Economic Institutions Research Articles

The Economics of Drought

Water scarcity and drought have determined the structure, location, and fate of civilizations throughout history. Drought remains an important factor in the performance of developed and developing economies, especially in the agricultural sector. While significant attention has been paid to drought as a meteorological phenomenon and on its economic impact, comparative institutional analysis of the economics of drought is limited. In this review, we focus on how economic institutions, the humanly devised constraints that shape the allocation and use of water, impact the severity and incidence of droughts. Water property rights in developed countries encourage infrastructure investments and reallocations that mitigate drought impacts, although such institutions may codify inequitable water access during drought. Developing economies rely more on informal strategies for mitigating drought and remain more vulnerable, experiencing economic losses, conflict, and violence.

Consular Complications: The Appointment and Rejection of Swedish Consuls in Eighteenth-Century Spain

The early modern consul was an important economic and diplomatic institution. By the end of the eighteenth century, the number of consuls had increased drastically. However, previous research has failed to appreciate how bilateral relations between states could have a significant impact on how one state’s consular service expanded. Appointments could get rejected or take a long time to secure, not least because the sender state wanted to avoid provoking tensions with the receiving state. In this article, the author explores these themes through the appointment of Swedish consuls in Spain in the eighteenth century. The article shows that the Spanish reticence to accept Swedish appointments had a severe effect on the Swedish consular service in Spain in terms of the speed and scope of its expansion. The Swedish diplomatic corps played a key role in trying to sway the Spanish authorities, and when that failed they circumvented the Spanish state’s rejections of consular appointments by authorizing agents. These agents must also be treated as part of the expansion of the early modern consular service. Their existence begs the question of what a consul really was and if we have underestimated the number of consuls in the eighteenth century.

Pension security in Ukraine: current trends and directions of development

The article aims to substantiate the directions for reforming and developing the pension system in Ukraine. To achieve the goal, the following research methods were used: methods of analysis and synthesis; abstract logical method; methods of theoretical generalization − formulating definitions of the concepts "pension security", "accumulated pension", etc.; systemic approach − changes and problems in the indicators of the pension system and the development of measures to solve them. As a result of the research, the concept of pension security and the pension system as a process of securement financial support in the form of pensions to a specific category of unemployed citizens, which is aimed at reducing the level of poverty due to its positive impact on such social risks as old age, disability and loss of working capacity, is defined as a set of legal, organizational, financial and economic institutions and norms, as well as professional organizational structures aimed at reducing the level of poverty by positively influencing such social risks as disability and loss of working capacity. The main problems of the pension system of Ukraine at the current stage are substantiated, namely the rapid deterioration of the ratio between the working age and the retirement age due to the drop in the birth rate and the increase in emigration, a permanent deficit of pension funds due to budget imbalance; low level of pensions; underdevelopment of non-state pension security; decrease in the number of payers due to economic instability, military events and other factors; significant lack of public awareness of pension provision; lack of trust in state financial programs and reforms. The main direction of the reform of the pension system has been determined − the introduction of non-state pension security, based on the principles of voluntary choice of the type of pension security and the creation of conditions for non-state pension security at the legislative level, as well as taking into account the risks associated with non-state pension security, such as the risk of investment losses, the instability of the financial market and the possibility of abuse by pension funds. Additional areas of pension development have been identified: increasing the efficiency of the system of tax collection and control over their payment to ensure stable financing of the Pension Fund; support for programs and initiatives aimed at increasing financial literacy among the population, which will contribute to more effective management of personal finances and retirement planning; introducing mechanisms to encourage additional voluntary contributions to the pension fund, such as tax benefits or special support programs for those who actively plan their financial future; development of social programs and services for pensioners aimed at improving their quality of life, access to medical care, cultural and educational events; strengthening mechanisms for controlling the Pension Fund's expenses and effective use of its resources to meet the needs of pensioners as much as possible; open and transparent control over the activities of pension funds and the functioning of the pension system. The scientific novelty of the study consists in substantiating the set of measures for the development and reform of the pension system of Ukraine, which involves the development of non-state pension schemes. The practical significance of the work is that the research results can be used at the level of individual organizations and industries and at the level of individual regions of Ukraine. Prospects for further research are the substantiation of the toolkit for the practical implementation of non-state pension funds. Keywords: pension security, accumulative pension security, pension system, non-state pension security, corporate pension fund

Impact of green technology and energy on green economic growth: role of FDI and globalization in G7 economies

With the increase in economic growth, the world is facing serious challenges concerning environmental sustainability. Hence, the green economic growth is imperative for sustainable and inclusive development. The objective of this study is to contribute to the existing literature about the factors that influence green economic growth. The study investigates the role of green technology, green energy, foreign direct investment, and globalization on green economic growth in G7 countries. The data of the study is collected from WDI, KOF Swiss Economic Institute, and OECD database and the data period ranges from 1995 to 2020. The existence of cointegration between the variables of the study was tested by Westerlund’s (Oxford Bull Econ Stat 69(6):709–748) cointegration test. Due to the presence of cross-sectional dependency, the study employed the cross-sectional autoregressive distributed lag (CS-ARDL) method to estimate the coefficients in the long and short run. The study also used a common correlated effect—mean group (CCEMG) estimator for robustness check. The findings of the study reveal that green energy and FDI positively contribute to green economic growth in the long and short run. The green technology also contributes positively to enhance green economic growth but only in long run. To accelerate green economic growth, G7 countries should incorporate policies promoting green energy and technology, while acquiring more foreign investments to ensure a sustainable development.

Natural resource extraction and environmental sustainability in Africa: The role of voice and accountability

AbstractWe examine the effect of natural resource extraction on environmental sustainability in Africa. Using comprehensive panel data from 30 countries for the 2004–2021 period, we find that natural resource extraction reduces environmental sustainability, particularly in resource‐poor countries. However, the nature of this nexus is time‐varying, with natural resource extraction exerting a positive and negative impact on environmental sustainability in the short and long run, respectively. We also note that strong economic institutions like voice and accountability can enhance environmental sustainability. In short, our results shed light on the complex dynamics of the extraction–sustainability nexus in an extremely young and rapidly developing part of the world. Moreover, our results demonstrate that robust economic institutions can be an effective environmental protection mechanism independent of initial natural resource endowment.

Influence of health food literacy on willingness to pay for healthier foods: focus on food insecurity

Abstract Background The repercussions of food insecurity are widely recognized to negatively impact overall health and are influenced by a complex interplay of physiological, psychological, social, and environmental factors. Methods This study examined the disparities in food consumption and literacy between among food security households and food insecurity households using data from the Korea Rural Economic Institute’s 2022 Consumer Behavior Survey for Food, which involved 3,321 respondents. Results Food security households had a greater understanding of and better attitude toward healthier food choices than food insecurity households. Economic ability was identified as having the most significant association with food purchasing behavior, with food security households spending more on average than food insecurity households. Structural equation modeling demonstrated the association of knowledge and attitude with dietary implementation and underscored the significance of consumer literacy as a factor related to willingness to pay for healthier foods. Conclusions This study underscores the intertwined relationships among financial capacity, knowledge, and health-conscious dietary choices. It also suggests the need for targeted interventions addressing economic and educational gaps to foster healthier food consumption patterns across different socioeconomic contexts.

Spontaneity and Control: Friedrich Hayek, Stafford Beer, and the Principles of Self-Organization

Friedrich Hayek, the Austrian economist, and Stafford Beer, best known for engineering socialist Chile's CYBERSYN project, met exactly once, at the 1960 Symposium on the Principles of Self-Organization, hosted by the Biological Computer Laboratory at the University of Illinois. Independently, in the decade that followed, Beer and Hayek each sought to apply the principles of self-organization to the design of economic institutions. They were joined in the belief that the full enjoyment of human liberty would require a self-organizing world economy. To understand why, this article delves into the explanatory logic and intellectual history of “self-organization.” I use points of convergence between Beer's thought and Hayek's to reframe a key moment in the history of neoliberalism.

The Role and Contribution of The New Institutional Economics In Economic System Performance

This study investigates new institutions' contributions and economic implications in current economic developments. This study uses a qualitative approach with a literature study method. The study illustrates key thought concepts and relevant works from figures such as Douglass North, Elinor Ostrom, Oliver Williamson, Ronald Coase, and Avner Greif through analysis of various reference sources, including books, journal articles, and other related publications. The results of the literature study show that New Institutional Economics has an essential contribution to understanding the role of formal and informal institutions in shaping economic behavior and Performance. Legal institutions, such as laws, regulations, and public policies, provide the framework for economic interactions, literature study results whereas informal institutions, such as norms, beliefs, and social networks, influence individual economic decisions. The importance of institutions and organizations in improving economic efficiency and overcoming problems arising in the economic system is also highlighted in this study. In the context of New Institutional Economics, institutions and organizations act as mechanisms for reducing transaction costs, resolving conflicts, and increasing trust and cooperation among economic actors. Its theoretical implications strengthen an understanding of how institutions and organizations can shape economic behavior and Performance. In contrast, its practical implications can provide direction for more relevant and effective public policies addressing economic and social problems.

Investigation into Behavioral Change Patterns of Dine-In at Restaurant, Food Delivery, and Food Take-Out Resulting from the COVID-19 Pandemic: A Case Study in South Korea

This paper examines behavioral change patterns of food consumption through three channels—dine-in at restaurant, food delivery, and food take-out—during and after the recent COVID-19 pandemic. The unique feature of the behaviors during the COVID-19 pandemic that set them apart from those during previous pandemics was the rise of online shopping. Thus, it is important to understand the new consumer behaviors for the three food consumption channels over time (before, during, and after the pandemic), for example, how they were affected by the pandemic, what dominant change patterns were, and how the intertwined relationship between the channels evolved. This study develops a latent class model using survey data collected by the Korea Rural Economic Institute in 2021 to jointly investigate the behavioral change patterns of dine-in at restaurant, food delivery, and food take-out. The results showed that there existed six latent groups, namely, 1) “status quo maintainers,” 2) “dine-in minimizers,” 3) “mild online adopters,” 4) “temporary shifters,” 5) “food expenditure cutters,” and 6) “strong online adopters.” The results highlighted that the behavioral change pattern varied by the persistence of the changes and the consumption channel choice. The socio-economic and demographic characteristics of each group were also discussed.

Das Deutsche Institut für Wirtschaftsforschung im Zweiten Weltkrieg

Abstract The German Institute for Economic Research (DIW Berlin), the largest institute of its kind in Germany, will celebrate its centenary in 2025. It was founded as the Institute for Business Cycle Research (IfK) on July 16 1925 by Ernst Wagemann, then President of the German Statistical Office. The Institute’s research on the war economy 1939 to 1945 has not yet been examined in a well-founded manner. As the DIW itself does not possess the necessary archival records, the secret studies had first to be made accessible from various archives of the authorities which had requested this research. Only then could the studies and reports which the IfK/DIW had done on the war economy be presented here. With Wagemann losing his dual function as head of the Institute and as President of the German Statistical Office in 1933, the IfK/DIW had no longer a smooth direct access to internal statistics of the Statistical Office. In order to be able to work in an expert capacity, the Institute and its President had to secure their clients’ trust through convincing professional competence. The article elaborates on the Institute’s struggle for the status of vital importance for the war, which awarded a special position compared with other institutes, e.g. in the Reich’s Research Council (Reichsforschungsrat). Wagemann’s skill in presenting his Institute as an indispensable economic research institute certainly contributed to its prominent status. He also asserted and made himself indispensable to the National Socialist system.

Cultural tightness and financial reporting behavior around the world

This study examines the effect of cultural tightness on earnings management globally through an institutional economics perspective. We find that managers are less (more) likely to use accrual-based (real) earnings management in countries with tight cultures, consistent with the notion that managers switch to real earnings management when accrual-based earnings management is constrained in tight cultures. Our findings are robust to several endogeneity and sensitivity tests. Additionally, our results show that the strength of investor protection attenuates the effect of cultural tightness on earnings management, suggesting a substitutive relationship between this effect and the legal regime. The results also show that transactions with other countries (i.e., more imports and exports or foreign sales) weaken the effect of cultural tightness. Thus, by focusing on norm-based cultural tightness rather than Hofstede’s value-based cultural dimensions, this study advances the understanding of how culture affects corporate reporting practices.

Do U.S. Trade Agreements Affect Corruption in Latin America? A Difference in Difference Analysis

Free trade is important in the development of good economic institutions. One issue, in particular, is whether free trade agreements (FTA) can reduce corruption. Liberalizing trade while reducing corruption can reinforce moral behavior. We examine FTA between the United States and its Latin American trading partners. Free trade may provide incentives that could possibly result in countries becoming less corrupt over time. However, since 2004 the United States has included explicit anti-corruption clauses in its agreements. Using a difference-in-difference framework and a panel of 16 Latin American countries between 1991 and 2018, we test if trade agreements with the U.S. have any effect on corruption. We find that there is an increase in general corruption in countries after signing these trade agreements in comparison to countries that never signed one. These findings suggest that letting countries determine their own rules for reducing corruption might be better than dictating them through an agreement.

Post Merger Financial Analysis: An AI & ML tool for Banks

This paper models the significance of mergers and acquisitions (M&A) in reviving the growth of obsolete or low performing organizations. In line with adapting to the changing circumstances and limiting exposure to the volatility, higher level of capital backing is necessary which only consolidation can achieve (Mantravadi, 2007). Banks being economic institutions are expected to be more directly involved in inclusive growth by including the whole economy in the growth and development, therefore, to support this belief, merger and acquisition as a strategic tool is studied. M&A is considered as one of the significant tools for organizational restructuring and value addition considering the volatility prevailing in the present business environment. It enables organizations to expand their horizon of operation, mitigating risks, explore new markets and geographical locations by creating synergies thereby increasing profitability gaining through competitive advantage. It includes the study of the factors and series of events that led the Government of India (GOI) to the merger of 10 public sector banks (PSB) into 4 merged entities, adoption of M&A as technique to achieve objectives moreover it studies acquisition of the Allahabad Bank by the Indian Bank to identify and interpret the purpose and potential of consolidation backed by a comparative analysis of pre-acquisition and post-acquisition performance of the above-mentioned banks. Key Words: Mergers and Acquisitions, Public Sector Banking (PSB), Indian Bank, Allahabad Bank, NPA and Synergy.

Entrepreneurship Education in Interactions in English Terminale and Mastering English (High School), Cameroon EFL/ESL Textbooks: A Critical Discourse Analysis

Entrepreneurship education in the 21st century has increasingly become an important topic in the field of language teaching. EFL/ESL textbooks, in the process of teaching English, have incorporated, among themes of interest, entrepreneurship, which is helpful to transform students’ environments, improve their socio-economic status, and keep them away from poverty. However, the teaching methodology and the quality of materials selected bear questionable social practices likely to denature textbook designers’ laudable intentions. This paper is a critical discourse analysis of the teaching of entrepreneurship in two selected Cameroon English language textbooks used in the French and English subsystems of education, namely Interactions in English Terminale and Mastering English (High School). It is a sociolinguistic qualitative study which hinges on Fairclough’s (2001) three-dimensional theoretical paradigm, which holds that discourses are not language-bound but encompass internal features that (re)produce social structures, social practices, and power relations, reinforcing social inequalities and hegemonic ideologies. The findings yielded significant findings, showing that both Interactions in English Terminale and Mastering English textbooks are replications of the political, economic, and social institutions of Cameroon society and inadvertently promote gender discrimination in terms of entrepreneurship representation. The textbooks examined are too idealistic in their entrepreneurial discourses and outcomes. They fail to expose students to the realities of entrepreneurial ventures, thereby depriving them of the risks and challenges faced by the prominent entrepreneurs celebrated in their course books. This study is relevant as it contributes to the improvement of entrepreneurship pedagogy in EFL/ESL textbooks used in Cameroon classrooms while adopting realistic overtones.

Model of student engagement in the distance learning process

PurposeWe aimed to identify factors that influence student engagement in distance learning.Design/methodology/approachThe research involved a group of 671 students from economic and technical higher education institutions in Poland. We collected the data with the CAWI technique and an original survey. Next, we processed the data using principal component analysis and then used the extracted components as predictors in the induced smoothing LASSO regression model.FindingsThe components of the students’ attitude toward remote classes learning conditions are: satisfaction with teachers’ approach, attitude to distance learning, the system of students’ values and motivation, IT infrastructure of the university, building a network of contacts and communication skills. The final model consisted of seven statistically significant variables, encompassing the student’s sex, level of studies and the first five extracted PCs. Student’s system of values and motivation as well as attitude toward distance learning, were those variables that had the biggest influence on student engagement.Practical implicationsThe research result suggests that in addition to students’ system of values and motivation and their attitude toward distance learning, the satisfaction level of teachers’ attitude is one of the three most important factors that influence student engagement during the distance learning process.Originality/valueThe main value of this article is the statistical model of student engagement during distance learning. The article fills the research gap in identifying and evaluating the impact of various factors determining student engagement in the distance learning process.

Institutions as predictors of government discrimination

AbstractExclusion of some groups caused by the misuse of government power remains a major problem across the world. We propose that market‐oriented institutions and policies have the capacity to reduce such exclusion. To test this, we use an overall measure derived from the V‐Dem dataset, capturing government discrimination based on political group, social group, socio‐economic group, and gender, which we combine with the Fraser Institute's Economic Freedom of the World index. The sample consists of 153 countries for 1970–2020, which we organize in a panel consisting of consecutive, non‐overlapping 5‐year periods, rendering up to about 1,200 observations. Our estimates show a clear negative association between the rule of law and government discrimination in electoral democracies and electoral autocracies but not in single‐party autocracies. There are, however, reasons for not considering the finding for electoral autocracies causal. Two further areas of economic freedom seem to matter: free trade is negatively related to government exclusion in electoral democracies, while regulatory freedom is so in both types of autocracies. Thus, it seems as if a market‐economic system may be able to constrain public officials in the direction of non‐discrimination.

Underperforming reformers: Examining disappointing cases of economic reforms

AbstractWhile pro‐market economic institutions are a strong and causal predictor of economic development, such institutions are not expected to have the same impact across countries. Furthermore, there are actually a few instances where countries that enacted market‐friendly reforms had negative economic growth soon after. Examining 49 cases of large and sustained increases in economic freedom over a five year window, we find 10 cases that were followed by low/negative economic growth thereafter. We consider various potential determinants of failed reforms by comparing different measures between the successful and failed reforming countries. Our strongest evidence points to the following as plausible reasons for failed reforms: culture (high levels of power distance, low levels of individualism, and low levels of generalized trust), areas of economic freedom that countries reformed (less focus on sound monetary policy, more focus on limiting the size of government, and more variance between the five areas), and autocratic political institutions.

Re-investigating the Impact of Economic Growth, Energy Consumption, Financial Development, Institutional Quality, and Globalization on Environmental Degradation in OECD Countries

Abstract This study attempts to quantify various macroeconomic variables’ influences on environmental quality. Being significantly negative in character, the impacts of economic growth (EG), energy consumption (EC) levels, financial development (FD) tools, changes in institutional qualities (IQUs), and globalization (GLO) on environmental degradation are regarded worthy of research. The dynamic panel model reports robust results using quantile regression and generalized moment method approaches. Renewable EC, GLO, and IQU significantly reduce the negative impacts on the natural environment across all quantiles. In contrast, electricity consumption has a significant deleterious impact across all quantiles, except at the 95% level, where the impact is not detrimental. EG and FD produce significantly positive injurious effects on the environment across all quantiles. Our findings reveal that callous indifference to global environmental degradation should not be tolerated for economic and ethical reasons, and it falls on the OECD countries to show leadership and take the initiative. OECD countries can mitigate environmental degradation by sharing knowledge and experience of balancing growth to promote sustainable development and responsible consumption globally.

Nonlinear effects of climate change on tourism development: evidence from China

PurposeThe purpose of this paper is to have a deeper understanding of the nonlinear relationship between the impact of climate change on tourism development. Current studies on the effects of climate change on tourism development primarily rely on linear correlation assumptions.Design/methodology/approachBased on the New Institutional Economics theory, the institutional setting inherently motivates and ensures the growth of the tourism industry. For a precise evaluation of the nonlinear consequences of climate change on tourism, this paper concentrates on Chinese cities between 2011 and 2021, methodically analyzing the influence of climate change on tourism.FindingsThe study findings suggest that there is an “inverse U”-shaped nonlinear relationship between climate change and tourism development, initially strengthening and subsequently weakening. Based on these findings, the research further delves into how institutional contexts shape the nonlinear association between climate change and tourism growth. It was found that in a higher institutional backdrop, the “inverse U” curve tends to flatten and surpass the curve adjusted for a lesser institutional context. Upon deeper mechanism analysis, it was observed that cities with more advanced marketization, improved industrial restructuring and enhanced educational growth exhibit a more evident “inverse U”-shaped nonlinear connection between climate change and tourism evolution.Originality/valueFirst, previous studies on climate change and tourism development largely rely on questionnaire data (Hu et al., 2022). In contrast to these studies, this paper uses dynamic panel data, which to some extent overcomes the subjectivity and difficulty of causality identification in questionnaire data, making our research conclusions more accurate and reliable. Second, this study breaks through the linear relationship hypothesis of previous literature regarding climate change and tourism development. By evaluating the nonlinear relationship of climate change to tourism development from the institutional pressure perspective, it more intricately delineates their interplay mechanism, expanding and supplementing the research literature on the relationship mechanism between climate change and tourism development. Thirdly, the conclusions of this study are beneficial for policymakers to better understand and assess the scope of climate change impacts. It also aids relevant departments in clarifying the direction of institutional environment optimization to elevate the level of tourism development when faced with adverse impacts brought about by climate change.

The Dialectics of Class struggle in Marqueze’s ‘One of These Days’ and The Biblical Parable ‘Ahab and Naboth’

This paper attempts to explore the class conflict and the struggle implicitly or explicitly inherent in “One of These Days” and “Ahab and Naboth” applying the conceptual frameworks of Conflict theory based on Marxism. Conflict theory views social and economic institutions as tools of the struggle between groups or classes, used to maintain inequality and the dominance of the ruling class. The dialectics of class struggle is inevitable in most of the societies. The ruling class or the oppressors exploit their subjects or even do not lag behind to take their life in order to serve or suit their interest and desires. The victimized cannot react immediately due to the fear engendered by the pomp of power and money of the higher class. Rather, they either face the terrible fate or become submissive unwillingly. When the interests and the desires of the higher or the ruling class center upon the exploitation and the oppression of the lower class for their happiness, there appears the conflict between them resulting into the class struggle. This paper explores how the ruling class having the feudal ideology oppresses and exploits the innocent people misusing their power. The paper seeks to answer the prominent question : why and how do the upper and the ruling class oppress and suppress the lower class or the common people? The pomp of power and money corrupts man as it instigates man to render atrocities towards common people. Being scared, the subordinate people cannot raise their voices and launch their protest for justice. Instead, they attempt to suppress their voices due to their apprehension.