Managing competition in professional services and the burden of inertia

Professional services require certain organizational patterns in order to avoid information asymmetries and external effects. These same patterns are used within production structures involving various degrees of monopoly. However, competitive restraints are justified today only when substantial external effects are clearly present, whereas information asymmetries hardly justify such restraints because reputational investments have become widespread in the economy and are relatively efficient in overcoming such asymmetries. As a consequence, innovation in the production of externalities can make competitive constraints unnecessary.

The role of institutions in the contractual process

Human beings increase their productivity by specializingtheir resources and exchanging their products. Theorganization of exchange is costly, however, becausespecialized activities need coordination and incentiveshave to be aligned. This work first describes how theseexchanges are organized in an institutional environment.It then focuses on the dual effect of this environment-as with any other specialized resource, institutions maybe used for expropriation purposes. They enjoyspecialization advantages in safeguarding exchange butthey also make possible new forms of opportunism,causing new costs of exchange. Three perverse tendenciesare identified:In the legal field, there is a surplus ofmandatory rules and, at the same time, a deficit in default rules. Second, courts activity is biased againstthe quasi-judicial role of the parties and the market. Third, Market enforcement is based on reputationalassets that are badly exposed to opportunism.

Bundling electronic journals and competition among publishers

Site licensing of e-journals has been revolutionizing the way academicinformation is distributed. However, many librarians are concerned aboutthe possibility that publishers might abuse site licensing by practicingbundling. In this paper, we analyze the private and social incentives forthe publishers to use bundling in the context of STM electronic journalmarket. In the short run in which the number of journals is exogenouslygiven, we find a strong conflict between the two incentives: each publisherfinds bundling optimal and bundling increases the industry profit butreduces social welfare. However, in the long run we find that publishersmight have higher incentives to introduce new journals under bundlingthan without bundling and, in this case, bundling can reduce the industryprofit while increasing social welfare. Finally, we examine publishers incentive to provide links to the websites of the rival publishers underbundling and show that even asymmetric publishers have incentive tointerconnect.

How political parties, rather than member-states, are building the European Union

Political party formation and coalition building in the European Parliament is being a driving force for making governance of the highly pluralistic European Union relatively effective and consensual. In spite of successive enlargements and the very high number of electoral partiesobtaining representation in the European Union institutions, the number of effective European Political Groups in the European Parliament has decreased from the first direct election in 1979 to the fifth in 1999. The formal analysis of national party¹s voting power in different Europeanparty configurations can explain the incentives for national parties to join large European Political Groups instead of forming smaller nationalistic groupings. Empirical evidence shows increasing cohesion of European Political Groups and an increasing role of the European Parliament in EU inter-institutional decision making. As a consequence of this evolution, intergovernmentalism is being replaced with federalizing relations. The analysis can support positive expectations regarding the governability of the European Union after further enlargements provided that new member states have party systems fitting the European PoliticalGroups.

Partisan competition, growth and the franchise

We present an argument for changes in the franchise in which an elite split along economic interests use the suffrage to influence implemented policies. Through the influence of these policies on the character of industrialization, we analyze the effects of franchise changes on economic growth. We identify in the social structure of society an explanation for the connection between enfranchisement and growth: When (1) there exist an economic conflict among the elite, (2) landed classes are not politically strong, and (3) there exists a critical mass of industrial workers, we observe both growth and democratization. The lack of conditions (1) or (2) resolves in stagnant autocracies while the absence of condition (3) drives growth-deterring democratic expansions. We provide historical support for our argument by analyzing the experience of 11 countries.

Why England? Demand, growth and inequality during the Industrial Revolution

Why was England first? And why Europe? We present a probabilistic model that builds on big-push models by Murphy, Shleifer and Vishny (1989), combined with hierarchical preferences. The interaction of exogenous demographic factors (in particular the English low-pressure variant of the European marriage pattern)and redistributive institutions such as the old Poor Law combined to make an Industrial Revolution more likely. Essentially, industrialization is the result of having a critical mass of consumers that is rich enough to afford (potentially) mass-produced goods. Our model is then calibrated to match the main characteristics of the English economy in 1750 and the observed transition until 1850.This allows us to address explicitly one of the key features of the British IndustrialRevolution unearthed by economic historians over the last three decades the slowness of productivity and output change. In our calibration, we find that the probability of Britain industrializing is 5 times larger than France s. Contrary to the recent argument by Pomeranz, China in the 18th century had essentially no chance to industrialize at all. This difference is decomposed into a demographic and a policy component, with the former being far more important than the latter.

On the origins of electoral systems and political parties. The role of elections in multi-member districts

The old, understudied electoral system composed of multi-member districts, open ballot and plurality rule is presented as the most remote scene of the origin of both political parties and new electoral systems. A survey of the uses of this set of electoral rules in different parts of the world during remote and recent periods shows its wide spread. A model of voting by this electoral system demonstrates that, while it can produce varied and pluralistic representation, it also provides incentives to form factional or partisan candidacies. Famous negative reactions to the emergence of factions and political parties during the 18th and 19th centuries are reinterpreted in this context. Many electoral rules and procedures invented since the second half of the 19th century, including the Australian ballot, single-member districts, limited and cumulative ballots, and proportional representation rules, derived from the search to reduce the effects of the originating multi-member district system in favor of a single party sweep. The general relations between political parties and electoral systems are restated to account for the foundational stage here discussed.

Competition and cost overruns. Optimal misspecification of procurement contracts

Most cases of cost overruns in public procurement are related to important changes in the initial project design. This paper deals with the problem of design specification in public procurement and provides a rationale for design misspecification. We propose a model in which the sponsor decides how much to invest in design specification and awards competitively the project to a contractor. After the project has been awarded the sponsor engages in bilateral renegotiation with the contractor, in order to accommodate changes in the initial project s design that new information makes desirable. When procurement takes place in the presence of horizontally differentiated contractors, the design s specification level is seen to affect the resulting degree of competition. The paper highlights this interaction between market competition and design specification and shows that the sponsor s optimal strategy, when facing an imperfectly competitive market supply, is to underinvest in design specification so as to make significant cost overruns likely. Since no such misspecification occurs in a perfectly competitive market, cost overruns are seen to arise as a consequence of lack of competition in the procurement market.

Allocating ideas: Horizontal competition in tournaments

We develop a stylized model of horizontal and vertical competition intournaments with two competing firms. The sponsor cares about the qualityof the design but also about the design location. A priori not even thesponsor knows his preferred design location, which is only discoveredonce he has seen the actual proposals. We show that the more efficientfirm is more likely to be conservative when choosing the design location.Also, to get some differentiation in design locations, the cost differencebetween contestants can neither be too small nor too big. Therefore, ifthe sponsor mainly cares about the design location, participation in thetournaments by the two lowest cost contestants cannot be optimal for thesponsor.

Credible redistributive policies and migration across US States

Does worker mobility undermine governments ability to redistribute income? Thispaper analyzes the experience of US states in the recent decades. We build a tractablemodel where both migration decisions and redistribution policies are endogenous. Wecalibrate the model to match skill premium and worker productivity at the state level,as well as the size and skill composition of migration flows. The calibrated modelis able to reproduce the large changes in skill composition as well as key qualitativerelationships of labor flows and redistribution policies observed in the data. Our resultssuggest that regional di¤erences in labor productivity are an important determinantof interstate migration. We use the calibrated model to compare the cross-section ofredistributive policies with and without worker mobility. The main result of the paperis that interstate migration has induced substantial convergence in tax rates acrossUS states, but no race to the bottom. Skill-biased in-migration has reduced the skillpremium and the need for tax-based redistribution in the states that would have hadthe highest tax rates in the absence of mobility.

Competition amongst contests

This article analyses the allocation of prizes in contests. While existing models consider a single contest with an exogenously given set of players, in our model several contests compete for participants. As a consequence, prizes not only induce incentive effects but also participation effects. We show that contests that aim to maximize players aggregate effort will award their entire prize budget to the winner. In contrast, multiple prizes will be awarded in contests that aim to maximize participation and the share of the prize budget awarded to the winner increases in the contests randomness. We also provide empirical evidence for this relationship using data from professional road running. In addition, we show that prize structures might be used to screen between players of differing ability.

How enforcement institutions affect markets

In an experiment we study market outcomes under alternative incentive structures for third-party enforcers. Our transactions resemble an anonymous credit market where lenders can give loans and borrowers can repay them. When borrowers default, judges are free to enforce repayment but are themselves paid differently in each of three treatments. First, paying judges according to lenders votes maximizes surplus and the equality of earnings. In contrast, paying judges according to borrowers votes triggers insufficient enforcement, destroying the market and producing the lowest surplus and the most unequal distribution of earnings. Lastly, judges paid the average earnings of borrowers and lenders achieve results close to those based on lender voting. We employ a steps-of-reasoning argument to interpret the performances of different institutions. When voting and enforcement rights are allocated to different classes of actors, the difficulty of their task changes, and arguably as a consequence they focus on high or low surplus equilibria.

Concepções, Práxis e Tendências de Desenvolvimento Curricular no Ensino Superior Público em Cabo Verde: um Estudo de Caso Sobre a Universidade de Cabo Verde

A tese enquadra-se nas discussões sobre as concepções do currículo, como problemática central nos processos de educação e formação, e o papel da Universidade ao longo dos tempos, mormente nos contextos actuais da globalização, conferindo especial relevo às concepções, práxis e tendências que caracterizam a experiência de desenvolvimento curricular na Universidade de Cabo Verde (Uni-CV), desde a sua criação, em Novembro de 2006, no seguimento de um percurso de quase três décadas do ensino superior público cabo-verdiano Com o enquadramento teórico da problemática da investigação faz-se uma ampla cartografia da literatura relevante no campo científico dos estudos curriculares, numa abordagem que patenteia a diversidade de conceptualizações do currículo e do desenvolvimento curricular, os principais traços característicos das teorias curriculares que se têm sucedido e ou que rivalizam na busca de hegemonia no sector da educação, bem como as políticas educativas e curriculares que vêm sendo concebidas e realizadas à escala global, dispensando atenção particular às dimensões instituinte e instituída do processo curricular. Ainda que fortemente condicionado pelas concepções e políticas de globalização da educação, a tendência para a uniformização educativa e curricular não constitui uma inevitabilidade, demonstrando-se, pelo contrário, que o processo de desenvolvimento curricular deixa espaços de apropriação e inovação ao nível das instituições educativas, atendendo à diversidade de contextos, expectativas e perspectivas inerentes à dinâmica da realização do currículo. Ainda no plano teórico, ao analisar-se a evolução do conceito ou ideia de Universidade, desde a sua génese até aos tempos actuais, coloca-se em relevo a natureza específica da instituição no âmbito do ensino superior, patenteando o modo como, nos diferentes contextos, a mesma tem procurado afirmar a centralidade do conhecimento e do currículo no cumprimento da sua missão, a despeito de factores e condicionalismos diversos, de entre os quais releva o tipo de relacionamento predominante entre a Universidade, o Estado e o mercado, no âmbito do qual se deve entender a complexidade da crise institucional, na triplicidade das suas manifestações (crise de legitimidade, de hegemonia e de identidade) que atravessa a academia, com reflexos ao nível das tendências para o condicionamento da autonomia, missão e funções da academia, assim como da própria natureza do conhecimento universitário. Na procura de saídas para a crise, que é global e, como tal, se reflecte nas universidades do continente africano, em que se insere Cabo Verde, a Universidade é desafiada a afirmar a sua especificidade institucional, enquanto promotora da alta cultura e da capacidade de pensamento de longo prazo, conciliando, deste modo, as suas funções essenciais ou simbólicas com as que se prendem com a satisfação das necessidades imediatas ou de curto prazo da economia e do mercado. Com base nos pertinentes subsídios teóricos, os estudos empíricos desenvolvem-se segundo a abordagem metodológica de estudo de caso, em que a análise documental e as técnicas de investigação qualitativa e quantitativa permitiram consolidar as evidências sobre: (i) os antecedentes da criação da Uni-CV, através do mapeamento do percurso académico e curricular dos diversos estabelecimentos públicos de ensino superior que precederam a universidade pública, legando a esta o seu património científico, tecnológico e logístico, com as inerentes potencialidades e limitações; (ii) o processo de institucionalização da Uni-CV, com a referencialização das opções estruturantes da organização e gestão da Universidade assim como da política educativa e curricular da Universidade; (iii) a experiência multifacetada de desenvolvimento curricular na novel instituição durante os cinco primeiros anos de funcionamento (2006-2011), correlacionando opções e práxis e evidenciando tendências da sua evolução. Da análise interpretativa dos estudos empíricos realizados, mediante a triangulação dos dados de arquivo e de perspectiva, resulta que a Uni-CV, não obstante as fragilidades persistentes no processo de seu desenvolvimento institucional, tem cumprido a sua missão de forma satisfatória, facto que fica a dever-se quer à adequação das opções, normas e directivas conformadoras da dimensão instituinte do processo curricular, quer ao esforço de realização das prescrições curriculares, sendo, todavia, evidentes os desafios a serem vencidos tendo em vista a consecução da almejada excelência académica, que os Estatutos propugnam, e que passa, nomeadamente, pela melhoria do nível da qualificação do seu corpo docente, pela implementação ou funcionamento efectivo de alguns dos órgãos da academia e pela afirmação da investigação científica como função incontornável para o desempenho cabal das funções de ensino e extensão. De entre as conclusões, sustenta-se que, no processo de integração de Cabo Verde nas redes internacionais de investigação e excelência científica e tecnológica, como, de resto, propugnam os Estatutos da Uni-CV, deve atender-se à especificidade deste pequeno país do Atlântico Médio, tendo em conta as suas fragilidades estruturais, pelo que se impõe algum distanciamento crítico em relação à incorporação de certas opções de política educativa e curricular que emanam de instâncias internacionais, independentemente do seu carácter inovador ou mesmo da sua possível consistência científica e técnica, comprovada em outros contextos.