Public-Private Partnerships in the GCC: Reality and Challenges

This article discusses the experience of Public-Private Partnerships (PPPs) in the Gulf Cooperation Council (GCC) countries. It also explores the relevant individual characteristics of each country of the GCC and highlights the challenges each country faces or is likely to face in implementing PPPs. This paper seeks to understand the extent to which the implementation of PPPs in the GCC has been consistent with international best practices in formulating and creating legal and regulatory frameworks for such partnerships. It adopts a comparative approach to public policy analysis to review empirical and theoretical studies of PPPs in the GCC. The article concludes that all the GCC countries follow different, and sometimes unclear, policies in implementing partnerships and that these partnerships remain limited compared to their global counterparts. It also identifies the most significant and common obstacles and challenges these countries face in creating an attractive and competitive environment in which to implement sustainable partnerships that contribute to their ambitious economic visions and accelerate their transformation from a rentier into knowledge and production economies.

Learning in Markets: Greed Leads to Chaos but Following the Price is Right

We study learning dynamics in distributed production economies such as blockchain mining, peer-to-peer file sharing and crowdsourcing. These economies can be modelled as multi-product Cournot competitions or all-pay auctions (Tullock contests) when individual firms have market power, or as Fisher markets with quasi-linear utilities when every firm has negligible influence on market outcomes. In the former case, we provide a formal proof that Gradient Ascent (GA) can be Li-Yorke chaotic for a step size as small as Θ(1/n), where n is the number of firms. In stark contrast, for the Fisher market case, we derive a Proportional Response (PR) protocol that converges to market equilibrium. The positive results on the convergence of the PR dynamics are obtained in full generality, in the sense that they hold for Fisher markets with any quasi-linear utility functions. Conversely, the chaos results for the GA dynamics are established even in the simplest possible setting of two firms and one good, and they hold for a wide range of price functions with different demand elasticities. Our findings suggest that by considering multi-agent interactions from a market rather than a game-theoretic perspective, we can formally derive natural learning protocols which are stable and converge to effective outcomes rather than being chaotic.

Vanishing Contagion Spreads

We study default in a multifirm equilibrium setting with incomplete information. Defaults are consistent with the firm’s balance sheet and aggregation. We show that the endogenous volatility and jump size of debt and equity generated by other firms’ shocks vanish as the number of firms in the economy increases. As a result, credit spreads depend asymptotically only on the firms’ own cash flow risk. Our vanishing contagion spread result calls into question recent findings based on production economies, in which quantities of risk (volatilities and jump sizes of securities) are specified exogenously, that attribute credit spreads mostly to contagion. This paper was accepted by Kay Giesecke, finance.

Tectoeconomics is the Forerunner of All Social Production Economies

Based on elaborated concept of reviving the culture of industrial consumption of resources, an attempt is made to prove the existence of tectoeconomics resulting from tectology — a universal organizational science. Tectoeconomics is understood as the art of conducting business as well as other creative activities based on selection and implementation of decisions to streamline the processes of creating and consuming material and spiritual goods. It is shown that the possibilities for socioeconomic growth should be sought in cultural origins. On the basis of perceptions on tectoeconomics, the author has identified one of the main structural and organizational shortcomings of domestic economy, which does not contain in the trade sphere a specific industrial branch in the form of a system of culture-forming service material centers, eliminating the own procurement production of finished products producers and contributing to intensive growth of the middle class. The article is commemorating the 100th anniversary of publishing the main work of the national thinker, encyclopedic scientist Alexander A. Bogdanov “Tectology. General organizational science”. In the Belarusian magazine OnAir No. 7 (104) 2018, was published an article by N.V. Kostyukovich “Two lives of Alexander Bogdanov”.