Risk management, optimal

Individuals continually confront a discrepancy between ever expanding and changing wants and the means that they have at their disposal, time, and income, to satisfy them. One of the consequences is the need to make constrained choices between alternatives that have uncertain outcomes. Risk is a different concept from uncertainty. Individual optimal risk management means reducing, eliminating, or fully bearing risk, after conducting a “cost-benefit” analysis. In practice, however, cognitive biases mean that many decisions are not economically rational, necessitating paternalistic government and judicial interventions. Systemic, or whole financial system collapse risk is, optimally managed using well-designed macroprudential regulatory tools. The source of this type of risk is the inherent dynamics of the financial system over the course of the business cycle, interacting with credit market negative externalities, often as in the case of the GFC, spawned by government regulatory failure

Conformity, replication of design and business niches

Conformity affects the choice and design of organizations; conformists replicate successful strategies, play along with the rules of the game and display inert behavior. Conformity leads to the dominance of one mode. The combined impact of conformity and inertia, and the existence of employment costs, switching costs and network externalities, may exclude equally or superior efficient modes from replacing the incumbent mode (the first mover). Unable to overcome these barriers to entry, efficient maverick organizations are forced into niches. This is illustrated with respect to niches formed by labor-managed firms and ethnic businesses.

Congestion pricing and active transport - evidence from five opportunities for natural experiment

Congestion pricing schemes have been implemented in cities worldwide as a means of addressing externalities associated with inefficient price signals in transport systems. Limited evidence exists however on the secondary impacts of these schemes, which may include both environmental and health benefits associated with a resultant reduction in motor vehicle usage. There is increasing recognition that transport behaviours may play a role as opportunistic population level targets to reduce physical inactivity. Yet limited evidence currently exists on the effectiveness of transport interventions, such as congestion pricing schemes, for improving physical activity levels.This study aims to examine the physical activity effects of congestion pricing, with the health benefits of physical activity well established. Congestion pricing schemes implemented internationally were considered as 'natural experiments' and evidence of modal shift from vehicle to active forms of transport or physical activity effect was reviewed. Twelve studies were included from a search of peer-reviewed and 'grey' literature, with overall evidence for a physical activity or modal shift effect considered weak. The quality of the available evidence was also considered to be low.This is not to say that congestion pricing schemes may not have important secondary physical activity related health benefits. Instead, this review highlights the paucity of evidence that has been collected from real-world implementation of congestion pricing schemes. Given the growing recognition of the importance of distal mediators and determinants of health and the need for an 'all-of-government' approach more and better quality evidence of effectiveness of transport interventions for a broad range of outcomes, including health, is required. Significant barriers to the collection of such evidence exist, with strategies for overcoming some of these barriers identified. Only with a better understanding of the full range of potential health impacts can transport policy be fully utilised as a tool for population health.

The politics of productivity growth in Australia

A prominent feature of recent Australian economic discourse is the assertion that there was a ‘productivity surge’ during the 1990s, resulting from the neoliberal microeconomic reforms inaugurated in the early 1980s. However, the evidence for the productivity surge is routinely overstated, thus undermining the rationale for many past and future microeconomic reforms. There is also substantial evidence that productivity growth can have perverse socioeconomic and/or environmental consequences. Nonetheless, many policymakers, economists and commentators remain preoccupied with increasing productivity growth. This article examines the Australian productivity debate and concludes that this is driven more by neoliberal norms than socioeconomic necessity. These are manifest in a disciplinary discourse that constructs productivity growth as a national imperative, unencumbered by negative social and environmental externalities.