ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Dealing with Corporate Crime: Some Lessons

At many of the big firm currently in the news for all the wrong reasons, there appear to have developed cultures that treated fraudulent disclosures as standard practice. This does not excuse top management at the wayward firms. However, the fact that similar cultures seem to have appeared simultaneously at a number of companies suggests that the root of the problem is much deeper than can be attributed to the greediness of a few executives.

Has the Financial World Arrived at a Collective Action Clause Consensus?

With truly astonishing speed (in a little over a month) collective action clauses in US bonds for sovereign issuers have moved from taboo, to a tentative first try (Mexico), to what looked like consensus on the clause (Uruguay), to more change (Brazil). What does this sudden move from a point of unwillingness to try even minimal change to one of everyday experimentation tell us about the dynamics of the underlying system? And where does this leave the policy debate?

Addressing Corporate Crime

If the markets continue to slide, a number of the regulatory proposals being currently discussed will be put in place. But will they do the job adequately? For, there is a remarkable lack of understanding about what causes corporate executives to commit the type of disclosure fraud that appears to have taken place in corporates in the past.

Perfect Market Puzzles

With the problem of sovereign debt everyone seems to assume that someone else, often referred to as 'the market', has figured out the solution. But even in the face of mounting billions in default and growing coordination problems, it looks to us as if nothing of the sort has occurred. The mechanism of the invisible hand is magical indeed - when it operates at all. But its operation is not safe to assume. Not even under the best possible set of conditions.

Airport Profiling: Cost-Benefit Calculus and Beyond

Given the reality of the terrorist threat to air travel, increased screening is something we need. But isn't it worth it to us to have everyone searched equally carefully and treated with an equal amount of dignity and humanity regardless of their ethnic, religious or racial profile? And if one must degenerate into a cost-benefit analysis for this, it is worth considering whether it is the failure to treat certain minority groups with equal humanity and dignity that causes them to be disaffected in the first place.

Restructuring Argentina's Debt: How Is It Going to Happen?

In the case of Ecuador about a year ago, to effect sovereign debt restructuring, lawyers turned to a solution embedded in the bond contracts themselves, using what is termed as an 'Exit Consent' offer. The lessons of the Ecuador experience are very relevant to Argentina today as a possible way to restructure its debt without the need for either a bail-out brokered by, say, the IMF or an international bankruptcy regime.

How to Get the Government-Owned Corporation Working

It is possible to structure government enterprises to work at improved levels of efficiency. In the private sector, for the most part, it is the markets that impose discipline. In the public sector there are generally no comparable disciplining mechanisms. However, there is nothing to prevent the creation of mechanisms for scrutiny and accountability for government enterprises.

Law and Finance : The UTI Mess

Newspapers for the past few weeks have been full of news about the UTI mess. And it is little wonder given that we have had massive losses in a mammoth mutual fund, high profile arrests, finance ministers pointing fingers at each other and even a prime minister offering to resign. Exactly what happened is still somewhat unclear, but the basics are as follows: The managers of UTI appear to have had their arms twisted (by a combination of ministerial pressures and private sector inducements) into making large investments in some flimsy high-tech stocks. Along with the rest of the high-tech equity market, UTI’s fortunes have suffered in recent times – and the losses with respect to the flimsy high-tech stocks were significant. That reversal of fortunes resulted in the once mighty UTI having to take some drastic steps such as restricting sales and repurchases of its US-64 fund. As was discovered later, however, this was not before some well-connected companies pulled out their money.

Female Labour in the Unorganised Sector-The Brick Worker Revisited

The Brick Worker Revisited Leela Gulati Mitu Gulati Revisiting Jayamma, the brick worker, after 20 years raises interesting questions about the way competitive markets are supposed to work and the assumption of rationality in economic (and social) behaviour, WE'VE known Jayamma for over 20 years now. We first got to know her when one of us was studying the lives of poor women in the brick industry [Gulati 1980]. Many years after the first project, we were examining the problems of poor widows [Gulati and Gulati 1993], and went to speak with Jayamma again. This time we were collecting data for an empirical study, and hadn't intended to do any case studies. As we were writing our article, with its broad generalisations about the problems the widows, based on 30 to 60 minute interviews with dozens of them, it struck us that Jayamma's life story had a different insight to provide from these short interviews that focused on widowhood alone. An insight that indicated the problems of widowhood were often ones that stemmed from problems that arose much before widowhood.
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