Cultural Diversity, European Integration and the Welfare State

According to the “Neoclassical” approach, stemming from the Tiebout model, the main advantage of federalism lies in the possibility that individuals with similar tastes, including those related to risk-aversion and the provision of public goods, can cluster in the same jurisdictions. The starting point of this paper is a criticism of this approach. While the main advantage of federalism is related to the possibility of clustering heterogeneous individuals, the assumption of costless movement from one State to the other implicitly implies that individuals are homogeneous in some of other important characteristics. For instance, individuals, facing low mobility costs must have very minor cultural and linguistic differences. This hypothesis may approximate the U. S. situation but clashes with the case of European Union. Since Cultural-linguistic standardisation and the social protection can be regarded as two alternative insurance devices (one increasing the probability of alternative employment and the second providing some assistance in case of dismissal from the present employment) a culturally diverse Europe must necessary rely more on the Welfare State than the United States. The comparison with the U. S. clarifies the paradoxical problem of European integration. On the one hand, social protection is more necessary when cultural-linguistic differences make it expensive to cultural standardisation as a substitute for it. On the other hand, social insurance among different regions is more unlikely to be accepted when these cultural differences prevail. We argue that a possible way out of this dilemma is a system of mutual insurance among the European national welfare systems

Marrying in the Cathedral: a Framework for the Analysis of Corporate Governance

The firm can be seen as a centralization of market transactions and as a decentralization of a public ordering which allows the management of joint liabilities. The paper advances the view that the main reason for the firm’s existence is the unification and the internalization of liabilities. From this perspective, Coase's and Fuller's contributions to the theory of the firm can be married within the architecture of Calabresi's Cathedral. Because of specific (dis)investments, fundamental transformations from competition to managed bilateral monopoly take place either in the public or the private sphere and provide an explanation for the ultimate nature of the firm

Politics-Business Interaction Paths

Most pre-crisis explanations of the various corporate governance systems have considered the separation between ownership and control to be an advantage of the Anglo-American economies. They have also attributed the failure of other countries to achieve these efficient arrangements to their different legal and/or electoral systems. In this paper we compare this view with the co-evolution approach based on the hypothesis that politics and corporate governance influence each other, generating complex interactions of financial and labour market institutions. Countries cluster along different complementary politics-business interaction paths and there is no reason to expect, or to device policies for, their convergence to a single model of corporate governance. We argue that this hypothesis provides a more convincing explanation of the past histories of major capitalist economies and can suggest some useful possible scenarios of their future institutional development. Bayesian model comparison suggests that the co-evolution approach turns out at least as influential as the competing theories in explaining shareholder and worker protection determination.employment protection, corporate governance, ownership concentration, Bayesian model estimation, Bayesian model comparison

Karl Marx luego de la nueva economía institucional

In this paper, we consider the two main causation mechanisms characterizing Marxian theory: the one running from productive forces to relations of production (Marx I) and the other moving in the opposite direction (Marx II). We argue that Marx did not achieve a satisfactory integration of the two mechanisms and that he failed to point out how multiple technological institutionalpaths may stem from the cumulative interactions between relations of production and productive forces. In spite of many important analytical insights, NIE has exacerbated the primacy of technology and productive forces, which characterized «Marx I». After NIE, the analysis of thecomplex relations between «Marx I» and «Marx II» can still help to extend the scope of institutional theory and, in particular, its application to the comparative analysis of models of capitalism coexisting in the global economy.El argumento central del presente trabajo se centra en la identificación de dos «Marx». El primero de estos, denominado «hermano mayor» o Marx I, es el que visualizó el modelo de «socialismo de una única empresa», el cual permitiría un mayor desarrollo de las fuerzas productivas para obtener el beneficio de una coordinación planificada. En este caso, se destaca la influencia ejercida por la naturaleza de las fuerzas productivas sobre los derechos. El segundo Marx, denominado «hermano menor» o Marx II, es el que imaginó la utopía final del comunismo, en la que el trabajo sería tan interesante que se encontraría al borde de ser indistinguible del tiempo de ocio y cada individuo buscaría un empleo en función de sus preferencias en lugar de su conveniencia económica. En este caso, se destaca la influencia ejercida por los derechos sobre la naturaleza de las fuerzas productivas empleadas. Luego de realizar un análisis profundo acerca de las contradicciones y coincidencias entre ambos Marx y las teorías neoclásicas, ricardianas, smithianas, tayloristas, toyotistas y neoinstitucionalistas, se llega a la conclusión de que es necesario abandonar un modelo universalista en el que todas las sociedades deben seguir la misma línea de desarrollo. En cambio, es importante reconocer el llamado «micromarxismo», en el que la multiplicidad de formas que pueden asumir las organizaciones se da debido a los mecanismos de mutuo refuerzo que se experimentan entre las fuerzas productivas y los tipos de propiedad. La globalización es, por lo tanto, un fenómeno complejo que involucra no solo un proceso de convergencia, sino también una creciente diversificación de las relaciones entre los derechos de propiedad y las fuerzas productivas de los países y, por ende, lleva a la especialización. Por consiguiente, se llega a la conclusión de que la coexistencia de ambos «hermanos» es provechosa para abordar algunos de los acontecimientos de la realidad actual, donde se aprecia un mundo impuro en términos teóricos y la combinación de enfoques, antiguos y contemporáneos, otorga visiones más realistas sobre el desarrollo de la sociedad contemporánea

The Evolution of the American Corporation and Global Organizational Biodiversity

The Evolution of the Modern Corporate Structure has been one of the most influential chapters of The Modern Corporation & Private Property. But Berle and Means’s superb analysis is framed in the American context and cannot be easily generalized to other experiences. Their corporate model arose in a democratic country where “production engineers” commanded more respect than financiers and capitalist dynasties. Other countries followed different organizational paths, characterized by different institutional complementarities between labor and financial markets that generated “concentrated equilibria” different from the American “dispersed equilibrium.” This Article argues that the divide can be traced to the different aristocratic and democratic evolutionary roots of the two systems, and that organizational biodiversity is still an important feature of the global economy

Property rights in the knowledge economy: an explanation of the crisis

Some of the roots underlying the recent crisis may be found in the global convergence towards a model characterized by strong property rights and an extremely limited role attributed to "open science". The modern economy has increasingly moved from an open science - open markets model toward a closed science - closed markets model. Paradoxically, while a non-rival resource like knowledge becomes the most relevant input, small firms and new entrants find it increasingly difficult to be competitive with large and well established organizations. Such a model is progressively increasing the costs of investment in new knowledge, with important negative consequences in terms of overall performance of the economy. We argue that in the knowledge economy, overcoming inequality and the economic crisis can be part of a single coherent policy. If some essential knowledge is moved from the private to the public sphere, this is has not only desirable inequality-decreasing consequences but can also contribute to re-launching the economy, creating the conditions for a sustained development. In a knowledge economy, a super-multiplier could couple the traditional effects of Keynesian spending in time of crisis with the multiplying virtues human knowledge, moved from the private to the public sphere.

Why only humans and social insects have a division of labour

Humans and social insects are located at extreme points of the set of possible evolutionary paths. However, they share a complex division of labour and comprise a large proportion of the earth’s biomass. These observations prompt two questions: If there are evident evolutionary advantages of cooperation and specialisation, why have only few species been able to increase their fitness in this way? Why have these characteristics emerged as such extremely different forms of life? In order to answer these two questions, we will focus on possible ‘transition societies’ in the evolutionary paths towards social species. We will argue that, in both the human and social insect cases, sexual selection had a crucial role in the development of the division of labour and entailed that the division of labour required either minimum or maximum unitary investments in the offspring. The species located in between these two extremes could not exploit the advantages of specialisation

Posiciones legales y complementariedades institucionales

Legal positions (such as rights, duties, liberties, powers, liabilities and immunities) are linked together by strong institutional complementarities that differ from the usual institutional complementarities that have been recently considered in economic literature. Legal positions not only satisfy the usual conditions of institutional complementarity stemming from the fact that legal positions that “fit” together are marginally better than those that do not. They also define legal equilibria characterized by the social scarcity constraint that is typical of positional goods.legal positions, institutional complementarities, contracts, property law, industrial organization, capitalist systems

Information Technology, Organizational Form, and Transition to the Market

The paper reviews theories of information technology adoption and organizational form and applies them to an empirical analysis of firm choices and characteristics in four transition economies: the Czech Republic, Hungary, Romania, and Slovakia. We argue that these economies have gone through two major structural changes-one concerning new technology and another concerning ownership and boundaries of firms-and we consider if and how each one of the two structural changes has affected the other. We test the impact of firm size, integration, and ownership on the extent of new information technology adoption (measured by growth in the fraction of employees using personal computers or computer-controlled machinery), and the impact of information technology on changes in the boundaries and the ownership structure of enterprises, drawing upon a sample survey of 330 firms.transition, economy, Earle, technology, organizational, form, Pagano, Lesi, Upjohn