Which competences enable problem solvers to successfully deal with complex real-world challenges such as the current economic and financial crises and in so doing, inspire innovation and sustainable development of society? Despite the importance of these questions, and although competences have become more center stage in management strategy, human resource development, and public policy/public administration research, a general theory of problem solving competence has remained elusive, largely because of insular single-disciplinary approaches. Embedded in a comprehensive review of management strategy, human resource development, and public policy/public administration theories, and by contrasting American and Central-European schools of thought, I discuss the theoretical formulations of previous competence frameworks, the empirical support for these frameworks, and their limitations in solving complex realworld problems. I outline how constituents of competence such as abilities, knowledge, and skills are entrenched within a multifaceted environment and influenced by the individual’s mental model(s). Finally, I develop a five-dimensional framework of competences needed to solve complex real-world problems, which considers both individual and collaborative aspects. The five core dimensions of this new competence framework are (1) personal competence; (2) professional domain competence; (3) systemic competence; (4) creativity competence; and (5) sociocultural (collaborative) competence. This paper is aimed at fostering further theory development and stimulating future research in the field of competence development.
Contemporary nationalism is typically framed as an oppositional ideology that legitimates the struggles of ethnic minorities for political sovereignty or, alternatively, justifies the xenophobic claims of nativist fringe groups. The emphasis on nationalism’s incendiary varieties, however, has led to the neglect of everyday popular nationalism—the routine and tacit acceptance of the nation-state as a primary object of identification and loyalty, as well as a fundamental unit of political organization. In an effort to address this gap in research, I examine the cross-national variation in popular conceptions of the nation-state using pooled-sample latent class analysis, a method that allows me to account for both within- and between-country heterogeneity and avoid reductive a priori assumptions about the national boundedness of culture. Having demonstrated that the resulting fourfold typology of popular nationalism is predictive of a wide range of political beliefs and is remarkably consistent across countries and over time, I show how the relative prevalence of the four types of nationalism shifts within countries in response to economic and political events that increase the salience of the nation-state. This study breaks new ground in the study of nationalism and offers a novel approach to the use of survey data in comparative research on political culture.
We argue that in pharmaceutical markets, variation in the arrival time of consumer heterogeneity creates differences between a producer’s ability to extract consumer surplus with preventives and treatments, potentially distorting R&D decisions. If consumers vary only in disease risk, revenue from treatments—sold after the disease is contracted, when disease risk is no longer a source of private information—always exceeds revenue from preventives. The revenue ratio can be arbitrarily high for sufficiently skewed distributions of disease risk. Under some circumstances, heterogeneity in harm from a disease, learned after a disease is contracted, can lead revenue from a treatment to exceed revenue from a preventative. Calibrations suggest that skewness in the US distribution of HIV risk would lead firms to earn only half the revenue from a vaccine as from a drug. Empirical tests are consistent with the predictions of the model that vaccines are less likely to be developed for diseases with substantial disease-risk heterogeneity.
This paper tests the theory of context-conditional political budget cycles in South Africa’s dominant party framework and demonstrates that the central government has both an incentive and the ability to implement PBCs on the subnational level. Using a unique panel dataset comprising South Africa’s nine provinces over the period 1995–2010 generates two main results: First, provinces where the national ruling party faces greater electoral competition receive higher per capita transfers in the year before an election. Second, this increase is driven by the conditional grant, which is the non- formula-based component of total the intergovernmental transfer. The ability to implement political budget cycles is successfully constrained when it comes to the formula-based equitable share component of the total transfer for which no evidence of electorally-induced funding is found. Overall, the results suggest that even in a dominant party framework, political competition can function as an incentive to implement political budget cycles.
Using data from the last 150 years in a small set of countries, and from the postwar period in a large set of countries, we show that large investments in state primary education systems tend to occur when countries face military rivals or threats from their neighbors. By contrast, we find that democratic transitions are negatively associated with education investments, while the presence of democratic political institutions magnifies the positive effect of military rivalries. These empirical results are robust to a number of statistical concerns and continue to hold when we instrument military rivalries with commodity prices or rivalries in a certain country’s immediate neighborhood. We also present historical case studies, as well as a simple model, that are consistent with the econometric evidence.
The 2008/09 World Financial Crisis underlined the importance of social responsibility for the sustainable functioning of economic markets. Heralding an age of novel heterodox economic thinking, the call for integrating social facets into mainstream economic models has reached unprecedented momentum. Financial Social Responsibility bridges the finance world with society in socially conscientious investments. Socially Responsible Investment (SRI) integrates corporate social responsibility in investment choices. In the aftermath of the 2008/09 World Financial Crisis, SRI is an idea whose time has come. Socially conscientious asset allocation styles add to expected yield and volatility of securities social, environmental and institutional considerations. In screenings, shareholder advocacy, community investing, social venture capital funding and political divestiture, socially conscientious investors hone their interest to align financial profit maximization strategies with social concerns. In a long history of classic finance theory having blacked out moral and ethical considerations of investment decision making, our knowledge of socio-economic motives for SRI is limited. Apart from economic profitability calculus and strategic leadership advantages, this article sheds light on socio-psychological motives underlying SRI. Altruism, need for innovation and entrepreneurial zest alongside utility derived from social status enhancement prospects and transparency may steer investors’ social conscientiousness. Self-enhancement and social expression of future-oriented SRI options may supplement profit maximization goals. Theoretically introducing potential SRI motives serves as a first step towards an empirical validation of Financial Social Responsibility to improve the interplay of financial markets and the real economy. The pursuit of crisis-robust and sustainable financial markets through strengthened Financial Social Responsibility targets at creating lasting societal value for this generation and the following.
Mexican immigration figures have reached its lowest point since 2000. Yet, even if as a whole the US is receiving less Mexican migrants, the opposite is true for cities at the border. In this paper, I present evidence to show that this sui generis migration pattern cannot be understood using traditional explanations of migration dynamics. Instead, Mexicans are migrating because of security issues, fearing drug-related violence and extortion, which has spiked since 2008. I estimate that a total of 264,693 have migrated fearing organized crime activities. By doing so, I combine the literature of migration dynamics with the one of violence and crime, pointing towards ways in which non-state actors shape actions of state members.
We consider the effect of legislative primaries on the electoral performance of political parties in a new democracy. While existing literature suggests that primaries may either hurt a party by selecting extremist candidates or improve performance by selecting high valence candidates or improving a party’s image, these mechanisms may not apply where clientelism is prevalent. A theory of primaries built on a logic of clientelism with intra-party conflict instead suggests different effects of legislative primaries for ruling and opposition parties, as well as spillover effects for presidential elections. Using matching with an original dataset on Ghana, we find evidence of a primary bonus for the opposition party and a primary penalty for the ruling party in the legislative election, while legislative primaries improve performance in the presidential election in some constituencies for both parties.
After a series of papers has provided—partially ambiguous—results on the impact of weather variables on stock (index) returns, this article studies the impact of weather on a wide variety of financial market instruments, namely "risk-free" interest rates, the US corporate bond market, stock returns, stock index returns and the VIX volatility index. First, we construct a model that combines asset pricing and results from psychology to show how weather variables can affect asset prices in different market segments via mood. Second, in our empirical analysis we use several weather variables from the National Climatic Data Center (NCDC) and control variables motivated by economic theory. Applying various econometric techniques and using different market segments (motivated by differences in the risk level and institutional differences) allows to give a more detailed picture on the impact of weather on financial market prices. We demonstrate that on none of the market segments analyzed the weather has any significant impact.
The long-awaited joint communication by the Commission and the High Representative for Foreign Affairs and Security Policy “Developing a European Union Policy towards the Arctic Region: Progress since 2008 and next steps” was issued in July 2012, four years after the groundbreaking Commission communication on the EU and the Arctic region.
The 2008 communication was a difficult effort to identify the EU’s potential role in the Arctic, building on a checkered variety of policies and actions. The declared aim was “to lead to a structured and coordinated approach to Arctic matters, as the first layer of an Arctic policy” for the EU, thus “opening new cooperation perspectives with the Arctic states, helping all of us to increase stability and to establish the right balance between the priority goal of preserving the Arctic environment and the need for sustainable use of resources.” That aim has yet to be achieved, as the language of 2012 reveals: “Taking a comprehensive approach to Arctic issues, this new Joint Communication underlines the need for a coherent, targeted EU approach towards the Arctic, building on the EU’s strengths, promoting responsible development while engaging more extensively in dialogue and cooperation with all Arctic stakeholders.”
This paper examines empirically how transparency of the budget process affects fiscal rules and incentives for fiscal gimmickry or creative accounting in the European Union. Using stock-flow adjustment data for EU countries from 1990–2007, we show that pressure from a deficit limit rule as in the Stability and Growth Pact creates incentives for fiscal gimmicks, as does political pressure from the electoral cycle and economic pressure from negative shocks in the business cycle. However, we show that where institutional transparency is higher, these incentives are damped and largely disappear. We infer that fiscal rules do not work well when institutional transparency is low.
A glance at a newspaper or the wait staff in a restaurant, at high-technology hubs such as Silicon Valley, on the streets of cities like Berlin or Barcelona, or at the students in our classes makes it clear how many immigrants now live in North America and Western Europe, and how important they are to our cultural, economic, and social lives. A glance at the landscape of governance, however, does not give a clear or consistent image of immigrants’ presence. In 2007, only twelve Representatives in the 435-member United States Congress were immigrants, as were only two each of the 50 governors and 100 senators. Immigrants cast only 6.3 percent of the vote in the American presidential election of 2008, despite being almost 13 percent of the total adult population (Garbaye and Mollenkopf forthcoming 2012). As of 2009, 11 deputies in the 622-seat German Bundestag were foreign-born (Alonso and Claro da Fonseca 2009). As of 2007, no French citizen of Mahgrébin origin had sat in the 555-member National Assembly.
Those who study the role of agriculture in the political economy of development focus on government policy choices on the one hand and the impact of price shocks on the other. We argue that the two should be studied together. We nd that civil unrest (Granger) causes government policies, pushing governments in poor and medium income countries to shift relative prices in favor of urban consumers. We also nd that while civil wars are related to food price shocks, when government policy choices are taken into account, the relationship disappears. We thus learn two things: Policies that placate urban consumers may in ict economic costs on governments, but they confer political benets. And when estimating the relationship between price shocks and political stability, equations that omit the policy response of governments are misspecied.
During the past decade, a variety of intermediaries have emerged to facilitate the trading of patents: brokers, non-practicing entities (NPEs), defensive aggregators, online platforms, auctions and unique entities such as Intellectual Ventures. We discuss the fundamental causes for the lack of liquidity in the IP market and analyze the merits and shortcomings of the various business models used by patent intermediaries. A key conclusion is that platform-type intermediaries (who facilitate transactions without taking possession of assets) have struggled, whereas merchant-type intermediaries (who acquire patents and seek to monetize them directly) have reached significant scale and influence in the technology industries that fall under the incidence of their assets. We also discuss some efficiency issues raised by the growing prominence of patent merchants.
We study patterns of FDI in a multi-country world economy. First, we present evidence for a broad sample of countries that firms direct FDI disproportionately to markets with income levels similar to their home market. Then we develop a model featuring non-homothetic preferences for quality and monopolistic competition in which specialization is purely demand-driven and the decision to serve foreign countries via exports or FDI depends on a proximity-concentration trade-off. We characterize the joint patterns of trade and FDI when countries differ in income distribution and size and show that FDI is more likely to occur between countries with similar per capita income levels. The model predicts a Linder Hypothesis for FDI, consistent with the patterns found in the data.
Co-author Gene Grossman is a professor of economics at Princeton University. Co-author Pablo Fajgelbaum is an assistant professor of economics at the University of California, LA.
Working Paper 17550, National Bureau of Economic Research, October 2011.
Using the most comprehensive data file ever compiled on air pollution, water pollution, environmental regulations, and infant mortality from a developing country, the paper examines the effectiveness of India’s environmental regulations. The air pollution regulations were effective at reducing ambient concentrations of particulate matter, sulfur dioxide, and nitrogen dioxide. The most successful air pollution regulation is associated with a modest and statistically insignificant decline in infant mortality. However, the water pollution regulations had no observable effect. Overall, these results contradict the conventional wisdom that environmental quality is a deterministic function of income and underscore the role of institutions and politics.
HKS Faculty Research Working Paper Series RWP11-034, John F. Kennedy School of Government, Harvard University.
Novelists have a better track record than economists at foretelling the future. Consider then Gary Shteyngart’s timely comic novel Super Sad True Love Story (Random House, 2010), which provides a rather graphic vision of what lies in store for the world economy. The novel takes place in the near future and is set against the backdrop of a United States that lies in economic and political ruin. The country’s bankrupt economy is ruled with a firm hand by the IMF from its new Parthenon-shaped headquarters in Singapore. China and sovereign wealth funds have parceled America’s most desirable real estate among themselves. Poor people are designated as LNWI (“low net worth individuals”) and are being pushed into ghettoes. Even skilled Americans are desperate to acquire residency status in foreign lands. This is sheer fantasy of course, but one that seems to resonate well with the collective mood. A future in which the US and other advanced economies are forced to play second fiddle to the dynamic emerging economies in Asia and elsewhere is rapidly becoming cliché. This vision is based in part on the very rapid pace of economic growth that emerging and developing economies experienced in the run-up to the global financial crisis of 2008-2009. Latin America benefited from a pace of economic development that it had not experienced since the 1970s, and Africa began to close the gap with the advanced countries for the first time since countries in the continent received their independence. Even though most of these countries were hit badly by the crisis, their recovery has also been swift. Optimism on developing countries is matched by pessimism on the rich country front. The United States and Europe have emerged from the crisis with debilitating challenges. They need to address a crushing debt burden and its unpleasant implications for fiscal and monetary policy. They also need to replace growth models which were based in many instances on finance, real estate, and unsustainable levels of borrowing. Japan has long ceased to exhibit any growth dynamism. And the eurozone’s future remains highly uncertain—with the economic and political ramifications of its unraveling looking nothing less than scary. In such an environment, rapid growth in the developing world is the only thing that could propel the world economy forward and generate increasing demand for rich-country goods and services—the only silver lining in an otherwise dreary future. The question I address in this paper is whether this gap in performance between the developed and developing worlds can continue, and in particular, whether developing nations can sustain the rapid growth they have experienced of late. I will not have anything to say on the prospects for the advanced economies themselves, assuming, along with conventional wisdom, that their growth will remain sluggish at best. My focus is squarely on the developing and emerging countries and on the likelihood of continued convergence.
HKS Faculty Research Working Paper Series RWP11-033, John F. Kennedy School of Government, Harvard University.
Does democratic governance expand wealth and prosperity? There is no consensus about this issue despite the fact that for more than half a century, rival theories about the regime-growth relationship have been repeatedly tested against the empirical evidence, using a variety of cases, models and techniques. To consider the issues, Part I of this paper reviews and summarizes theories why regimes are expected to influence economic growth directly, either positively or negatively. After considering these debates, Part II discusses the technical challenges facing research on this topic and how it is proposed to overcome these. Part III presents the results of the comparative analysis for the effects of democratic governance on economic growth during recent decades. The descriptive results illustrate the main relationships. The multivariate models check whether these patterns remain significant after controlling for many other factors associated with growth, including geography, economic conditions, social structural variables, cultural legacies, and global trends. The evidence supports the equilibrium thesis suggesting that regimes combining both liberal democracy and bureaucratic governance are most likely to generate growth, while by contrast patronage autocracies display the worst economic performance. The conclusion considers the implications.
Faculty Research Working Paper Series RWP11-035, John F. Kennedy School of Government, Harvard University.
Most social scientists would like to believe that their profession contributes to solving pressing global problems. There is today no shortage of global problems that social scientists should study in depth: ethnic and religious conflict within and between states, the challenge of economic development, terrorism, the management of a fragile world economy, climate change and other forms of environmental degradation, the origins and impact of great power rivalries, the spread of weapons of mass destruction, just to mention a few. In this complex and contentious world, one might think that academic expertise about global affairs would be a highly valued commodity. One might also expect scholars of international relations to play a prominent role in public debates about foreign policy, along with government officials, business interests, representatives of special interest groups, and other concerned citizens. Yet the precise role that academic scholars of international affairs should play is not easy to specify. Indeed, there appear to be two conflicting ways of thinking about this matter. On the one hand, there is a widespread sense that academic research on global affairs is of declining practical value, either as a guide to policymakers or as part of broader public discourse about world affairs. On the other hand, closer engagement with the policy world and more explicit efforts at public outreach are not without their own pitfalls. Scholars who enter government service or participate in policy debates may believe that they are "speaking truth to power," but they run the risk of being corrupted or co-opted in subtle and not-so-subtle ways by the same individuals and institutions that they initially hoped to sway. The remainder of this essay explores these themes in greater detail.
KS Faculty Research Working Paper Series RWP11-030, John F. Kennedy School of Government, Harvard University. Download PDF
In recent decades Socially Responsible Investment (SRI) emerged into an en vogue investment philosophy. Originating from religious and moral considerations, SRI evolved in the wake of socio-political deficiencies and corporate social conduct. In the global rise of financial social conscientiousness, differing national legislations and regulatory traditions have led to various SRI practices, which are harmonized by the United Nations (UN). Building on the historic advancement of Financial Social Responsibility in the wake of socio-ethical deficiencies, this paper highlights the future potential of SRI in the aftermath of the 2008/09 World Financial Crisis as a means to avert economic market downfalls. During the current financial market reform, additional micro- and macro-research on financial social conduct could foster the idea of Financial Social Responsibility and aid a successful implementation of SRI.
Julia Puaschunder is a faculty associate at the Center for the Environment at Harvard University. Download PDF