This paper establishes a relationship between the observability of common shocks and optimal organizational design under a multiagent moral hazard environment. The choices of organization and investment on information about common shocks are determined jointly, in a Walrasian equilibrium model where the commodities traded are memberships in organizations. Numerical results reveal that both coop...

A process of endogenous human capital formation is analyzed in combination with the existence of trade unions and banks. By lowering opportunity costs for schooling, trade unions provide incentive for human capital investments for parts of the workforce. Imperfect competition in the banking sector creates a self-selection situation favorable for long-term investment giving firms the possibility...

Households in developing countries use a variety of informal mechanisms to cope with risk, including mutual support and risk-sharing. These mechanisms cannot avoid that they remain vulnerable to shocks. Public programs in the form of food aid distribution and food-for-work programs are meant to protect vulnerable households from consumption and nutrition downturns by providing a safety net. In ...

Using a simple two-firm, two-period model, we analyze for a developing economy the process of ‘entrepreneurial entry,’ that is, entry by new firms into an industry that did not previously exist in that country, focusing on the choice between formal and informal status. Thus we explore issues such as how informality may enable an entrepreneur to test the profitability of an industry without incu...

Using data from a randomized control trial in Sri Lanka, this paper explores whether cash and in-kind grants helped microenterprises approach the productivity level of SMEs. The paper first estimates production functions and subsequently treatment effects on TFP levels. Most significantly, more able and more risk-averse owners benefit from the larger in-kind grant. Also, the larger in-kind gran...

Over the last couple of decades, it has become a commonplace to claim that “institutions matter” for economic development. Yet, institutions are not exogenous but the result of human action. It is argued here that the values and norms held by substantial parts of society’s members are an important determinant of its institutions. It is further argued that values and norms have both a direct and...

The Plesiomonas shigelloides 302-73 strain (serotype O1) wb gene cluster encodes 15 proteins which are consistent with the chemical structure of the O1-antigen lypopolysaccharide (LPS) previously described for this strain. The P. shigelloides O1-antigen LPS export uses the Wzy-dependent pathway as correspond to heteropolysaccharides structures. By the isolation of two mutants lacking this O1-an...

Economic and rent-seeking outcomes are determined jointly in a dynamic general equilibrium model of corruption, public spending and growth. In an economy with government intervention and capital accumulation, state-appointed bureaucrats are responsible for providing public goods, which contribute to productive efficiency. Corruption arises because of an opportunity for bureaucrats to appropriat...