An adverse social welfare consequence of a rich-to-poor income transfer: A relative deprivation approach

A transfer from a richer individual to a poorer one seems to be the most intuitive and straightforward way of reducing income inequality in a society. However, can such a transfer reduce the welfare of the society? We show that a rich-to-poor transfer can induce a response in the individuals’ behaviors which actually exacerbates, rather than reduces, income inequality as measured by the Gini index. We use this result as an input in assessing the social welfare consequence of the transfer. Measuring social welfare by Sen’s social welfare function, we show that the transfer reduces social welfare. These two results are possible even for individuals whose utility functions are relatively simple (namely, at most quadratic in all terms) and incorporate a distaste for low relative income. We first present the two results for a population of two individuals. We subsequently provide several generalizations. We show that our argument holds for a population of any size, and that the choice of utility functions which trigger this response is not singular - the results obtain for an open set of the space of admissible utility functions. In addition, we show that a rich-to-poor transfer can exacerbate inequality when we employ Lorenz-domination, and that it can decrease social welfare when we draw on any increasing, Schur-concave welfare function

Worker heterogeneity, new monopsony, and training

A worker's output depends not only on his/her own ability but also on that of colleagues, who can facilitate the performance of tasks that each individual cannot accomplish on his/her own. We show that this common-sense observation generates monopsony power and is sufficient to explain why employers might expend resources on training employees even when the training is of use to other firms. We show that training will take place in better-than-average or ‘good’ firms enjoying greater monopsony power, whereas ‘bad’ firms will have low-ability workers unlikely to receive much training

Price of anarchy on heterogeneous traffic-flow networks

The efficiency of routing traffic through a network, comprising nodes connected by links whose cost of traversal is either fixed or varies in proportion to volume of usage, can be measured by the `price of anarchy'. This is the ratio of the cost incurred by agents who act to minimise their individual expenditure to the optimal cost borne by the entire system. As the total traffic load and the network variability - parameterised by the proportion of variable-cost links in the network - changes, the behaviours that the system presents can be understood with the introduction of a network of simpler structure. This is constructed from classes of non-overlapping paths connecting source to destination nodes that are characterised by the number of variable-cost edges they contain. It is shown that localised peaks in the price of anarchy occur at critical traffic volumes at which it becomes beneficial to exploit ostensibly more expensive paths as the network becomes more congested. Simulation results verifying these findings are presented for the variation of the price of anarchy with the network's size, aspect-ratio, variability and traffic load

Dealing with a traumatic past: the victim hearings of the South African truth and reconciliation commission and their reconciliation discourse

In the final years of the twentieth and the beginning of the twenty-first century, there has been a worldwide tendency to approach conflict resolution from a restorative rather than from a retributive perspective. The South African Truth and Reconciliation Commission (TRC), with its principle of 'amnesty for truth' was a turning point. Based on my discursive research of the TRC victim hearings, I would argue that it was on a discursive level in particular that the Truth Commission has exerted/is still exerting a long-lasting impact on South African society. In this article, three of these features will be highlighted and illustrated: firstly, the TRC provided a discursive forum for thousands of ordinary citizens. Secondly, by means of testimonies from apartheid victims and perpetrators, the TRC composed an officially recognised archive of the apartheid past. Thirdly, the reconciliation discourse created at the TRC victim hearings formed a template for talking about a traumatic past, and it opened up the debate on reconciliation. By discussing these three features and their social impact, it will become clear that the way in which the apartheid past was remembered at the victim hearings seemed to have been determined, not so much by political concerns, but mainly by social needs

Financial Transaction Tax: Small is Beautiful

The case for taxing financial transactions merely to raise more revenues from the financial sector is not particularly strong. Better alternatives to tax the financial sector are likely to be available. However, a tax on financial transactions could be justified in order to limit socially undesirable transactions when more direct means of doing so are unavailable for political or practical reasons. Some financial transactions are indeed likely to do more harm than good, especially when they contribute to the systemic risk of the financial system. However, such a financial transaction tax should be very small, much smaller than the negative externalities in question, because it is a blunt instrument that also drives out socially useful transactions. There is a case for taxing over-the-counter derivative transactions at a somewhat higher rate than exchange-based derivative transactions. More targeted remedies to drive out socially undesirable transactions should be sought in parallel, which would allow, after their implementation, to reduce or even phase out financialtransaction taxes

National business regulations and city entrepreneurship in Europe: a multilevel nested analysis

This article provides and tests a theoretical framework with a multilevel (country–city) nested model to analyze the relationship between national business regulations (NBRs) and city level entrepreneurship. While public interest theory predicts a positive relationship between NBR and city level entrepreneurship, public choice theory predicts the opposite, a negative relationship. Based on multilevel analysis for a matched country–city panel of 228 cities across 20 European countries for the years 2004 to 2009, the empirical evidence from panel data estimation explains how changes in NBRs influence changes in city level entrepreneurial activity over time

The racist bodily imaginary: the image of the body-in-pieces in (post)apartheid culture

This paper outlines a reoccurring motif within the racist imaginary of (post)apartheid culture: the black body-in-pieces. This disturbing visual idiom is approached from three conceptual perspectives. By linking ideas prevalent in Frantz Fanon’s description of colonial racism with psychoanalytic concepts such as Lacan’s notion of the corps morcelé, the paper offers, firstly, an account of the black body-in-pieces as fantasmatic preoccupation of the (post)apartheid imaginary. The role of such images is approached, secondly, through the lens of affect theory which eschews a representational ‘reading’ of such images in favour of attention to their asignifying intensities and the role they play in effectively constituting such bodies. Lastly, Judith Butler’s discussion of war photography and the conditions of grievability introduces an ethical dimension to the discussion and helps draw attention to the unsavory relations of enjoyment occasioned by such images

Why Social Enterprises Are Asking to Be Multi-stakeholder and Deliberative: An Explanation around the Costs of Exclusion.

The study of multi-stakeholdership (and multi-stakeholder social enterprises in particular) is only at the start. Entrepreneurial choices which have emerged spontaneously, as well as the first legal frameworks approved in this direction, lack an adequate theoretical support. The debate itself is underdeveloped, as the existing understanding of organisations and their aims resist an inclusive, public interest view of enterprise. Our contribution aims at enriching the thin theoretical reflections on multi-stakeholdership, in a context where they are already established, i.e. that of social and personal services. The aim is to provide an economic justification on why the governance structure and decision-making praxis of the firm needs to account for multiple stakeholders. In particular with our analysis we want: a) to consider production and the role of firms in the context of the “public interest” which may or may not coincide with the non-profit objective; b) to ground the explanation of firm governance and processes upon the nature of production and the interconnections between demand and supply side; c) to explain that the costs associated with multi-stakeholder governance and deliberation in decision-making can increase internal efficiency and be “productive” since they lower internal costs and utilise resources that otherwise would go astray. The key insight of this work is that, differently from major interpretations, property costs should be compared with a more comprehensive range of costs, such as the social costs that emerge when the supply of social and personal services is insufficient or when the identification of aims and means is not shared amongst stakeholders. Our model highlights that when social costs derived from exclusion are high, even an enterprise with costly decisional processes, such as the multistakeholder, can be the most efficient solution amongst other possible alternatives