In employer-provided pension plans and individual retirement saving accounts, contributions over the working lifetime are used to purchase assets that are drawn down after retirement. In contrast, public pension systems typically use pay-as-you-go (PAYG) finance. With PAYG finance, current revenue to the program – which may be derived from a tax on payroll or from general taxation, – is used to finance current pension expenditure. Such a pension program is therefore a form of tax-and-transfer system, akin to other elements of the public welfare program. Given these general issues, this article describes an actuarial-based system and contrasts it with an explicitly redistributive program. It then delineates four dimensions in which public pension systems diverge from this actuarial benchmark, providing actual illustrations for OECD countries. The next section considers the limited empirical evidence on whether, in practice, deviations from an actuarial basis to the public pension system actually affect household behaviour.
Mitchel Y. Abolafia
Aidan R. Vining and David L. Weimer
This article aims to relate some of the core ideas of NPM (new public management) directly to their economic foundations by reviewing relevant theory and empirical evidence. This overview is limited in two ways. First, it focuses on the more strategic end of the NPM agenda and says little about important tactical issues, such as improving accounting procedures within agencies, more visionary leadership, or the potential of performance auditing. As far as present knowledge encompasses, economics offers little specific advice to public managers about these issues. The article focuses, therefore, on issues such as contracting-out and privatization that are believed to be informed by economics. Second, the focus is primarily normative, though managers' motivations cannot, and should not, be completely ignored. Some positive theory proponents believe that a primarily normative focus is largely a waste of time—that contracting-out decisions, for example, will be driven by bureaucratic self-interest, however complex that self-interest is to model.
Veljko Fotak, Jie Gao, and William L. Megginson
This chapter introduces the financial role of sovereign wealth funds (SWFs), which represent another form of investor with new corporate governance implications. It considers the argument that SWFs are the result of an evolution process of state ownership, and that they lessen the governance problems connected with government control of productive assets. It defines sovereign wealth funds, discusses their investment patterns, and describes their historical evolution. The chapter then presents a model of the role that SWFs have in the corporate governance of the companies in which they invest. The chapter also uses this model to study the successful case of China’s SWF in reorganizing the domestic banking system.
Ian Kirkpatrick, Chris Lonsdale, and Indraneth Neogy
In many countries governments and other funder of health services have become increasingly reliant on the advice of management consultants. In this chapter we focus on the nature and impact of this change drawing on a variety of secondary sources. Following a review of the wider literature on management consulting we look mainly at the UK experience to discuss how the role of consultants in health has evolved over the past four decades and with what consequences. A key conclusion is that the involvement of management consultants in health has been extensive, helping, as partners in government, to shape both the implementation and inception of new public management (NPM) reforms. However, we also point to the need for more research on this topic to better understand the impact this consulting advice is having and how the role of consultants might vary within and between different national health systems.
Using an institutional theory framework, this chapter discusses the place of the pharmaceutical industry within the health care organizational field, and the wide-ranging effects the industry has on the other organizations in the field. It then provides a snapshot of the discourse that has emerged about the pharmaceutical industry, and about commercialization and marketization of the health care more generally. This paints a picture of deep ambivalence toward the pharmaceutical industry, both within and between stakeholder groups. The chapter ends with an effort to explain this ambivalence as the effect of competing institutional logics. This, in turn, points to some suggestions as to how the pharmaceutical industry might be better accommodated within the health care organizational field, without losing sight of the need for ongoing critique of industry behavior.