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The Intersection of Economic Signals and Mythical Symbols
Cyril Morong [pdf] [html]

[Key words: economic signals, mythical symbols, rationality, emotions; JEL: A12, A13]

Mythical symbols and economic signals represent more than what they are. Symbols represent universal ideas and themes and evoke feelings and emotions, while economic signals are simple, efficient signs that stand for a more complex set of characteristics and information that are costly to learn. Symbols deal with the irrational and economic signals deal with the rational. Many of the signals cited in economic literature work well because they have a symbolic element that speaks to people's emotions. By evoking emotions, a signal makes the receiver feel more confident about the truthfulness of the information it represents. The intersection of symbols and signals illustrates the relationship between the rational world of facts and irrational world of emotions and values, a relationship which needs to be explored as part of the development of the ideal type of homo socio economicus, the selfish yet value and community-driven person.

What's wrong with Contemporary Economics?
Paul Streeten [pdf] [html]

[Key words: contemporary economics, social sciences, development economics; JEL: A12, B40, B59, O10]

In educating economists, we should sacrifice some of the more technical aspects of economics (which can be learned later), in favour of the compulsory inclusion of philosophy, political science, and economic history. Three reasons for these interdisciplinary studies are given here. In the discussion of the place of mathematics in economics, fuzziness enters when symbols a, b, c are identified with individuals, firms, or farms. The identification of the clear cut symbol with the often ambiguous and fuzzy reality invites lack of precision and blurs the concepts. If the social sciences, including economics, are regarded as a “soft" technology compared with the “hard" technology of the natural sciences, development studies have come to be regarded as the soft underbelly of “economic science". In development economics, the important question is: what are the springs of development? We must confess that we cannot answer this question, that we do not know what causes successful development.

The Moral Foundations of Economics: A Reinterpretation of Adam Smith's Problem
José Atilano Pena López y José Manuel Sánchez Santos [pdf] [html]

[Key words: ethics, economy, Adam Smith, sympathy; JEL: A10, A13, B12]

This paper offers a reinterpretation of “Adam Smith's problem" and reconsiders the relation between ethics and economics. It makes a critical revision of the attempts that seek to solve this problem, proposes an alternative framework constructed on the Smithian concepts of sympathy and the impartial spectator, and shows that morality understood as an extension of sympathy relations, constitutes a precondition for the market existence. The analysis clarifies that morality is the base of the economic system and, at the same time, the economic system limits morality.

The Limits of Economic Efficiency in a Democratic Society
Alejandro Agafonow [pdf] [html]

[Key words: economic efficiency, democracy, Rawls, JEL: A11, P20, P16]

During the 20th century, Marxism and non-egalitarian or classical liberalism debated the properties of economic reasoning, that is, the way economic institutions value multiple ends. This debate produced an implicit consensus between market socialists and non-egalitarian liberals about democracy. In this consensus, the Rousseau's general will was replaced by the individual will, and popular sovereignty reflected in consumer sovereignty. This essay uses a Rawlsian perspective to analyze the limits of economic efficiency in a democratic society.

Critical Review of Institutionalism's Contribution to the Theory and Practice of Development
Joan Oriol Prats [pdf] [html]

[Key words: institutionalism, development theory, rational choice, JEL: B52, O10, O20]

This paper analyzes institutionalism's contributions to development theory, and shows the need for a greater integration for the creation of successful institutional development strategies. It identifies the levels of institutional analysis, highlighting its frequency of change, type of institution and function performed. It also examines the contributions of rational and social choice institutionalism, organization theory, historical institutionalism and sociological institutionalism. Finally, it emphasizes the importance for complementarities between schools for the challenges faced by development policies.

Reciprocity and the Paradox of Voting
Jorge Andrés Gallego
[pdf] [html]

[Key words: reciprocity, paradox of voting, social preferences, evolutionary games, JEL: C73, D72]

This article shows that for a citizen with reciprocal preferences, voting can be a rational act. Even in elections with many voters, when the probability of being the pivotal voter is close to zero, the utility generated by strong reciprocal sentiments can compensate the material costs of voting. This paper offers a behavioral model with social preferences that represents the conditions that make voting more attractive than abstention. Using the dynamics of replication to explore the voting game evolution, it concludes that positive reciprocal sentiments promote voting for the candidate in power, while negative reciprocity promotes abstention or voting for a rival candidate.

Colombian Labor Market Division during the Nineties
José Ignacio Uribe, Carlos Humberto Ortiz y Gustavo Adolfo García
[pdf] [html]

[Key words: labor market, Mincer equations, human capital; JEL: J21, J24, J31, J42]

This article shows that the Mincer equations, augmented with variables of firm size and corrected by selectivity bias, yield results that are consistent with the theories of human capital and labor segmentation. Greater firm endowments of human capital and physical capital are related to greater labor income. This result is consistent with scale economies at the firm level. It also implies divisions between economic sectors due to physical and human capital markets barriers.

Voting Power in the National Council of the Social Security Health Service
Sandra Milena Rodríguez A.
[pdf] [html]

[Key words: agency relationships, power index, coalition, regulation, JEL: C71, D72, I18]

This paper presents a theoretical conceptualization of Colombia's National Council of Health Social Security (CNSSS). Using a simple framework of theory of games, it analyzes the voting power of its members, and estimates the indexes of Banzhaf, Shapley-Shubik and Coleman. It shows that the Council's decisions respond to a false consensus that reveals the interests of particular agents. It concludes that power indexes are sensitive to the election of the majority approval quota and that the proportion of votes does not clearly show the Council members' power.

Why do Colombians Emigrate? A Departmental Analysis Based on the 2005 Census
David Khoudour-Castéras
[pdf] [html]

[Key words: international migrations, Colombia, JEL: F22, O54]

The 2005 Census brings, for the first time, detailed information about Colombian migration flows. This paper analyses information related to Colombians living abroad, and examines the main causes of emigration. With this purpose, it calculates the emigration rate by department and uses an econometric study that differentiates between structural, cyclical and violence-related variables. The paper concludes that less-poor and better-prepared people from the most troubled departments have a higher propensity to migrate.


Revista de Economía Institucional
Universidad Externado de Colombia
Cra. 1 No. 12-68 Casa de las Mandolinas
Bogotá, Colombia
(571) 2826066 ext. 1307

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