The latest issue of CentrePiece, the magazine of LSE's Centre for Economic Performance, is now available. The summer 2005 edition includes articles on the following:
Does Management Matter? A new look at management practices across firms and nations
There are wide and persistent differences in productivity across firms and countries. A new study by Nick Bloom and colleagues uses a pioneering approach to measure management practices and assess their importance in driving these variations in economic performance. Looking at more than 730 manufacturing firms in France, Germany, the UK and the United States, they find that US firms are on average the best managed, with the Germans second, the French third and the UK last.
The study also finds that product market competition and weak labour market regulation are key drivers of good management practice. But although the UK has moderately high levels of competition and low levels of regulation, its firms are the worst managed on average: while some UK firms use world-class management practices, others are among the worst.
Children of the Revolution: the economic impact of '1968' in France
New research by Eric Maurin and Sandra McNally reveals that France's short-lived 'revolution' of May 1968 had long-term benefits for the angry students - and later for their children. The lowering of exam thresholds that year enabled a significant proportion of students to pursue more years of higher education that would otherwise have been possible. This was followed by a significant increase in their subsequent wages and occupational attainment, particularly for middle-class students.
What's more, because there is a relationship between parents' educational achievement and that of their children, these returns were transmitted to the next generation. These findings have important implications for the debate about widening access to higher education, indicating that the returns to an extra year of higher education may be at least as large as to an extra year of compulsory schooling.
Location, Location, Location: the economic consequences of Germany's post-war division
Germany's experiences after its post-World War II division provide strong evidence for the importance of market access as a driver of economic prosperity, according to new research by Stephen Redding and Daniel Sturm. West German cities close to the new border were suddenly cut off from their nearby trading partners in East Germany and, as a result, experienced a marked relative decline in population growth.
The researchers find that population in the border cities actually fell between 1960 and 1980, while population in the non-border cities continued to grow. Over the 40 years of division, there was a cumulative reduction of one third in the size of border cities relative to non-border cities. Smaller cities were disproportionately affected.
Small isn't Beautiful: the cost disadvantages of small remote economies
Small remote economies like Anguilla and Vanuatu face huge competitive challenges, not least the higher costs of doing business. New research by L Alan Winters and Pedro Martins measures the size of their cost disadvantages and explore potential solutions. They conclude that the sources of income necessary to keep some small economies going are likely to be external. And if small countries' income sources are not maintained, many of their inhabitants may seek to work abroad.
As the world economy becomes more integrated, small economies are feeling greater competitive pressure and losing some of the advantages they had previously taken for granted, such as preferential trade access to rich countries' markets. The study finds that 'micro' and very small economies - those with 200,000 inhabitants or fewer - face particularly tough challenges. Where smallness doesn't seem to matter, the secret is to integrate extremely closely with neighbouring large countries. And while tourist industries on small tropical islands may be viable, they need to manage costs carefully.
Performance Pay for Teachers: is it working?
The introduction of performance-related pay in England's schools has had a generally bad press. But new research by David Marsden and Richard Belfield find that it is starting to have a positive impact both on school management and pupils' academic achievements.
The researchers have regularly surveyed more than 300 head teachers and 1,000 classroom teachers since just before the new system of performance pay and performance management was first introduced into schools in the autumn of 2000. The responses indicate that performance management is making it possible to integrate classroom teaching objectives with those of the whole school. What's more, schools that improve their goal-setting also improve their pupils' academic results.
Trade Unions: resurgence or demise?
Trade unions have been in decline in Britain for 25 years. A new book edited by Sue Fernie and David Metcalf - and featuring contributions from most leading analysts of the labour movement - takes a generally pessimistic view of their likely future. Despite rising public sector employment and a variety of New Labour initiatives, union membership is unchanged since 1997. And with around 12 per cent of privately employed workers as members, the future for private sector unionisation looks bleak.
Circling the Wagons: unions' part in their own decline
The conventional explanation of union decline in Britain tends to stress the impact of outside forces: macroeconomic and political factors restricted unions' ability to sustain the membership advances of the 1970s across subsequent decades. But according to Paul Willman, it is not likely that unions today could take advantage of even the most favourable circumstances for growth without substantial internal reform. He is particularly critical of union mergers, which fail to bring down costs, fail to improve performance and fail to attract new members.
Public Service Unions: challenges of the reform agenda
The government's 'modernisation' agenda for the public services has put considerable pressure on unions in the sector, giving them the dual challenges of articulating a coherent national policy response and ensuring effective organisation and representation at workplace level. New research by Stephen Bach and Rebecca Kolins Givan highlights the degree to which public service unions operate in an environment of continuous restructuring, in which they have to contend with numerous public and private sector employers, and invest in workplace organisation to ensure a visible union presence that can deal with multiple terms and conditions of employment.
At the national level, the government needs to be persuaded that the unions have a convincing vision for the future of public services. But at the same time, the unions are starting to develop their own reform principles, which could attract public support for a distinctive vision of public service provision.
Unions in Germany: better placed than their British counterparts?
Like British unions, unions in Germany face the serious problem of crumbling membership. Union membership peaked in 1981 and has fallen ever since. Union density too has fallen with less than a quarter of German employees now members. And as in Britain, the sustained decline in membership and density seems to have been the consequence of both external factors - such as changes in the composition of the workforce - and internal factors - unions' own structures and policies.
New research by Claus Schnabel finds that behind the mask of a unified labour movement in Germany, there is a whole range of different union views and strategies, ranging from 'social partnership' to 'countervailing power' against both employers and government. He argues that it is high time for Germany's unions to define what they stand for in the twenty-first century and to find convincing strategies for reversing the various economic and political trends working against them.
From the Webbs to the Web: a new union form?
An inappropriate pessimism dominates discussions of the future of unions, according to Richard Freeman. Yes, union density is falling in the private sector and union influence is falling in Britain and many other countries. But some unions are responding to their difficulties by undertaking innovations using the internet that have the potential to improve union services and lower costs to members. Combining online activities with offline activities could create a new form of worker power.
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Contact: Romesh Vaitilingam, tel: 0117 983 9770, email: Romesh@compuserve.com.
CentrePiece is the magazine of the Centre for Economic Performance. It is published three times a year. The Summer 2005 issue is Volume 10 Issue 2. Cover price £5; subscription rates on application to 020 7955 6963.
The Centre for Economic Performance is an independent ESRC funded research centre based at the London School of Economics and Political Science (LSE). Its members are from LSE and a wide range of universities within the UK and around the world.
8 September 2005