Risk and the Outsourcing of Risk Management Services: The Case of Claims Management

Outsourcing of risk management activities is a well-established practice, involving a range of services from actuarial audits to loss control training to risk financing management to claims administration services. Surprisingly, little work has been done to examine the risks associated with outsourcing risk management activities. This article examines the outsourcing of claims management services by reviewing the research on outsourcing risks and by interviewing leading practitioners. In doing so, the authors draw some provisional observations about risks and risk costs associated with outsourcing claims management services—observations that seem generalizable to all risk management outsourcing.     

Legal Constraints and the Choice of Educational Grant Structures

Recent empirical work suggests that legalconstraints are significant in choosingstate educational grant structures. Unfortunately, the literature has not takensuch constraints into account, thus callinginto question particular grant structurerecommendations. This paper studies theconditions under which a legislature, underorder to reform its educational grantstructure, prefers foundation grants overdistrict power equalization grants. Atheoretical model is presented in which thechoice is shown to depend on the legalbasis of the court's decision, and theempirical validity of this conclusion isdemonstrated using Connecticut data and aseparate model of school districtexpenditure choice.     

Corruption,Cooperation and Endogenous Time Discount Rates

Virtually all uses of repeated games tostudy of cooperation assume that people'stime discount rates are exogenous andfixed. Here we offer an evolutionary gameembedded in a multi-period model ofinvestment and consumption in whichindividual time discounts are determined bytheir convergence to values determined byEvolutionary Stable Strategies. Oursubstantive motivation, though, iscorruption and its relationship to economicgrowth. To understand the observedrelationship between levels of corruptionand economic indicators of social welfare,we argue that corruption is a form ofcooperation that requires closeinterpersonal monitoring. If we assume,moreover, that when people discount thefuture greatly the only sustainable formsof cooperation are those that allow forclose monitoring, then our analysis can beinterpreted as a dynamic model of therelationship between corruption andinvestment.     

Economic Freedom and Taxation: Is There a Trade-off in the Locational Competition Between Countries?

This paper investigates the relationshipbetween economic freedomand taxation. We argue that an economicallyfree environment improvesthe attractiveness of a location, which, inturn, enables governmentsto levy higher business taxes. To test thishypothesis empirically, weestimate the impact of economic freedom onthe national tax policy,where the latter is measured by thecorporate tax revenue related toGNP (corporate tax ratio). We utilize adata set of 46 developed and lessdeveloped countries between 1980 and 1997and find a clear confirmationof our hypothesis. Further, a simulationanalysis reveals that the observedchange in economic freedom has equalizedthe international distributionof corporate tax ratios.     

Continuity and change: the administration of George W. Bush and US policy toward Taiwan

This paper examines recent modifications in American policy toward the Republic of China (ROC or Taiwan). It contends that, while the George W. Bush Administration may have carried out a significant readjustment of US policy, available evidence suggests that it will not endorse any major upgrades in ties with Taipei during the foreseeable future. Like previous administrations, the Bush Administration now recognizes the value of engaging the People's Republic of China (PRC). This development holds important implications for the future trajectory of America's relations with Taiwan and the PRC and for peace and stability in the Western Pacific.     

Book reviews

Journal of Chinese Political Science -     

Candidates' Ideological Locations,Abstention, and Turnout in U.S. Midterm Senate Elections

Many spatial models of voting suggest that citizens are more likely to abstain when they feel indifferent toward the candidates or alienated from them. In presidential elections, previous research offers evidence that alienation and indifference affect individuals' probabilities of voting. We find evidence that indifference and alienation also affect the decision to vote in midterm Senate elections, a context not previously explored. These individual-level effects imply that candidates' ideological locations should influence aggregate turnout by affecting the proportions of citizens who feel indifferent toward or alienated from the candidates. Our aggregate-level analysis supports this (at least in contests featuring two previous and/or future members of Congress). Our findings underscore the importance of the electoral context for understanding citizen behavior and suggest that elections featuring at least one centrist candidate may be normatively appealing since they stimulate participation.     

Adolescent Depressed Mood in a Multiethnic Sample

This research assessed whether there is an impact of race-ethnicity on depressed mood among adolescents, independent of socioeconomic status, whether gender differences in depressed mood are apparent within all race-ethnicity subgroups, and whether pubertal development influences depressed mood in a similar manner within gender and race-ethnicity subgroups. A three-stage, area probability sampling frame was utilized to select adolescents, ages 12–17 years, for an in-person interview. Depressed mood was assessed by the Children's Depression Inventory. Compared to Whites, African Americans, or Asian Americans, Latinos reported more symptoms of depressed mood, a finding that was independent of socioeconomic status. Advancing puberty was associated with depressed mood only among females, but the timing of pubertal changes, relative to ones peers, was related to depressed mood among both males and females, and among Latinos.