Feature Service Articles
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Article at a glance:
- Ronald Coase pioneered the work on transaction cost, which was transformative to economics at large.
- The International Society for New Institutional Economics (ISNIE) continues Coase’s work and celebrates his legacy.
- Oliver Williamson commemorates Coase, who was known for generously sharing credit for his work.
Investment is all about managing risks. It has been the root of traditional analysis to focus on numbers, ratios, and capital. But as investors evaluate an opportunity and banks look at loans, a new factor is being injected into the analysis – the risk that the numbers do not reflect the operating performance of the enterprise. So today, a whole new risk assessment industry has sprung up, focusing on the internal workings of the corporate structure. This new industry is corporate governance.
While the numbers remain important, investors and bankers are increasingly focusing on how the various aspects of the corporation perform relative to its objectives and its shareholders. Whether one views this new trend as simply fashion or evolution, good corporate governance is of increasing importance for companies in developing countries as they compete for capital and investment. It is seen to help create more sustainable companies regardless of their size, geographic location, or industry.Read more...
In his interview with CIPE, New York University Law Professor and constitutional expert Noah Feldman discusses the issues faced while framing the Iraqi Constitution and how the constitution will affect the commercial and legal environment in Iraq. Importantly, he discusses the constitution in the light of its economic, not just political, consequences.
Iraq’s future is predicated upon a functioning economy, which requires such things as firm private property rights guarantees. But it’s more than just writing the laws on the paper. If, following the ratification, politicians are unable to effectively administer the government and encourage economic growth, there is little hope that the public will embrace the constitution. However, while the constitution is very important in shaping the future of the Iraqi economy, the most pressing issue facing Iraq remains the security situation. A secure Iraq governed by the rule of law is the first precondition for a flourishing economy and functioning constitution. Once Iraq is able to eliminate security threats, its future will brighten considerably.Read more...
Globalization is here to stay. Unfortunately, the ills of globalization and the negative attributes of an increasingly interconnected world are being blamed on multinational corporations. Following the logic of the most fervent critics of globalization, trade liberalization and capitalism are the root of all evil. In the context of that scrutiny, globalization should be accepted as inevitable and embraced by public and private stakeholders to shape both public and private good. Globalization is a process that will work best if it is pro-actively managed to succeed. Trade agreements, foreign aid, and diplomatic engagement are the best tools available to leverage benefits and mitigate or prevent negative outcomes.Read more...
In his interview with CIPE, President of the Russian INDEM Foundation Georgi Satarov discusses the current state of corruption in Russia and some of the strategies that INDEM has undertaken to combat this important problem. Instead of considering corruption to be solely a criminal problem, INDEM focuses on the underlying institutional causes of corrupt behavior in both the public and private sectors. The most distinctive features of the Russian case are noticeably high rates of “low-level corruption” and “business capture,” in which government officials gain control of businesses by manipulating weak safeguards for private property.
Although many Russians feel that corruption is an unavoidable part of everyday life, it would be a mistake to call it an endemic characteristic of Russian society. INDEM works with local and federal government officials, business owners, and ordinary citizens to devise working strategies to strike corruption at its roots. Political and economic institutions in Russia need to be reformed and built, not simply imported from other countries, so that they are no longer a breeding ground for corrupt practices.Read more...
In the past, the international community’s efforts to combat corruption have largely focused on promoting regulatory frameworks or codes; and while public integrity requires a set of explicit rules, complex regulations alone do not reduce corrupt practices. In some places, democratic reform must precede anti-corruption efforts, as democracies are generally more successful in developing the political will to combat corruption by creating three conditions: inter-party competition in the form of free and fair elections, legitimacy, and diffusion of political power. The emphasis on political competition is crucial, however only with proper reforms political parties can assume their rightful role as an integral part of the anti-corruption solution.Read more...
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CIPE welcomes articles submitted by readers. Most articles run between 3-7 pages (1000-3000 words), but all submissions relevant to CIPE's mission of building accountable, democratic institutions through market-oriented reform will be considered based on merit. Economic Reform Feature Service articles are primarily geared toward an international, non-academic community of businesspeople, economic reformers, and policy-makers. Specific policy recommendations and articles based on direct experience are encouraged. In addition to articles, we are willing to adapt suitable lectures, speeches, research notes, and academic papers.
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