries, and new data on the design of these organizations. We find that formal independence has a positive and significant effect on quality. Contrary to expectations, though, formal political accountability does not boost regulatory quality, and there is no evidence that it increases the effect of independence by reducing the risk of slacking. The quality of work is also enhanced by increased staffing, more extensive regulatory powers, and spillover effects of a more capable bureaucratic system

The diffusion of financial supervisory governance ideas

Who is watching the financial services industry? Since 1980, there have been multiple waves of thought about whether the ministry of finance, the central bank, a specialized regulator or some combination of these should have supervisory authority. These waves have been associated with the convergence of actual practices. How much and through what channels did internationally promoted ideas about supervisory 'best practice' influence institutional design choices? I use a new dataset of 83 countries and jurisdictions between the 1980s and 2007 to examine the diffusion of supervisory ideas. With this data, I employ Cox Proportional Hazard and Competing Risks Event History Analyses to evaluate the possible causal roles best practice policy ideas might have played. I find that banking crises and certain peer groups can encourage policy convergence on heavily promoted ideas

The impact of deregulation and re-regulation on bank efficiency: evidence from Asia

Following the 1997 crisis, banking sector reforms in Asia have been characterised by the emphasis on prudential regulation, associated with increased financial liberalisation. Using a panel data set of commercial banks from eight major Asian economies over the period 2001-2010, this study explores how the coexistence of liberalisation and prudential regulation affects banks’ cost characteristics. Given the presence of heterogeneity of technologies across countries, we use a stochastic frontier approach followed by the estimation of a deterministic meta-frontier to provide ‘true’ estimates of bank cost efficiency measures. Our results show that the liberalization of bank interest rates and the increase in foreign banks' presence have had a positive and significant impact on technological progress and cost efficiency. On the other hand, we find that prudential regulation might adversely affect bank cost performance. When designing an optimal regulatory framework, policy makers should combine policies which aim to foster financial stability without hindering financial intermediation

Two interpretations of human evolution: Essentialism and Darwinism

Despite intensive studies of a large number of fossils discovered during the 20th century there is no consensus as to the interpretation of the process of hominin evolution. Some authors see as many as six genera and some 17 species, while others argue for a single lineage from Plio/Pleistocene until today. Such diversity of interpretations of the same facts indicates lack of a uniform theoretical basis underlying studies of human evolution. Debates can be resolved using basic principles of scientific inquiry - parsimony and falsification of null hypotheses. Hypothesis testing is now possible with respect to the evolution of basic hominin characteristics such as brain size, body size and the size of the dentition that have sample sizes of a few hundred individual data points each. These characters display a continuous change with time. Analyses of variance do not falsify the null hypothesis of the existence of only one species at any time - variances around regression lines on time do not differ from the variance observed in the single species of Homo sapiens - distributions of residuals are normal. Thus, splitting of the hominin lineage into coeval species can only be based on descriptive characteristics that are liable to errors of subjective judgment.Maciej Henneber

Dose-related effects of alcohol on cognitive functioning

We assessed the suitability of six applied tests of cognitive functioning to provide a single marker for dose-related alcohol intoxication. Numerous studies have demonstrated that alcohol has a deleterious effect on specific areas of cognitive processing but few have compared the effects of alcohol across a wide range of different cognitive processes. Adult participants (N = 56, 32 males, 24 females aged 18–45 years) were randomized to control or alcohol treatments within a mixed design experiment involving multiple-dosages at approximately one hour intervals (attained mean blood alcohol concentrations (BACs) of 0.00, 0.048, 0.082 and 0.10%), employing a battery of six psychometric tests; the Useful Field of View test (UFOV; processing speed together with directed attention); the Self-Ordered Pointing Task (SOPT; working memory); Inspection Time (IT; speed of processing independent from motor responding); the Traveling Salesperson Problem (TSP; strategic optimization); the Sustained Attention to Response Task (SART; vigilance, response inhibition and psychomotor function); and the Trail-Making Test(TMT; cognitive flexibility and psychomotor function). Results demonstrated that impairment is not uniform across different domains of cognitive processing and that both the size of the alcohol effect and the magnitude of effect change across different dose levels are quantitatively different for different cognitive processes. Only IT met the criteria for a marker for wide-spread application: reliable dose-related decline in a basic process as a function of rising BAC level and easy to use non-invasive task properties.Mathew J. Dry, Nicholas R. Burns, Ted Nettelbeck, Aaron L. Farquharson and Jason M. Whit

The Effects of Bilingualism on Attention and Task-Switching

Imaging studies have indicated that when bilingual people switch between languages, there is activation of brain areas known for executive function. This study aimed to clarify the effects of bilingualism on attention and task-switching capabilities by measuring event-related potentials, ERPs, during two tasks: subjects participated in an auditory Oddball paradigm, following the Oddball paradigm, subjects took the Madrid Card Sorting Test, MCST—a computerized version of the Wisconsin Card Sorting Test. Both tests measured P300 potentials, which are indicative of significant attentional shifts. These shifts in attention are imperative to task-switching abilities. Participants were 49 students, staff, and faculty from The College of Wooster; however, EEG data was analyzed for only 25 participants between the ages of 18 and 22 —12 monolingual and 13 bilingual. Results showed that there were no behavioral differences of accuracy or reaction time in the MCST. However, bilingual participants produced significantly smaller P3b potentials during this task, indicating that they required less activation to produce the same behavioral output. The Oddball paradigm showed significant novelty effects but no group differences. Therefore, bilingual and monolingual participants did not show significant differences in the purely attentional task, but they did in the task-switching paradigm. Because the attention pathway is primarily localized in the parietal lobe, and task-switching incorporates both parietal and prefrontal activities, these findings indicate that the main effects of bilingualism on taskswitching are likely due to changes in prefrontal activation. This evidence supports the hypothesis that bilingual people show significantly greater efficiency in task-switching abilities. Key Words: bilingualism, attention, task-switching, event-related potential