Issue 34 March 2011
SOE's: statism vs participatory democracy
In the 1980s and 1990s a number of New Zealand government departments were transformed into state-owned enterprises (SOEs). Established with the objective of being good businesses, the SOEs were given a 'commercial' organisational structure and placed at arms length from political management. The objective was successful: as SOEs, their productivity improved markedly. Now the current Government has announced it's considering a partial sale of the energy-sector SOEs, with preference likely to be given to Kiwi investors. Lewis Evans, who's been observing SOEs for some years, believes this approach is fainthearted. He argues that opening up ownership of all SOEs to New Zealand citizens could improve both the performance of the SOEs and the ability of citizens to influence them - and that this would be a form of participatory democracy.
Is Fast Broadband really worth the Subsidy?
In the last issue of Competion and Regulation Times, Mark Obren surveyed the literature on likely productivity gains from investment in ultrafast fibre-based broadband networks: he found the theoretical case to be highly complex and gains likely to be very much less than what's frequently claimed. Here Simon Vose reviews a recent international study that examined the quality of the evidence for substantial government subsidies of ultra-fast broadband networks to nearly every home in the country.
Does the dog wag the tail or ... ?
Financial markets are always coming up with new products that financial economists spend a lot of time trying to figure out how to price. In asking what a fair price is, economists sometimes find it hard to tell whether they're being positive or normative: are they describing the prices they see in the market, or are they telling the market what they should be? Toby Daglish and Lyndon Moore ponder their dilemma.
Co-operative Advantage
Would you willingly pay more for groceries from a local co-operative than for identical brands sold by the local branch of a privately-owned firm? Morris Altman's survey-based research in Saskatchewan (Canada) indicates that consumers will pay higher prices at the co-op, even when they're not members and so don't participate in the usual member-only benefits. This suggests that, in competitive markets, consumer co-operatives enjoy a relative advantage over non-co-ops because of the value consumers place on the non-material benefits of shopping at a co-op - such as the feel-good glow they get from the co-op's investment in social cohesion.
Alternative means to just ends
When commercial and personal agreements break down, the courts can be asked to decide how the dispute will be resolved. However, for many parties the court process is not ideal. Lukas Schroeter explores how voluntary alternative dispute-resolution (ADR) methods have evolved in response to some of the shortcomings of court processes - and have provided choices and potential increases in welfare for the adversaries. Greater access to and use of ADR thus offers not only more-satisfied disputants but also an alternative means of reducing high workloads and long waiting lists in the civil courts.
The new cargo cult?
Bronwyn Howell and Mark Obren ask whether the internet can transform the New Zealand economy in the same way as refrigerated shipping (the 'freezer ship') did in the late 19th century.