Ministers as strategic political leaders? : Strategic political steering after NPM reforms in Finland

This study explores strategic political steering after the New Public Management (NPM) reforms, with emphasis on the new role assigned to Government ministers in Finland. In the NPM model, politicians concentrate on broad, principal issues, while agencies have discretion within the limits set by politicians. In Finland, strategic steering was introduced with Management by Results (MBR), but the actual tools for strategic political steering have been the Government Programme, the Government Strategy Portfolio (GSP) and Frame Budgeting. This study addresses these tools as means of strategic steering conducted by the Cabinet and individual ministers within their respective ministries. The time frame of the study includes the two Lipponen Cabinets between 1995 and 2003. Interviews with fourteen ministers as well as with fourteen top officials were conducted. In addition, administrative reform documents and documents related to strategic steering tools were analysed. The empirical conclusions of the study can be summarised as follows: There were few signs of strategic political steering in the Lipponen Cabinets. Although the Government Programmes of both Cabinets introduced strategic thinking, the strategic guidelines set forth at the beginning of the Programme were not linked to the GSP or to Frame Budgeting. The GSP could be characterised as the collected strategic agendas of each ministry, while there was neither the will nor the courage among Cabinet members to prioritise the projects and to make selections. The Cabinet used Frame Budgeting mainly in the sense of spending limits, not in making strategic allocation decisions. As for the GSP at the departmental level, projects were suggested by top officials, and ministers only approved the suggested list. Frame Budgeting at the departmental level proved to be the most interesting strategic steering tool from ministers viewpoint: they actively participated in defining which issues would need extra financing. Because the chances for extra financing were minimal, ministers had an effect only on a marginal share of the budget. At the departmental level, the study shows that strategic plans were considered the domain of officials. As for strategies concerning specific substances, there was variation in the interest shown by the ministers. A few ministers emphasised the importance of strategic work and led strategy processes. In most cases, however, officials led the process while ministers offered comments on the drafts of strategy documents. The results of this study together with experiences reported in other countries and local politics show that political decision-makers have difficulty operating at the strategic level. The conclusion is that politicians do not have sufficient incentive to perform the strategic role implied by the NPM type of reforms. Overall, the empirical results of the study indicate the power of politics over management reforms.

The Vexing Case of Igor Shafarevich, a Russian Political Thinker

The Russian mathematician, academician and former dissident Igor Shafarevich (b. 1923) is commonly mentioned in Western scholarly studies on perestroika and post-perestroika-era Russian politics as one of the most notable anti-Semites and extreme nationalists of the country. This notoriety owes to Shafarevich’s old samizdat article Russophobia, which was published in 1988. The scandal surrounding Russophobia came to a head when the president of The National Academy of Sciences in the United States asked Shafarevich, its honorary member, to resign. Nothing like this had ever happened in the academy’s history. The present dissertation discusses Shafarevich’s political activities, his texts and ideas as well as their reception. Particular attention is given to Russophobia, whose detailed examination proves very clearly that its reputation as an anti-Semitic text is groundless. The reasons for Russophobia’s hasty but fierce condemnation were many, but only one was that when the Soviet system began to tumble, it was commonly assumed that a vigorous rise in anti-Semitism and extreme nationalism in the Soviet Union/Russia would be just a matter of time. Many observers were highly sensitised to detecting its signs and symptoms. The dissertation also shows that most of those to write the first criticisms of Russophobia and to liken Shafarevich to the ideologues of Nazi Germany were the same people he had criticised in Russophobia for their deterministic view of history and irrational manner of connecting things for the purpose of fanning the flames of distrust between Russia’s Jews and Russians. In retrospect, it is fairly evident that Shafarevich actually managed to effectively “neutralise” the message of many of those obsessed with the Jews among his Russian contemporaries and contributed to the fact that anti-Jewish sentiments have been a great deal less popular in post-communist Russia than so many had feared and expected. The thesis also thoroughly discusses Shafarevich’s other texts and activities before Russophobia’s appearance and after it. In the 1970s, Shafarevich was one of the best-known dissidents in the Soviet Union. He worked together with academician Andrei Sakharov in a dissidents’ unofficial human rights committee and co-operated closely with Aleksandr Solzhenitsyn before Solzhenitsyn’s exile. Then, during the chaotic years of perestroika, Shafarevich defended the basic rights of ordinary citizens and warned that the hype concerning democracy could become counterproductive if the most palpable result of the reforms was the disappearance of citizens’ basic security and elementary social justice. One of the conclusions of the thesis is that even if the world around Shafarevich has changed considerably, his views have remained essentially the same since the late 1960s and early 1970s.

Glutamatergic Modulation of Cue-Induced Drug-Seeking Behavior in the Rat

The characteristics of drug addiction include compulsive drug use despite negative consequences and re-occurring relapses, returns to drug use after a period of abstinence. Therefore, relapse prevention is one of the major challenges for the treatment of drug addiction. There are three main factors capable of inducing craving for drugs and triggering relapse long after cessation of drug use and dissipation of physical withdrawal signs: stress, re-exposure to the drug, and environmental stimuli (cues) that have been previously associated with drug use. The neurotransmitters dopamine and glutamate have been implicated in the modulation of drug-seeking behavior. The aim of this project was to examine the role of glutamatergic neurotransmission in relapse triggered by conditioned drug-associated stimuli. The focus was on clarifying whether relapse to drug seeking can be attenuated by blockade of glutamate receptors. In addition, as the nucleus accumbens has been proposed to participate in the modulation of drug-seeking behavior, the effects of glutamate receptor blockade in this brain structure on cue-induced relapse were investigated. The studies employed animals models in which rats were trained to press a lever in a test cage to obtain alcohol or intravenous cocaine. Drug availability was paired with distinct olfactory, auditory, or visual stimuli. This phase was followed by extinction training, during which lever presses did not result in the presentation of the drug or the drug-associated stimuli. Extinction training led to a gradual decrease in the number of lever presses during test sessions. Relapse was triggered by presenting the rats with the drug-associated stimuli in the absence of alcohol or cocaine. The drug-associated stimuli were alone capable of inducing resumption of lever pressing and maintaining this behavior during repeated testing. The number of lever presses during a session represented the intensity of drug-seeking and relapse behavior. The results suggest that glutamatergic neurotransmission is involved in the modulation of drug-seeking behavior. Both alcohol and cocaine relapse were attenuated by systemic pretreatment with glutamate receptor antagonists. However, differences were found in the ability of ionotropic AMPA/kainate and NMDA receptor antagonists to regulate drug-seeking behavior. The AMPA/kainate antagonists CNQX and NBQX, and L-701,324, an antagonist with affinity for the glycine site of the NMDA receptor, attenuated cue-induced drug seeking, whereas the competitive NMDA antagonist CGP39551 and the NMDA channel blocker MK-801 were without effect. MPEP, an antagonist at metabotropic mGlu5 glutamate receptors, also decreased drug seeking, but its administration was found to lead to conditioned suppression of behavior during subsequent treatment sessions, suggesting that MPEP may have undesirable side effects. The mGluR2/3 agonist LY379268 and the mGluR8 agonist (S)-3,4-DCPG decreased both cue-induced relapse to alcohol drinking and alcohol consumption. Control experiments showed however that administration of the agonists was accompanied by motor suppression limiting their usefulness. Administration of the AMPA/kainate antagonist CNQX, the NMDA antagonist D-AP5, and the mGluR5 antagonist MPEP into the nucleus accumbens resulted also in a decrease in drug-seeking behavior, suggesting that the nucleus accumbens is at least one of the anatomical sites regulating drug seeking and mediating the effects of glutamate receptor antagonists on this behavior.

On the mechanical behavior of compacted pack ice : A theoretical and numerical investigation

Pack ice is an aggregate of ice floes drifting on the sea surface. The forces controlling the motion and deformation of pack ice are air and water drag forces, sea surface tilt, Coriolis force and the internal force due to the interaction between ice floes. In this thesis, the mechanical behavior of compacted pack ice is investigated using theoretical and numerical methods, focusing on the three basic material properties: compressive strength, yield curve and flow rule. A high-resolution three-category sea ice model is applied to investigate the sea ice dynamics in two small basins, the whole Gulf Riga and the inside Pärnu Bay, focusing on the calibration of the compressive strength for thin ice. These two basins are on the scales of 100 km and 20 km, respectively, with typical ice thickness of 10-30 cm. The model is found capable of capturing the main characteristics of the ice dynamics. The compressive strength is calibrated to be about 30 kPa, consistent with the values from most large-scale sea ice dynamic studies. In addition, the numerical study in Pärnu Bay suggests that the shear strength drops significantly when the ice-floe size markedly decreases. A characteristic inversion method is developed to probe the yield curve of compacted pack ice. The basis of this method is the relationship between the intersection angle of linear kinematic features (LKFs) in sea ice and the slope of the yield curve. A summary of the observed LKFs shows that they can be basically divided into three groups: intersecting leads, uniaxial opening leads and uniaxial pressure ridges. Based on the available observed angles, the yield curve is determined to be a curved diamond. Comparisons of this yield curve with those from other methods show that it possesses almost all the advantages identified by the other methods. A new constitutive law is proposed, where the yield curve is a diamond and the flow rule is a combination of the normal and co-axial flow rule. The non-normal co-axial flow rule is necessary for the Coulombic yield constraint. This constitutive law not only captures the main features of forming LKFs but also takes the advantage of avoiding overestimating divergence during shear deformation. Moreover, this study provides a method for observing the flow rule for pack ice during deformation.

The phenomenon of oligarchy in Russia and its impact on Russian transition

Nowadays any analysis of Russian economy is incomplete without taking into account the phenomenon of oligarchy. Russian oligarchs appeared after the fall of the Soviet Union and are represented by wealthy businessmen who control a huge part of natural resources enterprises and have a big political influence. Oligarchs’ shares in some natural resources industries reach even 70-80%. Their role in Russian economy is big without any doubts, however there has been very little economic analysis done. The aim of this work is to examine Russian oligarchy on micro and macro levels, its role in Russia’s transition and the possible positive and negative outcomes from this phenomenon. For this purpose the work presents two theoretical models. The first part of this thesis work examines the role of oligarchs on micro level, concentrating on the question whether the oligarchs can be more productive owners than other types of owners. To answer the question this part presents a model based on the article “Are oligarchs productive? Theory and evidence” by Y. Gorodnichenko and Y. Grygorenko. It is followed by empirical test based on the works of S. Guriev and A. Rachinsky. The model predicts oligarchs to invest more in the productivity of their enterprises and have higher returns on capital, therefore be more productive owners. According to the empirical test, oligarchs were found to outperform other types of owners, however it is not defined whether the productivity gains offset losses in tax revenue. The second part of the work concentrates on the role of oligarchy on macro level. More precisely, it examines the assumption that the depression after 1998 crises in Russia was caused by the oligarchs’ behavior. This part presents a theoretical model based on the article “A macroeconomic model of Russian transition: The role of oligarchic property rights” by S. Braguinsky and R. Myerson, where the special type of property rights is introduced. After the 1998 crises oligarchs started to invest all their resources abroad to protect themselves from political risks, which resulted in the long depression phase. The macroeconomic model shows, that better protection of property rights (smaller political risk) or/and higher outside investing could reduce the depression. Taking into account this result, the government policy can change the oligarchs’ behavior to be more beneficial for the Russian economy and make the transition faster.

Very Low Birth Weight Infants as Young Adults : Focus on aspects of cognition, behavior and sleep

Major advances in the treatment of preterm infants have occurred during the last three decades. Survival rates have increased, and the first generations of preterm infants born at very low birth weight (VLBW; less than 1500 g) who profited from modern neonatal intensive care are now in young adulthood. The literature shows that VLBW children achieve on average lower scores on cognitive tests, even after exclusion of individuals with obvious neurosensory deficits. Evidence also exists for an increased risk in VLBW children for various neuropsychiatric disorders such as attention-deficit hyperactivity disorder (ADHD) and related behavioral symptoms. Up till now, studies extending into adulthood are sparse, and it remains to be seen whether these problems persist into adulthood. The aim of this thesis was to study ADHD-related symptoms and cognitive and executive functioning in young adults born at VLBW. In addition, we aimed to study sleep disturbances, known to adversely affect both cognition and attention. We hypothesized that preterm birth at VLBW interferes with early brain development in a way that alters the neuropsychological phenotype; this may manifest itself as ADHD symptoms and impaired cognitive abilities in young adulthood. In this cohort study from a geographically defined region, we studied 166 VLBW adults and 172 term-born controls born from 1978 through 1985. At ages 18 to 27 years, the study participants took part in a clinic study during which their physical and psychological health was assessed in detail. Three years later, 213 of these individuals participated in a follow-up. The current study is part of a larger research project (The Helsinki Study of Very Low Birth Weight Adults), and the measurements of interest for this particular study include the following: 1) The Adult Problem Questionnaire (APQ), a self-rating scale of ADHD-related symptoms in adults; 2) A computerized cognitive test battery designed for population studies (CogState®) which measures core cognitive abilities such as reaction time, working memory, and visual learning; 3) Sleep assessment by actigraphy, the Basic Nordic Sleep Questionnaire, and the Morningness-Eveningness Questionnaire. Actigraphs are wrist-worn accelerometers that separate sleep from wakefulness by registering body movements. Contrary to expectations, VLBW adults as a group reported no more ADHD-related behavioral symptoms than did controls. Further subdivision of the VLBW group into SGA (small for gestational age) and AGA (appropriate for gestational age) subgroups, however, revealed more symptoms on ADHD subscales pertaining to executive dysfunction and emotional instability among those born SGA. Thus, it seems that intrauterine growth retardation (for which SGA served as a proxy) is a more essential predictor for self-perceived ADHD symptoms in adulthood than is VLBW birth as such. In line with observations from other cohorts, the VLBW adults reported less risk-taking behavior in terms of substance use (alcohol, smoking, and recreational drugs), a finding reassuring for the VLBW individuals and their families. On the cognitive test, VLBW adults free from neurosensory deficits had longer reaction times than did term-born peers on all tasks included in the test battery, and lower accuracy on the learning task, with no discernible effect of SGA status over and above the effect of VLBW. Altogether, on a group level, even high-functioning VLBW adults show subtle deficits in psychomotor processing speed, visual working memory, and learning abilities. The sleep studies provided no evidence for differences in sleep quality or duration between the two groups. The VLBW adults were, however, at more than two-fold higher risk for sleep-disordered breathing (in terms of chronic snoring). Given the link between sleep-disordered breathing and health sequelae, these results suggest that VLBW individuals may benefit from an increased awareness among clinicians of this potential problem area. An unexpected finding from the sleep studies was the suggestion of an advanced sleep phase: The VLBW adults went to bed earlier according to the actigraphy registrations and also reported earlier wake-up times on the questionnaire. In further study of this issue in conjunction with the follow-up three years later, the VLBW group reported higher levels of morningness propensity, further corroborating the preliminary findings of an advanced sleep phase. Although the clinical implications are not entirely clear, the issue may be worth further study, since circadian rhythms are closely related to health and well-being. In sum, we believe that increased understanding of long-term outcomes after VLBW, and identification of areas and subgroups that are particularly vulnerable, will allow earlier recognition of potential problems and ultimately lead to improved prevention strategies.

The effects of stall surfaces and milk yield on the lying behavior of dairy cow

The importance of lying behavior to dairy cows and the feasible definition of lying has attracted many studies on the subject. Cattle show both behavioral and physiological stress responses when subjected to thwarting of their lying behavior. If cows are unable to lie down they later compensate for lost lying time when possible. Environmental factors such as housing and bedding systems have been noted to affect the time spent lying, but there is usually large variation in lying time between individuals. Internal factors such as the reproductive stage, age and health of cows affect their lying time and can cause variation. However, the effect of higher milk production on behavior has not previously been illuminated. The objective of this study was to provide data applicable for the improvement of resting conditions of cows. The preference of stall surface material, differences in normal behavior per unit time and various health measures were observed. The aim was to evaluate lying behavior and cow comfort on different stall bedding materials. In addition, the effect of milk yield on behavior was examined in a tie stall experiment. The preferences for surface materials were investigated in 5 experiments using 3 surface materials with bedding manipulations. According to the results, the cows preferred abundant straw bedding and soft rubber mats. However, they showed an aversion to sand bedding. Some individuals even refused to use stalls with sand when no organic bedding material was present. However, this study was unable to determine the reason for the avoidance, as neither the sand particle size nor thermal properties appeared critical. However, previous exposure to particular surface materials increased the preference for them. The amount of straw bedding was found to be an important factor affecting the preferences for stalls, and the lying time in stalls increased when the flooring softness was improved by applying straw or by installing elastic mats. Despite sand being the least preferred flooring material in preference tests, the health of legs improved during exposure to sand-floored stalls. Moreover cows using sand were cleaner than those that used straw stalls. Thus, sand bedding entailed some health benefits despite the contradictory results of preference tests, which more strongly reflected the perceptions of individual animals. Milk yield was observed to affect behavior by reducing the lying time, possibly due to factors other than longer duration of eating. High yielding cows seemed to intensify their lying bouts, as they were observed to lie with the neck muscles relaxed sooner after lying down than lower yielding cows. In conclusion, cows were found to prefer softer stall surface materials and organic bedding material. In addition, the lying time was reduced by a high milk yield, although the lying time seemed to be important for resting. Cows might differ in the needs for their lying environment. The management of dairy cows should eliminate any unnecessary prevention of lying, as even in tie-stalls high yielding cows seem to be affected by time constraints. Adding fresh bedding material to stalls increases the comfort of any stall flooring material.

Oligarchs, political regime changes, and firm valuation

This paper examines the impact of a regime shift on the valuation of politically powerful oligarch firms. Focusing on the Yeltsin-Putin regime shift in Russia, we find that the valuations of outside shareholders claims are significantly higher under the Putin regime than under the Yeltsin regime after controlling for industry and time effects. The findings suggest that the increasing cost of extracting private benefits outweigh the reduction in the value of political connections following the political regime change. The results are also consistent with changes in the risk of state expropriation. Our results show that effects driven by the political regime change complement the traditional view stating that increased ownership concentration improved the performance of Russian oligarch firms.

Political Risk in Credit Evaluation: Empirical Studies and Survey Results

Financing trade between economic agents located in different countries is affected by many types of risks, resulting from incomplete information about the debtor, the problems of enforcing international contracts, or the prevalence of political and financial crises. Trade is important for economic development and the availability of trade finance is essential, especially for developing countries. Relatively few studies treat the topic of political risk, particularly in the context of international lending. This thesis explores new ground to identify links between political risk and international debt defaults. The core hypothesis of the study is that the default probability of debt increases with increasing political risk in the country of the borrower. The thesis consists of three essays that support the hypothesis from different angles of the credit evaluation process. The first essay takes the point of view of an international lender assessing the credit risk of a public borrower. The second investigates creditworthiness assessment of companies. The obtained results are substantiated in the third essay that deals with an extensive political risk survey among finance professionals in developing countries. The financial instruments of core interest are export credit guaranteed debt initiated between the Export Credit Agency of Finland and buyers in 145 countries between 1975 and 2006. Default events of the foreign credit counterparts are conditioned on country-specific macroeconomic variables, corporate-specific accounting information as well as political risk indicators from various international sources. Essay 1 examines debt issued to government controlled institutions and conditions public default events on traditional macroeconomic fundamentals, in addition to selected political and institutional risk factors. Confirming previous research, the study finds country indebtedness and the GDP growth rate to be significant indicators of public default. Further, it is shown that public defaults respond to various political risk factors. However, the impact of the risk varies between countries at different stages of economic development. Essay 2 proceeds by investigating political risk factors as conveivable drivers of corporate default and uses traditional accounting variables together with new political risk indicators in the credit evaluation of private debtors. The study finds links between corporate default and leverage, as well as between corporate default and the general investment climate and measeures of conflict in the debtor country. Essay 3 concludes the thesis by offering survey evidence on the impact of political risk on debt default, as perceived and experienced by 103 finance professionals in 38 developing countries. Taken together, the results of the thesis suggest that various forms of political risk are associated with international debt defaults and continue to pose great concerns for both international creditors and borrowers in developing countries. The study provides new insights on the importance of variable selection in country risk analysis, and shows how political risk is actually perceived and experienced in the riskier, often lower income countries of the global economy.

Short-term Price Behavior and the Effect of Foreign Investors in Finnish Equity Markets (summary section only)

As globalization and capital free movement has increased, so has interest in the effects of that global money flow, especially during financial crises. The concern has been that large global money flows will affect the pricing of small local markets by causing, in particular, overreaction. The purpose of this thesis is to contribute to the body of work concerning short-term under- and overreaction and the short-term effects of foreign investment flow in the small Finnish equity markets. This thesis also compares foreign execution return to domestic execution return. This study’s results indicate that short-term under- and overreaction occurs in domestic-buy portfolios (domestic net buying) rather than in foreign-buy portfolios. This under- and overreaction, however, is not economically meaningful after controlling for the bid-ask bounce effect. Based on this finding, one can conclude that foreign investors do not have a destabilizing effect in the short-term in the Finnish markets. Foreign activity affects short-term returns. When foreign investors are net buyers (sellers) there are positive (negative) market adjusted returns. Literature related to nationality and institutional effect leads us to expect these kind of results. These foreign flows are persistent at a 5 % to 21 % level and the persistence of foreign buy flow is higher than the foreign sell flow. Foreign daily trading execution is worse than domestic execution. Literature which quantifies foreign investors as liquidity demanders and literature related to front-running leads us to expect poorer foreign execution than domestic execution.