Impact investors can gain real feedback from their portfolio companies’ customers. Do they want it?
Prof. Alnoor Ebrahim
“The single most important feature of Lean Data is its focus on listening to customers in order to serve them better,” writes Alnoor Ebrahim, a professor Tufts’ Fletcher School. Acumen’s Lean Data methodology is no silver bullet, he says, and “is better seen as a complement to evaluation approaches such as randomized control trials rather than a substitute.”
William L. Clayton Professor of International Economic Affairs Michael W. Klein sits down with James Stavridis, Dean of The Fletcher School of Law and Diplomacy, to discuss Econofact, the non-partisan publication co-founded by Klein and colleague, Prof. Edward Schumacher-Matos. Econofact, launched in January 2017, now boasts a network of over 70 contributing economists and is designed to bring key facts and incisive analysis to the national debate on economic and social policies.
This now-standard tallying of the benefits and risks of securitization omits the costs involved in the decline of old-fashioned banking itself. And those costs are quite significant. A financial system that downgrades the role of banks becomes dangerously dependent on nearly blind trust in generic credit scores — a risk still underappreciated even a decade after the financial crisis. The marginalization of traditional banking also discourages lending to small businesses, which are essential to America’s economic dynamism. And it tends to over-centralize the supply of money, and therefore of credit, in ways that distort our economic life.
Instead of applauding the greater “completeness” of anonymous debt markets, we should lament the marginalization of traditional banking. And we should work to reverse it.
From time to time we like to feature the recent work of a number of our esteemed business faculty here at The Fletcher School. The series continues with Jette Steen Knudsen, Professor of Policy & International Business and Shelby Cullom Davis Chair in Sustainability at The Fletcher School.
The latest work from Professor of Policy & International Business and Shelby Cullom Davis Chair in Sustainability, Jette Steen Knudsen, examines the changing relationship between the regulator environment across the globe and the corporate social responsibility (CSR) initiatives of multinational corporations. Learn more:
A growing number of states are regulating the corporate social responsibility (CSR) of domestic multinational corporations relating to overseas subsidiaries and suppliers. In this book, Jette Steen Knudsen and Jeremy Moon offer a new framework for analysing government–CSR relations: direct and indirect policies for CSR. Arguing that existing research on CSR regulation fails to address the growing role of the state in shaping the international practices of multinational corporations, the authors provide insight into the CSR issues that are addressed by government policies. Drawing on case studies, they analyse three key examples of CSR: non-financial reporting, ethical trade and tax transparency in extractive industries. In doing so, they propose a new research agenda of government and CSR that is relevant to scholars and graduate students in CSR, sustainability, political economy and economic sociology, as well as policymakers and consultants in international development and trade.
The latest edition of “Fletcher Reads the Newspaper” tackled the thorny question: Is Brexit a “house of cards” that threatens the stability of the world order? After introductions by Bhaskar Chakravorti, Senior Associate Dean of International Business and Finance at The Fletcher School, and Lisbeth L. Tarlow, Chair of The Fletcher School Board of Overseers, the two debaters kicked off.
Lord Michael Dobbs Speaks to the Fletcher Audience as part of Fletcher Reads the Newspaper
Lord Michael Dobbs, introduced as “Westminster’s baby-faced hitman,” wasted no time attacking the premise of stability to begin with. He claimed global stability disappeared at least twenty years ago. The seasoned debater laid out the three-part argument that a) there is no stable world order b) the EU is the cause of instability and c) the EU failed the challenge of changing internally due to its undemocratic nature. Countering the common narrative that the UK left the EU for economic reasons, Dobbs insisted that the UK left to reclaim its sovereignty, which has been compromised by an “arrogant, authoritarian, inefficient, ineffective, and elitist” EU that refused to reform itself. According to Dobbs, the democratic deficit generated by decision-making in Brussels by unelected representatives is irreconcilable, and the EU itself is in danger of becoming a “house of cards.”
Dr. Amar Bhidé, after excusing himself for this “hopelessly mismatched debate” took a different approach, borrowing a page from British economist John Kay to illustrate the perils of Brexit using the example of regulation on jam. Bhidé demonstrated how the trade and safety regulations so lamented by the pro-Brexit camp in fact will not be eliminated by leaving the EU, and are actually made less burdensome by unifying standards across the region. He went on to extend the jam example to immigration, claiming that Brexit is really about the flow of people, which also will not end with Brexit and is arguably much more important to the economy than the flow of jam.
The Fletcher School is no stranger to literature involving leadership and negotiation. As professor and former Fletcher dean Jeswald Salacuse noticed, however, these two genres often fail to address one another. Rather, leadership and negotiation are often treated as subjects unto themselves: matters of vision and drive on the one hand, and agreements and alternatives on the other.
Drawing on his experience in academic and private-sector leadership, Salacuse came to the following conclusion: “To lead is to negotiate.” Contrary to popular opinion, leadership is not simply a matter of developing a vision and then cracking the whip. The act of leadership certainly involves vision and execution, but the journey of leadership fundamentally involves negotiation at every stage, he said.
How do refugees finance their journeys and which expenses need financing? This was the question that a team of us at Fletcher set out to answer in our study “The Financial Journey of Refugees.” We studied the routes and financial challenges of more than 100 refugees in Greece, Jordan and Turkey, between July 2016 and April 2017. The refugees we interviewed had traveled from South Asia, Central Asia, the Middle East, East Africa and West Africa.
Regardless of their country of origin, with the exception of Syria, a refugee’s biggest expense was the cost of hiring a smuggler. Smuggling expenses ran about 85 percent of the total cost of the journey. The smuggler’s fee included important services: travel by air or overland, depending on the refugee’s budget, guide services across borders, payment of bribes at border crossings, and documentation falsification expenses. Smuggling prices varied widely by country of origin (some borders being porous, others sealed tight), by how deluxe a trip was (air versus ground), by numbers of borders crossed (affecting the number of falsified IDs required). To give an example, journeying overland from Afghanistan through Pakistan, Iran, and Turkey to Greece might cost $7,500 per person, a price that went up or down based on shifting rules and border crackdowns. Traveling from Eritrea to Greece might cost the same amount. Traveling from Syria to Turkey could cost as little as $500.
The price of the journey was one factor in a traveler’s safety – the higher the cost, the better the traveling modes, and the safer the travel. While what refugees paid their smuggler was important, how they paid them was equally important. Did the refugee pre-pay the kingpin smuggler in advance of the journey? Did she post-pay him after arriving safely in Greece or Germany? Did she pay leg by leg? All these strategies were in play and we outline them in our report summary and they are detailed by the refugees themselves in a Compendium of Field Notes. Below we describe two of many strategies.
Strategy 1: Guarantee Scheme via a Financial Third Party
Media Equifax Critics Are Missing the Bigger Point
Outrage that Equifax exposed more than 143 million credit records to identity thieves misses the point. We really should worry about what makes impersonation so easy—why do lenders know so little about the people to whom they issue credit?
Government Regulation of International Corporate Social Responsibility in the US and the UK: How Domestic Institutions Shape Mandatory and Supportive Initiatives
by Jette Steen Knudsen
While most scholarship on corporate social responsibility (CSR) focuses on company-level CSR initiatives, it increasingly also examines government programs for CSR. However, research on how governments contribute to CSR has mainly focused on domestic and not international CSR challenges. This literature also does not specify whether governments shape CSR through mandatory regulation or supportive initiatives. This article adopts a processtracing approach to determine how governments regulate international CSR. It demonstrates that the legal and political systems in the liberal market economies of theUK and theUS lead to different forms of public CSR regulation—notably in the areas of labour standards in apparel and tax transparency in extractives. The UK government has been more likely to support bottom-up collaborative multi-stakeholder initiatives, whereas the US government has favoured top-down mandatory regulation.
From time to time we like to feature some of the outstanding work of The Fletcher School’s business faculty. Today we look at a new article from Jette Steen Knudsen, Associate Professor of International Business and The Shelby Cullom Davis Chair in International Business.
A Global Policy special issue on public and private protections of labor and social standards in the global economy explores whether public and private regulations of such standards develop in harmony or tension with one another. Included in this issue was a piece researched and written by Prof. Jette Steen Knudsen titled, “How Do Domestic Regulatory Traditions Shape CSR in Large International US and UK Firms?”
Read the abstract below and follow the link to learn more:
This article examines corporate social responsibility (CSR) pertaining to labor standards in apparel and tax transparency in extractives and explores how domestic regulatory traditions shape CSR in large international US and UK firms. Reflecting their more collaborative business-government traditions, British firms are more willing to join international CSR multi-stakeholder initiatives with business-critical actors such as unions and civil society actors. The US has a more top-down regulatory approach, which promotes hard law international CSR or encourages business-driven voluntary CSR initiatives. This article makes three contributions. First, it argues that while corporations are the key actors in international CSR, their behavior reflects their respective national business systems. Second, focusing on a range of international CSR initiatives, this article finds that UK firms are more interested in adopting international (multi-stakeholder) CSR initiatives than US firms. Finally, the article shows that the US and the UK governments play a key role in driving an international CSR agenda, and in doing this it highlights government agency more so than other research has.