Prospecting for Economic Returns to Research: Adding Informational Value at the Market Fringe

Abstract.  Private markets constantly assess project investment opportunities across a spectrum of such possibilities. The market's perspective on the boundary of viable projects, however, may be more limited than socially optimal due to informational constraints. In the case of economic development projects in particular, this boundary could be extended by public researchers. This paper constructs a method to estimate the private and social value‐added of such research, providing a new means to understand and assess the public/private sector interface. The framework uses agents' evolving subjective perceptions through Bayesian updating to value research information, along with methods to estimate functional forms and relative optima. Two case studies of regional development research on value‐added agriculture in Colorado highlight the utility of the approach.     

The effects of public capital on private sector performance in Turkish regional manufacturing industries1

This article investigates the impact of public capital formation on private manufacturing sector performance in the seven geographical regions of Turkey and in aggregate. A vector autoregression (VAR) model has been employed to estimate long run accumulated elasticities of private sector variables with respect to public capital for the time period 1980–2000. The results show that public capital affects private output positively in aggregate and in all regions apart from the Black Sea and Mediterranean regions. The results also reveal that only in the Marmara region, the impact is positive both on input and output. The public capital crowds in private sector inputs in some regions.     

The “who” and “how” of place marketing: the role of the private sector in Rutherford County,North Carolina

ABSTRACT

Private sector actors are often viewed as a part of the outcome for an economic development project. The assumption, however, ignores the early role of the private sector in marketing places for firm recruitment. Through a study of two recruitment projects in Rutherford County, North Carolina, I examine the points of entry of private sector actors in the place marketing process. Data gathered from interviews and primary sources reveal that the private sector is actively leading the recruitment of firms and the marketing of places. This paper shows how private sector actors produce knowledge about places, market a place within their own interests, and shape a government’s agenda through their involvement in place marketing. Examining economic development actors as active place-makers reveals how, through place marketing processes, these actors incorporate their own interests in the construction of place.     

Global Liquidity,the Private Sector and Debt Sustainability in Sub‐Saharan Africa

This article analyses the effect of changes in international financial markets on the debt dynamics in sub‐Saharan Africa in recent years. A key development is the rise of the private sector as both a lender and a borrower in African debt markets, a process that is associated with the growing integration of the region into global financial markets. The article argues that the Debt Sustainability Framework of the International Monetary Fund and World Bank has taken some steps to account for this growth of private sector, cross‐border debt, but such steps still fall short of what is needed. A full appreciation of the importance of private debt implies, first, that debt sustainability in sub‐Saharan Africa be understood in the context of countries’ integration in global financial markets and the global liquidity cycles that characterize those markets and, second, that the interplay between private and public debt be monitored in order to provide a fuller picture of the impact of private sector debt on fiscal sustainability.     

The Effect of Public Infrastructure on the Private Productive Sector of Spanish Regions

In this paper we analyze the effect of infrastructure on the cost and productivity performance of the private productive sector of Spanish regions over the period 1980–1993. We use a dual approach based on cost functions that allows us to recover the usual parameters estimated with production functions. In addition, we obtain rates of return and cost elasticities of production factors at the regional level. Our framework explicitly considers that some factors are quasi-fixed and their volume can differ from their optimal endowment levels. Our results indicate that the public sector has contributed significantly to enhance productivity and reduce costs in the private sector of almost every Spanish region. Nevertheless, there is still scope for the government to continue its investment efforts, given that there remains an appreciable gap between observed and optimal public capital, and we find that in the long run, public capital promotes private investment.     

Public funding of culture in the Czech Republic since the fall of the iron curtain: contemporary dilemmas

The article deals with explicit cultural policy and its outcomes in the post-communist Czech Republic. In the first part, the authors look at the organisational and conceptual impact on culture of the transition from a centrally managed economy to a pluralist parliamentary democracy following the collapse of the Eastern Bloc. The cultural sector experienced privatisation, property restitution, commercialisation, globalisation, decentralisation and devolution, as well as the emergence of the private sector and the non-governmental non-profit sector (NGO). Although the process of societal transformation is now complete, certain key issues of cultural policy remain unresolved. The authors focus on three contemporary issues in theatre, namely: political intervention in the management of public cultural institutions, the persistent debate on funding through grant systems and the lack of trust culture professionals have in the creators of cultural policy. As a result, even though after 1989 it was expected that the private or NGO sector would dominate in the area of culture, there still exists a relatively dense network of public cultural institutions (contributory organisations) characterised by a resistance to proposed organisational and funding changes.     

THE POLITICAL ECONOMY OF WORKER PENSION FUNDS

Increasing concentration of economic power within the corporate sector, as well as the extent of corporate control by a few financial institutions such as commercial banks, have been subjects of intense scrutiny and debate in recent years. However, the role of private and public worker retirement trusts in providing power for institutional investors has not been adequately addressed. Pension fund assets, which were relatively inconsequential prior to 1960, and their investment in and share of total corporate equities minor, have grown to over $l410 billion by the end of 1977. In their analysis of and interest in public and private pension trusts, scholars, employers and even employees have tended to emphasize narrow economic issues such as investment performance. It is the central argument of this article that workers’ funds have become a major source of capital in the American economy, and as such have been used to help create and/or sustain practices that adversely impinge on workers themselves. It is argued that pension assets have contributed to: 1) the increasing power of financial institutions; 2) growth of corporate profits that only minimally benefit some pension plan participants; 3)capital shortages for 'socially useful’ investments; and 4)support of corporate enterprises that refuse basic worker demands including unionization itself. The study further suggests that the rapidly growing pension assets have the potential to serve‘the public interest’ as well as the needs of workers. Threat of withdrawal of funds from selected money managers and corporations, and utilization of share–holder voting rights to influence corporate policies can be potent weapons for organized labor. Since this is an exploratory analysis, the aim of the article is to gather, present and clarify basic information on worker pension trusts and to propose alternative avenues for future research in this critical area.     

Public Housing and Intergovernmental Reform in the 1990s

The problem identified in this paper is twofold. One is the plight of public housing at the end of the decade, with State programs undermined by Commonwealth funding cuts; the other is the problem of intergovernmental reform and its consequences for discrete areas of policy such as housing. The paper traces developments in CommonwealthState housing arrangements, beginning with the reforms initiated through the Council of Australian Governments through to the still uncertain future of public housing under the Howard government. It examines a number of inquiries into housing and recommendations for reform which served the plans of reformist governments intent on separating out the functional roles and responsibilities of the Commonwealth and the States. In particular, these inquiries advocated an ‘affordability’s benchmark which sought to blur the distinction between public and private rental housing leading, inevitably, to the residualisation of the public housing sector.     

我国"长三角"地区民营资本投资旅游业研究

近年来,我国长三角地区民营旅游经济发展迅猛,成为该区域旅游业发展的一大特点.本文选取了长三角39家涉及旅游业务的大型民营企业为研究样本,基于它们近10年来的投资资料,分析了长三角民营资本投资旅游业的特点,论述了民营资本投资旅游业的环境以及发展趋势.     

Voluntary Environmental Programs in the Public Sector: Evaluating an Urban Water Conservation Program in California

Solving conflictual environmental policy problems is increasingly falling under the purview of local governments and public agencies. Nonregulatory approaches, such as the development of voluntary environmental programs (VEPs), could offer a useful policy alternative as they often have greater political traction and flexibility. However, there has been little work examining the use of VEPs in the public sector. This article uses a new dataset from California to examine how political institutions affect decisions by local governments and public agencies to participate in a voluntary urban water conservation program and whether this program has improved the water conservation performance of its members. The results show that special district governments, private utilities, and water suppliers dependent on purchased water are more likely to participate in the program and to join early. However, urban water agencies that have joined the program have not reduced their per capita water use more than those that have not. These results underscore the influence of political institutions in public‐sector decision making and demonstrate that, as in the private sector, commitment to a VEP by local government and public agencies does not guarantee implementation or environmental improvements. While voluntary programs offer political and administrative advantages, in order for VEPs in the public sector to be effective they must be accompanied and supported by credible enforcement mechanisms, performance standards, and rigorous monitoring programs.     

Infrastructure shortfall in the United Kingdom: the private finance initiative and government policy

Investment infrastructure is essential for long term economic growth, sustainable regional economic development, and the quality of urban life. Yet the available evidence suggests a significant shortfall in current UK government investment on infrastructure, and a long term pattern of low investment compared to other European countries. Given the pre-occupation of the Labour government with managing expenditures within the parameters set by the previous government, and the vulnerability of any government to financial markets' valuation of current spending plans in relation to interest rates and currency exchange rates, there is little likelihood of major new public spending on infrastructure in the near future. In this context, the Private Finance Initiative (PFI) is very important for the government's plans to make up the shortfall. Although inherited from the previous Conservative government, the PFI has powerful advocates within the Labour government. The PFI is the formal mechanism by which government departments, agencies and instrumentalities, like the National Heath Service, utilise private sector investment capital and, in particular, pension fund assets, to revitalise public services. This paper sets out the institutional history of the PFI, beginning with the Thatcher government's Ryrie Rules, the efforts of the Major Conservative government to make it a viable operational practice, and the reasons why the new government supports PFI and has made significant moves to improve its effectiveness. Still we are sceptical about the future of the PFI. We show that the PFI has foundered upon fundamentally flawed design and the politicians' obsession with control of public sector spending. Notwithstanding recent `reforms', PFI may only succeed if the PFI process is decentralised and linked explicitly with regional development programmes. In any event, given the difficulties posed by the PFI process for private investors, perhaps different institutional responses to infrastructure shortfall should be contemplated, including the introduction of traded infrastructure bonds.     

Punctuated Equilibria in the Private Sector and the Stability of Market Systems

The article examines longitudinal trends in expenditures by over 1,200 private firms, finding evidence of punctuated equilibrium—a pattern of change widely interpreted as evidence of stick‐slip dynamics in decision‐making processes. Levels of punctuation in the private sector closely resemble those observed in studies on public budgeting, suggesting that the private sector is not on average any less resistant to change than government. Both private‐ and public‐sector decision making is a function of deliberative processes, which the article compares to market systems. Deliberative decision making takes place when a group comes to a consensus about the allocation of resources. Market processes aggregate the actions of many independent decision makers to arrive at an outcome, such as the value of a commodity. The article considers the relative informational efficiency of these two processes and concludes that market systems should be more adaptive to incoming information. Three case studies provide natural experiments to investigate the stability of outputs during periods of deliberative and market control. A key finding is that when outputs are determined by market systems it greatly reduces the magnitude of punctuation.     

Young people's lived experience of the ‘street’ in North Lakes master planned estate

This article explores young people's lived experience of the ‘street’, defined as outdoor public/private spaces, such as streets, shopping centres, corner stores within a Master Planned Estate in Australia. A strong market-based planning rationale has significantly constrained young people's access to, and use of, public space and the public realm. Young people are often left with little option but to occupy spaces through paths of least resistance or subversive use of space. Private developers require stronger regulatory oversight and a shared vision with planning authorities for the creation of appropriate spaces for young people.     

External Leveraging and Technological Upgrading Among East Asian Firms in the US

This paper examines the innovation strategies driving Asian firms' investment in the US based on the resource-based model of knowledge. Specifically, it is shown that Asian firms' competitive advantage revolves around their ability to capture rents through a series of technological and marketing capabilities that collectively constitute the firms' knowledge resource base. The process of learning is documented by shedding light on the major sources of knowledge acquisition that enhance technological capabilities internally and externally. Specifically, this empirical research, based on a large-scale quantitative survey of Taiwanese, South Korean, and Singaporean firms in the US that was conducted between 2003 and 2004, shows that the firms in industrializing Asian economies (henceforth the IAFs) are directly investing in the US and setting up R&D operations there to acquire knowledge that enables them to become more innovative. A variety of technology sourcing strategies practiced among these IAFs was found, depending on their firm-specific variables (e.g. size and sector) and their prior technological capabilities. The types of technology and knowledge sources also go beyond conventional technological know-how to embrace the entire production chain from manufacturing technologies to expertise in marketing and distribution.     

Public–Private Plan Development: Can Early Private Involvement Strengthen Infrastructure Planning?

Private parties, who are usually involved in later stages of design, construction and maintenance, can potentially strengthen the early plan-making stages of infrastructure planning. They can bring in knowledge, expertise and experience to help address complexity in planning. Such early private involvement can be accommodated through several models for which experiences in Dutch infrastructure planning practice differ. In this article, we assess the potential of early private involvement for strengthening infrastructure plan development by examining evaluative studies and conducting interviews with public and private actors involved in four early private involvement models in Dutch infrastructure planning: market consultation, early design contest, market reconnaissance and unsolicited proposal. We conclude that in order to unlock the potential of early private involvement government needs to incorporate incentives for creativity, reward private involvement and strike a balance in the setup of the investigated models between conceptual freedom for private solutions and transparent public guidance in preconditions and regulations. Early private involvement could, thus, provide opportunities for conceptual creativity and innovation and opportunities for public–private collaboration, which can strengthen plan development.     

The Political Economy of Inappropriate Technology: Industrialization in Sub-Saharan Africa

The failure of public sector investment projects in Sub-Saharan Africa can often be described in large measure as a technological one, where technology is defined not just in the narrow sense of alternative factor proportions, but in the wider terms of scale and import intensity as well. In confining itself mainly to the economic dimensions of the problem, the existing literature fails to consider the reasons for the extraordinarily rapid and widespread expansion of the public sector in Sub-Saharan Africa and it hence ignores the possibility that this expansion might itself be related to the observed patterns of technological behaviour in the sector. Such a possibility, I suggest, resides in the political and institutional compulsions that drive industrial firms in the public sector to increase the size of their operations.     

Making waves: The Royal Navy's management of invention and innovation in steam shipping, 1815–1832 1

Abstract

This paper explores the sources of invention and innovation in steam shipping, the distribution of funding and risk between the state and the private sector, and the Royal Navy's management of innovation, during the experimental period of steam power's adoption at sea. It identifies two intersecting channels through which steam‐related innovations reached the Royal Navy. First, “packages” of innovations were embedded in the marine engines that were commissioned by the Navy from private engine‐making firms. Secondly, the Navy was spontaneously offered a gamut of ideas and inventions, which varied enormously both in potential importance and in degree of development. Although the mechanisms for dealing with these two channels were different, the end result was much the same ‐ in minimizing both the expense and the risk borne by the public sector. It was principally the private sector that was funding scientific and technological development in this sphere. Recognizing its own lack of expertise and consequent hazard, the Navy Board was developing a systematic yet flexible method of assessing steam‐related inventions ‐ which appears to have served it well.     

Urban Neighborhoods as a National Resource: Irreversible Decisions and Their Equity Spillovers

The differential timing and pace of private versus public sector disinvestments in declining neighborhoods have some positive spillovers for their residents. Public services are not withdrawn or reduced as rapidly as private investments and the opportunity is preserved for future redevelopment or rehabilitation. This “public service bonus” is vulnerable, however, during periods of austerity and general retrenchment. During such crises, the pressures to rationalize service provision are able to overcome local political and bureaucratic resistance to service reallocations. The analysis is based upon the investment theory literature dealing with irreversible decisions and is exemplified by the reallocation of services in New York City's declining neighborhoods during the past decade.     

Nontraditional Public Enterprise as Local Economic Development Policy

Recently, many local governments have explored or implemented economic development policies involving “local public enterprise,” i.e., local-level public ownership of economic enterprises and other profitmaking productive assets. This policy activity tends to involve enterprises and productive assets not traditionally owned by the local public sector, such as hotels, retail establishments, manufacturing facilities, and sports teams. This emerging but still experimental policy phenomenon is explored systematically below.     

Biodiversity Finance

The 1992 Convention on Biological Diversity (CBD) challenged signatory countries to seek and encourage new financial resources, including private‐sector resources, to implement the objectives of the Convention. During the past decade, pioneering businesses have succeeded at making money while conserving and sustainably using biodiversity. What lessons have we learned? How can we speed up the adoption of biodiversity‐friendly business activities? Where and how can additional private investment for biodiversity conservation and sustainable use be found? To answer these questions, this article reviews why biodiversity conservation needs private‐sector finance. It defines the beneficial links between business and biodiversity; presents the business rationale for financing conservation and sustainable use; identifies who is currently investing in these businesses; and outlines the conditions necessary to attract considerably more amounts of private‐sector financing for biodiversity conservation and sustainable use.