The Ukrainian Orange Revolution brought more than a new president: What kind of democracy will the institutional changes bring?

The authors discuss the institutional changes proposed in Ukraine's constitutional framework and election laws that could fundamentally alter the separation of powers and the responsiveness of Ukrainian government to the electorate. We analyze the proposed institutional changes from the perspective of what they portend for Ukraine's democratic transition. Building on the most recent vein of democratization studies examining institutional factors affecting democratic stability, we emphasize that it cannot be assumed that Ukraine is “in transition to democracy.” We conclude that comprehending the likelihood of achieving democratic stability must be contextualized in an understanding of intervening factors—political, economic, and historical—that ultimately influence democratic stability. Our analysis reminds government reform advocates that it is necessary to go beyond the basic institutional framework of proposed governmental changes in order to obtain a more comprehensive picture of democratization.     

Russian stereotypes and myths of Ukraine and Ukrainians and why Novorossiya failed

This article discusses two inter-related issues. Firstly, the factors lying behind Russia's fervent belief that its Novorossiya (New Russia) project, aimed to bring back to Russia eight oblasts of Donetsk, Luhansk, Kharkiv, Dnipro, Zaporizhhya, Odesa, Mykolayiv, and Kherson in eastern and southern Ukraine and launched during the 2014 “Russian Spring,” would be successful. Russian identity misunderstood, and continues to misunderstand, Ukraine and Ukrainians through stereotypes and myths of Ukraine as an “artificial state” and Ukraine's Russian speakers as “fraternal brothers” and Russians and Ukrainians as “one people” (odin narod). Secondly, why Ukrainian national identity was different than these Russian stereotypes and myths and how this led to the failure of the Novorossiya project. Russian stereotypes and myths of Ukraine and Ukrainians came face to face with the reality of Russian-speaking Ukrainian patriotism and their low support for the Russkij Mir (Russian World). The article compares Russian stereotypes and myths of Ukraine and Ukrainians with how Ukrainians see themselves to explain the roots of the 2014 crisis, “Russian Spring,” and failure of Russian President Vladimir Putin's Novorossiya project.     

Putting Ukraine on the map: the contribution of Stepan Rudnyts'kyi to Ukrainian nation-building

This paper examines the contribution of the founder of modern Ukrainian geography, Stepan Rudnyts'kyi, to Ukrainian nation-building. It demonstrates how Rudnyts'kyi put Ukraine on the mental map of the Ukrainian public before the declaration of Ukraine's independence in 1918. This is done by analyzing his key publications and showing how he formed a vision of Ukraine and delineated its territory to influence the perceptions of the Ukrainian public on the eve of the struggle for Ukraine's independence. Rudnyts'kyi's contribution is also viewed within the context of competition from rival modern nation-building projects in Eastern Europe, most notably Polish and Russian. The developments are also examined within Miroslav Hroch's periodization of national movements. Rudnyts'kyi played an important role in stage B (patriotic agitation) in Ukrainian national revival.     

Privatization in developing countries: ideal and reality

In both developed and developing countries, governments finance, produce, and distribute various goods and services. In recent years, the range of goods provided by government has extended widely, covering many goods which do not meet the purist's definition of “public” goods. As the size of the public sector has increased steadily there has been a growing concern about the effectiveness of the public sector's performance as producer. Critics of this rapid growth argue that the public provision of certain goods is inefficient and have proposed that the private sector replace many current public sector activities, that is, that services be privatized. Since Ronald Reagan took office greater privatization efforts have been pursued in the United States. Paralleling this trend has been a strong endorsement by international and bilateral donor agencies for heavier reliance on the private sector in developing countries.

However, the political, institutional, and economic environments of developing nations are markedly different from those of developed countries. It is not clear that the theories and empirical evidence purported to justify privatization in developed countries are applicable to developing countries.

In this paper we present a study of privatization using the case of Honduras. We examine the policy shift from “direct administration” to “contracting out” for three construction activities: urban upgrading for housing projects, rural primary schools, and rural roads. The purpose of our study is threefold. First, we test key hypotheses pertaining to the effectiveness of privatization, focusing on three aspects: cost, time, and quality. Second, we identify major factors which affect the performance of this privatization approach. Third, we document the impact of privatization as it influences the political and institutional settings of Honduras. Our main finding is that contracting out in Honduras has not led to the common expectations of its proponents because of institutional barriers and limited competitiveness in the market. These findings suggest that privatization can not produce goods and services efficiently without substantial reform in the market and regulatory procedures. Policy makers also need to consider carefully multiple objectives at the national level in making decisions about privatization.     

Pacts,Parties and Elite Struggle: Ukraine's Troubled Post-Orange Transition

This article resuscitates some of the theoretical arguments of transition studies to shed light on the complex institutional and political developments in post-Orange Ukraine (2004 – 2007). In December 2004, Ukraine's elite agreed to embark on a complex transition involving power-sharing between the Rada (parliament) and the government on one side, and the presidency on the other. The new electoral law was to be based on a fully proportional system. In the subsequent period of 2005 – 2007, two consecutive proportional elections have been held, Ukraine has had several governments, and the Rada was incapacitated for a longer period. Rival elites engaged in a zero-sum game over reforms, and attempts were made to resolve differences by several pacts. This article analyses the post-Orange transition in terms of three variables: the effectiveness of pacts, the need to abide by the transition scheme, and the effect of elections. It is argued that Ukraine has failed to deliver on pacts and timetables, but has delivered on elections. This means that its political system may be considered a minimalist and electoral based one.     

A working model to help institutionalize quality improvements in local governments

This article describes a working model designed to help leadership in public management introduce quality improvements and eventually facilitate transformations to quality organizations (TQO). By quality improvements and transformations to quality organizations -- whether in government, public education, public health, or other fields of activity -- we mean those institutional changes which reliably achieve ever greater effectiveness in accomplishing mission and responsively achieve ever higher levels of measurable service to public “customers.”

This article discusses the development of an organizational assessment instrument which the authors designed for the County of Los Angeles. Building on the Malcolm Baldrige National Quality Award and the President's Award in the USA, as well as on the review of other state and local criteria and comments received through a national review process, the authors formulated criteria of quality management with a view toward public service customers, particularly at local levels of government.

The model described has been initially applied to conduct self-assessments in four departments of Los Angeles County. It is also intended for broader use by administrative practitioners and scholars interested in the organizational change process. This article reports the development of the working model and identifies some lessons learned. The purpose of this article is threefold: (1) to inform about quality developments in the County of Los Angeles, (2) to present the working model as a point of departure for dialogue about the role which quality criteria might play in strengthening local governments more broadly, and (3) to consider the working model's possible use in facilitating shared mutual learning across geographic and other boundaries electronically.     

Why Some Cities Provide More Public Goods than Others: A Subnational Comparison of the Provision of Public Goods in German Cities in 1912

What determines a government’s level of public goods provision? Most scholarship tends to focus on the “demand side” of public goods provision, highlighting how varying patterns of social preferences shape the provision of public goods. In an analysis of municipal hospitals and infant health clinics in Germany’s 84 largest cities in 1912, this article uses an original dataset to test a variety of hypotheses to introduce an alternative logic centered around the institutional capability of local governments. The findings suggest a supply-side theory of public goods provision in which the fiscal resources of cities and the professionalism of local government officials are important determinants of the level of public goods. The implications of these findings are two-fold: first, in federal political systems, highly capable local governments—with resources, expertise and professionalism—might represent a “decentralized” or “bottom-up” path for achieving higher overall levels of state infrastructural power in a political system. Second, public health threats might serve as a crucial trigger for the development of local capacity and hence state infrastructural power more broadly.     

The early 1960s as a cultural space: a microhistory of Ukraine's generation of cultural rebels

This article analyzes the early stage of the Ukrainian “sixtiers” movement as a semi-autonomous space of cultural expression that was tolerated by the authorities and defined, developed, and inhabited by young Ukrainian intellectuals. In contrast to present-day Ukrainian representations of the sixtiers as a force acting in opposition to the Soviet regime, the spatial angle employed here reveals an ambiguous relationship with official institutions. The Ukrainian Komsomol organization in particular appears to be both a controlling and an enabling agent that, together with the Writers' Union, provided meeting venues for the sixtiers until the mid-1960s. This complex symbiotic relationship continued even after some creative youth pioneered the first attempts to claim public space for cultural events without the authorities' permission. The cultural terrain inhabited by young Ukrainian intellectuals was not fully separate from mainstream Soviet Ukrainian culture or in opposition to it, although their vibrant cultural space also reached into a world of non-conformist culture unregulated by the state. A series of government crackdowns beginning in the mid-1960s dramatically shrank this open, ambivalent space of semi-free cultural expression, imposing firm boundaries and forcing intellectuals to make political choices.     

The challenge of design of intergovernmental relations in economies in transition

The governments of Eastern Europe and the former Soviet Union are at a crucial juncture in their movement from highly centralized command economies to more decentralized market economies. While there is a belief in these countries that decentralization brings greater economic efficiency, the reality is that such a transition is a difficult process. This paper examines what types of administrative reforms are needed for the decentralization process, how far along the countries are with respect to these reforms, and what reforms are missing. As we discuss, many of the necessary administration reforms are missing and we argue that more attention must be paid to these elements for successful decentralization of these governments.

This paper examines the recent experience and reform needs of the key administrative aspects of the design of intergovernmental relations in countries in transition in Eastern Europe and in the former Soviet Union. There is a widespread realization in all of these countries that decentralizing government will help increase efficiency in the public sector just as privatization will improve efficiency in their economies. Decentralization of government operations is also attractive as a way to cement a democratic form of government. Despite the appearances of the existence of an already decentralized system, such as in the case of the Soviet Union, this experiment started in practically all cases with a lack of institutions and experience on how decentralized government operations should be organized.

As different as these countries are, there are many similarities in the reform process they are following in order to decentralize government structure. While the basic components of a decentralized system of government are emerging in many of these countries the structure of government has not fully evolved in a manner that can support such a decentralized system. Often, governments remain structured along a vertical hierarchy: information, budgetary authority, and revenue pass from the central government down to subnational levels of government while little communication or interaction exists at a horizontal level. In general, the assignment of revenue and expenditure has not been clearly defined among the two or three levels of government, central government transfers continue to occur in a relatively ad hoc manner, and the entire budgeting system still rests in many cases on more or less formal system of negotiations and bargaining among the different levels of government. There has been some change in this structure in certain countries. Over the last three years, both Poland and Hungary have legally increased the automony of subnational governments. In 1994 in Russia a new and more transparent system of intergovernmental grants has been established between the federal government and the regions. In 1994 also, Latvia introduced a more transparent formula-driven, transfer formula for the regional and municipal governments.

The focus of this paper is to develop a “blue print” for necessary changes in organization and administration of intergovernmental relations in countries in transition. While many experts have recently been discussing the public finance policy components of this new, evolving relationship among levels of government, less attention has been paid to the structural and administrative challenges and the information design issues that must be met in order to develop and support a system of intergovernmental relations.

The paper is organized as follows: First we review the major responsibilities and their allocation among levels of government, the assignment of revenue sources, and the system of transfers. We then turn to a discussion of the current experience of Eastern European and NIS countries in the context of the structural components of an intergovernmental fiscal system. Next, we analyze the organizational reforms that are necessary for the efficient functioning of a decentralized system of government in the economies in transition. Finally we “rate” the transition economies in relation to their current design of the system of intergovernmental relations and support mechanisms.     

The Politics of Local Policy-Making in Urban Bangladesh: The Case of Rajshahi City Corporation

Some of the contemporary writings provide a different outlook in adopting institutional analysis by claiming that society-rooted politics is foremost in shaping the third world's political institutions. This paper, drawing on an empirical study, puts special emphasis on understanding the nature of society rooted politics in designing the local government system in Bangladesh and how it has shaped local policy-making. By focusing on the policy-making of a municipal corporation, this paper identifies the actors and factors and their roles in the urban local governance process in Bangladesh.     

Multiculturalism,memory, and ritualization: Ukrainian nationalist monuments in Edmonton,Alberta

Canadians of Ukrainian descent constitute a significant part of the population of the Albertan capital. Among other things, their presence is felt in the public space as Ukrainian monuments constitute a part of the landscape. The article studies three key monuments, physical manifestations of the ideology of local Ukrainian nationalist elites in Edmonton: a 1973 monument to nationalist leader Roman Shukhevych, a 1976 memorial constructed by the Ukrainian Waffen-SS in Edmonton, and a 1983 memorial to the 1932–1933 famine in the Ukrainian SSR. Representing a narrative of suffering, resistance, and redemption, all three monuments were organized by the same activists and are representative for the selective memory of an “ethnic” elite, which presents nationalist ideology as authentic Ukrainian cultural heritage. The narrative is based partly upon an uncritical cult of totalitarian, anti-Semitic, and terroristic political figures, whose war crimes, ethnic cleansing, and collaboration with Nazi Germany the nationalists deny and obfuscate. The article argues that government support and direct public funding has strengthened the radicals within the community and helped promulgate their mythology. In the case of the Ukrainian Canadian political elite, official multiculturalism underwrites a narrative at odds with the liberal democratic values it was intended to promote. The failure to deconstruct the “ethnic” building blocks of Canadian multiculturalism and the willingness to accept at face value the primordial claims and nationalist myths of “ethnic” groups has given Canadian multiculturalism the character of multi-nationalism.     

Local Government Public Servants Performance and Citizens Participation in Governance in Nigeria

Abstract

This paper examines the performance of public administrators at the local government level in Nigeria. It traces the development of local governments in Nigeria from 1945 to present times. It argues that the shift in the critical decision‐making powers and functions of local government requires its public administrators to be better‐trained professionals. However, without citizens' participation in governance, public servants' accountability will be low. The study addresses the following questions: How do public sector performance and development of actions by citizens affect accountability in the local governments? How much training do public administrators in Nigeria's local governments have in public management? What is the relationship between performance and citizenship participation in local governments' development process? The question of interests in this study is how public administration at the local government level can better serve Nigeria's communities and in so doing develop authentic relationship with citizen groups, and equitably enhance public trust, legitimacy, and performance of the public sector in the nation.     

After the fall of the soviet union: the changing status of local governments in the republic of latvia

When the Republic of Latvia gained its independence from the Soviet Union in 1991, one of Latvia's first priorities was to rebuild its system of local government. This article describes many of the problems local governments in Latvia faced after 50 years of communist rule. The article also discusses the new Latvian laws which changed the structure of local government in that country. Also discussed are Latvian central government institutions which impacted on local governments in general and local government finances in particular. The unique status of the Capitol City of Riga, Latvia's largest municipality is also reviewed in detail.     

Looking for ‘the International’ beyond the West

As international attention focuses on the rebuilding of Afghanistan, this paper looks critically at the evolution and meaning of the core concepts underpinning aims and strategies for recovery: the key role of institutional development and capacity building in establishing good governance based on collaboration between state, civil society and market; the empirical consensus, over many decades, for best practice in development; the acknowledgement that recovery of war-torn societies is a development challenge. It is shown that, despite this understanding, operational practice continues to contradict the principles and lessons learned from proven experience. The financial and administrative culture of the international institutions, lack of political will, donor conditionality and recipients' contrary agendas are seen to contribute to this failure. The paper concludes by examining the implications of this analysis for the recovery of Afghanistan.     

BETWEEN STATE AND SERVICE INDUSTRY: GROUP AND COLLECTIVE WEDDINGS IN COMMUNIST SHANGHAI, 1949–1956

Abstract

Group weddings have commonly been associated with Republican China under Guomindang rule. Wedding ceremonies involving multiple couples, however, continued to be held in the People’s Republic of China throughout the 1950s and after. During the early 1950s, Shanghai’s commercial group wedding agencies marketed their services to local couples, and district governments organized what they termed “collective weddings,” hoping that couples would be more amenable to state marriage registration if they could participate in a ceremony. In 1956, the municipal government considered instituting a unified collective ceremony across Shanghai. By examining meeting minutes, letter exchanges, and records of internal government and business discussions, this article explores entrepreneurial and governmental attempts to standardize Shanghai’s group and collective weddings. Although commercial group weddings and state collective ceremonies served different purposes, their proponents faced similar organizational difficulties in the search for a standardized, economical wedding ceremony befitting “New China.”     

Hybrid Historical Memories in Post-Euromaidan Ukraine

Abstract

This article attempts to measure the multilayered, diverse historical memories of contemporary Ukrainians, drawing on a cluster analysis of nationwide survey data collected after the Euromaidan. A significant minority of Ukrainian citizens still gravitate toward Soviet–Russian narratives. These are not merely copies of those embraced in Russia, however; they include ambivalent ‘hybrid’ feelings of nostalgia for the Soviet Union while supporting Ukraine's independence. This article argues that historical memories of Ukrainians in the southern and eastern regions are amorphous and heterogeneous, and that the architects of the Novorossiya project failed to distinguish Soviet nostalgia from Ukrainophobia and separatist grievances.     

The effectiveness of network administrative organizations in governing interjurisdictional natural resources

Can network administrative organizations (NAOs) improve networks' ability to solve complex social and environmental problems? This is a classical question in collaborative governance. The public management literature examines collaborative outcomes at either the organization or the entire network level, but has not addressed “edge level” outcomes to evaluate structured interactions among network actors. Therefore, we investigate outcomes in an interjurisdictional area that reflect collaborative efforts between local governments. Recently, Guangdong Province in China enacted the River Chief System, an institutional reform that mandates the provincial government to establish an NAO to coordinate intercity rivers' management. To assess how well the reform has worked to reduce pollution, we employ the synthetic control method using monthly water quality data from 14 river monitoring sites in two neighboring cities. Our results indicate that the reform reduced the interjurisdictional river sites' pollution level effectively by 36% in the following year. This preliminary finding contributes to the collaborative governance theory and provides new evidence on whether the NAO model improves the shared outcomes between local governments.     

The new business environment of latin america and the caribbean

Latin America and the Caribbean Region experienced dramatic changes in the 1990s. Politically, all but one country, are governed by a democratically elected government. Economically, import substitution industrialization policies (ISI) followed in the past, were replaced by liberalization programs aimed at reducing inflationary pressures and creating a competitive environment.

The significant increase in capital flows to Latin America in one single year, 1990, buried the 1980s as the “lost decade,” and the successful implementation of privatization programs region-wide prompted to affirm that the 1990s might constitute the “Latin America's decade.” Where does the euphoria come from? Is there any implicit promise to be derived from such international capital flows? Will the pattern be sustained? Has Latin America begun a new era? Are unfolding events on defiance of fundamentals?

These and many other questions can be raised regarding the spectacular transformation of Latin America and the Caribbean, particularly when analysts still debate about the Mexican crisis of 1994, investors eagerly pursue the agenda of a second privatization wave, experts around the world get fascinated with the high-tech push found in Latin America, bankers apply Latin American lessons to deal with the currency crisis in Asia, and casual observers recognize the value-creation process added by Latin American entrepreneurs who challenge the most adverse circumstances. Indeed, Latin America and the Caribbean is a land full of promises and contrasts, where there exists a head to head competition between globalization and nationalism, the haves and the have-nots, capitalism and communism, literature and high-technology, markets and governments, East and West, North and South, myth and reality, and … “despair and hope.”

There is no question, however, that Latin America and the Caribbean, being she a detached wide-land, is a region of great opportunity. Since the external debt crisis of 1982 and its aftermath, democracy, open markets, economic reform and privatization have blended to offer great expectations and opportunities for business and investment in the region. The new vision strongly questioned the status quo to render a new business environment to open the doors and light up the roads of the upcoming millennium.

It is the purpose of the International Journal of Public Administration to offer to its readers, for the very first time, a special issue devoted entirely to the discussion of the new business environment of Latin America and the Caribbean. We are, therefore, grateful to all the authors who generously are sharing with us the findings from their scholarly research. Given the far reaching consequences of their contributions, we, as guest editors of this special issue, had no other choice but to incorporate the fruits yielded by this symposium of thirty-seven papers in four issues in one single volume. The papers have been sorted according to the following four focal points: Privatization of State Owned Enterprises; Mexico; Economic, Financial and Foreign Investment Issues; and Economic Integration, Trade and Cultural Issues.

Part I of this special issue on “The New Latin American Business Environment” looks at one element of the broad economic strategy followed by most Latin American countries: Privatization of State Owned Enterprises. The role of governments is to provide the framework that will allow the private sector to create wealth. Notwithstanding, this partnership between the public and private sectors must ensure the inclusion of the poorer sections of the population. In many ways, the long-term sustainability of these economic programs will largely depend on this. The ten papers selected for this part, provide insight on how this phenomenon is affecting different Latin American countries.

The first paper by Shamsul Haque argues that there is a need to analyze the social consequences of privatization programs. Further research is needed to identify the main advocates and beneficiaries of privatization programs. According to the author, “critical economic conditions have not improved significantly after privatization, and in many instances, the conditions have deteriorated.” About fifty percent of Latin America's population of 470 million people live under poverty.

The late Sister Martin Byrne (1) documents in her paper, “Cananea Consolidated Copper Company from Nationalization to Privatization: 1972-1991 ,” the problems of ownership and management faced by La Cananea, a Mexican copper mine. Sister Byrne argues that “The Cananea mines were profitable under entrepreneurial and MNC ownership, but proved to be a financial drain on the government during the paraestatal period.”

The third paper by Garcia and Dyner, examined the reform and regulation of electricity in Columbia. According to the authors, the regulatory framework adopted by the government is going to determine the success of these programs. Furthermore, “the challenge is the change of public intervention in the sector, so that it regulates, supports, and supervises the decentralized activities of the firms, and liberates resources to be invested in other areas.”

Walter and Gonzalez provide interesting philosophical arguments on technology and human resources management derived from the cases of privatized companies in Argentina. The authors consider two variants, “systemic modernization and revamping of existing teams” to invite a reopening of the old debate on technological blending. They argue, however, that “to compete you do not necessarily need to ‘ be on the frontier.’”

Joan B. Anderson examines, the “Privatization, Efficiency and Market Failure: Transforming Ecuador's Public Sector,” privatization in Ecuador through the shift experienced by development theory with respect to the role of the public sector. In this paper the author points out that “while careful privatization can be positive, privatizing monopolies like the electric utility and/or quasi-public goods like highways are likely to be detrimental to long run economic development.”

Doshi identifies the successes and failures of the privatization program in Mexico by analyzing the cases of Mexicana Airlines, Aeromexico and Telmex. The author argues that even though the government was able to sell a number of state owned enterprises, a “successful” privatization program required appropriate macroeconomic policies and defining the role of foreign investment in economic development. One can argue then, that even though the size of the state is shrinking, its role is becoming more important.

The article by Vetter and Zanetta analyze also the case of Argentina. The authors argue that in order to consolidate the economic reforms implemented by the national government, provincial reform has to take place. A number of important lessons were identified.

John M. Kirk and Julia Sagebien present, in “Cuba's Market Rapprochement: Private Sector Reform - Public Sector Style,” the highlights of Cuba's process of transition towards a market economy by analyzing the conditions that lead to a market opening as well as the ends, the means and the actors of the ensuing process of economic reform.

Walter T. Molano contributes a paper, “The Lessons of Privatization,” based on his book The Logic of Privatization: The Case of Telecommunications in the Southern Cone of Latin America by looking at privatization as a process that may end up in varied outcomes as seen from microeconomic-, macroeconomic-, and political perspectives of analysis.

The focal point of Part II is Mexico. It is very clear that since the beginning of the decade, Mexico has made major efforts to transform its economy in order to play a more significant role in the global economy. Different attempts have been undertaken leading to: first, address the aftermath of the debt crisis of 1982; second, modernize and open the economy through a structural change that have included, among other programs, privatization, deregulation, fiscal deficit reduction, and trade liberalization: and third, change the political landscape.

Ephraim Clark models, in his “Agency Conflict and the Signaling Snafu in the Mexican Peso Crisis of 1994,” the conflict as a government held option to default and introduce signaling by assuming that the Mexican government had monopolistic information on the economy's true situation. The author argues that “if steps had been taken in late 1993 and early 1994, the crisis element of the adjustment could probably have been avoided.”

Blaine's article examines the role of foreign capital in economic development. By studying the Mexican case, the author answers a number ofvery important questions: How are once protected markets going to react to a large inflow of foreign capital? How did Mexican authorities deal with these inflows? What are some of the lessons that could be derived from the Mexican experience?

Hazera's paper discusses the history and legal basis of Mexican financial groups. On the basis of various stock market and financial statement data, an examination is also made of the groups’ evolution from 1991 to 1994.

Eugene M. Salorio and Thomas L. Brewer consider, in “Expanding the Levels of Analysis of FDI for Improved Understanding of Policy issues: The Case of Mexico,” both macro-, and micro-level shifts of analysis which mutually complement one another, and yield, for example, a “components profile” of disaggregated national level FDI flows which depends on the type of the project. The authors identify far reaching implications for public policy that may be extrapolated from the case of Mexico to the new business environment faced by the Latin American countries.

Francis A. Lees suggests also, from another angle, that the crisis of December 1994 could have been avoided because the financial disequilibrium was clearly evident by mid-1994 just be looking at Mexico's GDP and balance of payments.

C. Bulent Aybar, Riad A. Ajami, and Marca M. Bear provide a comparative study of the recent experiences of Mexico and Turkey. The authors identify common elements in the development and eruption of the crises to conclude that “under capital mobility strong internal and external shocks may lead to explosive crises … even though overall macroeconomic balances are sound.”

James P. D’Mello shows in “An Analysis of Mergers and Acquisitions in Mexico: 1985-1996,” that the Mexican crisis has led to an escalation of corporate restructuring such as mergers, acquisitions and joint-ventures.

Jiawen Yang joins the current debate on the causes of the recent Mexican financial crisis by arguing that “capital inflows that are not well absorbed by the private sector will cause financial instability under a fixed exchange rate regime.”

Part III of the new business environment of Latin America and the Caribbean includes ten papers on Foreign Investment, Economic and Financial issues which add significantly to the understanding of the overall transformation carried out in recent years by this region of the world.

Christopher Korth and Ajay Samant, and Craig A. Peterson andK. C. O’Shaughnessy recognize, respectively in the following two papers, “American Depositary Receipts (ADRs) from Latin America: An Opportunity for American Investors.” and “Financial Investment Via ADRs in Mexico and South America,” the usefulness of ADRs for operationalizing international diversification.

Juan Espana surveys the literature on models and tools currently used to predict exchange rate movements, and aims to suggest market solutions, economic policy measures and institutional arrangements to currency crises. The author analyzes the origin and evolution of the 1994 Mexican Peso crisis, its contagion effects on other Latin American economies, and the measures taken by the affected countries to manage the crisis.

Prakash L. Dheeriya and Mahendra Raj provide, in “An Investigation in Exchange Rate Behavior of Emerging Countries,” insights on the role that exchange rate risk plays by identifying similarities and differences through international comparisons.

Kumar's paper examines the important role of foreign direct investment in promoting economic development. The emphasis here is on the transfer of technology through foreign direct investment.

Neupert and Montoya study the characteristics of’ Japanese foreign investment in Latin America, with a focus on Brazil and Mexico. The authors looked at the preferred modes of entry and the post-entry performance of these subsidiaries.

Thomas M. Fullerton, Jr. shows, in “Currency Movements and International Border Crossings,” through two ARIMAmodels that “northbound bridge traffic to El Paso is nonrandom and follows fairly well defined patterns each year.”

Trevor Campbell makes, in “A Note on the Current and Capital Accounts Compilation of Barbados under the Fourth and Fifth IMFEditions,” a comparison with respect to the composition and structure of the current and capital accounts of Barbados.

Janet Kelly and Alexeis Perera argue, in “Antitrust Policy in a Hostile Environment: Institutional Building in Venezuela's Procompetencia,” that the theories of bureaucracy in Latin America generally stress institutional weakness, political volatility and the politicized nature of government agencies which motivated, in Venezuela, the creation of the anti-monopoly agency called “Procompetencia.”

G. Scott Erickson and Andrea Nhuch recommend in ‘The Latin American Business Environment: Patent Protection Issues” a general hybrid system to deal with patent rights issues.

Finally, Part IV deals with a blend of Trade, Economic Integration and Cultural issues. Since much of the world still tends to view Latin America and the Caribbean in terms of stereotypes, it seems appropriate to end this special issue on the new business environment of the region with a group of papers that revisits the rich mosaic of Latin America, and permits appreciate her new reality.

Isaac Cohen argues, in “Hispanics and Foreign Policy.” that though the primacy of economics in Hemispheric relations provides an opportunity for Hispanic businesses, yet this community will have to act deliberately to benefit from the opportunities that are emerging.

Eva Kras contributes, in “The Viable Future of Mexico and Latin America: A New Business Paradigm,” with a South looking North approach for doing business that challenges the traditional view of business relations.

Guillermo Duenas argues, in “Cultural Aspects in the Integration of the Americas,” that managing cultural integration successfully requires a process of “intercultural learning.”

Andres A. Thompson, Francisco B. Tancredi and Marcos Kisil introduce, in “New Partnerships for Social Development: Business and the Third Sector,” the novel argument that corporate philanthropy can make the difference in social development because grantmaking is still the least frequent used strategy in Latin America and the Caribbean region.

Chris Robertson, Pol Herrmann and Kevin Duffy measure, in “Exploring Perceptions of Technology Between the United States and Ecuador,” perceptions of technology on the basis of the typology of motivators and inhibitors of technological growth.

Melissa H. Birch argues, in “Mercosur: The Road to Economic Integration in the Southern Cone,” that Mercosur represents, in contrast to the historical record of economic integration in the region, an adaptation to the contemporary political climate.

Wu and Longley discuss the rationale for extending NAFTA to Chile. Their study examines also how NAFTA negotiators may address issues such as trade and investment rules, intellectual property rights, and labor and environmental standards among other things.

Roger Kashlak and Srinath Beldona identify, in “Partner Reciprocity, Telecommunications Flows and Balance of Trade Patterns Between the United States and Latin America,” partner reciprocity as the issue at the core of the international long-distance industry.

Ines Bustillo extends, in “Overview of Economic-wide NAFTA Models” computable general equilibrium models to the case of NAFTA.

We hope that this special issue is informative and interesting to business-decision makers, regulatory policy makers, and students concerned with gaining an understanding of the ongoing transformation of Latin American and the Caribbean.

Finally, we are again most grateful to the contributors of articles for making this special issue possible. We would also like to thank Jack Rabin, editor-in-chief of the International Journal of Public Administration, for trusting us the delicate mission of providing to the readers a fresh view of the new business environment of Latin America and the Caribbean.     

Joint care and joint funding

One of the most important possible sources of conflict of interest between central and local governments is difference in political preferences with respect to, for example, income redistribution. If local governments are of a different political composition than the central government, they may be inclined to reinforce or weaken the redistribution policies as pursued by the central government. We empirically test whether local governments in the Netherlands do pursue income redistribution policies over and above the central government's redistribution policy and we find that the distribution of the local tax burden over the various household types differs according to the political composition of the local council.