Interaction of governance ambidexterity and the institutional environment on handling uncertainty in public-private partnerships

From the mid-1990s, world demand for organic products, particularly fruits and vegetables, grew significantly. Sales that were initially restricted to the alternative trading began to count on the supermarket as the main and most important marketing channel. The shift from a located and unimportant consumption to the mass consumption raises relevant theoretical and empirical issues, with respect to the structure that will govern relations between supermarkets and their suppliers. This is because such products as opposed to conventional, have high information asymmetry with respect to the desired attribute (organic) by consumers. Moreover, it is assumed that the institutional environment has an important role in determining the governance, as this may entail different transaction costs for economic agents. Based on New Institutional Economics (NIE), the objective of the thesis was to understand the criterion of choice of governance structure between supermarkets and suppliers of organic and conventional products (fresh fruits and vegetables -FFV) in two different institutional environments (Brazil and the U.S.A). Therefore, initially was presented the theoretical framework of New Institutional Economics (NIE), focusing on the approach of the theory of Transaction Cost Economics (TCE) in its two aspects, governance cost (WILLIAMSON) and measurement cost (BARZEL). From this analysis it was possible to hypothesize that the governance costs and the measurement costs would result in a different way in the transactions between producers and retailers of organic and conventional products and between the two different institutional environments -Brazil and the U.S.A. It was believed that transactions of organic products according to the theory of measurement costs would be shaped by more complex governance structure than those of conventional products, given their characteristics of credence goods. At the same time, it was expected that the complexity of the different types of production could have been relativized due to increased use of organic certification, which would reduce the measurement cost in the relationships between agents, thus leading to a convergence between these governance structures initially distinct. Regarding the countries studied, it was assumed a difference of complexity in their governance structures, and those that occurred in the U.S.A could be the less complex, mainly due to its greater consolidation in these markets studied and its major alternative marketing channels for FFV products. To test these hypotheses were conducted 128 interviews, which were analyzed with the creation of some indices and then some regressions using ordinary least squares (OLS) with robust estimates of the deviations. The results showed that the main difference was that the criteria for choosing among the governance structures differ depending on the institutional environment. In Brazil, the governance was better explained by variables related to asset specificity (governance cost), whereas in the U.S.A were the variables of measurement cost that best explained the arrangements between supermarkets and suppliers. Such differences are due to the more advanced development of standardization of organic products in the U.S.A. The main similarity was that in both countries there has been a convergence of governance structure between supermarkets and farmers, regardless of the type of production (organic or conventional). So the supermarket relates similarly to conventional and organic producers, mainly due to the advent of certification. It is possible to conclude, in the end of this work, that there are empirical evidences, demonstrated through the creation of these indices, that the institutional environment matters in the choice criteria of the governance structure to be used.

Introduction Institutional economics is a unique way of looking at the economy and the processes that influence its development. The uniqueness refers mostly to its difference from neoclassical economics. Starting from the mid-1990s, Poland witnessed an active interest in heterodox economics, including many other economic trends, apart from mainstream economics. The reasons behind this interest are related to the practical economics on the macroeconomic level. One of the reasons for the development of heterodox economic research was that the theses about the end of the transformation process in Poland, which appeared before the end of the 1990s, were inconsistent with the statistical data illustrating the state of the Polish economy. The development of a few branches of economy and of a few markets does not equal the development of social institutions, better welfare of people, or better access to social services. The state of the Polish economy after 20 years of transformation brought an increased interest in the alternative approaches of the economy that could be useful in explaining economic phenomena and pointing to the proper changes in economic policy. Apart from a number of trends in heterodox economics, currents in institutional economics (IE) are also of great interest. After 1989, orthodox economics was dominant in Poland both in teaching and practical economics. During the late 1990s, the renewed interest in IE turned out to be essential for the understanding and explanation of the current socioeconomic situation, as it exerted a strong influence on the market and on the implementation of new economic reforms. The socioeconomic situation of that time involved the privatization of State Treasury assets, and its consequences, illegal employment and the development of the gray economy. Papers, published mostly in Poland, explained economic processes by the means of the methods of institutional economics. However, it has to be noted that those papers presented the methods of new institutional economics (NIE). A number of them failed to include the historical context and descriptive studies that are characteristics of traditional institutionalists. NIE is an attempt to fuse mainstream economic theory with the traditional institutional economics (TIE) and shows several trends. Those trends include: the new theory of the firm (Coase 1990, 1992, 1998), social and public choice theory (Buchanan and Yoon 2003, 2008), the theory of international regimes, a new economic history, and the theory of transaction costs (North 1994, 2003). What seems to be important is that NIE always seeks to set economic phenomena within the institutional environment. Due to the fact that NIE has an exploitative attitude toward institutions, one can postulate that it does not refer to IE at all. Moreover, it does not fully resemble neoclassical economics, as it ahnost entirely rejects the neoclassical theory of the firm, the neoclassical perception of market mechanism, and the construction of the homo oeconomicus model. Still, taking into consideration its explanatory values, the IE, with its holistic character and historical and evolutionary outlook on socioeconomic phenomena, was overlooked in scholarly works. NIE, on the other hand, is still dominant in the published theses and articles. Due to the fact that IE, and especially NIE, have been the fields of scholarly interest for a relatively short time, the works published in Poland point to the application of the selected institutional arguments, rather than to the full and complete implementation of the institutionalist method of traditional institutionalism and NIE. Many authors (1) make occasional and indirect references to institutionalism, not wishing to implement the theory in its entirety. The aim of the article is to present a number of selected social and economic phenomena that are of great interest to the scholars investigating the TIE and NIE. …

The global expansion of public-private partnerships (PPPs) has generated interest in establishing national PPP units for implementing or analyzing PPPs. Despite the good intentions for establishing such units, results have been mixed. Unless its role is clarified, a national PPP unit cannot be successful because it lacks adequate authority to respond appropriately to the changing environment. However, relevant research in construction journals is too limited to provide policymakers with constructive suggestions. This study aims to improve this situation by aligning a theoretical model with empirical data. The PPP activities can be analyzed as a game between the host government and private promoters trying to maximize their respective payoffs; thus, in accordance with new institutional economics (NIE) theory, a national PPP unit can be considered an endogenous equilibrium outcome of a game. On the basis of this perspective, three game (four consensus) theoretical models are constructed to find equilibriums: a single game for a single authority, repeated games for a single authority, and repeated games for government with multiple subordinate authorities. This study also uses a case study to present the history of PPPs in Taiwan and the evolutionary role of the National PPP Taskforce, Taiwan. National and international data confirm the theoretical model, which indicates that the common role of a national PPP unit is as a trust-creator between the public and private sectors. This pilot study contributes to the theoretical foundation that policymakers need to accelerate the learning process for implementing a PPP. It also provides researchers in the construction field with an NIE methodology for analyzing other governance structures in the construction field.

PurposeThis paper aims to investigate the joint effect of product market competition (PMC) and institutional environment on accrual quality.Design/methodology/approachThe sample covers a large data set of 52,138 firm-year observations from 35 countries over the period of 2011-2015. Using the weighted least square regression, the study estimates PMC and institutional environment on accrual quality. The study measures PMC based on Herfindahl-Hirschman index, anti-director rights index (ADRI) based on the revised and updated La Porta et al.'s (1998) and accrual quality using the modified Dechow and Dichev (2002) model proposed by McNichols (2002). The study also uses a series of specification tests using alternative measures for each variable.FindingsThe study finds that highly intensified PMC relates to a lower quality of accruals. The results also show that accrual quality is better in countries with stronger institutional environment, specifically countries with higher ADRI, investor protection, judicial independence, protection of minority shareholders’ interests, protection of property rights, strength of the auditing and reporting standards, efficacy of corporate boards and corporate ethics. The findings suggest that institutional factors weaken the negative impact of PMC intensity on accrual quality, hence suggesting that institutional environment has a significant role to enhance accrual quality among firms in highly intensified industries.Practical implicationsThe findings provide additional insights to policymakers and regulators on the importance of strong institutional and industry environment that can provide incentives and extra governance mechanisms besides the conventional firm-level corporate governance.Originality/valueThis study contributes in understanding the impact of intensity of PMC on accrual quality internationally and subsequently highlights the role of institutional environment as significant country-level governance in determining financial reporting quality, particularly accrual quality.

ABSTRACTThe paper provides a novel perspective for the examination of urban public transport (UPT) systems based on a literature review of new institutional economics (NIE). New institutional economics is a rapidly growing interdisciplinary economic perspective which seeks to explain the role of institutions in the performance of socio-economic systems. It encompasses various economic theories including transaction cost economics, agency theory, contract theory and property rights economics. Although NIE-based approaches have been utilised in different sectors and policy areas, management and organisation of UPT systems is a policy area where the implications of NIE-related theories have not been thoroughly explored. UPT systems are complex and involve a variety of transport actors such as transport authorities, regulators, operators and passengers. These actors interact with each other as embedded in an institutional environment which structures the rules, hence determines the incentives, roles and liabilities for the actors. However, previous studies have generally taken this institutional environment as given and have not problematised it. This paper seeks to provide a concise literature review of UPT through the perspective of NIE to delve into the institutional configuration of UPT systems so that an institutional account of UPT is given. An institutional framework is proposed to help structure the current literature on UPT. To explore the applicability of NIE in conceptualising and problematising the issues concerning the management of UPT, the paper attempts to delineate the institutional landscape of UPT. The informal and formal institutions, governance structures and contractual relationships in UPT are examined through the lens of NIE. These institutional levels constitute the building blocks for the institutional arrangement of the UPT systems, and the proposed institutional framework for the analysis of UPT systems reviews and examines each institutional level in a systematic way. The paper explores the potential added-value that NIE provides, identifies the research gaps in the literature, and finally, shows the future avenues for NIE-inspired UPT studies.

Recent critique against the past urban housing provision strategies in Nigeria was that the low-income groups are marginalised. It then led to the adoption of public private partnership (PPP) initiative with a view to pursuing the broad goal of housing-for-all in Nigeria. Most recent studies have however criticised the effectiveness of the existing PPP practice in the housing provision structure without providing a pragmatic suggestion towards an effective framework for improvement. It thus raised the question; what are the main causes of ineffectiveness of existing PPP in housing provision and how can an effective PPP policy framework for urban low-income housing be achieved in Nigeria? This study utilised the concepts of new institutional economics (NIE) -a theoretical and methodological underpinning for multi-actors’ policy matters. Using qualitative data from structured interview and credible literature sources, findings indicate that uncertainties in land accessibility, high transaction costs and the developers’ high profit agenda, are the major causes of PPP ineffectiveness for housing provision, which are also attributed to lack of a specific PPP policy that recognises all income groups and their roles on housing provision. End-users suggested that governmentcould have a negotiation with land owners and building materials dealers to address the housing problem. In conclusion, it is established in this study that adoption of all-inclusive conceptual approach described within the context of NIE thought can facilitate an effective planning for urban low-income housing in Nigeria.

This thesis is about understanding the Urban Informal Sector (UIS)' phenomenon in Colombo, Sri Lanka. While there has been much debate about the UIS in developing countries, including Sri Lanka, it is evident that there has only limited research into ways to identify its importance and to find pragmatic ways to support it. Nowhere in Sri Lanka is the importance of the UIS more evident than in the urban landscape of Colombo City - the largest urban center and the commercial capital. In fact, the UIS is indispensable to Colombo, so much so that Sanderatne (1 99 1 :7 1) states that 'indeed, without the informal sector, food supply would diminish to famine levels, transport would grind to a halt, and urban basic needs such as food and clothing would be unaffordable for the majority of urban dwellers'. The UIS in developing cities like Colombo has increasingly been recognised as a key to promoting economic growth and employment to reducing poverty. However, at the same time, the UIS also poses serious problems including traffic congestion, public health and hygiene, and it is often seen as an eye-sore. In addition, UIS workers themselves face a number of problems as a result of a hostile institutional environment including: lack of legal status; poor access to resources, markets and services; and harassment and/or eviction. The role of the Colombo Municipal Council (CMC) and its ability to manage the UIS in Colombo City presents similar problems to the sector's management in most cities in developing countries. Much of CMC's problems associated with the UIS emanate from the institutional arrangements. The problems can be identified in the roles of the various 'players' in the city and their rules and regulations, and how these are enforced through incentives and transaction cost which in turn impact on the UIS. Whilst a number of theories are on offer to address these problems, the powerful concepts embodied in the theoretical foundations of the New Institutional ~conomics~ (NIE) provided the most promising framework. These NIE concepts include: 'players of the game' (including their assumptions and objectives); and 'rules of the game' (including their incentives and transaction costs). Based on these concepts, a NIE framework applicable to the UIS was formulated. This thesis adopts the case study research strategy propounded by Yin (2003) which entails a detailed qualitative analysis of selected case studies. Three case studies have been selected in Colombo, viz. street vendors, home-based workers and collectors of recyclable materials (botal pattaray). The qualitative data for analysing each of the three case studies has been derived from two sources. Firstly, through formal interviews and informal discussions with relevant players such as the CMC (eg. Mayor; Municipal Members of Council; and various departments and divisions); nationallcentral and provincial government ministries and departments; non-governmental organisations; media; private sector; trade unions; academic and research organisations; politicians; international organisations; the police; and the general public. Secondly, the results of these interviews have been checked for credibility, and where possible have been supported by, documentary evidence such as policies, regulations and newspaper articles. The qualitative data obtained through this method has then been organised and presented using the NVivo software. This NIE framework was then applied to each of the three selected case studies. The principal findings from the case study analysis are: first, the need to introduce a new assumption (referred to as socio-cultural orientation) that governs player behaviour; second, the distinction between formally espoused objectives and informal objectives followed by the players; third, the emergence of 'informal' players and their informally crafted rules that impact on the UIS; and finally, this study has demonstrated that the ' ~ a l ' rules that govern player behaviour rest in the complex relationship between the formal and informal 'rules of the game', and this relationship between the two sets of rules could be either 'substitutive' or 'complementary'. Using the principal findings from the case studies, the thesis proposes extensions to the NIE framework. The resultant framework from this study has important implications for urban local authorities in developing countries, particularly as an urban planning tool that can be used to understand and successfully manage the UIS. Areas for new research emanating from this study are also outlined.

The specific system of governance is a critical factor, which to a great extent (pre)determines the type and speed of development in different countries, industries, regions, communities, etc. This article tries to fill the gap and assesses the impact of institutional environment on agrarian sustainability in Bulgaria. The interdisciplinary New Institutional Economics framework is applied and assessment made on specific effects of major components of the “external” institutional environment on agrarian sustainability level in different administrative, geographical and ecological regions, subsectors of agriculture, and farms of various juridical type and size. Our study has found out that individual elements of external institutional, market and natural environment affect quite unequally farms of different types, individual subsectors of agriculture, and specific ecological and geographical regions. This type of studies is to be expended and their precision and representation increased. The latter however, requires a close cooperation between all interested parties, and participation of the farmers, agrarian organizations, local and central authorities, interest groups, research institutes and experts, etc.

Establishing a metropolitan transport authority in Istanbul: A new institutional economics framework for institutional change in urban transport

Despite the good intentions for the public sector to use public-private partnerships (PPPs, a common form is Build-Operate-Transfer, BOT), results have been mixed. Together with the global expansion of PPP, governments around the world are keen to know how to establish proper institutions in order to promote PPP programs successfully. However, relevant research is limited and mainly based on rule-of-thumbs. This study aims to improve the quality of PPP research related to institutional issues by a more rigorous way which includes New Institutional Economics (NIE), Transaction Cost Theory (TCE), Game Theory and case study. Two institutional issues, the role of national PPP units and proactive measures of governmental debt guarantees, are selected to demonstrate the value of the proposed research methodology in conducting institution-related research. In addition, the findings of each topic can advance the body of knowledge in PPP implementation. Regarding the role of national PPP units, it is a policy-level institution. Unless its role is clarified, a national PPP unit cannot be successful because it lacks adequate authority to respond appropriately to the changing environment. The PPP activities can be analyzed as a game between the host government and private developers trying to maximize their respective payoffs; thus, in accordance with NIE, a national PPP unit can be considered an endogenous equilibrium outcome of a game. On the basis of this perspective, three game theoretical models are constructed to find equilibriums: a single game for a single authority, repeated games for a single authority, and repeated games for government with multiple subordinate authorities. This part also uses a case study to present the history of PPPs in Taiwan and the evolutionary role of the National PPP Taskforce, Taiwan. National and international data confirm the theoretical model, which indicates that the common role of a national PPP unit is as a trust-creator between the public and private sectors. The contractual arrangement in a PPP contract can be viewed as the project-level institution. Governmental Debt Guarantees (GDGs) are often used to encourage involvement by developers and financial institutions in PPP projects. However, even after demonstrating the bankability of a project and reducing debt cost, the success of the project may be prevented by the lack of long-term commitment from shareholders. Equity contributions by developers in the project company are generally recovered from earnings on short-term construction activities. Based on lesson learned from early PPP projects with GDG, the hold-up problem for government in the view of TCE theory may worsen if the designed contractual structure does not adequately manage opportunistic behaviors from developers. This part empirically examined the effects of a structured GDG mechanism with particular complementary measures applied in joint projects to develop the Taipei Mass Rapid Transit (MRT) stations. A GDG game model was then applied to bridge the theoretical gap based on the Taipei MRT experience. The analysis shows that requiring the developer to provide sufficient equity and ensuring the commitment of the lender to provide the loan are the appropriate proactive measures. This pilot study contributes to the theoretical foundation that policymakers need to accelerate the learning process for implementing a PPP. It also provides researchers in the construction field with a more rigorous methodology by combining NIE, TCE, game theory and case study for analyzing other governance structures in the construction field.

Pressupõe-se que o ambiente institucional tem um papel relevante em determinar a governança, já que este pode implicar diferentes custos de transação para os agentes econômicos. Tendo como base a Nova Economia Institucional (NEI), o objetivo deste artigo foi entender como os custos de transação podem influenciar um dos principais elementos de escolha da estrutura de governança, a complexidade das relações contratuais, e como esta influência pode variar nos distintos ambientes institucionais. Para isso, estudou-se a relação contratual entre supermercados e fornecedores de produtos (frutas, verduras e legumes - FLV) orgânicos e convencionais em dois diferentes ambientes institucionais (Brasil e EUA). Testaram-se as hipóteses propostas neste artigo por meio de 128 entrevistas, as quais foram analisadas por meio dos modelos de equações estruturais, sendo que um mesmo modelo teórico foi estimado para dois grupos (os dois países) para comparação de seus coeficientes. Os resultados encontrados mostraram que a influência dos custos de transação na complexidade da relação contratual, afetando assim a escolha entre as estruturas de governança, foi diferente a depender do ambiente institucional considerado. Conclui-se ao final deste trabalho que há evidências empíricas, demonstradas pelos resultados dos modelos de equações estruturais aqui utilizados, de que o ambiente institucional pode alterar as influências sobre a complexidade das relações contratuais e assim na escolha da estrutura de governança a ser utilizada.

This study examines the effect of a novel antecedent, namely cross-organizational governance (which can be further divided into contractual and relational governance), on supply chain resilience. Additionally, it explores the mediating and moderating effects of supply chain collaboration and institutional environment, respectively, on the relationship between cross-organizational governance and supply chain resilience. Accordingly, a research model, together with four hypotheses, is constructed based on institutional theory. These are further tested based on data collected from a single-respondent survey of 358 Chinese manufacturing companies. The results reveal that contractual and relational governance have significant positive effects on supply chain resilience; supply chain collaboration plays a partially mediating role and institutional environment plays a moderating role in the effects of contractual and relational governance on supply chain resilience. This study enriches the understanding of the relationships between cross-organizational governance, supply chain collaboration, supply chain resilience, and institutional environment. It also provides a reference for supply chain managers’ decision-making activities.

Enhancing performance in emerging-market-supplier/MNE-buyer relationships: An examination of the interplay between virtual and relational governance

Purpose Beyond the traditional concerns of cost, time and quality, megaprojects often face criticism for failing to meet social responsibility expectations, which are essential for ensuring their long-term sustainability and legitimacy. Governance mechanisms, particularly contractual and relational mechanisms, offer potential pathways to improve megaproject social responsibility performance (MSRP). However, their effectiveness can vary depending on the host country's institutional environment, particularly in the context of international megaprojects. Therefore, this study examines the impact of governance mechanisms on MSRP and the role of the host country's institutional environment in moderating these effects with a specific focus on Belt and Road Initiative (BRI) megaprojects. Design/methodology/approach A conceptual model comprising six hypotheses was developed. A questionnaire survey was designed, refined and distributed to the participants in the BRI megaprojects, yielding 145 valid responses. The resulting data were analysed using partial least squares structural equation modelling (PLS-SEM). Findings The results indicate that both contractual governance and relational governance positively improve MSRP. While the host country's institutional environment does not directly impact MSRP, it plays a significant moderating role. Specifically, a weak institutional environment positively moderates the impact of contractual governance on MSRP, but it weakens the positive relationship between relational governance and MSRP. These results highlight the importance of adapting governance mechanisms based on the institutional context of the host country. Practical implications The findings suggest that policymakers and stakeholders should adopt context-specific governance frameworks that balance contractual and relational mechanisms while considering factors such as legal systems, political stability and economic development in the host country. Such tailored approaches enhance social responsibility performance in BRI megaprojects. Originality/value The study is one of the pioneering efforts to examine how different governance mechanisms enhance social responsibility performance in BRI megaprojects, with the host country's institutional environment playing a key role in shaping and determining the efficacy of these mechanisms.

Scholars' criticism of transparency in public–private partnerships (PPPs) often focuses on ‘external’ transparency, that is, the extent to which internal information is visible to the outside world. However, to achieve external transparency,internaltransparency – the availability and inferability of information for the public procurer and the private party – is crucial. In this article we analyse input, process, and output transparency from three different perspectives (institutional, cognitive, and strategic) in fourPPPsin the Netherlands. We conclude that input transparency is high, but process and output transparency less so. Moreover, output transparency has gained importance inPPPs. Whether this is problematic depends on thePPPs' institutional environment. In some partnerships the desired output is uncontested and predetermined by clear standards in the institutional environment, whereas otherPPPsdeal with contested output norms, decreasing the partnerships' transparency. These results nuance the current debate on the lack of transparency inPPPs.