Agenda setting power and moral hazard in principal-agent relationships: Evidence from hospital budgeting in Norway

Abstract. The article addresses a public sector principal-agent relationship under a financial regime of block grants. Two types of questions arise in principal-agent relations in this setting. The first is whether a public sector agent can force the principal to approve budgets that are away from the principal's ideal point, or if it is the principal that is the strong party in the relationship and can determine the agent's budget. The second is whether the agent can exploit a situation of asymmetric information or neglect from the principal, to lower efficiency. Predictions from different assumptions of the principal-agent relationship are empirically tested on data from counties and county run hospitals in Norway. Results show that counties have the upper hand in the relationship and can set hospital budgets. However, agents reduce efficiency when budgets are increased and counties can not prevent efficiency from falling by monitoring the agent. Under a block grant financing system counties face a tradeoff between cost-efficiency and production. Low budgets lead to high efficiency and low production. High budgets lead to low efficiency and high production.     

Shaping the Constitutional Dialogue on Federalism: Canada's Supreme Court as Meta-Political Actor

This article challenges the view that the Supreme Court hasbecome the predominant authority on the constitutional distributionof rights and entitlements among governments in the Canadianfederation. By assuming this position of supremacy, criticscontinue, the Court has usurped key policy functions that belongto political actors, a move that has undermined democratic governancein Canada. Against this view, we argue that the management ofCanada's federal constitutional architecture is a responsibilitythe courts share with key political actors. We describe theCourt's role as meta-political, whereby the Court's federalismjurisprudence supplements rather than subverts the constitutionalrole of political actors. We develop our thesis in relationto two subnational constituencies with a distinctive constitutionalstatus in Canada: the province of Quebec and Aboriginal FirstNations.     

The Socioeconomic Impacts of Structural Adjustment

The 1980s were painful years of structural adjustment during which many developing countries abandoned statist economic models in favor of market-oriented paradigms. The proponents of structural adjustment, including international lending agencies such as the IMF and World Bank, argued that reforms were necessary to restore growth and curtail inflation. The opponents of adjustment claimed its macroeconomic results were not a foregone conclusion and, regardless of them, such changes would drastically affect the already precarious position of the poor. We use data from sixteen Latin American cases to examine the socioeconomic impacts of structural adjustment. Adjustment was weakly associated with growth, and reform did seem to reduce inflation. Counterintuitively, the extent of structural adjustment appears to be negatively associated with both poverty and inequality. Finally, empirical data show that low levels of growth or even mere economic stability are the best remedy for poverty and inequality.     

Pathways to work for low‐income workers: The effect of work in the temporary help industry

This paper provides new evidence to inform the policy debate about the effect of a newly important industry—the temporary help industry—on the labor market outcomes of low‐income workers and those workers who are at risk of being on public assistance. The core issue of whether temporary help work harms the long‐term prospects of disadvantaged individuals depends critically on the alternatives available to the worker. Temporary employment results in labor market outcomes that are better than not working at all. For example, while nonemployed public assistance recipients have only a 35 percent chance of being employed a year later, those who were in temporary employment have almost twice the likelihood of being employed in the same period. These findings, if correct, would support the use of temporary agencies by welfare programs. © 2003 by the Association for Public Policy Analysis and Management     

'All things richly to enjoy': Economics and Politics in Locke's Two Treatises of Government

For all its importance, what is actually said about money in Two Treatises is highly obscure. Comparison with Locke's 1668–74 writings on interest reveals a common understanding of the function of money, akin to that of contemporary mercantilists, which illuminates many difficulties in the chapter on property. These writings are the source of the main economic concepts in the Treatises ; namely, labour as the active source of wealth (which along with the Roman Law notion of self-ownership provides the basis of Locke's theory of property); money overcoming the 'spoliation limit' on the accumulation of consumables, and the idea that money is created by and derives its value from consent (which Two Treatises exploits as a justification of the unequal distribution of property). Finally, the early writings suggest how implausible it is to read a labour theory of exchange value into the Treatises .