This note summarizes some of the highlights of my longer paper with Guillermo Calvo”Fear of Floating.” Many emerging market countries have suffered financial crises. One view blames soft pegs for these crises. Adherents to that view suggest that countries move to corner solutions--hard pegs or floating exchange rates. We analyze the behavior of exchange rates, reserves, and interest rates to assess whether there is evidence that country practice is moving toward corner solutions. We focus on whether countries that claim they are floating are indeed doing so. We find that countries that say they allow their exchange rate to float mostly do not--there seems to be an epidemic case of “fear of floating.”

The mirage of floating exchange rates

Botswana national health policy states that the Ministry of Health shall from time to time review and revise its organization and management structures to respond to new developments and challenges in order to achieve and sustain a high level of efficiency in the provision of health care. Even though the government clearly views assuring efficiency in the health sector as one of its leadership and governance responsibilities, to date no study has been undertaken to measure the technical efficiency of hospitals which consume the majority of health sector resources. The specific objectives of this study were to quantify the technical and scale efficiency of hospitals in Botswana, and to evaluate changes in productivity over a three year period in order to analyze changes in efficiency and technology use. DEAP software was used to analyze technical efficiency along with the DEA-based Malmquist productivity index which was applied to a sample of 21 non-teaching hospitals in the Republic of Botswana over a period of three years (2006 to 2008). The analysis revealed that 16 (76.2 percent), 16 (76.2 percent) and 13 (61.9 percent) of the 21 hospitals were run inefficiently in 2006, 2007 and 2008, with average variable returns to scale (VRS) technical efficiency scores of 70.4 percent, 74.2 percent and 76.3 percent respectively. On average, Malmquist Total Factor Productivity (MTFP) decreased by 1.5 percent. Whilst hospital efficiency increased by 3.1 percent, technical change (innovation) regressed by 4.5 percent. Efficiency change was thus attributed to an improvement in pure efficiency of 4.2 percent and a decline in scale efficiency of 1 percent. The MTFP change was the highest in 2008 (MTFP = 1.008) and the lowest in 2007 (MTFP = 0.963). The results indicate significant inefficiencies within the sample for the years under study. In 2008, taken together, the inefficient hospitals would have needed to increase the number of outpatient visits by 117627 (18 percent) and inpatient days by 49415 (13 percent) in order to reach full efficiency. Alternatively, inefficiencies could have been reduced by transferring 264 clinical staff and 39 beds to health clinics, health posts and mobile posts. The transfer of excess clinical staff to those facilities which are closest to the communities may also contribute to accelerating progress towards the Millennium Development Goals related to child and maternal health. Nine (57.1 percent) of the 21 hospitals experienced MTFP deterioration during the three years. We found the sources of inefficiencies to be either adverse change in pure efficiency, scale efficiency and/or technical efficiency. In line with the report Health financing: A strategy for the African Region, which was adopted by the Fifty-sixth WHO Regional Committee for Africa, it might be helpful for Botswana to consider institutionalizing efficiency monitoring of health facilities within health management information systems.

https://link.springer.com/content/pdf/10.1186%2F1755-7682-3-27.pdf

Assessment of productivity of hospitals in Botswana: a DEA application

Banks and other financial institutions are a unique set of business firms whose assets and liabilities, regulatory restrictions, economic functions and operating make them an important subject of research. Banks’ performance monitoring, analysis and control needs special analysis in respect to their operation, productivity and performance results from the viewpoint of different audiences:

/pdf/productivity-the-malmquist-index-and-the-empirical-study-of-4tjk30wegs.pdf

Productivity, the Malmquist Index and the Empirical Study of Banks in Estonia

This first volume of two on European Monetary Union (EMU) is based on the work, and gives the view, of the Commission of the European Communities. It provides a general introduction to the issues. The EMU project is outlined and its benefits and costs examined, including the implications for public finances and the impact on the international system. The author also looks at transitional issues in general, at national perspectives, transaction costs, and macroeconomic model simulations.

One Market, One Money: An Evaluation of the Potential Benefits and Costs of Forming an Economic and Monetary Union

The returns of firms are important in deciding the question, if works councils are efficient or inefficient. Former investigations considered only the influence of the mere existence or nonexistence of works councils on returns. This paper regards also the establishment and winding up as well as different types of works councils. It can be shown that firms with works councils have lower returns on average than firms without works councils. Companies losing their works council face the worst situation concerning returns whereas companies possessing newly founded works councils receive the highest returns. These results indicate the workers have at least some redistributive goals by establishing a works council, but in a crisis they give priority to saving the firm. Examing different types of works councils shows them all to cause lower returns of the firm compared to companies without any works council. Among the firms with works councils the returns are highest where the works council doesn't participate in every decision by itself. Constant conflicts create the worst results instead, so managers should avoid them.

Ertragswirkungen von Betriebsräten: Eine Untersuchung mit Hilfe des NIFA-Panels

Banks and other financial institutions are a unique set of business firms whose assets and liabilities, regulatory restrictions, economic functions, and operating make them an important subject of research. Banks performance monitoring, analysis and control needs special analysis in respect to their operation, productivity and performance results from the viewpoint of different audiences, like investors/owners, regulators, customers/clients, and management themselves. In this paper, productivity change in Estonian banking is estimated using the Malmquist productivity index. The data used in this study covers the period from 1999 to 2002. One purpose of this research is to introduce the Malmquist productivity index, which is first used for productivity analysis of Estonian banks. The present study shows that Estonian banks experienced average a 25.6 percent annual productivity growth rate during 1999-2002, what was the result of technological progress. Generally, all Estonian banks have increased productivity as a result of technological progress on this period. Some historical notes on the development of the Estonian banking system and the capital structure of banks are presented in this article. The usage of a modified version of DuPont financial ratio analysis is discussed also in the article. Empirical results of the Estonian commercial banking system performance analysis are presented in the article (1994-2002).

/pdf/estonian-banking-sector-performance-analysis-using-malmquist-512qx9qtan.pdf

Estonian Banking Sector Performance Analysis Using Malmquist Indexes And DuPont Financial Ratio Analysis

The transformation of the banking and financial sector in transition economies has become critical for the successful shift from centrally planned to market-driven economic systems. Such reforms led to the creation of financial markets, which are essential for market transactions. The development of the financial sector has been one of the most difficult areas of reform since at the start of transition financial institutions and markets were limited or non-existent (Fries and Taci, 2001). Financial sector reforms are not easy to accomplish in a turbulent environment. This is even more so considering the high speed of economic and social transformation as well as the length, severity and effects of the economic and financial crises experienced in the course of the transition process. Adding to the complexity of the reform process has been the lack of risk management experience in the banking sector and the numerous changes in banking regulations.

https://www.econstor.eu/bitstream/10419/48942/1/360569862.pdf

Transformation of the Estonian Banking System

The choice of a suitable exchange rate regime is the subject of numerous discussions in economic literature. Estonia has been successful in achieving economic stabilization and growth and steadily declining inflation. It has one of the highest per capita foreign direct investments in central and eastern Europe. Estonia also has one of the most liberalized economies among all transition countries. An essential element of the success of Estonian economic development is strict exchange rate control. Estonia has adopted a currency board that serves as a signal of commitment to prudent monetary policy and as a guarantee of sound money during the transition period. This paper discusses the experience of operating the currency board, some future prospects of the currency board arrangement, and the development of the banking system in Estonia.

Development of the banking system under the Estonian currency board

Estonia is one of the leading countries in terms of indebtedness in Central and Eastern Europe. Even though the public sector debt is surprisingly low, the private sector indebtedness has risen very quickly in recent years. In current paper the indebtedness of the private sector of Estonia in 2000-2007 has been analyzed. Our study shows that indebtedness in Estonia in that period has been determined by low interest rate as well as high growth of income. We also proved that those determinants alone cannot be enough to explain the credit growth. Determinants of credit growth are indicating that the credit growth in Estonia could be explained by permanent income hypothesis.

Determinantes of foreign loans in Estonian private sector

Reconstruction of Estonian banking system started twenty years ago. Estonia built up for the market economy a banking oriented financial sector, which is centred on commercial banks. During the two decades less than ten banks remained from more than 50 licensed commercial banks, the rest were not able to continue independently, they merged or have failed. The bad result of such kind of development was also the excessive concentration of banking. Banking sector in Estonia during the transition period was opened to the invasion of foreign banks due to the openness of the economy and excessive risks taken. Two banking crises, selected quickly the very limited number of prosperous banks, and the major commercial banks went into the ownership of Scandinavian banks. The qualitative effects of foreign banks' entry into the Estonian banking market were new features of competition in banking market and transfer of various knowhow from foreign banks. Better liquidity risk management techniques, information systems, credit policy and personnel policy transfer from foreign banks supported banks to have high profitability and low credit losses rates. These directions are noticeable also by quantitative analyses of banking market development. The takeover of main commercial banks by the large Swedish and Finnish banks was one of important factors in the gradual increase of the social orientation of Estonian banks however the ideas of social responsibility of enterprises are especially popular in Scandinavia. In our paper we analyse also Estonian banks' practices of supporting the social development of Estonia.

Foreign banks increase the social orientation of Estonian financial sector

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