Efficiency of financial market intermediation in Kenya: A comparative analysis

Wide interest margins as witnessed in Kenya are a sign of a repressed and inefficient financial sector. This paper carries out a cross-country analysis of the determinants of financial market efficiency using panel cointegration with a view to recommending policy options for improving the efficiency of the financial sector intermediation process in Kenya. The study finds that the major contributors to the differences in financial sector inefficiency in Kenya compared to the other countries in the study are high bank operating costs, default risk and financial market structure. The study recommends, among other measures, that the government through the Central Bank need to collaborate with the commercial banks and establish a working credit reference bureau to enable easy identification of credit worthy customers in order to reduce default risk; there is also need by the central bank to license more new banks to increase competition and reduce bank concentration. The study also recommends increased use of technology including phone-banking and e-banking to reduce operation costs of the banks. The paper concludes that contrary to the findings from other cross-country analysis, the factors that lead to financial market in/efficiency varies from one country to the other.     

Commodity market stabilization: A comparison of simple and optimal intervention strategies in the world copper market

With the publication of the Brandt Report, international commodity policy has again become an important issue. Commodity stabilization agreements have been proposed as a means of stabilizing producers' incomes and/or redistributing wealth to less developed economies. This paper examines, in the context of a single market, the extent to which prices can be stabilized, the potential costs of such a scheme, and whether this redistribution would be achieved. By comparing the bandwidth rules that have been proposed with optimal stabilization rules, we find that significant stabilization is possible but expensive and that bandwidth rules are likely to prove inadequate because they cannot anticipate.     

Single-year and multi-year insurance policies in a competitive market

This paper examines the demand and supply of annual and multi-year insurance contracts with respect to protection against a catastrophic risk in a competitive market. Insurers who offer annual policies can cancel policies at the end of each year and change the premium in the following year. Multi-year insurance has a fixed annual price for each year and no cancellations are permitted at the end of any given year. Homeowners are identical with respect to their exposure to the hazard. Each homeowner determines whether or not to purchase an annual or multi-year contract so as to maximize her expected utility. The competitive equilibrium consists of a set of prices where homeowners who are not very risk averse decide to be uninsured. Other individuals demand either single-year or multi-year policies depending on their degree of risk aversion and the premiums charged by insurers for each type of policy.     

The impact of the European Youth Guarantee on active labour market policies: A convergence analysis

The European Union’s (EU) Youth Guarantee aims to improve the labour market situation of young people. Rather than prescribing a uniform policy model, it acknowledges that supportive measures need to align with national, regional and local circumstances. It thus seeks to promote mutual policy learning through the open method of coordination. As an innovative measure, the EU has deployed funding programmes to support the domestic measures related to the Youth Guarantee. We therefore examined in this study whether this mix of recommendations and financial incentives has entailed a convergence of member state policies. Our analysis of policy outputs for the period 2007?2014 yields a mixed empirical picture. There is catching‐up convergence regarding policies’ sectoral coverage but increasing divergence concerning the number of adopted policy instruments. The first two years of financial incentives did not produce any effect on enhancing policy experimentation among less active member states. We offer an optimistic and a pessimistic interpretation of these findings.     

A comparison of two models for income distribution planning

This article compares the results from two models developed to explore the relationship between policy instruments and income distribution in developing countries. The BACHUE model is a long-run economic-demographic model of the Philippines and the Adelman-Robinson model is a medium-term computable general equilibrium model of Korea. In spite of differences in focus and design, the two models yield similar conclusions. Although the size distribution of income is quite stable and hard to change, it is possible to achieve egalitarian development strategies with integrated, comprehensive sets of policies. However, the distribution of income by socioeconomic groups (an extended functional distribution) is much more sensitive to policy interventions, indicating the need to integrate economic and political analysis of distribution policies. In any case, a general equilibrium analysis is important since indirect effects are often crucial in determining the ultimate impact of a policy intervention.     

Unconventional monetary policies from conventional theories: Modern lessons for central bankers

The aim of this paper is to provide a critical review of some recent developments in macroeconomics. We discuss the introduction of financial frictions in New Keynesian models, which is said to account for the increasing influence of financial markets, institutions and products in real-world economies. For this purpose, we compare the macro dynamics of a benchmark NCM-DSGE model with the behaviour of the same model augmented with a financial accelerator mechanism. Our simulation exercises show that the financial accelerator mechanism can be regarded as an effective, though indirect, way to account for hysteresis in potential output. A fundamental policy corollary follows that central banks should pursue financial stability, rather than price stability, and target current output growth, rather than output gap. Such an unconventional result is obtained by a simple macroeconomic amendment to an otherwise conventional NCM-DSGE model.     

Moving targets: Target groups of active labour market policies and transitions to employment in Europe

This study drew on recurrent debates related to labour market mobility among the unemployed and those outside the labour force and asked to what extent active labour market policies (ALMP) increase employment in these two groups. By utilising new programme‐level data on ALMP, the study analysed the impact of core programmes directed towards registered unemployed; peripheral programmes that target the inactive part of the working age population; and mixed programmes targeting both groups. The programme data were combined with individual‐level panel data from the European Survey on Income and Living Conditions and analysed using multilevel analysis. The main results show that both resources devoted to programmes and their size were related to employment transitions. Transitions among the unemployed were mainly associated with spending on core programmes, whereas the inactive seemed to benefit from increased spending on all types of programmes, as well as increased scope of mixed programmes.     

Building assets from birth: a global comparison of Child Development Account policies

Asset building is a growing theme in public policy, and building assets from birth in the form of Child Development Accounts is now occurring in several countries. This article provides an overview of the Child Development Account policies in Singapore, Canada, the UK and Korea, and the proposed policy in the USA. The key elements of inclusiveness, progressivity, coherence and integration, and development are explicated and discussed.     

The impact of trade policies on income distribution in a planning model for Colombia

This paper develops a multisector Computable General Equilibrium (CGE) model to simulate the effects of trade on the distribution of income among socioeconomic groups defined both by the factors of production they own and the sector in which they work. The categorization of recipients includes landless rural labor, land owners, workers in the urban traditional sector, and workers in the organized sector and capitalists. Experiments are conducted with an application to Columbia, a primary-exporting economy. The results indicate that, for such an economy, outward-looking policies with increased primary exports are likely to be more detrimental for the distribution of income in the medium term than inward-looking ones.     

Gender differences in labor market wages: A comparison of industrial sector effects and a decomposition within four occupations

Women earn less than men. The reason may be due to either industrial segmentation or occupational segregation or both according to the current research. Researches focusing on one structure tend to neglect the other or to use an inadequate representation. This article examines the simultaneous impact of industrial sector and gender on imputed wages with labor force incumbents in four detailed occupations. These occupations are from a set identified as relatively internally homogeneous on measures of task performed from the Dictionary of Occupational Titles. Thus, within-occupational differences in work performed between males and females are minimized. The findings reinforce the importance of industrial sector for economic outcomes and demonstrate the value of an improved representation of occupation. The decomposition shows wage discrimination exists against females in each of these occupations, and in two sector-by-sector occupation comparisons, females should earn more than males.     

Regional labor market adjustment to structural shocks: An international comparison

Previous research indicates that local industry composition significantly influences unemployment in the American Rust Belt. This paper uses a dual market model to compare evolutions of structural joblessness in German regions with those of a Rust Belt area in the United States. Results indicate that German labor markets exhibit both intriguing similarities and differences to the US benchmark case. In particular, the contrasts between the two areas highlight the less distinct labor supply flexibility of Western European labor markets as demonstrated by unemployment responses to changes in regional employment prospects.     

New social risks in postindustrial society: Some evidence on responses to active labour market policies from Eurobarometer

One result of the complex economic and social changes currently impacting on state welfare is the emergence of what may be termed "new social risks" as part of the shift to a postindustrial society. These concern access to adequately paid employment, particularly for lower-skilled young people, in an increasingly flexible labour market, and managing work-life balance for women with family responsibilities engaged in full-time careers. They coexist with the old social risks that traditional welfare states developed to meet, which typically concern retirement from or interruption to paid work, in most cases for a male "breadwinner". New social risks offer policymakers the opportunity to transform vice into virtue by replacing costly passive benefits with policies which mobilize the workforce, arguably enhancing economic competitiveness, and reduce poverty among vulnerable groups. However, the political constituencies to support such policies are weak, since the risks affect people most strongly at particular life stages and among specific groups. This paper examines attitudes to new social risk labour market policies in four contrasting European countries. It shows that attitudes in this area are strongly embedded in overall beliefs about the appropriate scale, direction and role of state welfare interventions, so that the weakness of new social risk constituencies does not necessarily undermine the possibility of attracting support for such policies, provided they are developed in ways that do not contradict national traditions of welfare state values.     

A comparison of models for strategic planning,risk analysis and risk management

Summary Risks, uncertainties in firms and their environment are increasingly dealt with strategic planning, risk analysis and risk management. The present state of strategic planning enables us to consider the greatest part of internal and environmental risks mainly qualitatively - due to the fact that the majority of planning models used are of a deterministic type.The application of CAPM in strategic planning could take risks into account explicitly and maximize the expected value of the firms' common stock. Linked to a corporate simulation model or a DSS it could generate a series of values for the expected rate of return, its standard deviations as well as other output variables important for the management. The difficulties of the use of CAPM are numerous but an attempt to optimize the value of the firm would be a big step in developing new powerful instruments for evaluating the economic consequences of alternative strategies. The problems of CAPM lead to the considerations of the application of stochastic programming in strategic planning. For special cases solution methods can be developed and applied. The implementation of the Decision Support System in strategic planning could help to find the best decision in an interactive way - as suggested in this paper for the case of strategic marketing planning. DSS renders the consideration of other factors relevant to strategic decisions possible; businesses need not be reduced to portfolio terms. The limitations of CAPM, stochastic programming and the difficulties of the implementations of DSS for strategic planning could be partially avoided through the concept of Risk Management. On this concept strategic planning represents only one instrument of Risk Management and is a powerful tool of risk identification. In this paper the other instruments have been shortly demonstrated for the cases of product reliability and risks in relation with foreign countries. The development of new instruments for special cases (e.g., siting problems, specific strategic decisions, etc.), the considerations of risk behavior in individual, group and inter-organizational or even international decision making are now the main topics in the urgent task of research in risk management.     

The extension of healthcare coverage and protection in relation to the labour market: Problems and policies in Latin America

In the past 25 years almost all 20 countries of Latin America have reformed their healthcare systems, but coverage by social insurance averages 53 per cent of the total population (less than the ILO minimum standard), ranges from 7 to 26 per cent in ten countries and has stagnated or decreased in at least eight, and access is insufficient. This article (1) analyses the transformation of the labour market and its impact on social insurance coverage; describes legal coverage of various groups; estimates statistical coverage/access and its trends in the three typical sectors (public, social insurance and private); documents the differences in coverage by income, geographical area and ethnic group; examines the difficulties in the incorporation of the informal economy, the rural population, indigenous peoples and the poor, as well as the causes of low coverage, and touches problems of access;(2) summarizes recommendations from international organizations on coverage and access; suggests specific policies to expand protection in general and to vulnerable groups, and identifies themes that require more statistics and research; and (3) summarizes findings and recommendations. A preliminary version of this article was presented at the ISSA Regional Conference for the Americas held in Belize City, 28‐31 May 2006. Based on the author's book Las Reformas de Saluden América Latina y el Caribe: Su Impacto en los Principios de la Seguridad Social (Santiago, ECLAC/GTZ, 2006), the article summarizes and restructures all pertinent sections of that book, with numerous changes and new data. Useful comments were provided by two anonymous referees.     

Youth‐oriented active labour market policies and economic crisis: Explaining policy effort in Greece and Portugal

The starting point of this study is the implementation of seemingly similar youth‐oriented labour market policies in Greece and Portugal. Both countries have suffered high youth unemployment rates and have been pressured to restructure their labour market as part of the rescue programmes adopted during the European sovereign debt crisis. Despite convergence in terms of policy trajectories, there is a significant divergence in employment outcomes. In Portugal, youth‐oriented policies were better‐targeted and structured. Their implementation has been more effective and has involved the social partners from the outset of the crisis. In Greece, policy design failures, administrative weaknesses and unfavourable macroeconomic conditions have limited the dynamics of youth‐oriented policies thus increasing youth insecurity. Τhe analysis suggests that convergence in policy content can be compatible with divergence in terms of outcomes.     

Employer‐oriented labour market policies in Sweden: Creating jobs and the division of labour in the public sector

In many European countries, greater importance is accorded to labour market policies in which employers are involved in activating unemployed people. Such employer‐oriented policies target employers’ demand for labour and attempt to influence their willingness to hire, train or guide (often disadvantaged) unemployed groups. Using data from a qualitative interview study of an employer‐oriented programme in a medium‐size city in Sweden, the present article aims to develop knowledge about how these policies are used to influence employers to hire unemployed workers and how jobs created in this context differ from regular jobs. The article argues that creating jobs through new arrangements for the division of labour, with the promise of relieving regular staff of unskilled tasks, may influence employers’ willingness to hire the unemployed when used alongside other kinds of policy instruments. However, the article also shows that this new division of labour, with programme participants performing mainly unskilled tasks, has been difficult to realize, as new staff gradually come to perform an increasing number of regular working tasks.     

有效利用社会资源:高等职业教育贴近社会贴近市场的必然选择

高等职业教育“职业性”、“地方性”和“就业导向性”的基本特性决定了它相比起普通本科教育更要求贴近社会贴近市场。高等职业教育如何真正贴近社会、贴近市场,三个必然途径是不可忽视的,这就是：吸纳社会“精英”优化专业和课程建设;利用社会资源,改进教学和实践模式;利用校友和学生家长资源,推进学校事业发展。     

A Contractarian Approach to Pareto Efficiency in Teams: A Note

We show that if identical members first decide on the sharing technology (stage I) taking into account their subsequent effort supply (stage II) decisions, the resulting contractarian sharing technology (constitution) channels individual self-seeking towards team (Pareto) optimum. Voting with one's feet and open entry can ensure symmetry and majoritarian decision making in the real world teams. The model helps explain the differential performance of the Israeli Kibbutz and the Russian Kolkhoz.