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Rules without Enforcement are but Words on Paper
Elinor Ostrom [pdf] [html]

[Keywords: rules, social systems, ecological systems; JEL: B52, Q57]

This paper synthesizes extensive research conducted by colleagues from a wide diversity of disciplines that examines the relationships between the social systems and ecological systems they use. One of the key observations is that efforts to design general-purpose blueprints frequently fail. The variety of conditions of an ecological system rarely fit a single scheme for good institutions for a large region.

Lessons from the Great Depression for Economic Recovery in 2009
Christina D. Romer [pdf] [html]

[Keywords: economic crises, Great Depression; JEL: E32]

This article compares the Great Depression of the thirties with the current global crisis and offers some useful lessons for designing policies to overcome the crisis and begin a strong recovery. One of the lessons is that a small fiscal expansion has only small effects and that a monetary expansion may help to stabilize the economy even if interest rates are near to zero. In addition, policymakers should avoid reducing the incentives early and should consider that the financial and the real recovery go together.

The Economic Man and Rationality in Adam Smith
Vanesa Valeria D'Elia [pdf] [html]

[Keywords: behavior, egoism, homo economicus; JEL: B0, B4, D1]

The assumption of rationality is central in current economic theory. This hypothesis is the pillar for the creation of the homo economicus of conventional theory. Starting with Adam Smith's approach to rationality, the aim of this paper is to contribute to the discussion of the main characteristics of the individual underlying the rational man of economics and their implications for economic analysis. The meaning of rationality in several authors is reexamined and it is argued that the basis of Adam Smith's work are still valid.

A New Institutional Economics Perspective on Corruption and Anti-corruption
Frédéric Boehm and Johann Graf Lambsdorff [pdf] [html]

[Keywords: Corruption, institutions, transaction costs, anti-corruption; JEL: B52, D73]

Corruption is a complex and multifaceted phenomenon. The aim of this article is to open the “black box" of corrupt transactions using the framework of the New Institutional Economics. First, it examines “corrupt contracts”, the institutions that promote them, the mechanisms involved, the transaction costs and the problems faced by the actors. Then the stages of a typical corrupt agreement are described: initiation, execution and post-contractual phase. To combat corruption the understanding of how corrupt actors think and how corrupt agreements work is necessary. Finally, the potential and limitations of traditional and the more recent anti-corruption measures are analyzed.

The Concept of Incentive in Management. Literature Review
Yuri Gorbaneff, Sergio Torres y José Fernando Cardona [pdf] [html]

[Keywords: incentive, governance form, transaction costs; JEL:: J33, D23]

The paper reviews and discusses the literature on the concept of incentive in management; the visions of ancient Greek philosophers, classical economists, scientific management, agency theory, contracts, property theory and transaction costs theory. The discussion shows that the transaction costs theory, with its central idea of forms of governance, constitutes a comprehensive view of incentives that explains what are the inexplicable paradoxes for other theoretical perspectives. The paper analyzes the relations between incentives and helps to build up a theoretical and useful formal model of incentives.

Rural Elites' Veto of Land Reform in Colombia
Mauricio Uribe López [pdf] [html]

[Keywords: Land Reform, State and Local Taxation; JEL: Q150, H710]

Several attempted redistributive land reforms in Colombia have been systematically blocked by the political influence of t he landlords. Although, the decentralization process seeks to multiply the social decision spaces in order to bring them closer to the median voter, its fiscal emphasis entails a number of perverse effects. One of these has been to increase the veto power of the landlords. Moreover, the increasing number of “effective political parties" at the local level makes it more difficult to change the status quo since this means a larger number of veto players.

The Colombian Economic Slowdown: You Reap What You Sow
Carlos Humberto Ortiz [pdf] [html]

[Keywords: economic growth, industrial slowdown, technological autonomy, drug trafficking, violence; JEL: D78, E22, F13, F14, F43, O11, O14, O33, O47]

The economic slowdown experienced in Colombia since 1980 is explained by the structural stagnation of the national economy and the escalation of violence associated with the expansion of drug trafficking. The available data do not reject this hypothesis. The article sustains that de-industrialization and drug trafficking were forged in the same crucible: a development model that gradually integrates the national economy into world markets whilst abandoning the option of industrialization. Moreover, it argues that the explosion of drug trafficking is due to the deepening of the war on drugs in the context of a growing and inelastic global demand.

Duration of Unemployment and Search Methods in Colombia
Carlos Augusto Viáfara L. y José Ignacio Uribe G. [pdf] [html]

[Keywords: duration of unemployment, search methods, search methods effectiveness; JEL: J60, J64]

This paper studies the duration of unemployment in Colombia as an indicator of the effectivity of search methods. This work is based on the Continuing Survey of Households (ECH), carried out in Colombia in the second quarter of 2006. Parametric (Weibull proportional risk) and nonparametric (Kaplan-Meier) duration models are estimated. The findings suggest that the duration of unemployment is strongly influenced by the search methods used by employees and the unemployed. Formal methods are the most effective .

From The Radicalism to The Regeneration. The Monetary Issue (1880-1903)
Juan Santiago Correa R. [pdf] [html]

[Keywords: monetary policy, Radicalism, The Regeneration (conservative regimen), free banking, civil war; JEL: E52, E58, N16]

This article shows, from an economic history perspective, the changes in the Colombian monetary policy brought about by “La Regeneración" (conservative regime) from 1880. The new political model replaced the decentralization policies, pursued by Radicals in the previous decades, with a very centralized economic policy model, which marked by profound irregularities, that led to a major civil war (Guerra de los Mil Dias).

Balance of Payments, Stability and Growth in México 1979-2005
Yanod Márquez Aldana [pdf] [html]

[Keywords: Keywords: México, Keynesian models, international trade, Thirlwall law; JEL: F11, F13, F31]

This paper presents an extended model that includes Thirlwall's simple rule. Growth in Mexico fell from an annual average of 6,76% in 1961-1981 to 2,95% in the 1982-2004 period. Net flows of capital, rents and transfers promote and stabilize the economy, while devaluation does not improve growth. Income growth rates and income elasticities between Mexico and the United States have matched, which prevents convergence of per capita income. Mexico must design and implement an industrial policy if it wants to increase rate of growth and face the fall of oil reserves and the changes in the US migratory policies.

The Competitiveness of Portuguese Towns. The Case of District Capital Towns
Paulo Reis Mourão y Júlio Miguel Coelho Barbosa [pdf] [html]

[Keywords: competitiveness, regional development, regional development indexes; JEL: F230, R230, C650]

This article analyses the competitiveness in the inner regions of Portugal using an institutionalist approach. After reviewing academic work about the different aspects of competitiveness it then tests the hypothesis: “The inner regions of Portugal have competitive socio-economic dimensions in the national context". A Cities Competitiveness Index was constructed that indicates that the demographic, employment and welfare dimensions exhibit more competitive values.


Revista de Economía Institucional
Universidad Externado de Colombia
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Bogotá, Colombia
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