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The key mechanisms through which information frictions affect the composition and the volatility of international capital flows are market based. Foreign direct investors get more efficient outcomes than foreign portfolio investors because the former have more direct control over management. Thus, they are able to make a better-informed decision of how to run the business. However, the better information mires FDI investors with the “lemons” problem: If the investors’ liquidity dries up, forcing the investors to sell off foreign subsidiaries, market participants would not know whether the subsidiary is liquidated because of the investors’ liquidity problems or because of bad inside information about the profitability of the subsidiary. Consequently, the market will place a discount on assets sold by an FDI investor, who has the inside information, unlike the FPI investor. Thus, the liquidated stock of an FDI investor is sold at a discount. High-liquidity-risk investors opt for FPI investment, whereas low-liquidity-risk investors opt for FDI investment.

The chapter focuses on the analysis of energy resource balance and the ecological limits on energy resources with special reference to the oil crisis in both the global and the Indian context. It discusses the roles of fossil fuels, nuclear energy, hydro resources, renewables like biomass, bioliquids and other aboitic renewables particularly wind and solar energy resources in providing the energy security for India with some sectorwise details as well as their implications in respect of environmental degradation over the full life cycle of their respective uses. The chapter further discusses the economic effects of the ecological limits as expressed in the forms of resource scarcity and environmental pollution. It then reviews the trend of past energy and carbon efficiency of India and the projections of the same in future as per the study of the expert group of the planning commission and discusses their policy implications

The first of a set of cases, this examination of the history of Danish energy policy shows that a classic green spiral effect has led over time to the decoupling of emissions and economic growth. This spiral begins with Denmark’s response to the oil crisis of the 1970s, which led to energy security policies that shifted commercial and industrial infrastructure toward high energy efficiency, developed a thriving wind energy industry, and encouraged a broad grass-roots constituency that benefited from wind generation. These shifts in interest fed back into policymaking. Ultimately, policy-industry feedback over time has led to a paradigmatic shift in Denmark’s energy industry and policy. Denmark’s energy industry now sees its own interests as invested in, not threatened by, green policy. For example, DONG Energy is pulling back from investment in coal power and expects to derive future growth from low-carbon investments and green regulation.

This chapter offers a discussion of the relevance of international organizations’ efficiency in crisis response. It is framed in broader scholarly and policy debates on the effectiveness of peace operations. The chapter introduces the book’s argument that differences across organizations’ informal norms and networks can explain variation in organizations’ response rates in the context of conflict. This focus on informal factors challenges traditional explanations of decision-making in international organizations because they concentrate on the interests of individual member states. In an overview of the methodology, the author describes the use of elite interviews and discourse analysis to gain insider perspectives on decision-making from those actors directly involved in security negotiations. Survey-based interviews were specifically conducted with 50 ambassadors and more staff from four international organizations (the AU, EU, OAS, and OSCE). Following a discussion on how response rates can be measured, the subsequent section presents an original database of response rates. Finally, a sociological institutionalist explanation sheds light on why a more affluent organization, such as the EU, might prove more efficient than those with fewer resources and capabilities.

This chapter focuses on the impact of efficiency on conflict-affected populations and on the effectiveness of interventions. It details the conditions under which speed of response enhances prospects for sustainable peace, and it places the discussion on speed in an international security context. Organizations have thus far failed in their efforts to develop and employ rapid response mechanisms. Instead, control over speed of response remains in the hands of the member states driving consensus-based decisions to react. The chapter provides a means for measuring the efficiency involved in the planning and operationalizing of these decisions. It then introduces an original database on response rate variation across four international organizations. In an analysis of the response rates data, the chapter elucidates core distinctions between the record of the European Union and the record of the African Union, OAS, and OSCE. From membership size to strength of capabilities, potential reasons for the variation in speed are assessed but fail to explain why the EU would be slower to react to crises. State-based theories of international relations prove equally insufficient in explaining the phenomenon. This suggests the need for an entirely different explanation, which is outlined in the subsequent chapter.

This chapter provides an introduction to the informal level of decision-making and presents the book’s central argument. That is, the ways in which actors interact and negotiate within international organizations can explain why some find consensus more quickly than others. The chapter adopts sociological institutionalism as a theoretical framework and applies it to explain how informal norms and informal relations among key actors affect speed of response. The text distinguishes between informal and formal modes of decision-making and the conditions under which informality can facilitate the building of consensus and, ultimately, quicker multilateral responses to crises. As the argument is unpacked, interpersonal trust is identified as a key mechanism. The chapter offers two final and detailed sections: one providing the theoretical argument behind the role of informal norms and one providing the theoretical argument behind the role of informal relations.

This chapter offers a typology of decision-making on crisis response across four international organizations. However, unlike previous scholarship, this research focuses on how decisions are taken in practice rather than the formal rules themselves. The chapter also discusses the interactions between the existing formal rules and the informal norms that develop around them and that guide actors’ behavior. The formal institutional design of an organization sets the tone for how such informal norms will be institutionalized. To measure institutional differences, the author focuses on four key metrics: environment, socialization, friendships, and perceived culture. These factors are reflected in the survey questions asked of staff and ambassadors involved in the peace and security committees of four international organizations. The chapter then presents the results of the survey data in conjunction with scholarly data. Through the use of original and comprehensive analyses, the chapter is able to systematically explain variation in institutional culture across the peace and security committees of each organization. The typology’s descriptions of different regional styles of crisis response encompass formal rules, informal norms, and relevant anecdotes of the contentious deliberations.

Building on evidence presented in the previous chapter, this chapter makes the case that international organizations with informal institutional cultures react more rapidly than those organizations with formal institutional cultures. The chapter explains positive and negative impacts of informal norms on efficiency through the application of a sociological institutionalist theory of bureaucratic dysfunction, adapted from scholarship by Barnett and Finnemore. Individual norms are identified and categorized. The chapter emphasizes differences regarding how information is shared at the European Union Political and Security Committee in contrast to how it is at similar committees at other organizations. For each of four international organizations, the author describes and illustrates the implementation of both positive and negative norms.

Building on evidence presented in Chapter 5, this chapter explains the second part of the book’s argument about institutional culture. Specifically, a climate of positive interpersonal relations among actors at international organizations helps to speed up their responses to crises. Equally, negative relations can lead to slower responses. The chapter begins by giving evidence that the majority of critical decision-making occurs outside of formal channels through bilateral informal negotiations or through multilateral social networks. It then applies Principal-Agent Theory to explain the process of ambassadors gaining trust at their respective peace and security committees and to explain the role of information asymmetries among ambassadors and their capitals. In detail, the chapter traces the process of establishing positive interpersonal relations and the critical role that trust plays in access to critical information. After information is shared, ties are strengthened and consensus can be more easily achieved. After having examined the role of interpersonal relations in organization efficiency, the chapter proceeds to discuss how social networks among groups of actors within international organizations affect speed of response. The author categorizes and explores dominant types of networks observed across organizations and concludes that both informal relations and informal networks can positively ( negatively) affect speed of response.

This chapter offers a summary of the book’s key findings and points to venues for future research. It reviews the central argument that differences in institutional culture explain why some international organizations respond more quickly than others to demands for intervention. It also revisits the evidence that two relevant aspects of institutional culture—informal norms and informal relations—have been shown to influence rates of response. With respect to future directions for research, the chapter calls for more studies on the informal level of decision-making and planning that occurs at international organizations. It also calls for further research on the subject of “rapid response.” The second part of the chapter identifies key policy recommendations for institutional reform and examines what steps might be needed to see such reforms become reality. The recommendations are explained in detail with reference, where possible, to practical examples such as those from the United Nations.

There was never the remotest possibility that the reformers could have succeeded in their ultimate objective of enrolling all the children of the community in their common schools. Even if the funds had been forthcoming and generous enough to build schools as grand as palaces, the poor would not have been able to send their children to them—and not because they did not understand the value of an education. As Stephen Thernstrom has written regarding the situation of the poor and working parents of Newburyport, no matter how eloquently Horace Mann might extol the benefits of a common schooling, “education for their children was simply a luxury the family could not afford.” Universal schooling—for the poor as for the prosperous— would not be attained within the reformers’ lifetimes. It was contingent on something the reformers could not produce: the acceptance of child labor regulation by the employers themselves. Without this acceptance—based on the recognition that unregulated child labor was destroying workers before they reached their productive prime—no child labor or compulsory schooling legislation could produce widespread common school enrollment. Universal common school enrollment was further dependent on other factors beyond the capacity of the reformers to effect. In the West and in rural areas of the Northeast, there could be no common schooling at all until the population was dense enough to support a school within commuting distance of each household. In the South, universal schooling was unthinkable as long as slavery was maintained. As we have seen in preceding chapters, while there appeared to be widespread agreement among Americans on the importance of schooling for their children, there was no consensus on the shape that schooling should take. There were differences of opinion over how the schools should be funded; over what form religious instruction should take; and over the qualifications for schoolmasters, the facilities for schoolhouses, the contents and objectives of school books, and the proper language of classroom instruction. In all these areas of dispute, the reformers forced their consensus on local communities not through the power of their arguments so much as through the power of their political coalitions.

Adaptive procedures are developed to reduce the burden of data collection in psychophysics by creating more efficient experimental test designs and methods of estimating either statistics or parameters. In some cases, these adaptive procedures may reduce the amount of testing by as much as 80% to 90%. This chapter begins with a description of classical staircase procedures for estimating the threshold and/or slope of the psychometric function, followed by a description of modern Bayesian adaptive methods for optimizing psychophysical tests. We introduce applications of Bayesian adaptive procedures for the estimation of psychophysically measured functions and surfaces. The bias, precision and efficiency of estimates is considered. Each method is accompanied by an illustrative example and sample results and a discussion of the practical requirements of the procedure.

The chapter outlines the different motivations for FDI as well as the economic and institutional determinants of location choice for foreign investment, which is in turn fundamental for analyzing whether and to what extent different types of incentives can and should be used to influence those investment decisions. The chapter discusses the differences between market seeking, resource seeking, efficiency seeking and strategic asset seeking investment, each of which of has different implications for governments seeking to attract FDI, particularly through the use of incentives. The chapter also examines the policy challenges arising from a changing composition of FDI, including the shift to services, the increasing importance of non-equity modalities, the growth in market seeking investment into emerging markets, and the rise of market and asset seeking investment from emerging markets.

Economic theory seeks to determine the most effective use of scarce resources in achieving a given goal. This chapter discusses evaluation of criminal justice interventions with a view to increasing efficiency of service provision. Such analyses support evidence informed policy by comparing measured costs with benefits of interventions. However, in a political climate that promotes an increasing reliance on the private sector through marketisation, the very choice of intervention studied, and the costs and benefit to be measured, are based on value judgements. This chapter highlights the distinction between the positivist (value-neutral) values of economics and the normative (values-based) choice of the way economics is used.

This chapter studies the implications of inter-jurisdictional mobility in a dynamic fiscal policy perspective.The acquisition and utilization of human capital occurs over a lifetime and is affected by migration decisions. The impact of fiscal policy on migration, and of migration on fiscal systems,should thus be assessed within an intertemporal framework – especially because of (a) evidence that migration is a gradual process, (b) the age-conditioned nature of many fiscal policies, and (c) the decline in fertility rates in high-income countries and corresponding shifts in the age distribution. After reviewing relevant international demographic trends, this chapter examines thefiscal implications of mobility, especially of the highly skilled, starting with standard atemporal approaches and then moving to explicitly dynamic modeling. That latter offers significant new insights – for instance, those who gain in the “short run” from redistributive policies may be harmed in the “long run”, and conversely. Further development of dynamic models of fiscal competition should shed new light on the distributional and allocative effects of fiscal policies and on the political economy of fiscal policy.

This paper develops a simple model to analyze the “dual-track” approach to market liberalization as a mechanism for implementing efficient Pareto-improving economic reform, that is, reform achieving efficiency without creating losers. The approach, based on the continued enforcement of the existing plan while simultaneously liberalizing the market, can be understood as a method for making implicit lump sum transfers to compensate potential losers of the reform. The model highlights the critical roles of enforcement of the plan for achieving Pareto improvement and full liberalization of the market track for achieving efficiency. We examine how the dual-track approach has worked in product and labor market liberalization in China.

In line with Aby Warburg’s conviction that the past should engage the present by expanding and refreshing it, the Warburg Institute Library’s rare and singular collections are both about the books and the shaping of the scholarly mind behind the ordering of its contents. Received opinion, however, held that it was more efficient to dissolve its unique holdings into the overarching library system of the University of London. This essay argues first that we should not be automatically persuaded by the unexamined rhetoric of efficiency. Second, while the unique presentation of the Library requires and, happily, has now retained its own premises, it needs to be reconceived in order to operate in the twenty-first century. What makes the Library vital to today’s networked epistemology is the insights it provides to the varieties of human ordering, organization, formatting, categorization —tellingly exhibited in the spatial arrangement of its holdings. In its refreshingly individualistic collections, it resembles another London scholarly institution, assembled by a brilliant architect and collector of artifacts, books, and drawings. Sir John Soane’s house museum at Lincoln’s Inn Fields, I propose, provides a workable model for an analogously useful and apposite museum of the mind.