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Explores economic & political events that caused Venezuela's dramatic growth following the 1918 discovery of oil to become a "growth disaster." Between 1950 & 1957 Venezuela's real output per capita growth was an average of 5.4 percent per annum but the real income per capita growth dropped to a rate of minus 0.13 percent between 1960 & 1997. Private international companies handled all aspects of the oil business until the late 1950s when political leaders began to undermine the mechanisms that protected private property & replace a market economy with socialist & mercantilist institutions. Diminished prosperity caused social unrest that was conducive to the 1998 election of populist leader Hugo Chavez who blames capitalism for the people's impoverishment. Under Chavez, Venezuela is denied the wealth of its rich resources because the oil is owned by the government, not the people. Other factors that prevent the return to a market economy include collective action, a patrimonial government that bribes its people, & a lack of entrepreneurial leadership. Prospects for the future are discussed. References. J. Lindroth

AbstractIn this paper we investigate the effect of golden parachute (GP) adoptions on shareholder wealth. We control for the potential effect a GP adoption has on the probability that a firm will receive a takeover bid by investigating the wealth effects for firms that are in play when the GP is adopted. We find that announcements are wealth neutral when firms are in play and wealth increasing when firms are not in play when a GP is adopted. The results suggest that GPs have no influence on the success of a tender offer, refuting the hypotheses that they either align manager and shareholder interests or that they entrench inefficient managers. The difference in the results for in‐play and not‐in‐play firms is consistent with the hypothesis that GPs signal an increased likelihood that a firm will receive a takeover bid.

Abstract:A growing body of evidence documents a vast array of economic and social ill-effects of public perceived corruption. These findings and the scant evidence of recent success in the fight against corruption beg the question: how to abate it? We document the existence of a negative, statistically significant and quantitatively large impact of economic freedom (our proxy for institutions of capitalism, markets and competition) on public corruption. This negative response of corruption to economic freedom holds after allowing for non-linearities interacting economic freedom and political rights, endowments, legal families, ethnicity and for robust determinants of corruption uncovered by Daniel Treisman ['What Have We Learned About the Causes of Corruption From Ten Years of Cross-National Empirical Research?',Annual Review of Political Science,10: 211–244], such as income, democracy, freedom of the press and fuel exports. Thus, this paper helps to explain why high-income prosperous countries exhibit low levels of public perceived corruption, and why honesty is a normal good.