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The purpose of this paper is to analyze a recent proposal by the State of New York that would subject a large portion of the credit default swap (CDS) market to state‐based insurance regulatory oversight.

Using the collapse of AIG as an example of the systemic risk inherent in unregulated CDS transacting, the Coase Theorem is then applied to determine the optimal level of CDS regulatory oversight.

Although CDSs resemble insurance contracts in many respects, they are also uniquely complex financial instruments that are continually changing and thus not well suited for the antiquated state‐based model of insurance regulation. Furthermore, the external forces that influence state‐based regulatory decision‐making are likely to produce inefficient regulation.

The Coase Theorem states that the optimal level of regulatory oversight is the one that causes market participants to internalize the risk inherent in transacting and does so at the lowest cost. Because of the complexity of CDS contracts and the unique forces that guide state‐based regulatory decision‐making, the State of New York's proposal is ill advised.

By utilizing a law and economics perspective, it becomes clear that although a state‐based model of regulatory oversight may force market participants to internalize systemic risk, it is nevertheless suboptimal because it does not do so at the lowest cost.

The end of World War II brought about many economic changes, among them the tremendous increase of US manufacturing activities in Western Europe. This astronomical increase of foreign direct investment (FDI) required a new theory ‐ an economic theory of foreign direct investment. International economic theory, which traditionally had ignored the FDI decision, was not able to explain the FDI decision, nor could it explain the phenomena of multinational corporation (MNC). In a world of perfect competition, foreign direct investment would be absent. And when all markets operate efficiently, when there are no external economies of production and marketing, when information is costless and there are no barriers to trade or competition, international trade is the only possible form of international involvement. Logically, it follows that it is the departures from the models of perfect competition that must provide the rationale for foreign direct investment. Since, according to the Heckscher‐ Ohlin‐Samuelson (neoclassical) model, trade of goods will equalize factor prices in a world of factor immobility. In fact, the FDI decision is even ignored by new international economics which, since the late 1970's, has utilized new developments in the field of industrial organization. Proponents of these new theories have developed models that emphasize increasing returns and imperfect competition and see the possibility that government involvements in trade (trade restrictions, export subsidies, etc.) may under some circumstances be useful. All of this is done while foreign direct investment is ignored.

In order to answer this question, it will first be necessary to distinguish between political and economic correctness on the one hand, and then between Austrian and mainstream economics on the other.

To provide an evaluation of an EU spectrum policy proposal aimed at furthering the goals of the i2010 Information Society initiative.

This paper revisits the methodology premised on neoclassical principles devised by Ronald Coase. An evaluation of EU spectrum reform based on the work of J.R. Commons is proposed.

The approach by Coase fails to take into account the need for institutional reform of the spectrum management process. The approach of J.R. Commons identifies areas that will have to be addressed if the proposals for EU spectrum reform are to be met.

The methodology advanced by J.R. Commons provides a more complete account of interdependent variables associated with spectrum management and is likely to lead to workable solutions to this complex policy problem. However, it is less theoretically coherent than Coase's model.

Recommendations for reform and problem areas are suggested that consider both market and extra‐market valuation of the spectrum resource.

This paper addresses this issue and provides an alternative model based on institutional economic analysis using the methodology given by J.R. Commons.

This paper aims to take a step in this direction and use the high dimensional fixed effects and quantile regression discontinuity design to test the managerial Coase theorem, which provides an institutional perspective for us to gauge the impact of private property rights on firm performance and the effect of management costs on intermediate inputs.

This study first uses high dimensional regression discontinuity designs to examine the impact of privatization on firm performance in China between 1998 and 2013.

Results indicate that privatization effects increase average outputs of the firm by around 10% given lower management costs, and management costs increase intermediate inputs by more than 50% points. Using data from annual surveys to test managerial Coase theorem, the authors show that management costs negatively affect the marginal effect of privatization on the average outputs of the firm. The positive impact on the investment in intermediate goods and services is larger in magnitude under higher management costs.

The authors develop the managerial Coase theorem. Today, given lower management costs, private property rights provide an incentive structure for a firm to maximize the value of the assets and expand the boundaries.

Uncertainty means that transaction costs have to be incurred by organisations whenever they make an agreement. These costs include time and money spent searching, drawing up and enforcing contracts and in dealing with contingencies. The concept of transaction costs is traced from its originator, economist Ronald Coase, to its more recent development by David Kreps. Good reputations, themselves a product of successful corporate communications activities, tend to reduce internal and external transaction costs. Given a competitive environment those firms with lower transaction costs, as a result of high reputations, will tend to survive better than those with weak ones.

This paper aims to provide an analysis of the UK's experience with spectrum trading using data from Ofcom's transfer notice registry and the UK statutory instrument on spectrum trading.

The legal framework for spectrum trading is outlined and the data from Ofcom's transfer notice registry is subjected to three analytical techniques: descriptive statistical analysis, a binary logistic regression and volitional pragmatism.

A descriptive account of the empirical observations associated with spectrum trading shows that most trades (however defined) occur in business radio. A binary logistic regression of the transfer notice registry data demonstrates that trading is more likely to occur where the buyer and seller of a radio license are in the same service/industry. This analysis is inconclusive however due to lack of data. A third analytical technique, volitional pragmatism, suggests that the interdependency inherent in radio communications makes the scope of spectrum trading less workable as a mechanism of co‐ordinating spectrum use and users than previously assumed.

An approach to evaluating the real‐world efficacy of spectrum trading given the operational goals of a national regulatory authority is provided.

The purpose of this paper is to consider the impact of Baumol’s work on entrepreneurship has had on framing the economic development puzzle.

In many ways, the intuition behind the paper is straightforward. Entrepreneurs allocate their time and attention based on the relative payoffs they face in any given social setting. If the institutional environment rewards productive entrepreneurship, then the time and attention of entrepreneurial actors in the economy will be directed toward realizing the gains from trade and the gains from innovation. If, on the other hand, there are greater returns from the allocation of that time and attention toward rent-seeking and even criminal activity, alert individuals will respond to those incentives accordingly. The simplicity of the point being made is part of the brilliance in Baumol’s article. As with other classics in economics, once stated the proposition seems to be so basic it is amazing that others did not put it that way beforehand.

It has been 25 years since Baumol published his paper in the Journal of Political Economy, and as pointed out, it has had a significant scientific impact. But to put things in perspective, James Buchanan’s “An economic theory of clubs” published in 1965 has accumulated roughly 3,500 citations, F.A. Hayek’s “The use of knowledge in society,” published in 1945 has over 12,000, and Ronald Coase’s “The problem of social cost” published in 1960 has over 28,000 citations. So Baumol’s paper would put him in rather elite company. The great strength of the paper is to focus the attention on the relative payoffs of productive, unproductive and destructive entrepreneurial activity. But one of the most significant disappointments of the subsequent history of this paper is a methodological one. The comparative case study approach that Baumol employed did not result in a renewed appreciation for narrative forms of empirical research in political economy. It could legitimately be argued that the sort of questions about the fundamental institutional causes of economic growth and development can only be captured with these more historical methods. Attempts to force fit this analysis into a set of methodological tools which have already revealed themselves to be inadequate to do justice of the role of institutions and disregard the underlying cultural norms and beliefs that characterize human sociability.

In this paper, the authors will focus on the contribution made by Baumol’s 1990 paper on the field of comparative political economy, and in particular on the literature on transitional political economy. Section 2 places Baumol’s argument in the context of the failure of neoclassical growth theory. Section 3, the authors argue that although the Baumol framing was an improvement over the old comparative economic systems literature, contemporary transitional political economists have failed to fully realize the implications of the institutional revolution. They have therefore been unable to understand the causes of the heterogeneity of outcomes among those countries that transitioned from communism to the market economy in the 1990s. In Section 4, the authors argue that the political economy of transition will gain from a more sophisticated view of the economic process of the market economy, an appreciation of the entrepreneurial function, and a deeper understanding of the role of formal and informal institutions and their effect on entrepreneurship. The authors will illustrate the point with some examples from the recent history of the Russian political and economic transition. Credible commitment problems and the deficiencies of the institutional reforms of the early 1990s were responsible for the failure of reallocating the entrepreneurial talent that existed in the Soviet economy to productive economic activities. The framework can therefore be used to solve the puzzle of why the announced liberalization of Russian markets and privatization of previously state-owned resources led to economic stagnation, the growth of black markets, and the rise of organized crime, instead of economic development through the operations of smoothly operating markets. Section 5 briefly concludes.