Government and Politics →
- 15 Feb 2007
- Research & Ideas
Helping Low-Income Families Save More
Marketers are quite efficient at targeting potential customers when they have money—that is, at tax-refund time. Professor Peter Tufano thinks tax time could also be perfect for helping low-income families save more. Closed for comment; 0 Comments.
- 31 Jan 2007
- Working Paper Summaries
Behavioral Decision Research, Legislation, and Society: Three Cases
Insights about how people make decisions have enormous importance for society and public policy, yet often behavioral decision findings are overlooked or dismissed in favor of arguments based on sometimes-simplistic economic theory. This is particularly true in Washington, D.C., where Bazerman provided expert testimony in government cases on auditor bias, pharmaceutical company collusion, and big tobacco, respectively. His experiences highlight the barriers to the use of the most appropriate social science under the existing legal and legislative frameworks. In this article that is based on analysis and opinion, he tells what happened and reflects on the need for social sciences, in addition to economics, to be brought to the legal and policy-making domains. Key concepts include: Economic logic lies behind preventable disasters that range from accounting scandals to the many avoidable deaths resulting from the U.S. organ donation system. Creating wise policies in society means updating our understanding of unconscious or unintentional processes in decision making and recognizing how social science today is based on rigorous science. Economic logic plays an important role in the policy-making process, but it should not be used at the expense of other social science knowledge. A smoking gun is not necessary to show that an institution is set up to encourage wrongdoing. For behavior-decision reasons, organizations are likely to prefer a status quo. Too often, when it comes to public policy, the status quo either prevails or inappropriately influences future activity. Closed for comment; 0 Comments.
- 22 Dec 2006
- Working Paper Summaries
Future Lock-in: Or, I’ll Agree to Do the Right Thing...Next Week
Most of us believe that we should make certain choices—save more money or reduce gas consumption, for example—but we do not want to carry out these choices. In psychology this tension has been referred to as a "want/should" conflict. Rogers and Bazerman show through four experiments that people are more likely to choose what they believe they should choose when the choice will be implemented in the future rather than in the present, a tendency they call "future lock-in." They also discuss directions for future research and applications for public policy, an arena in which citizens are often asked to consider binding policies that trade short-term interests for long-term benefits. Key concepts include: Tension occurs between an individual's immediate self-interest and the interests of all others, including his or her own "future self." Individuals tend to think that their future selves will behave more virtuously than their present selves. Four studies demonstrated the future lock-in effect, which describes a person's increased willingness to choose and support a binding "should-choice" when it is to be implemented in the future rather than in the present. Policymakers could leverage the benefits of future lock-in by advocating for reforms that would be decided upon in the present, but go into effect in the future. Future lock-in would encourage citizens to more heavily weight a policy's abstract merits rather than its concrete costs. Closed for comment; 0 Comments.
- 19 Dec 2006
- Working Paper Summaries
The Political Economy of Capitalism
Capitalism is often defined as an economic system where private actors are allowed to own and control the use of property according to their own interests, and where the invisible hand of the pricing mechanism coordinates supply and demand in markets in a way that is automatically in the best interests of society. Government, in this perspective, is often described as responsible for peace, justice, and tolerable taxes. Bruce Scott argues in this chapter that for a capitalist system to evolve in an effective developmental sense through time, it must have two hands, not one: an invisible hand that is implicit in the pricing mechanism, and a visible hand that is explicitly managed by government through a legislature and a bureaucracy. Inevitably the actions of the visible hand imply a strategy, no matter how implicit, shortsighted, or incoherent that strategy may be. Key concepts include: Government has two quite different roles to play in a capitalist economy, as an administrator of an ongoing system and as an innovator. Political leaders have prime responsibility for mobilizing the power to promote changes to the system. Capitalism has two hands, first the familiar if invisible hand of price mechanisms that coordinate economic actors within current frameworks, and second the visible hand of government, where it is both an administrator and an innovator. The visible hand of the state must be able to intervene in order to modernize market frameworks in a timely way, while at the same time administering and enforcing existing rights and responsibilities as a complement to the invisible hand. Closed for comment; 0 Comments.
- 13 Oct 2006
- Working Paper Summaries
Coerced Confessions: Self-Policing in the Shadow of the Regulator
Are regulators necessary? In industry, self-regulation and self-policing have been touted as a new paradigm of regulation that trades outmoded "command-and-control" strategies for industry-directed, market-based solutions. Short and Toffel's work, one of the first empirical studies to address self-policing behavior, examined a rich data set of companies' voluntary disclosures of regulatory violations under the U.S. Environmental Protection Agency's Audit Policy. The goal: to learn how violators behave when offered the option of voluntarily self-disclosing. The results show that even as corporations are given an expanding role in their own governance, the success of "voluntary" self-policing depends on the continued involvement of regulators with coercive powers. Key concepts include: Despite the rhetoric of cooperation surrounding self-policing programs, self-disclosures of violations are motivated by coercive regulatory enforcement activities. Facilities in the study were more likely to self-disclose violations if they were recently inspected, subjected to an enforcement action, or narrowly targeted for heightened scrutiny by a compliance incentive program. There was some evidence that facilities were more likely to "turn themselves in" in states where statutory immunity shielded their self-disclosed violations from prosecution. There was no evidence that facilities protected by state-level audit privilege were more likely to self-disclose. This research counsels caution regarding the extent to which government should cede regulatory monitoring to companies themselves, and suggests that self-policing can complement, but not substitute for, government regulatory inspections. Closed for comment; 0 Comments.
- 11 Oct 2006
- Research & Ideas
U.S. Tops Business Competitiveness Index 2006
The United States and Germany continue to top an annual review of the business competitiveness of 121 countries, which is compiled by Professor Michael Porter's Institute for Strategy and Competitiveness at Harvard Business School. While India climbed in the rankings, China fell. Key concepts include: The Business Competitiveness Index measures the underpinnings of a country's prosperity. While a nation's macroeconomic factors are often considered fundamental to long-term prosperity, productivity depends on microeconomic factors such as the level of company sophistication and quality of the business environment. Unless microeconomic capabilities improve, sustainable improvements in prosperity will not occur. Closed for comment; 0 Comments.
- 18 Sep 2006
- Research & Ideas
When Words Get in the Way: The Failure of Fiscal Language
Professor Jerry Green and coauthor Laurence J. Kotlikoff agree with the long-made argument that the deficit and related fiscal measures are basically labeling conventions with no intrinsic meaning. So why, they wonder, aren't economists getting the message? Key concepts include: Common fiscal measures and terms such as "the deficit" hold no intrinsic meaning, yet governments continue to use them as the basis to build economic policy. By relying on these terms and measures, economists can't truly explain the affects of the underlying fiscal policy. Generational accounting accurately describes what is really happening with economic policy: the redistribution of spending power from young and future generations to older ones. Closed for comment; 0 Comments.
- 21 Aug 2006
- Research & Ideas
How Europe Wrote the Rules of Global Finance
Following decades of liberalization, controls on cross-border capital movements are again being discussed by financial institutions, governments, and policymakers around the globe. Professor Rawi Abdelal discusses implications and the historical roles of Europe and the United States in promoting the flow of capital across national borders. Key concepts include: European policymakers, particularly the French, created regulations and enforcement that govern the majority of the world's capital flows. The U.S. has followed an ad hoc approach to capital liberalization, with no evidence it supported a liberal international financial regime. The trend toward liberalization and a lessening of capital controls on worldwide finance appears to be on the wane. Closed for comment; 0 Comments.
- 07 Aug 2006
- Research & Ideas
Whatever Happened to Caveat Emptor?
In many world nations, consumers enjoy vast protections that are relatively new on the scene. Why the rapid rise in consumer protectionism? Why do these efforts vary from country to country? A discussion with professor Gunnar Trumbull on his new book, Consumer Capitalism. Key concepts include: Until the 1960s, consumers enjoyed few regulatory protections from faulty products. The United States led the change. Consumer protections, which vary in scope and intent from country to country, influence product design. Germans favor quality; the French, innovation. Consumers benefit from these protections, but as part of a larger trend toward modernization, something in the social fabric is lost. Closed for comment; 0 Comments.
- 19 Jul 2006
- Research & Ideas
Political Turmoil and Mexico’s Economy
Professor Noel Maurer's historical research into Mexico and other countries with unstable governments shows that their economies perform better than might be expected. Why? Key concepts include: A country's political instability does not necessarily take down the economy—rules matter. The final outcome of Mexico's disputed recent presidential election will tell how far the country has moved toward democracy. U.S. attempts to reform domestic institutions of other countries have sometimes been sidetracked in favor of economic expediency. Closed for comment; 0 Comments.
- 14 Jul 2006
- Op-Ed
The Case for Consumer-Driven Medicaid
The Medicaid program is a health insurance safety net for 52 million Americans, but the price tag threatens the financial stability of the states. Regina Herzlinger looks to South Carolina for a model in consumer-driven healthcare. Key concepts include: Medicaid costs threaten the financial health of states. Consumer-driven plans dramatically control costs and improve the health of those with chronic disease. Closed for comment; 0 Comments.
- 12 Jul 2006
- Research & Ideas
Competition the Cure for Healthcare
Michael Porter is considered by many the world's foremost authority on competition and strategy. He discusses the need for fundamental reform in the way the United States delivers healthcare. Q&A. Key concepts include: American healthcare is broken structurally, rewarding the wrong actions and punishing the patient. Competition correctly placed in healthcare can reduce cost, improve physician performance, and create better results for patients. Closed for comment; 0 Comments.
- 05 Jul 2006
- Working Paper Summaries
Reinventing Savings Bonds
At one point in American history, savings bonds were an important tool families used to build assets and get ahead. While times have changed, this function of savings bonds may be even more important now, especially for the 41 million low- and moderate-income American households. Tufano and Schneider lay out a case for why savings bonds should be reimagined to help millions of Americans build assets now. Key concepts include: Allow taxpayers to purchase bonds with Federal tax refunds. Help low- and moderate-income families redeem their bonds before twelve months. Enlist private sector social marketing for savings bonds. Find a role for savings bonds in the life cycles of low- and moderate-income families. Make the process of buying savings bonds more user friendly. Closed for comment; 0 Comments.
- 05 Jun 2006
- Research & Ideas
Using Competition to Reform Healthcare
In their new book, HBS Professor Michael Porter and Elizabeth Olmsted Teisberg argue that the very structure of U.S. healthcare must be redesigned to create value and effective competition throughout the system. An excerpt from Redefining Health Care: Creating Value-Based Competition on Results. Closed for comment; 0 Comments.
- 13 Feb 2006
- Research & Ideas
The Hidden Market for Babies
Surrogates. Fertility clinics. Egg donors. Adoption. It's time to recognize (and perhaps regulate) the huge market being created by reproductive technologies, says HBS professor Debora L. Spar. She discusses her new book, The Baby Business. Closed for comment; 0 Comments.
- 06 Sep 2005
- What Do You Think?
What are the Lessons of New Orleans?
The response by public officials to the Hurricane Katrina disaster will be analyzed for years. Can lessons learned in the private sector instruct us in minimizing the suffering and damage from inevitable future calamities? Closed for comment; 0 Comments.
- 10 Jan 2005
- What Do You Think?
Public Pension Reform: Does Mexico Have the Answer?
Mexico may have found a formula for avoiding most of the misfortunes that could arise when individuals invest their own funds. What's the right way to support an aging workforce? And why is it that a concept—life-long security—that should bring comfort to all of us is so distasteful to address in public? Closed for comment; 0 Comments.
- 20 Dec 2004
- Research & Ideas
The U.S. Patent Game: How to Change It
Innovators and society are paying too high a price in the current patent system, says a new book by Adam B. Jaffe and Harvard Business School’s Josh Lerner. A book excerpt and Q&A with Lerner. Closed for comment; 0 Comments.
- 15 Nov 2004
- Research & Ideas
Solving the Health Care Conundrum
Executive summary of a presentation on reforming health care made by Professor Michael Porter at a Harvard Business School Publishing Virtual Seminar. Closed for comment; 0 Comments.
Capital Rules: The Tensions of Global Finance
With the start of the new decade, most global financial powers are rethinking a previously powerful trend toward liberalizing global finance. In his new book Capital Rules, Professor Rawi Abdelal charts the intellectual, legal, and political history of financial globalization, and the tensions facing today's world economy. Read an excerpt. Key concepts include: The year 1998 was the closest the world has come to establishing a consensus that capital's right to freedom applies always and everywhere. The world looks different to most financial policymakers in the twenty-first century, with many regions, and the United States in particular, adopting ad hoc measures that benefit their own interests but ignore the lessons learned from financial crises in the 1920s and 1930s. The European Commission is the only recognized international financial authority to support complete, unqualified capital mobility. Closed for comment; 0 Comments.