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Given the centrality of the process of innovation to the performance of dynamic economies, the types of corporate governance that will promote economic performance can be determined only within a conceptual framework that integrates an analysis of the economics of innovation. In Sect. 1.2, theoretical and empirical research on the economics of innovation is reviewed in order to identify the key stylized facts of the process through which resources are developed and utilized in the economy; innovation is specifically characterized as a process that is cumulative, collective, and uncertain. In Sect. 1.3, it is argued that these characteristics imply that innovation requires an allocation process that is (1) developmental––resources must be committed to irreversible investments with uncertain returns, (2) organizational––returns are generated through the integration of human and physical resources, and (3) strategic––resources are allocated to overcome market and technological conditions that other firms take as given. In Sect. 1.4, the critical characteristics of innovative resource allocation are contrasted with neoclassical resource allocation, which is reversible, individual, and optimal. Section 1.5 discusses the relationships between resource allocation and corporate governance, emphasizing that in spite of continuing attempts by heterodox economists to introduce one or more of the characteristics of resource allocation discussed in Sect. 1.4 to a theory of economic performance (in particular, developmental, organizational, and strategic characteristics), it is only by taking all of these characteristics together that the profound implications they have for the governance of corporations can be seen, implying the need for organizational control over the allocation of resources in the economy.

This chapter first reviews the evidence for interactions between life-history stages, centering this around reproduction itself: the intention is to put reproduction in the context of the complete life-cycle. It considers how the wintering and pre-breeding period, including spring migration, can influence reproductive decisions, and in turn how reproductive decisions can influence subsequent post-breeding life stages such as molt, fall migration, and over-winter survival. It looks at the costs of reproduction, simply as a more specific example of general carry-over effects, especially from a mechanistic point of view, with potentially common underlying mechanisms. The chapter argues that short-term energy or nutrient “debts” and resource-allocation trade-offs provide unsatisfactory models for long-term carry-over effects or costs of reproduction; instead, it emphasizes potential “non-resource based” mechanisms.

This chapter examines the conditions under which the multiproduct firm should use market share as a metric for resource allocation. It distinguishes short- and long-run effects, analyze the effects of competition, and show how the discount rate affects the firm's revenue- and volume-based market shares. In particular, it shows how the firm can use marketing-finance fusion to choose the optimal performance metrics for managers so that they focus on maximizing long-run performance.

Explores how policy‐makers have addressed the need for international co‐operation on resource allocation in financing global public goods. It analyses the range of policy tools currently available, and suggests ways in which resource allocation methods could be improved in the future.

This chapter evaluates the economic impacts of the government's industrial and financial policies, which provided interest subsidies, wealth, and inflation windfalls to privileged businesses in terms of production costs, profits, investments, sectoral growth, industrial organization, and savings. The chapter further evaluates the impact of resource allocation on macroeconomic disruptions, sectoral misallocations between privileged and unsupported businesses, manufacturing vs. service industries, heavy and chemical industries vs. light industries, and large vs. small businesses. Economic rent-seeking activities, cronyism and corruption, non-performing loans, financial burdens, the disciplining of financial intermediaries, and financial and corporate reforms in recent years are assessed. The chapter also asks: were the government's industrial and financial policies the optimal measures to achieve the industrialization and the expansion of the nation's economy? Who were the major beneficiaries of the government's industrial and financial policies? Did government control of financial institutions deprive the banks of incentive to improve efficiency? Finally, the chapter lists the future economic and financial challenges facing the country.

This chapter investigates whether the fact that public resources are limited provides an excuse for a failure on the part of the state to intervene to save life. While courts are reluctant to overstep their judicial boundaries by second guessing allocation of resource issues, it is argued that it is possible for the positive obligations inherent in the right to life to be enforced by the courts even when they involve expenditure. The positive obligation upon the state exists regardless of the financial, or other, burdens caused by it, although such burdens will be highly relevant to a determination of what can reasonably be expected of a state. It is proposed that the rule of rescue should be a prioritising principle within the balancing exercise which should be performed when allocating public funds. The application of the ‘accountability for reasonableness’ theory will provide a useful check in this context.

The question of how corporations should be governed to enhance corporate and economic performance has been widely discussed in the last two decades in the USA and the UK, but until recently, the subject of corporate governance has attracted much less attention on the European continent, in Asia, and in other parts of the world. By the late 1990s, however, corporate governance had become a major, and highly contentious, issue in all of the advanced economies and, increasingly, in developing countries as well. International organizations, including the OECD, the World Bank, and the IMF have devoted increasing attention to corporate governance as a topic of global concern. The starting point for the analysis of corporate resource allocation and its governance presented in this book is a concern with the dynamics of enterprise and economic performance, and central to the process through which successful enterprises and economies improve their performance over time, as well as relative to each other, is a phenomenon that can broadly be termed ’innovation’; the term is used here in a general sense to include all activities that enterprises and economies undertake to deliver higher‐quality and/or cheaper products, i.e. it has a distinctly commercial connotation, and in particular, is not reducible to technological novelty. The particular focus of the book is a comparison of the historical development of systems of corporate governance in the USA and Germany, and given the pervasive influence of the US system as a model of corporate governance in contemporary academic and policy debates, an especially detailed historical analysis of the evolution and influence of governance institutions in that country has been done; this reveals the value of the organizational control framework for understanding the economics of corporate governance in the USA, and highlights the serious deficiencies of alternative theoretical treatments of the contemporary US system that have often led to what, in historical perspective, are serious misunderstandings of its essential elements.

In historical perspective, market control over the allocation of US corporate resources stands out as a recent phenomenon, since for most of the twentieth century, salaried managers have exercised control over resource allocation by US corporate enterprises. In this chapter, the lengthy and complex historical process through which the institutional foundations of managerial control emerged in the US corporate economy is discussed. The focusing, in particular, is on the role of the integration of managers as members of business organizations, the diffusion of share ownership, the changing interaction between the stock market and the public corporation, and the transformation of corporate law in facilitating the separation of beneficial ownership of corporate stock from strategic control over the allocation of corporate resources. The main sections of the chapter are: 3.2, The historical foundations of managerial control; 3.3, Managerial control and the Great Depression; 3.4, and New deals, old deals––which discusses changes in corporate governance, workers’ rights and unionism, and defence of the corporate manager's right to manage.

This chapter discusses critically the main criticisms of the use of cost‐benefit analysis in environmental policy, such as the incommensurability of environmental values with the values born by marketable goods, and the related unreliability of estimates of peoples’ willingness to pay for environmental protection. While it is found that there is some strength in these criticisms, it is still necessary to take account of the resource constraint involved in decisions concerning public goods. Furthermore, a democratic society needs some impartial and transparent process for solving allocation problems. However, the need to reconcile the valid objections made by environmentalists to cost‐benefit analysis with the problems raised by resource constraints raises new problems of political theory and institutions.

The resource allocation and budgeting process is one of the most powerful stages of planning. Resource allocation refers to the distribution of resources, and in particular finance, from the centre to peripheral levels. Budgeting implies the more detailed determination of precisely how these funds are to be used. This chapter first outlines the major types of budget. It then looks at the main approaches to budgeting and resource allocation, and lastly discusses financial management issues relevant to the planner.