Absence Of Effective Institutions Research Articles

The enduring effect of formalization on firm-level corruption in Vietnam: The mediating role of internal control

In the past, the question whether formalization and internal control systems can be employed by firms as anti-corruption measures has received little attention. Based on a unique panel dataset of Vietnamese SMEs, this paper finds that when enterprises formalize, they have to pay more in bribes. The evidence supports the hypothesis that a legitimate corporation with a high level of visibility is more likely to feel constrained to pay bribes. Internal control, on the other hand, reduces bribe payments and legal breaches. Effective internal control mechanisms also reduce the favorable correlation between formalization and bribe payments. This suggests that in the absence of effective institutions, firms should develop appropriate internal control mechanisms to prevent the harm caused by bribery.

The effects of corporate social responsibility on firm efficiency: Inside the matrix of corporate finance

Using a balanced panel dataset of more than 5000 firms, this study contributes to the literature by making the first investigation in Vietnam into the effect of corporate social responsibility (CSR) on firm efficiency and its decompositions. The results show insignificant relationships between CSR practices and aggregate efficiency. However, the research reveals that in the absence of effective institutions, CSR management and compliance and a committee overseeing CSR activities are essential factors for improving the business environment for enterprises as well as their efficiency.

Does rising corporate social responsibility promote firm tax payments? New perspectives from a quantile approach

Studies of the linkage between CSR and firms' tax payment often use mean regression strategies and focus on developed economies. Using panel data from Vietnamese firms, this study finds that CSR has insignificant effects on firm tax payments when applying fixed-effect instrumental variable estimations. Using a quantile approach, however, this paper finds that CSR improves firm tax payment at a higher percentile but is negatively linked to enterprises with low tax payment, a result driven by several mechanisms. First, high adherence to CSR increases firms' compliance with the law. Also, although high adherence to CSR does not immediately promote transparency in the business environment, it does improve firm profitability and value added. This suggests that in the absence of effective institutions, firms can engage in the effort against tax avoidance and promote tax payment by applying CSR practices.

Economic and Social Policy Trade-Offs in the Russian Regions: Evidence from Four Case Studies

Through case studies of four Russian regions, we examine the trade-offs between social and economic policy at the regional level. All four regions studied seek to stimulate entrepreneurship while preserving or expanding social welfare coverage. Regions differ in development strategies, some placing greater emphasis on indigenous business development and others seeking to attract outside investment. Variation in levels of democracy are unrelated to policy choices. All four regional governments consult actively with local business associations while organised labour is weak. The absence of effective institutions to enforce commitments undermines regional capacity to make social policy an instrument for long-term development.

'There is No Middle Class - There are Rich and Poor': Economic and Social Policy Trade-Offs in the Russian Regions

On the basis of in-depth case studies of four Russian regions, Kirov and Voronezh oblasts and Krasnoyarsk and Perm' krais, the trade-offs among social and economic policy at the regional level in Russia are examined. All four regional governments seek to develop entrepreneurship while preserving social welfare obligations and improving compensation in the public sector. Richer regions have a greater ability to reconcile social commitments with the promotion of business. Regions differ in their development strategies, some placing greater emphasis on indigenous business development and others seeking to attract federal or foreign investment. Governors have considerable discretion in choosing their strategy so long as they meet basic performance demands set by the federal government such as ensuring good results for the United Russia party. In all four regions, governments consult actively with local business associations whereas organized labor is weak. However, the absence of effective institutions to enforce commitments undertaken by government and its social partners undermines regional capacity to use social policy as a basis for long-term economic development.

Migration as Diplomacy: Labor Migrants, Refugees, and Arab Regional Politics in the Oil-Rich Countries

AbstractThis article explores the political dynamics of labor migration in the Middle East. It seeks to explain the politics of Arab population movements by looking at historical trends in regional integration and contends that migration to the oil-rich countries, including refugee flows, has been the key factor driving Arab integration in the absence of effective institutions and economic integration processes. To account for the influence of this largely forgotten factor, the article looks at the formal and informal institutions that have shaped massive labor flows from the 1970s onward. It offers historical evidence pointing to the role of migration in Arab regional integration by looking at free circulation of Eritrean refugees and migrants in the Arab region using oral history and administrative archives. Linking labor migration, refugee movements, and regional politics, the article introduces the concept of “migration diplomacy” as an analytical framework and argues that the politics of regional integration can be better understood when looked at through the lens of migration.

The Accountability Deficit in the Philippines: Implications and Prospects for Democratic Consolidation

One of the major challenges that consolidating democracies such as the Philippines needs to address is how to combat and control the problems of corruption, abuse of power, and other forms of particularism. The absence of effective institutions and mechanisms to counter them would result in one major democratic deficit — the lack or weakness of accountability. This article attempts to expose the manifestations of the “accountability deficit” in the Philippines by looking at the problems, limitations, and inadequacies of elections and horizontal state agencies of restraint as institutions of accountability. It also probes into the emergence of an alternative means known as “societal accountability”, using the resignation, impeachment, and ouster (RIO) campaign against then President Joseph Estrada as a case study. This article concludes with some thoughts on the implications of the accountability deficit to the prospects for democratic consolidation in the Philippines.

Politics in Post-Taliban Afghanistan: An Assessment

The Afghan war is far from over. With the political process that began in December 2001 having completed three years, it is pertinent to revisit and examine the course of the post-Taliban Afghan politics. Afghanistan's attempt to move towards peace and democracy has been perilous and remains so. The ouster of the Taliban1 and subsequent signing of the Bonn Agreement2 at the end of 2001 marked yet another turning point in the long-drawn Afghan conundrum. The tragic events of 9/11, which led to the consequential Operation Enduring Freedom (OEF) by the United States, not only displaced the Taliban, but also reengaged the US in Afghanistan leading a ‘coalition of the willing’. The political revival of the mujahideen, who have come to play a dominant role in the post-Taliban politics, and the reworking of the US-mujahideen synergy, a prominent aspect of the US' anti-Soviet game plan in Afghanistan during the Cold War era, are other remarkable features. Having elected a president, Afghanistan is gearing up for a wider electoral°exercise - parliamentary and local elections are due in September 2005. The paper suggests that in the backdrop of rising violence, socio-political polarisation, scarcity of funds, booming poppy production, warlordism and inadequate logistics, the elections alone will not serve the objectives of the Bonn process. In the absence of effective institutions of governance and the attention deficit of the international community, Afghanistan will continue to be at odds with the Bonn-mandated political and economic reforms being attempted there.

The Accountability Deficit in the Philippines: Implications and Prospects for Democratic Consolidation

One of the major challenges that consolidating democracies such as the Philippines needs to address is how to combat and control the problems of corruption, abuse of power, and other forms of particularism. The absence of effective institutions and mechanisms to counter them would result in one major democratic deficit — the lack or weakness of accountability. This article attempts to expose the manifestations of the “accountability deficit” in the Philippines by looking at the problems, limitations, and inadequacies of elections and horizontal state agencies of restraint as institutions of accountability. It also probes into the emergence of an alternative means known as “societal accountability”, using the resignation, impeachment, and ouster (RIO) campaign against then President Joseph Estrada as a case study. This article concludes with some thoughts on the implications of the accountability deficit to the prospects for democratic consolidation in the Philippines.