The logics of political business in state-owned enterprises: the case of Indonesia

2019 ◽  
Vol 14 (5) ◽  
pp. 709-730 ◽  
Author(s):  
Indri Dwi Apriliyanti ◽  
Stein Oluf Kristiansen
Keyword(s):  
Good Governance ◽  
Separation Of Powers ◽  
Continuous Process ◽  
Business Environment ◽  
Rent Seeking ◽  
Business Practices ◽  
Checks And Balances ◽  
Content Type ◽  
Organisational Structures ◽  
The Government

Purpose The purpose of this paper is to illuminate the hidden process of collusion among power holders in state-owned enterprises (SOEs) in an emerging economy, which endures despite comprehensive reforms towards democracy and good governance. Why are mechanisms of checks and balances not functioning in the way they should? Design/methodology/approach The analysis is based on in-depth interviews with board members, executives, politicians, bureaucrats and representatives from auditing boards involved in the management of SOEs in Indonesia. Findings The findings reveal practices of collective conservatism, reciprocal opportunism and normalisation of corruption. The costs of getting into powerful positions are so high that conglomerate business owners gain control over the management of SOEs. The authors use the terms “wall-building and gatekeeping” to explain such cases. Research limitations/implications There is a continuous process of wall building and gatekeeping occurring among business oligarchs, bureaucrats and elected politicians in Indonesia. New entrants into the system are co-opted by the established elite. Practical implications This study shows collusion, rent-seeking and corruption among political and business elites as well as top officials in the government hinder good governance reforms in state-owned Indonesian enterprises. Social implications Collusion and illicit business practices in SOEs are clearly grounded on wall building and gatekeeping. Tackling this problem is a precondition for good governance and an improved legal and regulatory business environment in Indonesia. The ideal separation of powers and the checks and balances for good governance apparently need more than a democracy to break through. A further strengthening of the free press and critical academics will be one crucial contribution. Originality/value There is generally a lack of understanding of the context of corruption, such as the influence of institutional and organisational structures. The topic of corruption is also under-researched due to the difficulty of finding empire evidence. This paper contributes to explaining why new political and organisational structures, such as a democratically elected parliament and a particularly designed corruption eradication commission, are not able to hinder rent-seeking practices and illicit political business in state agencies.

The Separation of Powers in African Constitutionalism

2019 ◽  
Author(s):  
Charles Manga Fombad
Keyword(s):  
Rule Of Law ◽  
Good Governance ◽  
Separation Of Powers ◽  
Common Denominator ◽  
Checks And Balances ◽  
The Rule Of Law ◽  
Pure System ◽  
Key Innovation ◽  
Anglo American ◽  
The Government

One reason why dictatorships flourished in Africa until the 1990s was that constitutions concentrated excessive powers in presidents. The democratic revival of the 1990s led to the introduction of new or substantially revised constitutions in a number of countries that for the first time sought to promote constitutionalism, good governance, and respect for the rule of law. A key innovation was the introduction of provisions providing for separation of powers. However, in many cases the reintroduction of multipartyism did not lead to thorough constitutional reform, setting the scene for a subsequent struggle between opposition parties, civil society, and the government, over the rule of law. This reflects the complex politics of constitutionalism in Africa over the last 60 years. In this context, it is important to note that most of the constitutions introduced at independence had provided for some degree of separation of powers, but the provisions relating to this were often vaguely worded and quickly undermined. Despite this, the doctrine of separation of powers has a long history, and the abundant literature on it shows that there is no general agreement on what it means or what its contemporary relevance is. Of the three main models of separation of powers, the American one, which comes closest to a “pure” system of separation of powers, and the British, which involves an extensive fusion of powers, have influenced developments in anglophone Africa. The French model, which combines elements of the British and American models but in which the executive predominates over the other two branches, has influenced developments in all civilian jurisdictions in Africa, particularly those in francophone Africa. The common denominator among the models is the desire to prevent tyrannical and arbitrary government by separating powers but doing so in a manner that allows for limited interference through checks and balances on the principle that le pouvoir arrête le pouvoir. The combined Anglo-American (common law) and French (civil law) models received during the colonial period remain applicable today, but despite its adoption in the 1990s, the effectiveness of the doctrine of separation of powers in limiting governmental abuse has been curtailed by the excessive powers African presidents still enjoy and the control they exercise over dominant parties in legislatures. South Africa in its 1996 Constitution, followed by Kenya in 2010 and Zimbabwe in 2013, entrenched a number of hybrid institutions of accountability that have the potential not only to complement the checks and balances provided by the traditional triad but also to act where it is unable or unwilling to do so. The advent of these institutions has given the doctrine of separation of powers renewed potency and relevance in advancing Africa’s faltering constitutionalism project.

scholarly journals Monopoly behavior of China’s manufacturing enterprises

2019 ◽  
Vol 2 (1) ◽  
pp. 157-179
Author(s):  
Guidong Wang
Keyword(s):  
Design Methodology ◽  
Manufacturing Industry ◽  
Rent Seeking ◽  
Content Type ◽  
Manufacturing Enterprises ◽  
Slow Decline ◽  
State Capital ◽  
The Government ◽  
Do So ◽  
Initial Jump

Purpose With the increase of state capital, corporate total factor productivity (TFP) has a tendency to jump up at first and then slowly decrease. Generally, no significant “productivity paradox” can be observed in China’s manufacturing industry. With the increase of export density, corporate TFP also shows a trend of initial jump growth and subsequent slow decline. This paper aims to discuss these issues. Design/methodology/approach Using the 1996–2013 China Industrial Enterprise Database, this paper studies the monopolistic behavior of Chinese manufacturing enterprises through the measurement of TFP and corporate monopoly power. Findings Results show that China’s manufacturing monopoly enterprises are generally innovation-oriented rather than rent-seeking. However, there are certain differences between diversified types of monopoly enterprises: the ones with state capital are more inclined to innovate than those without, whereas the ones with export delivery value are more inclined to seek rent than those without. Originality/value Therefore, the government should implement differentiated policies for diversified types of monopoly enterprises, and do so in a targeted manner fully reflecting the containment of rent-seeking and the encouragement of innovation.

Adapting the scrum methodology for establishing the dynamic inter-organizational collaboration

2018 ◽  
Vol 31 (4) ◽  
pp. 852-866 ◽  
Author(s):  
Mohammad Reza Mollahoseini Ardakani ◽  
Seyyed Mohsen Hashemi ◽  
Mohammadreza Razzazi
Keyword(s):  
Value Added ◽  
Business Environment ◽  
Professional Organizations ◽  
Business Practices ◽  
Content Type ◽  
Incremental Method ◽  
Business Environments ◽  
Project Life Cycle ◽  
Modern Business ◽  
Project Life

Purpose The purpose of this paper is to propose an applicable method for establishing the dynamic inter-organizational collaborations (DIOCs) based on the scrum methodology. Design/methodology/approach The scrum methodology embedded within the context of the DIOC project life cycle was used and adapted to being usable with specific characteristics of the project. Findings In order to succeed in the highly competitive, dynamic and changing business environments, the organizations need to change their view of business practices. The transition from the traditional status of manufacturing to the inter-organizational collaborations can be one of the fundamental changes in the modern business management. The proposed method has the capability to establish DIOCs effectively and efficiently whilst guaranteeing agility, competitiveness, and risk timely management. Originality/value Establishing collaborative alliances via association of various experienced and professional organizations and producing the value-added market’s need services is an effective and efficient solution for survival of SMEs in the current competitive, dynamic and changing business environment. So far, different frameworks, reference models/architectures, and many theoretical discussions have been presented for DIOCs context, but these representations are conceptual, empirical and generic. This paper aims to propose an applicable iterative and incremental method for establishing the DIOC which guarantees the agility and risk timely management of the establishment process and promotes competitiveness of partners.

Critical Analysis on the Comparative Advantage of Presidentialism over Parliamentary System on Liberty and National Unity in Ethiopia

2021 ◽  
pp. 1-17
Author(s):  
Sisay A. Temesgen
Keyword(s):  
Comparative Advantage ◽  
Democratic Republic ◽  
Separation Of Powers ◽  
National Unity ◽  
Checks And Balances ◽  
Parliamentary System ◽  
The Government ◽  
Executive Organ ◽  
Council Of Ministers ◽  
The Impact

Abstract The Ethiopian Federal Democratic Republic (EFDR) Constitution is promulgated in 1994. Under Article (45) of the EFDR the country is restructured from presidential to parliamentary system of government. Since then, the country has been ravaged by the gross violation of the liberty of citizens and the crisis of national unity and consensus among the diversified ethnic groups. The impact of the parliamentary system in aggravating those critical challenges and the comparative advantage of presidantialism is the most ignored political research topic. In this Article, I investigated that the blurry separation of powers of the parliamentary structure of the country has created fusion of powers which has undermined the system of checks and balances. Thus, the executive organ of the government has enabled to concentrate unchecked and unaccountable power which has manifested in the gross violation of the liberty of citizens. Likewise, Article (73) of EFDR has declared that the prime minister and council of ministers of the country to be appointed by the legislators. This has deprived their boarder popular base and authenticity; and equivocally undermined their potency and decisiveness in addressing the existing crisis of national unity and consensus. Comparatively, the presidential structure of government is defined by the firm separation of powers and genuine system of checks and balances. The direct popular election of the president enables the president and council of ministers to secure broader popular base and authenticity. Thus, it is advantageous over parliamentarian structure in terms of protecting the liberty of citizens and addressing the crisis of national unity and consensus in Ethiopia.

Perceived effectiveness of e-governance as an underlying mechanism between good governance and public trust: a case of Indonesia

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Dadang Hartanto ◽  
Juhriyansyah Dalle ◽  
A. Akrim ◽  
Hastin Umi Anisah
Keyword(s):  
Local Governments ◽  
Good Governance ◽  
Underlying Mechanism ◽  
Public Trust ◽  
The Body ◽  
Perceived Effectiveness ◽  
Content Type ◽  
Body Of Knowledge ◽  
Governance Effectiveness ◽  
The Government

Purpose This study aims to investigate the association of perceived accountability, perceived responsiveness and perceived transparency, and public trust in local government. Additionally, mediation of the perceived effectiveness of e-governance was also tested between these relationships. Design/methodology/approach Using a quantitative cross-sectional field survey, primary data was collected at local administration levels from two cities in Indonesia. The final data set of 355 respondents was then analyzed using SmartPls3 and the measurement and structural models were tested. Findings Positive results were obtained for all the hypothesized links (direct and indirect relationships). The study’s findings revealed useful insights for policymakers and researchers regarding the public’s perception of good governance and their expectations from the government, which further lead toward trust in local governments. Practical implications The study concluded that good governance practices develop and enhance the public’s trust in the government, thus provided key policy directions. Originality/value This study contributes to the body of knowledge related to good governance elements and their impact on public trust in the local government via the underlying mechanism of perceived e-governance effectiveness in developing countries in general and particularly the Indonesian context. Moreover, it is a unique study in the good governance domain while considering three good governance elements into a single theoretical framework. Previous studies have explored these elements individually with public trust, so this combined framework advances the body of knowledge. This research’s findings also contributed toward validating good governance theory with e-governance effectiveness and public trust integration in a single comprehensive framework. This research also helped answer the questions arising from past literature about declining public trust trends in local governments.

Guatemala’s economy on the way to recovery

2021 ◽  
Keyword(s):  
Climate Change ◽  
Latin America ◽  
Violent Crime ◽  
Business Environment ◽  
Policy Support ◽  
Content Type ◽  
Containment Measures ◽  
The Government ◽  
The Way

Significance National GDP nevertheless contracted by just 1.5% in 2020 -- less than almost any other country in Latin America. Resilient remittances and exports, coupled with unprecedented policy support, have mitigated the effects of the pandemic and subsequent containment measures, leaving the country better placed for recovery than its neighbours. Impacts Enduring poverty, inequality and violent crime, and the impacts of accelerating climate change, will drive further migration from Guatemala. The government will pursue banking law reforms, to reduce risks to financial activities in the post-pandemic business environment. Infighting and corruption scandals will hinder the opposition's ability to benefit from the decline of the president's popularity.

Is bribing a good strategy? Imbalanced interdependence and hazard of opportunism in bribery

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ho Wook Shin ◽  
Jinsil Kim ◽  
Seung-hyun Lee
Keyword(s):  
Instrumental Variable ◽  
Design Methodology ◽  
Resource Dependence ◽  
Business Environment ◽  
Government Officials ◽  
Content Type ◽  
Relational Contract ◽  
Current Resource ◽  
The Government ◽  
A Current

PurposeIn fragile institutional environments, firms often have no choice but bribery as the means to access the services monopolized by the government. Corrupt government officials whose resources are valuable to many different firms can easily find other firms willing to offer bribes. The purpose of this paper is to examine whether and how this imbalanced interdependence exposes the bribing firm to the hazard of opportunism from the bribed officials.Design/methodology/approachThis study draws on World Business Environment Survey (WBES) data and the instrumental variable (IV) Probit estimator with Heckman correction for the potential selection bias.FindingsThe authors find that the more firms depend on bribery to acquire governmental resources, the severer the level of opportunism they encounter from the government officials. In addition, the authors find that although the presence of a legal alternative to bribery reduces the level of a corrupt government official's opportunism that a bribing firm experiences, the more firms depend on bribery despite the presence of a legal alternative, the higher the level of the corrupt official's opportunism that the firm will experience. Finally, the authors find that establishing a relational contract with government officials reduces the hazard of opportunism.Originality/valueThe study contributes to the resource dependence literature by finding that a greater imbalance in the interdependence between two parties in bribery exposes the more dependent party to a larger hazard of opportunism. The finding that an ineffective alternative to a current resource provider would not strengthen but weaken a resource seeker's bargaining power expands the literature. The authors also contribute to the corruption research by showing the significant strategic, not legal, risk to bribing firms of engaging in bribery, which to date has not been sufficiently discussed.

The supply-side of corruption: a review of scenario, causes and prevention measure

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Nurfarizan Mazhani Mahmud ◽  
Intan Salwani Mohamed ◽  
Roshayani Arshad
Keyword(s):  
Private Sector ◽  
Business Environment ◽  
Supply Side ◽  
Public Officials ◽  
Theoretical Understanding ◽  
Content Type ◽  
Preventative Measures ◽  
Prior Literature ◽  
The Government ◽  
High Level

Purpose This paper aims to provide a proper understanding of corruption in the private sector, also known as the supply-side of corruption. It also presents the causes of corrupt practices and points out the corporations’ actions to mitigate corrupt behaviour in the business environment. Design/methodology/approach This study reviews the prior literature on the phenomenon of corruption in the private sector, its causes and the preventive measures that should be implemented. Findings Corruption in the private sector was associated with a firm’s interaction with the public sector, and the most common corruption in the private sector is grand corruption, which is improper contribution made to high-level public officials and politicians. The causes of corruption in the private sector can be explained from several dimensions: economy, psychosocial and legal and regulation. Preventative measures encompass both internal strategies, which are endogenous to business and external strategies like exogenous legislation and restrictions enforced by the government or outside organizations. Originality/value The efficient strategies in combating corruption need active cooperation and participation from the supply-side of corruption. Thus, this study contributes to the literature on the theoretical understanding of the corruption problem from the supply-side and responsibility play by the private sector in global anti-corruption initiatives.

Conventional banks and Fintechs: how digitization has transformed both models

2019 ◽  
Vol 41 (6) ◽  
pp. 19-29
Author(s):  
Elisabeth Paulet ◽  
Hareesh Mavoori
Keyword(s):  
Business Model ◽  
Financial Institutions ◽  
New Technologies ◽  
Business Environment ◽  
Business Practices ◽  
Content Type ◽  
Digital Revolution ◽  
Banking Strategy ◽  
Conventional Banks ◽  
The Impact

Purpose The digital revolution has substantially changed the business environment. Most banks have acknowledged the importance of new technologies to improve performance and client satisfaction. The development of these innovations has led to the entrance of the so-called Fintechs. This paper aims to evaluate the impact of these transformations on the performance of financial institutions and on their business model. Design/methodology/approach The authors use data envelopment analysis and Malmquist total productivity indices to measure financial institutions’ efficiency and their influence on strategy. Findings The main finding is that clients are more than ever at the core of banking strategy. The irrelevance of distance in basic banking transactions has reduced expenses and contributed to increasing revenues for all financial institutions. Banks will have a card to play in the advice they can bring to their clients. Practical implications This research could be of interest for financial managers who wish to re-examine their current business practices and imagine their business model for the future. Originality/value The contribution will be to further define the correlation between the provision of electronic banking services and its performance by including diversified institutions (conventional banks, Fintechs, Gafas) in the sample from multiple geographic zones to identify differences as regards their efficiency and business practices.

Factors affecting level of unemployment in South Asia

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Aiza Shabbir ◽  
Shazia kousar ◽  
Muhammad Zubair Alam
Keyword(s):  
South Asian ◽  
Unemployment Rate ◽  
Significant Relationship ◽  
Good Governance ◽  
Asian Countries ◽  
Economic Variables ◽  
Content Type ◽  
Long Run ◽  
Short Run ◽  
The Government

PurposeThis study aims to investigate the short-run and long-run relationship between economic variables and the unemployment rate in South Asian countries.Design/methodology/approachA panel Vector Error Correction (VECM) model is used to establish the long-run and the short-run relationship between unemployment rate and selected economic variables. Data were collected from WDI, WGI and FDSD for the year's 1994–2016.FindingsThe finding of the study showed a negative and significant relationship at the 5% level of significance among governance, internet users, mobile cellular subscriptions, fixed broadband subscriptions and human capital with an unemployment rate of South Asian economies. On the other hand, financial activity (credit) and population growth have a positive and significant relationship with the unemployment rate.Research limitations/implicationsIn the light of our findings clear that employment problems can only be created if the government does not put in place adequate measures to control the population and allocate resources equitably, giving a sense of belonging to all citizens. Therefore, to provide the controlled population with the necessary employment opportunities, it is necessary to allocate resources efficiently and to launch projects aimed at creating jobs.Practical implicationsTransparency or merit is the basis of good governance and the very first step to achieving the goal of good governance is to fight against corruption. It provides a complete justification for providing good quality management records, financial controlling and managerial systems.Originality/valueThe connections between governance and unemployment are complex and need to be studied in a detailed manner. There is the absence of literature that strongly interfaces good governance to unemployment; the fundamental work in this regard is Farid (2015). They locate a solid relationship between good governance and improving external debt situation by in Pakistan a time series analysis. But there is no research in the context of South Asian countries between governance and unemployment.

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