Click on these headings for information:
I. Papers and PublicationsII.
III. HSK Insight Series
I.
Most of M-RCBG's research is conducted through the research programs and working papers series that are listed elsewhere on our website. Listed on this page are activities and papers that do not necessarily fall within one of our programs. Readers may also be interested in an additional listing of 'business & government' publications by Kennedy School faculty - click here for the link.
John Ruggie - Human Rights Policies and Practices of Global Fortune 500 Firms: Results of a Survey. September 1, 2006
John Ruggie - Promotion and Protection of Human Rights: Interim Report of the UN Special Representative on Human Rights and Transnational Corporations. February 2006
Stephen Peterson - Automating Public Financial Management in Developing Countries. October 2006.
II.
M-RCBG is pleased to be able to provide seed grants to individual faculty for research and/or course development relating to the core interests of the Center. Awards are announced twice per year. For information on how to apply, click here. The following grants have been awarded thus far:
March 2008
Hannah Bowles: Research on gender in negotiation, specifically on how women can overcome the social risks of initiating compensation negotiations.
In past research, Professor Bowles has shown that women face a higher social risk than men from initiating compensation negotiations. In multiple experiments, Bowles and her co-authors demonstrated that evaluators were significantly less inclined to work with a woman who initiated compensation negotiations as compared to one who did not, and that this social risk of initiating compensation negotiations was significantly greater for female than for male candidates, particularly with male evaluators (Bowles, Babcock, & Lai, 2007). Funding from M-RCBG will support follow-on research to explore ways in which women can reduce these previously demonstrated social risks of initiating compensation negotiations.
Pepper Culpepper: Book Project on “Managers and the Politics of Corporate Control”
The seed grant will be used to help complete a book manuscript on the comparative politics of organized business in corporate governance. In addition to comparing overall outcomes in corporate governance reform in 18 advanced industrial countries since 1990, the book relies on case studies of four countries whose politics have been particularly interesting and worthy of study during this period: France, Germany, Japan, and the Netherlands.
Brigitte Madrian: Development of a new course on Household Finance
The field of finance has long been focused on two issues: (1) what factors determine asset prices (asset pricing), and (2) how do business enterprises use financial assets to further their own objectives and resolve agency problems (corporate finance). In his recent American Financial Association address, John Campbell outlines his vision of a new branch of financial inquiry—which he terms household finance—focused on how households make financial decisions to achieve their own objectives (Campbell, 2006). Relative to firms, households face a distinct set of financial problems and constraints: they “plan over long but finite investment horizons; they have important nontraded assets notably their human capital; they hold illiquid assets, notably housing; they face constraints on their ability to borrow; and they are subject to complex taxation (Campbell 2006).” The objective of this course is to explore this newly emerging field of household finance and the role of government in regulating the institutions that shape household behavior.
Erich Muehlegger: Industry Self-Regulation: Do Changes in Program Design Affect Outcomes? Study of the Chemical Industry’s Responsible Care Initiative
For the past two decades, in an attempt to bolster public opinion and avoid costly regulation, a number of trade associations have promoted industry self-regulation—the voluntary association of firms to control their collective behavior. A leading example of industry self-regulation in the United States is the chemical manufacturing industry’s Responsible Care initiative. The chemical industry adopted Responsible Care in the late 1980s in response to the tragic chemical accident in Bhopal, India, and it was hailed as the most sophisticated and far-reaching regime of self-regulation found anywhere in the world (Gunningham 1995). By the late-1990s, however, questions began to arise about Responsible Care’s effectiveness. Amid mounting criticism, the American Chemistry Council initiated a series of steps to strengthen Responsible Care. Is the “new” Responsible Care bringing about more consistent adoption of Responsible Care management practices? The proposed research seeks to answer this question. It will document the extent to which changes in Responsible Care’s requirements since 2000 are leading to changes in members’ environmental and safety activities.
Erich Muehlegger: Market Based Regulation: A Tool for Assuring Safe Importation of Food from China?
Over the past twelve years, US imports of food products from China have grown rapidly, increasing from $880 million in 1996 to $4.2 billion in 2006. At the same time, regulatory scrutiny, media coverage and consumer concerns related to the safety of food imported from China have also increased. The structure of the food industry in China makes regulatory monitoring and enforcement particularly challenging. The industry is highly fragmented making training, inspection and enforcement difficult. This structure also makes traditional “command and control” regulatory regimes difficult. An alternative regulatory approach is management-based regulation, which has been particularly successful in situations where the production processes are heterogeneous, the number of regulated entities is very large, the ability to detect safety problems goes beyond visual inspection, and the consequences of failure are high. These are precisely the conditions China faces with regard to food safety. The goal of this research project is to assess the feasibility and desirability of implementing management-based regulation in the Chinese food production industry as one tool for increasing food safety.
Jay Rosengard: Development of a case study on Akbank in Turkey
This will be a two-part teaching case. Part A will be from the perspective of Akbank's senior management or owners in 2001, when Turkey was hit with a severe banking crisis due to overall macroeconomic mismanagement (high inflation, high interest rates, and substantial public borrowing) and related flawed financial sector policies (mainly deregulation with poor supervision, coupled with moral hazard created by unlimited deposit guarantees). It will address such questions as the impetus for reform and strategic alternatives for reform in light both of this crisis and new government policies to address the crisis. Part B will describe what Akbank actually did, and why, with a summary of the results - the main teaching lessons will focus on how a private sector financial institution can adapt profitably to a changing policy environment. It will also include a discussion of strategic alternatives considered and ultimately rejected by Akbank, as well as Akbank's current strategic dilemmas in light of expected new government policies, especially in respect to privatization, foreign ownership, and financial inclusion.
Alan Trager: Development of a ‘public-private partnership’ module for use in HKS Executive Education programs
To support the growing demand for curricular materials in public-private partnerships (PPPs), this grant will lead to the development of a public-private partnership module for use in HKS Executive Education programs, based in part on the existing modular courses taught by Professor Trager.
October 2007
Jack Donahue: Support for the HKS-HBS Joint Degree Seminar development
KSG and HBS have authorized two new, truly joint degrees—the MPP-MBA and the MPA/ID-MBA. Along with the core curriculum of each component program, joint degree students will take three specially designed courses. This seminar is the first of these and will be taught when the joint degree program launches in the fall of 2008.
Jeffrey A. Frankel: Estimation of De Facto Exchange Rate Regimes, with Applications to China and other Asian/Pacific currencies
In July 2005, China announced a switch to a new exchange rate regime. The exchange rate would be set with respect to basket of other currencies, with numerical weights unannounced. This grant funds the next phase in on-going research related to this change. The authors hope to get a better handle on the true policies followed by China and other Asia/Pacific currencies, especially those that purport to use a basket of major currencies. They also hope that they analytic technique will more generally prove useful to other analysts, for example, to IMF staff who are now devoting more attention to analysis and surveillance of members’ exchange rate policies than in the past (in part due to US concerns about the RMB).
Robert Lawrence: The Politics of Biofuel Policy in the United States
This grant will be used to develop a case study on the politics of biofuel policy in the United States. In his January 2007 State of the Union address, President George W. Bush set a goal to reduce gasoline consumption in the United States by 20 percent over 10 years. To partially offset the use of gasoline, Bush said, the US would use 35 billion gallons of renewable and alternative fuels by 2017, including biofuels derived from plants or biomass. Bush argued that his goal for alternative fuel use was important for national energy security and environmental reasons. Observers noted that in the near term, the president’s plan would largely involve increasing the use of ethanol, a fuel additive derived from corn. At 5 billion gallons in 2006, ethanol production was a long way off from the president’s goal. The case will describe how the President came to adopt this position. It will also present alternative views on the desirability of an approach based on ethanol to achieve environmental and energy independence objectives. All told, it will allow discussion of how, on the one hand, business groups use worthy public goals to advance their private interests and, conversely, how government tries to mobilize such interests for public purposes.
Jennifer Lerner: Promoting Optimal Decisions through Accountability
In the popular view, accountability improves decision making. Indeed, many people expect that simply requiring someone to explain their decisions to others will promote more careful thought processes and better decision outcomes. However, research evidence to date reveals that different types of accountability interact with different types of decisions, resulting in some improved decisions, some unchanged decisions and some degraded decisions. Thus, accountability is no simple panacea. For an organization to best structure accountability relationships, understanding the impact that different types of accountability have on different types of decisions is essential. This research grant will address the impact of accountability when decision makers are held accountable to their constituents. This kind of accountability (i.e. to constituents), although prevalent in business and government settings, has received scant attention in the empirical literature. In the proposed experiments, we will examine how accountability to constituents affects decisions involving risk and in decisions involving scare-resource allocation.
Alan Trager: New case on public-private partnerships
This grant will fund the development of a new case exploring the use of a public-private partnership structure to create a version of Slate designed for the American Muslim community. American Muslims are a community that is vulnerable to prejudice and confusion. Their identity is challenged by suspicion of their belief system and way of life on the part of the media, government and general public. By choosing Slate as a model to frame and illuminate these issues, we hope to create an attractive alternative to the current crisis in communications and identity felt by this community.
March 2007
Linda Bilmes: Research assistance and travel related to forthcoming book on reforming the US federal workforce
The book, to be published by Brookings, is called “The People Factor”. The premise is that the federal government must change the way we manage, train, recruit and organize the federal workforce. We suggest a new civil service system, based on best practices in the private sector, the military, and the government. I am co-writing this with Dr. W. Scott Gould, who is a senior vice president of the IBM Center for Business and Government, a retired Navy Intelligence Officer, and a former Assistant Secretary and CFO in the US Department of Treasury.
Pepper Culpepper: Framing Effects: Dutch Employers and Corporate Governance
This research will analyze the the strategies of Dutch managers to defeat legislative attempts to create an active market for corporate control in the Netherlands between 1995 and 2005. During this period, an employers’ organization created expressly for the purpose of maintaining the Dutch system’s protection of hostile takeovers—the VEUO—managed to orchestrate the defeat of initiatives supported by several powerful political actors, including the long-serving Dutch Finance Minister, Gerrit Zalm; the European Union; a coalition of minority investors in the Netherlands; and a group of senior managers, led by Morris Tabaksblat, who themselves favored liberalization. The surprising victory of the VEUO is a story with much import for understanding the comparative politics of liberalization in the area of takeover regulation, and it is one that belies the expectations of many current theorists who write about the politics of corporate governance.
Joan Kaufman: Developing a China AIDS and CSR Training and Research Program
This grants supports a survey of current work in corporate social responsibility and AIDS in China, and the outlining of a strategy for developing a targeted program for Chinese companies and their international partners on AIDS and CSR.
Nolan Miller: The Role of Information in Environmental Health Policy: Measuring Household Responses to Information on Inorganic Contaminants in Private Well Water
This proposal seeks to expand our understanding of the role of information as an environmental health policy tool by examining how households respond to information on three inorganic chemical contaminants—arsenic, radium and radon—that may be present in the water from their private wells. Through a field experiment, this project seeks to determine whether changing the way information on contaminants is presented to subjects affects their decision to adopt health-promoting technologies such as filters. Using insights from behavioral economics, this study will generate advice for policymakers on how to present information in order to encourage people to help themselves.
Rohini Pande: Study focusing on how moving out of the slums into public housing projects affects the economic and business outcomes of formal and informal sector workers in Ahmedabad, located in the Indian state of Gujarat
This study focuses on how moving out of the slums into public housing projects affects the economic and business outcomes of formal and informal sector workers. Our analysis exploits the fact that, due to oversubscription, allocation of housing under multiple public housing programs in Ahmedabad occurred via lottery. We focus on two separate public housing programs –one which was open to any low income households and one which was restricted to poor households working in a specific sector of the informal economy – beedi rolling (traditional cigarette making). By collecting data in 2007 on individuals who participated in both programs, we can compare how 5-15 years after moving into public housing the employment histories, business and economic outcomes of those who were randomly allocated apartments in public housing projects differ from those who were not. The randomized nature of housing assignment offers a key benefit for our evaluation methodology. Namely, while under most circumstances, the characteristics of those who receive public housing differ from those who do not, the
allocation of housing by public lottery guarantees that at the time of the initial lottery, winners and losers looked, on average, similar on various economic dimensions. Hence, differences observed at the time of the survey in 2007 can be attributed to causal impacts of moving into public housing. In addition to its relevance for public housing policy, this research contributes to the growing literature on the importance of neighborhood effects for socio-economic outcomes and mobility.
October 2006
Jeffrey Frankel: Assessing China's Exchange Rate Regime
The once-obscure question of Chinese exchange rate policy is today one of the hottest topics in the world of international monetary policy issues. The United States has for the last few years been pressuring China to abandon its peg to the dollar and allow the renminbi (RMB; also called the yuan) to appreciate, and has claimed that China’s refusal to do so constitutes “unfair manipulation” of the currency for competitive advantage. The motivation evidently stems from concerns over the US trade deficit, where China is following closely in the path of scapegoat that was earlier tread by Japan and Korea. American firms that have trouble competing against China are of course a source of political pressure. The Chinese have resisted the pressure to appreciate, even though many economists think it may be in their own interest. This study will evaluate what exchange rate regime China has actually been following since July 2005, and will also review various hypotheses about the nature of US Treasury response.
RESULT: Click here for a working paper on this topic (a revised version of this same working paper has been accepted for publication in a forthcoming issue of the journal 'Economic Policy').
Elizabeth Keating: Pension funding database
This grant supports the further development of a database on the pension funding status of the 50 states and largest cities from 2002-4. Although the database is largely completed, it will now be supplemented with 2005 pension data as well as the new GASB 45 retiree healthcare disclosures. In addition, the pension data can most effectively be studied in conjunction with information from governmental financial statements. Remarkably, the audited financials of states and the largest cities are not available in machine readable form and must be hand collected and coded before being analyzed.
Robert Stavins: Corporate Social Responsibility through an Economic Lens
This inter-faculty research project with Professors Forest Reinhardt and Richard Vietor of the Harvard Business School entails a careful analysis of “corporate social responsibility” (CSR) in the environmental realm, the notion that firms do and ought to exceed full compliance with environmental laws, because of their broader social responsibilities. There has been a dramatic increase in the number of large corporations making claims that they “do the right thing” without regard for the impact on profits. And many other firms assert that they exceed compliance, but that it pays to do so (i.e., that it “pays to be green”). We bring to bear analysis from law, business, and economics to examine four key questions: may they, can they, do they, and should they. Previous work by the authors on this topic include Environmental Protection and the Social Responsibility of Firms (RFF Press, 2005).
Alan Trager: Public-private partnership case study focusing on Eli Lilly
This case is about efforts to combat multi-drug resistant tuberculosis. It is an excellent teaching example for managing a multinational public private partnership team. It is also rich in corporate social responsibility (CSR) and public management issues. The research and writing of the case requires extensive contacts with partners in India, China, Russia and South Africa. RESULT: The completed case is available here through the Kennedy School Case Program.
The Harvard Kennedy School Insight Series features compelling Kennedy School research and analysis on governance and global issues. Many of M-RCBG's faculty affiliates have sat for these interviews.
Pepper Culpepper on Changing Demographics in France and Europe
“I think that the riots probably are the death knell of the French assimilationist model, though that will be a hard dying for the French elite, for they are very wedded to that model.”
Archon Fung on Transparency and Civil Society
“We don’t yet know if and whether technology will be deployed in a way that really propels forward the realization of our democratic values of political accountability, or the ability of citizens to improve their judgment and level of information and command over different public issues.”
John Ruggie on The United Nations
“The United States needs to realize that it cannot simply support the United Nations only when it absolutely needs it and dump on it when it’s politically expedient to do so. You don’t treat institutions that way, the same way that you don’t treat friendships that way. You’ll have neither friends, nor allies, very long if you do."
Tony Saich on The Future of China
“I think if you talk with both academics and government officials in China, many of them are now coming to the conclusion that the severe problems for China moving forward are related to questions of governance: the levels of corruption in China, questions of transparency of budgets, questions of the qualifications of local officials, and issues to do with accountability.”
Iris Bohnet on Trust and Risk
“In order to be a successful negotiator, you have to know how to build trust, when to trust, how to work with people who have broken your trust. Only when you trust can you share information and create value. So it's hugely relevant for negotiations; it's hugely relevant for economies, for any governments."
Jeffrey Frankel on International Currency Rankings
“If you think that it’s important whether you are an international debtor or international creditor—which historically has always been considered important—then, on a number of grounds, the Euro represents a plausible threat.”
William Hogan on Energy Policy
“Relying more on private businesses and private incentives is an important policy direction. But it is also clear that the design of the rules, setting the rules of the game, and the institutions that are going to exist in that marketplace have to be set by government. It’s important for both sides of this discussion to recognize that the other side is necessary and important. …”
Calestous Juma on Paving the Road to Development with Science and Technology
"It’s a question of how to manage change and adapt to the modern world rather than simply a matter of financial resources. Funding matters greatly, in fact if you don’t have the funding you won’t make a difference. But funding alone is not sufficient."
Robert Lawrence on the Chinese Economy
“It is precisely [its] sense of competitiveness that has made China a very good global citizen when it comes to the trading regime. In an environment in which China felt less competitive, there would also be a danger that it could become more protectionist.”
Stephen Peterson on Financial Reforms in Developing Countries
“Reform of finances is very context-specific. It requires an understanding of how government procedures operate. It requires an understanding of the direction of public finance in that country. There is a tendency to look for a model or an approach for a country to adopt, and, ironically, there are very few models of success. This is a field that is littered with starts and stops.”
F.M. Scherer on Resale Price Maintenance
“I have long been in favor of a rule of reason approach. However, I have also long thought that resale price maintenance can do considerable harm to consumers, and therefore you need a toughly structured rule of reason.”
Elaine Kamarck on Homeland Security
“The intelligence system we have is one in which we are drowning in information. We are drowning in data and we are severely lacking in the capacity to make sense out of that data. People that I talked to in the intelligence community talked about the impossibility of a human mind ever making sense out of the reams and reams of information that are collected.”
Jane Nelson on Corporate Social Responsibility
“Climate change and HIV/AIDS are two obvious global challenges which no one sector, indeed, no one nation can address on its own. Not only activists, but also governments and other stakeholders are increasingly looking to the private sector—which has global reach, influence, and resources—to play a role in helping to address some of these complex problems.”
Brigitte Madrian on Americans and Retirement Savings
“I think public policy should be focused largely on giving companies the right incentives to set up plans that do right by their workers.”
David Lazer on DNA and Law Enforcement
“The key ethical question is: if you have a standard, like we seem to have had in the U.S., that a person needs to have been convicted of a crime in order to go into the database for life ... does it follow that you should be in the database simply because you are related to someone who has been convicted of a crime?"
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