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Next week sees a high-profile head-to-head between two of the leading voices on microfinance. In a debate hosted by the United States Agency for International Development (USAID) in Washinton D.C. on Monday, 30 January at 9:00 a.m./14:00 GMT/15:00 CET, David Roodman (Center for Global Development, USA) and Milford Bateman (University of Pula, Croatia) will have alot to discuss.

(P.S. See also below for information about a debate at Harvard University on 2nd February with Guy Stuart.)

Roodman (“Due Diligence”); Bateman (“Why Doesn’t Microfinance Work?”)

The past few years have been particularly turbulent, with a succession of microfinance crises, growing overindebtedness, borrower suicides, disappointing impact findings, and a prize-winning Norwegian documentary contributing to Muhammad Yunus being removed from office as head of Grameen Bank.

The two debaters have met in the past. Bateman first brought a critique of microfinance into the mainstream with his 2010 book, which Roodman heavily criticised. Roodman has made a name for himself as a prolific and insightful blogger with the open book blog he kept while writing the book he recently published.

Whether Roodman’s book (endorsed by Muhammad Yunus) is anything as “impertinent” as it claims to be; what to think of Bateman’s musings about the “end of microfinance?”; and why the best evidence of microfinance’s impact on poverty still is “zero”, will be questions likely affecting the debate as much as the official debate question (which USAID succeeded in making so overwhelmingly dull I fear it may even scare off Washington development brass):

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We are late with posts on the issue that dominated the web over the last couple weeks, namely the two bills in the U.S. congress on SOPA and PIPA. Even Wikipedia, for the first time in its history, decided to join the protest blackout on January 18 to protest against the bills. (Which was, by the way, also exemplifying the difficulties of Wikimedia making decisions involving the community due to the absence of accepted and routinized participation structures within Wikimedia governance, see also “Redrawing the Borders of Wikimedia Governance“).

Nevertheless, this might not be all that much of a problem. Because if NYU’s Clay Shirky is right, SOPA and PIPA will come back with new acronyms but similar content. But see for yourself in Shirky’s 15 minute TED talk on the issue:

(leonhard)

End of June seems to be the conference date in 2012. After Olga pointed to the Call for Papers to this year’s SASE conference in Boston, I am happy to announce the Call for Paper for the “Wikipedia Academy 2012: Research and Free Knowledge” taking place in Berlin June 29 to July 1, 2012. To some degree, this conference resembles the “Free Culture Research Conference” held in 2010 (see also: “Retrospect” and “Conference Documentation“), in that it tries to gather researchers of different disciplines working on free knowledge in general and Wikipedia in particular.

The Wikipedia Academy is hosted by the Alexander on Humboldt Institute for Internet and SocietyFreie Universitaet Berlin, and Wikimedia Germany. Extended abstracts can be submitted by March 31 (see Submission Process). Topics of interest are:

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Two days ago, Sigrid and I have submitted a paper on community governance in the realm of Creative Commons and Wikimedia to this year’s Academy of Management Annual Meeting. Today, I have learnt about major upcoming changes in governance of the latter of our two cases. Wikimedia is at the brink of abandoning its decentralized and geography-based network of Wikimedia chapters and replace it with a much more centralized network of different types of movement organizations.

Logo of the Wikimedia Foundation

The current governance structure of Wikimedia, the formal organization behind the global community of volunteers responsible for Wikipedia, had emerged comparably unplanned. The focal Wikimedia Foundation itself was founded two years after Wikipedia had been launched as a side-project of the quality-controlled “Nupedia“. And while Wikipedia had been transnational from the very start with versions in German, Catalan, Japanese, French and Spanish only two months after its launch, the Foundation was not. The first local Wikimedia branch in Germany was founded independently from Wikimedia headquarters and only formally recognized as a formal Wikimedia chapter after the fact. Following the German example, so far 38 membership-based chapter associations have been founded and formally recognized. Together, these chapters nominate two members to the Foundation’s Board of Trustees.

With the exception of two US chapters in New York City and in the District of Columbia, all these chapters are related to countries. One of the main reasons for tying local chapter organizations to countries is a financial one. Many Wikimedia chapter organizations such as the German, the Polish or the Swiss chapter receive tax exempted donations. This is one of the big advantages of local chapter organizations and even a rationale for founding them as grassroots organizations in the first place. The same time, however, this also restricts the flow of funds within the organizational network. Donations to the German Wikimedia chapter, for example, cannot easily be transferred to the focal Wikimedia Foundation in the US due to legal restraints.

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Why should Africa adopt IFRSs? Adoption is less of the story.. not practicing what you preach is the bigger evil.

In the past decade the rise in the use of the International Financial Reporting Standards (IFRS) in many countries around the world has moved the wave towards developing countries considering adopting these standards. Factually, about 120 countries presently use IFRS across the globe. Out of this number about 13 countries in Africa have already adopted (i.e as issued by the IASB without any modification) or adapted (.i.e with modification to meet local socio-economic needs of a particular accounting jurisdiction) to IFRS.

A diverse Continent a uniform accounting standard? Primarily, former Anglo-Saxon colonies have adopted IFRSs.

(Source: Data from PwC IFRS map, Own drawings)

However, it is quite surprising that Africa as whole is considering adopting IFRS given the chaotic nature of these standards on the international front and the often unseen justification given for the adoption of IFRS particularly in Africa. Many international organizations like the World Bank , the World Trade Organization , USAID and UNCTAD  have all been arguing for the adoption of IFRS in less developed countries . There are many reasons why Africa should not adopt IFRS. I will try to explain and to some extent justify this line of reasoning.

Politics over Economics

First, the merits of IFRS often mentioned include, improved comparability and uniformity of financial statements among companies and countries, resulting in a decrease in the equity cost of capital, improved transparency, a decline in information processing cost and a reduction in risk of international investment decisions amongst others. Whilst these benefits look very desirable, it is also the case that these benefits cannot be reached in every economy.

To be clear, IFRSs were designed for developed and matured capital markets. At least the economics speaks for itself. It is an undeniable fact that financial statements assist investors in making critical investment decisions. As pointed out in the general purpose of financial statements in the conceptual framework of the IASB, financial statements should aid users in valuing securities, be it when buying or when selling.

The argument for the use of IFRSs in developed countries in plausible. However, what I find puzzling is the push for IFRS adoption even in countries that have no stock markets or stock market listed companies. I do not deny that quality financial reporting should be present in economies where there are no capital markets. But I also admit that such countries have totally different financial reporting needs than industrialized countries. Accounting systems of a country are traditionally shaped by its socio- economic, cultural and political environment. Some economies are totally different from others and therefore we must recognize that these differences in accounting needs shape financial reporting.

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I would like to use our blog to draw our readers’ attention to a mini-conference that I organize together with Tim Bartley, Nicole Helmerich and Chikako Oka titled “Regulating Labor and Environment: Beyond the Public-Private Divide”. The mini-conference will take place in the framework of the 2012 Annual Conference of the Society for the Advancement of Socio-Economics (SASE) at MIT (Cambridge, Massachusetts, USA) on June 28-30, 2012.

The central question that we would like to address during the mini-conference is what the implications of global shifts and transnational standards for domestic regulatory projects in labor and environmental fields are. On the one hand, we invite papers that seek to explain how local contexts shape implementation and effectiveness of labor and environmental regulation in a globalizing world. On the other hand, our focus is the intersection between public and private forms of environmental and labor governance. To sum up, we seek to examine transnational-domestic and private-public links in transnational labor and environmental governance. Read the rest of this entry »

In the history of copyright law, legislation in Europe and the US have wound each other up more and more. Everytime when there was a copyright term extension on one side of the ocean, lobbyists on the other side started finger pointing, demanding the same rights to protect artists and the industry. A recent example for such regulatory inspiration has been the EU database  directive, which created a sui generis right for the creators of databases which do not qualify for copyright. Ever since this directive had been passed in Europe, lobbyists in the US have tried to introduce a similar provision into US copyright law (see Boyle 2008: 207 ff.). Such regulatory inspiration is neither new nor surprising nor restricted to the domain of copyright.

However, what has been leaked in the Wikileaks cables on the influence of the US on the new Spanish copyright law is way beyond mere inspiration for lobbyists. As reported by the Guardian, in this case the lobbyist has been the US government itself:

The US ambassador in Madrid threatened Spain with “retaliation actions” if the country did not pass tough new internet piracy laws, according to leaked documents. [...] In his letter, Solomont  [i.e. the US ambassedor] issued veiled threats, reminding its recipients that Spain is on the Special 301, the US trade representatives’ list of countries that do not provide “adequate and effective” protection of intellectual property rights. Spain risks having its position on the list “degraded”, and could join the real blacklist of “the worst violators of global intellectual property rights.”

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This is the second part of a three-part series on the regulation of securitization before and after the crisis. This part’s topic: The states’ helping hand: finance ministries and the expansion of securitization in the EU.

As I explained in part 1 of this series, securitization required the transfer of credits from banks’ banking books into shell companies, where the cash flows from these credits would be redirected to serve debt instruments that the shell company (or Special-Purpose Entity, SPE) emitted. The banks remained linked to the revenues and risks of these assets by providing liquidity lines to these shell companies in case the market fell dry.

When the crisis in the subprime mortgage market became evident, the buyers of debt instruments emitted by SPEs which had assets on the asset side whose cash flow was seen as deteriorating. Buyers in the market refused to take up the risk, as they could not price it and feared to have to take losses. In this moment, the liquidity lines of banks were drawn, and banks bought the papers from the SPEs they had initially set-up to get rid of these assets.

Now that they ended up refinancing the assets they had sold to the SPE, they in fact became again the owner of these assets, which is why they reappeared on their balance sheets, but only in the worst of moments. The first SPEs which experienced such a buyers strike were those which did not even have a liquidity line and where the buyers were supposed to carry the entire credit risk themselves. Rather than imposing losses on their clients, many banks took the assets they had transferred into the balance sheets of these SPEs (called Structured Investment Vehicles) back on their own books for reputational reasons. Banks argued that they could better cope with the deteriorating value of these assets by holding them to maturity and that imposing losses on their clients would endanger their future financing possibilities.

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After their surprising election success in the German capital Berlin, the pirate party continues to surge in the polls. In all recent federal polls the German pirates have been above the 5 percent election threshold and there is no end in sight.

When a TV crew from Russia Today had visited Berlin to film a short report on the pirate phenomenon, they also approached me as a “talking (research) head” on the issue. Unsurprisingly, only one sentence of the half an hour long interview made it into the segment featured below.

The reason the Russian TV crew had found me was this post-election blog post.

(leonhard)

2012 will be our fourth year of collaboratively blogging about governance across borders. Fortunately, more and more researchers in related fields start running blogs, as well. Recently, for example, the research group on “Cultural Sources of Newness” at the Social Science Research Center (WZB) in Berlin has started their blog, which I highly recommend. Specifically Ariane Berthoin Antal provides most interesting reflections on newness in general and newness in academia in particular – at an impressive pace.

Looking back at our own third year of blogging, I am happy to provide this year’s statistics (see stats for 2010 and 2009 respectively):

Top 5 blog posts 2011 (in terms of visitors):

  1. Boarding Berlin: The Pirate Party Triumph in the German Capital (FAQ)
  2. Transnational Studies and Governance # 3: Studies on ‘global’ markets in history*
  3. The Dark Side of Copyright’s Force: LucasArts v. YouTube v. Greenpeace v. VW [Update]
  4. Anonymous Attacks German Collecting Society GEMA
  5. The “Why?” of Andhra Pradesh – An Interview with Malcolm Harper

* also #1 in the Top 5 of 2010

Top 5 search terms guiding visitors to our blog in 2011:

  1. Andhra Pradesh microfinance crisis
  2. post-socialism (also #2 in 2010)
  3. anonymous gema
  4. Milford Bateman microfinance (also #4 in 2010)
  5. transnational institutions

Top 5 tags attached to blog posts in 2011:

  1. Microfinance / Microcredit (16 out of 38 in 2011)
  2. Google (7/15)
  3. Creative Commons (7/22)
  4. YouTube (6/9)
  5. copyright (6/16)

Top series in 2011:

  1. Bordercrossing Books (4 out of 6 posts in 2011)
  2. The Series Series (3/7)
  3. Wise Cartoons (2/4)

In total we published 56 new posts in 2011 – three more than last year but still short of the 64 posts we had in our first year of blogging in 2009. We thus did not manage to reach our self-imposed goal for 2011, which was to “beat the 2009 level of posts but keep the comment-per-article ratio at 2″ (see statistics for 2010). However, we still have on average one post per week and we received 208 new comments last year. This means that we managed to double the comment-per-article ratio the second year in a row, from 2 to 4.

We also very much appreciate a growing number of guest bloggers (see guestxborders). For 2011, we are indebted to Domen Bajde, Elke Schüßler and Matthias Thiemann, who will return in 2012 to continue his series “Securitization Revisited“.

(leonhard)

The Book

Governance across borders: transnational fields and transversal themes. Leonhard Dobusch, Philip Mader and Sigrid Quack (eds.), 2013, epubli publishers.
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