Business, Government & the International Economy

- September 2024
- Case
Burn the Gondolas? Venice, the Ghetto, and the Seasons of Capitalism

By: Sophus A. Reinert, Charlotte Robertson and Robert Fredona
- September 2024
- Case
Burn the Gondolas? Venice, the Ghetto, and the Seasons of Capitalism

By: Sophus A. Reinert, Charlotte Robertson and Robert Fredona
- 2024
- Working Paper
Markups and Cost Pass-through Along the Supply Chain

By: Santiago E. Alvarez, Alberto Cavallo, Alexander MacKay and Paolo Mengano

We study markups and pricing strategies along the supply chain. Our unique dataset combines detailed price and cost information from a large global manufacturer with matched retail prices collected online for the period July 2018 through June 2023. We show that total markups—reflecting the difference between retail prices and production costs—are stable over time, despite the inflationary period at the end of the sample. Along the supply chain, manufacturer and retail markups are negatively correlated. For the most part, we find similar patterns across countries, though there is substantial heterogeneity in the split of markups between the manufacturer and retailers. Our analysis also reveals divergent pricing behaviors in response to cost shocks. The manufacturer adjusts prices more quickly than retailers and appears to more fully incorporate idiosyncratic cost shocks to specific products. Both types of firms respond more quickly to expected costs than to unexpected costs.
- 2024
- Working Paper
Markups and Cost Pass-through Along the Supply Chain

By: Santiago E. Alvarez, Alberto Cavallo, Alexander MacKay and Paolo Mengano

We study markups and pricing strategies along the supply chain. Our unique dataset combines detailed price and cost information from a large global manufacturer with matched retail prices collected online for the period July 2018 through June 2023. We show that total markups—reflecting the difference between retail prices and production costs—are...
- 2024
- Working Paper
Voting Rules, Turnout, and Economic Policies

By: Enrico Cantoni, Vincent Pons and Jérôme Schäfer

In recent years, voter ID laws and convenience voting have generated heated partisan debates. To shed light on these policy issues, we survey the recent evidence on the institutional determinants and effects of voter turnout and broaden the perspective beyond the most debated rules. We begin by discussing the importance of electoral participation both for its consequences on policy choices and for democratic legitimacy. Building on a simple cost-benefit model of voting, we then review (quasi)-experimental work studying the effects of voting procedures and of other election rules. Voting procedures (which determine how people vote) primarily affect the cost of participation. The obstacles they create matter more when they occur ahead of the election, when the stakes are not salient (e.g., voter registration requirements), and less when parties mobilize voters against them and when alternative ways to vote exist (e.g., when people can choose whether to vote by mail or in person). Election rules upstream from the election (such as campaign finance laws) and downstream (such as the use of proportional representation vs. plurality rule to map vote choices into a set of election winners) mostly operate through benefits, for instance by affecting electoral competitiveness and the number of candidates. We conclude by highlighting questions for future research.
- 2024
- Working Paper
Voting Rules, Turnout, and Economic Policies

By: Enrico Cantoni, Vincent Pons and Jérôme Schäfer

In recent years, voter ID laws and convenience voting have generated heated partisan debates. To shed light on these policy issues, we survey the recent evidence on the institutional determinants and effects of voter turnout and broaden the perspective beyond the most debated rules. We begin by discussing the importance of electoral participation...

About the Unit

The BGIE Unit conducts research on, and teaches about, the economic, political, social, and legal environment in which business operates. The Unit includes scholars trained in economics, political science, and history; in its work, it draws on perspectives from all three of these disciplines.

The following demonstrates one way of classifying the approaches the Unit takes to learning and teaching.

The Unit examines the “rules” and policies established by government and other non-business institutions that affect business in the United States.
The Unit turns to history to understand the origins of today’s business environment as well as some of the alternatives that have emerged from time to time.
The Unit examines other countries’ business environments and their historical development.
The BGIE group is deeply interested in the impact of globalization and the way rules are emerging to govern international economic transactions as globalization proceeds.

Recent Publications

Burn the Gondolas? Venice, the Ghetto, and the Seasons of Capitalism

By: Sophus A. Reinert, Charlotte Robertson and Robert Fredona

September 2024 |
Case |
Faculty Research

Citation

Educators

Markups and Cost Pass-through Along the Supply Chain

By: Santiago E. Alvarez, Alberto Cavallo, Alexander MacKay and Paolo Mengano

2024 |
Working Paper |
Faculty Research

We study markups and pricing strategies along the supply chain. Our unique dataset combines detailed price and cost information from a large global manufacturer with matched retail prices collected online for the period July 2018 through June 2023. We show that total markups—reflecting the difference between retail prices and production costs—are stable over time, despite the inflationary period at the end of the sample. Along the supply chain, manufacturer and retail markups are negatively correlated. For the most part, we find similar patterns across countries, though there is substantial heterogeneity in the split of markups between the manufacturer and retailers. Our analysis also reveals divergent pricing behaviors in response to cost shocks. The manufacturer adjusts prices more quickly than retailers and appears to more fully incorporate idiosyncratic cost shocks to specific products. Both types of firms respond more quickly to expected costs than to unexpected costs.

Keywords: Markups; Pricing; Price; Supply Chain; Inflation and Deflation; Cost

Citation

Read Now

Carlsberg: Creating a Buzz in Uzbekistan

By: Sophus A. Reinert, Akanksha Justin and Eric Justin

September 2024 |
Case |
Faculty Research

Citation

Educators

Voting Rules, Turnout, and Economic Policies

By: Enrico Cantoni, Vincent Pons and Jérôme Schäfer

2024 |
Working Paper |
Faculty Research

In recent years, voter ID laws and convenience voting have generated heated partisan debates. To shed light on these policy issues, we survey the recent evidence on the institutional determinants and effects of voter turnout and broaden the perspective beyond the most debated rules. We begin by discussing the importance of electoral participation both for its consequences on policy choices and for democratic legitimacy. Building on a simple cost-benefit model of voting, we then review (quasi)-experimental work studying the effects of voting procedures and of other election rules. Voting procedures (which determine how people vote) primarily affect the cost of participation. The obstacles they create matter more when they occur ahead of the election, when the stakes are not salient (e.g., voter registration requirements), and less when parties mobilize voters against them and when alternative ways to vote exist (e.g., when people can choose whether to vote by mail or in person). Election rules upstream from the election (such as campaign finance laws) and downstream (such as the use of proportional representation vs. plurality rule to map vote choices into a set of election winners) mostly operate through benefits, for instance by affecting electoral competitiveness and the number of candidates. We conclude by highlighting questions for future research.

Keywords: Voting; Political Elections; Policy

Citation

Find at Harvard

Iceland: "A Model to the World"

By: Sophus A. Reinert

September 2024 |
Case |
Faculty Research

Citation

Educators

Political Elite Cues and Attitude Formation in Post-Conflict Contexts

By: Natalia Garbiras-Díaz, Miguel Garcia-Sanchez and Aila M. Matanock

September 2024 |
Article |
Journal of Peace Research

Civil conflicts typically end with negotiated settlements, but many settlements fail, often during the implementation stage when average citizens have increasing influence. Citizens sometimes evaluate peace agreements by voting on referendums or the negotiating leaders, and, almost always, they decide whether to cooperate. Yet, despite their role, we do not know much about how citizens form attitudes toward peace agreements. In this article, we assess how citizens form attitudes toward settlements, specifically the policy provisions that emerge from them, which are central in shaping the post-conflict context. These are complex policy changes, involving deeply factionalized actors, and the citizens evaluating them are often focused on rebuilding their lives. We therefore theorize that citizens use stark cues from political elites with whom they have affinity to form their attitudes. We test our theory using survey experiments in Colombia. We find that citizens rely on political elites’ cues to decide their stance on the settlement’s provisions. These cues appear to supply easily-accessible information that respondents use over other information. In contrast to work positing that peace agreements are exceptional and weary citizens are stabilizing forces, our results suggest that even these decisions are politics as usual, where divisions among political elites drive the outcome.