Privatisation, state ownership and productivity:evidence from China

This paper examines the relationship between the transfer of ownership between the public and private sectors of Chinese industry, and its impacts on performance. We link ownership changes to productivity growth, and demonstrate that privatisation contributes significantly. We offer an extension that is generally ignored in the literature, in looking at firms that are taken back into state ownership, and evaluating the productivity growth effects of this. Further, we highlight the well-understood simultaneity problems, and demonstrate the hazard of ignoring the issue by comparing various estimators, including the modified control function approach. In general, the results stress the importance of allowing for such endogeneity when evaluating the productivity effects of ownership change.

State advances and private retreats? Evidence from the decomposition of the Chinese manufacturing aggregate productivity decomposition in China

This paper is motivated by the recent debate on the existence and scale of China's 'Guo Jin Min Tui' phenomenon, which is often translated as 'the state sector advances and the private sector retreats'. We argue that the profound implication of an advancing state sector is not the size expansion of the state ownership in the economy per se, but the likely retardation of the development of the already financially constrained private sector and the issues around the sustainability of the already weakening Chinese economy growth. Drawing on recent methodological advances, we provide a critical analysis of the contributions of the state and non-state sectors in the aggregate Total Factor Productivity and its growth over the period of 1998-2007 to verify the existence of GJMT and its possible impacts on Chinese economic growth. Overall, we find strong and consistent evidence of a systematic and worsening resource misallocation within the state sector and/or between the state sectors and private sectors over time. This suggests that non-market forces allow resources to be driven away from their competitive market allocation and towards the inefficient state sector. Crown Copyright © 2014.

State fragility and international development co-operation

Over the past few years addressing state fragility in the third world has become an important priority in international development cooperation. However, it seems that the international donor community has so far not been able to develop adequate instruments for dealing with the problems posed by state failure. We see two reasons for this: (i) there is growing recognition within the donor community that the lack of absorptive capacity, or bad economic policies in the partner country can actually make aid counterproductive, even harmful; and (ii) it is very difficult to manage effective development cooperation with weak governments. Channelling aid through NGOs, or giving limited aid in the form of capacity-building is clearly not sufficient to solve the problems fragile states face.

Contesting human rights through institutional reform:a case study of the reform of the UK Equality and Human Rights Commission

This article presents a case study of the recent reform of the United Kingdom Equalities and Human Rights Commission, to address a critical gap in the literature on national human rights institutions (NHRIs) concerning the power of governments to exert control over these institutions through reform processes. Through this analysis, the article demonstrates, first, that NHRIs are affected by contextual factors not only related to the popularity of the human rights agenda but also to wider policy agendas which impact on their status and functions; and second, that attempts by government to exert more administrative control can be significantly problematic for the operational independence of NHRIs.

State control and corporate governance in transition economies:25 years on from 1989

Research Question/Issue - Which forms of state control over corporations have emerged in countries that made a transition from centrally-planned to marked-based economies and what are their implications for corporate governance? We assess the literature on variation and evolution of state control in transition economies, focusing on corporate governance of state-controlled firms. We highlight emerging trends and identify future research avenues. Research Findings/Insights - Based on our analysis of more than 100 articles in leading management, finance, and economics journals since 1989, we demonstrate how research on state control evolved from a polarized approach of public–private equity ownership comparison to studying a variety of constellations of state capitalism. Theoretical/Academic Implications - We identify theoretical perspectives that help us better understand benefits and costs associated with various forms of state control over firms. We encourage future studies to examine how context-specific factors determine the effect of state control on corporate governance. Practitioner/Policy Implications - Investors and policymakers should consider under which conditions investing in state-affiliated firms generates superior returns.

State Fragility and International Development Cooperation

Over the past few years addressing state fragility in the third world has become an important priority in international development cooperation. However, it seems that the international donor community has so far not been able to develop adequate instruments for dealing with the problems posed by state failure. We see two reasons for this: (i) there is growing recognition within the donor community that the lack of absorptive capacity, or bad economic policies in the partner country can actually make aid counterproductive, even harmful; and (ii) it is very difficult to manage effective development cooperation with weak governments. Channelling aid through NGOs, or giving limited aid in the form of capacity-building is clearly not sufficient to solve the problems fragile states face.

State subsidy and moral hazard in corporate financing

This paper investigates the impact of state subsidy on the behavior of the entrepreneur under asymmetric information. Several authors formulated concerns about state intervention as it can aggravate moral hazard in corporate financing. In the seminal paper of Holmström and Tirole (1997) a two-player moral hazard model is presented with an entrepreneur initiating a risky scalable project and a private investor (e.g. bank or venture capitalist) providing outside financing. The novelty of our research is that this basic moral hazard model is extended to the case of positive externalities and to three players by introducing the state subsidizing the project. It is shown that in the optimum, state subsidy does not harm, but improves the incentives of the entrepreneur to make efforts for the success of the project; hence in effect state intervention reduces moral hazard. Consequently, state subsidy increases social welfare which is defined as the sum of private and public net benefits. Also, the exact form of the state subsidy (ex-ante/ex-post, conditional/unconditional, refundable/nonrefundable) is irrelevant in respect of the optimal size and the total welfare effect of the project. Moreover, in case of nonrefundable subsidies state does not crowd out private investors; but on the contrary, by providing additional capital it boosts private financing. In case of refundable subsidies some crowding effects may occur depending on the subsidy form and the parameters.

State collapse and politicized identity: Somalia and Sudan

Scholarship on how to rebuild failed or collapsed states provides scant theoretical guidance in the search for specific warning signs or mechanisms of collapsing states. This thesis argues that state collapse is a societal response to an identity crisis politicized by the state apparatus in response to a legitimation crisis. As regime legitimacy deteriorates, identity politics are deployed to build support for the regime, but typically at the cost of increasing other forces of internal conflict. Absent a mediating force to suppress internal conflict, the state collapses once the regime has been removed. Somalia and Sudan proceeded through this trajectory during their civil wars, though with different outcomes. Somalia fragmented into clan and subclan groups that continued their inimical relationship perpetuating the war following Siyad Barre's coup. Sudan maintained two core identity groups separated by the implementation of sharia that survived each state legitimation crisis, though the state's physical solidity endured.

Quantum transition state theory and solving a first order master equation for complex reactions numerically

The field of chemical kinetics is an exciting and active field. The prevailing theories make a number of simplifying assumptions that do not always hold in actual cases. Another current problem concerns a development of efficient numerical algorithms for solving the master equations that arise in the description of complex reactions. The objective of the present work is to furnish a completely general and exact theory of reaction rates, in a form reminiscent of transition state theory, valid for all fluid phases and also to develop a computer program that can solve complex reactions by finding the concentrations of all participating substances as a function of time. To do so, the full quantum scattering theory is used for deriving the exact rate law, and then the resulting cumulative reaction probability is put into several equivalent forms that take into account all relativistic effects if applicable, including one that is strongly reminiscent of transition state theory, but includes corrections from scattering theory. Then two programs, one for solving complex reactions, the other for solving first order linear kinetic master equations to solve them, have been developed and tested for simple applications.

Indirect and direct controls of macroinvertebrates and small fish by abiotic factors and trophic interactions in the Florida Everglades

1. The roles of nutrients, disturbance and predation in regulating consumer densities have long been of interest, but their indirect effects have rarely been quantified in wetland ecosystems. The Florida Everglades contains gradients of hydrological disturbance (marsh drying) and nutrient enrichment (phosphorus), often correlated with densities of macroinvertebrate infauna (macroinvertebrates inhabiting periphyton), small fish and larger invertebrates, such as snails, grass shrimp, insects and crayfish. However, most causal relationships have yet to be quantified. 2.  We sampled periphyton (content and community structure) and consumer (small omnivores, carnivores and herbivores, and infaunal macroinvertebrates inhabiting periphyton) density at 28 sites spanning a range of hydrological and nutrient conditions and compared our data to seven a priori structural equation models. 3.  The best model included bottom-up and top-down effects among trophic groups and supported top-down control of infauna by omnivores and predators that cascaded to periphyton biomass. The next best model included bottom-up paths only and allowed direct effects of periphyton on omnivore density. Both models suggested a positive relationship between small herbivores and small omnivores, indicating that predation was unable to limit herbivore numbers. Total effects of time following flooding were negative for all three consumer groups even when both preferred models suggested positive direct effects for some groups. Total effects of nutrient levels (phosphorus) were positive for consumers and generally larger than those of hydrological disturbance and were mediated by changes in periphyton content. 4.  Our findings provide quantitative support for indirect effects of nutrient enrichment on consumers, and the importance of both algal community structure and periphyton biomass to Everglades food webs. Evidence for top-down control of infauna by omnivores was noted, though without substantially greater support than a competing bottom-up-only model.

Fish Community Responses to the Combined Effects of Decreased Hydroperiod and Nonnative Fish Invasions in a Karst Wetland: Are Everglades Solution Holes Sinks for Native Fishes?

Short-hydroperiod Everglades wetlands have been disproportionately affected by reductions in freshwater inflows, land conversion and biotic invasions. Severe hydroperiod reductions in these habitats, including the Rocky Glades, coupled with proximity to canals that act as sources of invasions, may limit their ability to support high levels of aquatic production. We examined whether karst solution holes function as dry-down refuges for fishes, providing a source of marsh colonists upon reflooding, by tracking fish abundance, nonnative composition, and survival in solution holes throughout the dry season. We paired field surveys with an in situ nonnative predation experiment that tested the effects of predation by the recent invader, African jewelfish (Hemichromis letourneuxi) on native fishes. Over the 3 years surveyed, a large number of the solution holes dried before the onset of the wet season, while those retaining water had low survivorship and were dominated by nonnatives. In the experiment, mortality of eastern mosquitofish (Gambusia holbrooki) in the presence of African jewelfish was greater than that associated with deteriorating water quality. Under current water management, findings suggest that solution holes are largely sinks for native fishes, given the high frequency of drydown, extensive period of fish residence, and predation by nonnative fishes.

Relational conceptions of paternalism : a way to rebut nanny-state accusations and evaluate public health interventions

This work is funded by NHMRC grant 1023197. Stacy Carter is funded by an NHMRC Career Development Fellowship 1032963.

Basil Paterson, Secretary of State (left) and Mary Anne Krupsak inside convention center

General note: Title and date provided by Bettye Lane.