Don Goldstein

Financial sector reform and sustainable development: the case of Costa Rica.

Abstract How can financial sector reform be designed specifically so that it enhances the prospects for sustainable development? This paper begins an analysis of this little-discussed intersection, with a focus on the problems and possibilities facing Costa Rica. Policy changes that encourage financial markets to incorporate long-term environmental sustainability concerns will require moving beyond a standard model of financial liberalization. Flighty financial flows, systemic pressures against innovation, and unpriced environmental externalities all mean that real sector environmental performance will be adversely affected by financial sector dynamics, lacking appropriate policy markers. Financial market policies must encourage market forces to channel capital flows that build productive capabilities based on complementarities between development and environmental quality. Costa Ricas reform process and unusual depth of experience in pursuing sustainable development make it an ideal place for such financial market innovations to be attempted. Getting its incentive system right in financial restructuring could aid immensely in the emergence and application of sustainability-based competitive capabilities. A set of market-based ‘green’ financial reforms is proposed, including tax-advantaged banking and bond programs, rural group lending, and a single certification entity for potential borrowers in these programs.

Weirton Revisited: Finance, the Working Class, and Rustbelt Steel Restructuring

I met Dave Houston while researching an article on the 1983 employee buyout of Weirton Steel. This contact initiated a journey that led me to a PhD in economics and research on financially driven corporate restructuring in an era of troubled capital accumulation. Dave counseled and practiced a clear-eyed look at the conditions for “acceptable” surplus value extraction when analyzing viable avenues for worker resistance. With a quarter-century’s hindsight, this paper applies that approach to an assessment of what restructuring has meant for the industrial working class in steel and related sectors.

Service Learning and Teaching about Globalization

Service and activist learning (SAL) and teaching about globalization can be mutually reinforcing pedagogies. SAL combines community activity with social analysis, attracting many students who want to make the world better. Integrating globalization helps them place local problems in the context of world trade and investment policies and dynamics. Rather than feeling overwhelmed by the complexity of global processes, students explore ways of responding in their daily lives and become more effective social change advocates.

Identifying and measuring dynamic capability using search routines

Much attention has been paid to the theoretical and empirical difficulties of identifying dynamic capability, given that it is a latent construct that is difficult to observe. There is consensus that dynamic capability should be defined so as to distinguish the capability for change from the change achieved: it is the organisation’s capacity to change its resource base. But operationalising this idea has proven difficult. We propose an empirical representation based on a modest theoretical extension: the accepted definition implies that dynamic capability is constituted in organic engagement with the operating resources it is intended to change. This extension allows us to represent dynamic capability using a widely recognised, observable underpinning of dynamic capability – search routines. Using data on Irish manufacturers’ efforts to adapt to a heightened environmental-regulation regime, we draw from environmental-management research and the evolutionary and behavioural theories of the firm to specify criteria for identifying, categorising and measuring search routines and using this to construct a dynamic capability measure. The contribution is to present a replicable, theory-based protocol for studying dynamic capability and its complex relationship with firm performance and evolutionary fitness.