Public versus Private Provisioning: Role of Education and Political Participation

This paper studies the role played by education in the public provision of private ‘merit goods’, such as healthcare, schooling, security and so on. Corruption is endemic in public provision. Better educated individuals are more effective at exerting political pressure, which reduces corruption and improves quality of the merit goods delivered. At the same time, educated elite have higher income which allows them to opt out of public provisioning and form a private club that delivers the merit good/service to its members. This may lead to deterioration of public provisioning. Depending on parametric conditions, several equilibrium configurations exist, some exhibiting multiple equilibria – with different degrees of corruption and concomitant variation in the quality of public provision and welfare of people. Under a stochastic adaptive dynamic process, almost surely a unique equilibrium will be selected, which need not be the one which isleast corrupt or most efficient. This brings in the scope for effective policy intervention. We also analyze the long run wealth dynamics and its implication for the public vis-a-vis private provisioning.

  • Prof. Tridip Ray, Indian Statistical Institute, Delhi
  • |
  • 2016-06-28

Choice of IT Governance Mode:Effect of IT infrastructure Agglomeration

Information technologies have enabled growth of large firms with multiple business units spread across geographies and markets. Governance of IT infrastructure is a key strategic priority for managing digitally-enabled operations across these firms. Specifically, firms either govern the IT infrastructure centrally or decentralize the decision-making to business units. Making this choice is challenging. Offering foundation platforms, IT infrastructure enables (or limits) the business units’ capability for digitizing business operations. Using an option-based perspective, we argue that firms’ assessment of IT infrastructure options requires considering various future scenarios. An effective governance model facilitates assessment of these scenarios. In general, firms consider costs of coordination and responsiveness, while choosing centralized or decentralized mode of IT infrastructure governance. Previous research examines how the characteristics of business unit or central headquarters, or the relationship between the two, influence this choice of a governance mode. However, network effects, due to knowledge exchange between units, have been overlooked in the previous research. In this research, we argue that agglomeration effects influence the choice of a governance mode. Identifying these agglomeration effects, we assess if similarity of technologies–software and hardware–across business units influences the choice of IT infrastructure governance mode. Specifically, we propose and test if firms centralize IT infrastructure governance for a business unit that has similar hardware and software profiles as that of other business units in the firm. Study also assesses the moderating effect of organizational size on these relationships. We test relationships using data from CI Technology Database and additional data from SDC Platinum Mergers and Acquisitions, Lexis-Nexis corporate affiliation, and COMPUSTAT. We test various econometric time series models, to test our hypotheses. Study discusses the academic contributions and practical implications of our findings.

  • Prof. Pankaj Setia, University of Arkansas, US
  • |
  • 2016-06-17