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In 1989, the Brazilian city of Porto Alegre initiated a model of budget participation known internationally as "participatory budgeting." In this process of diagnosis, deliberation and decision-making, city residents directly decide how to allocate part of a public budget, typically at the level of municipal government. During the past two decades, hundreds of cities in Latin America, Europe, Asia, and Africa have adapted this model of participatory democracy to their own contexts. In this article, we explore one of the first Canadian experiments of participatory budgeting. In Guelph, Ontario, a civil society organization called the Neighbourhood Support Coalition uses participatory budgeting to allocate of public and private funds. We discuss the Canadian context for this experiment, as well as the history and evolution of participatory budgeting in Guelph. Based on four years of interviews, ethnographic observation, and primary and secondary literature, we identify several lessons learned through the Guelph process, as well as the conditions that have enabled its development and posed challenges for its success.

We examine the influence of venture capital on patented inventions in the United States across twenty industries over three decades. We address concerns about causality in several ways, including exploiting a 1979 policy shift that spurred venture capital fundraising. We find that increases in venture capital activity in an industry are associated with significantly higher patenting rates. While the ratio of venture capital to R&D averaged less than 3% from 1983–1992, our estimates suggest that venture capital may have accounted for 8% of industrial innovations in that period.

Past work has shown that failure tolerance by principals has the potential to stimulate innovation, but has not examined how this affects which projects principals will start. We demonstrate that failure tolerance has an equilibrium price – in terms of an investor’s required share of equity – that increases in the level of radical innovation. Financiers with investment strategies that tolerate early failure will endogenously choose to fund less radical innovations, while the most radical innovations (for whom the price of failure tolerance is too high) can only be started by investors who are not failure tolerant. Since policies to stimulate innovation must often be set before specific investments in innovative projects are made, this creates a trade-off between a policy that encourages experimentation ex post and the one that funds experimental projects ex ante. In equilibrium, it is possible that all competing financiers choose to offer failure tolerant contracts to attract entrepreneurs, leaving no capital to fund the most radical, experimental projects in the economy. The impact of different innovation policies can help to explain who finances radical innovations, and when and where radical innovation occurs.

There has been a recent surge of interest in open source software development, which involves developers at many different locations and organizations sharing code to develop and refine programs. To an economist, the behavior of individual programmers and commercial companies engaged in open source projects is initially startling. This paper makes a preliminary exploration of the economics of open source software. We highlight the extent to which labor economics, especially the literature on career concerns’, can explain many of these projects’ features. Aspects of the future of open source development process, however, remain somewhat difficult to predict with off-the-shelf’ economic models.

The purpose of this paper is to present a case study of UK fashion retailer New Look and focuses on the impact of private equity on corporate governance, employment and leverage after the public‐to‐private conversion in 2003.

This study follows a case study approach to offer in‐depth insights into the role of different parties in the deal and their perceptions. The case study is based on semi‐structured interviews with key management of New Look, partners of the private equity firms and other members of the New Look board. In addition, complements the analysis with secondary sources (e.g. analyst reports, published articles and financial data of New Look) in order to triangulate our findings.

The case presents an example of a company that pursued a public‐to‐private transaction with the support of private equity firms. The envisioned transformation process post‐transaction turned out to be highly successful with increasing efficiencies and profits as well as an increase of over 3,500 employees over four years. This paper analyses key success drivers and the role of the private equity firms in achieving this success.

The paper is the first in‐depth case study of a European public‐to‐private transaction with support of private equity that offers rich evidence on the impact of private equity on corporate governance, employment and leverage.

This paper views the housing and credit bubble 2001–2008 as a sequence starting with a financial innovation in 2001 followed by the superimposition of other financial innovations leading to the prevalence of uncertainty in Knight's sense and ending in the last quarter of 2008 with both market failure and regulation failure. To the extent that financial innovations were an important factor in the development of the bubble, the most obvious question is whether anything can be done to prevent destabilizing innovations from entering the market. The paper outlines a policy proposal to keep pace with financial innovation and strike a balance between innovation and financial stability.

Although issues of intellectual property rights would seem to be ones of interest only to obscure groups of academics and lawyers, they have become topics of everyday discussion among the regular population. Alleged copyright infringements by teenagers downloading music from the internet and accompanying threats of prosecution as well as charges of strategic patenting to harm competitors in recent high profile antitrust cases have placed intellectual property into public and political debate.

When considered as organized solutions to problems of provision of public goods, Free/Open Source Software (F/OSS) productions share a number of their defining features with the organized anarchies described by Cohen, March and Olsen in their “Garbage Can Model” (GCM). The open and voluntary contribution of software developers creates constant fluctuations in levels of attention and an extremely fluid participation. The lack of predefined hierarchical access to organizational problems determines a fundamental uncertainty about how collective goals may be linked to individual activities, and in how responsibilities and tasks may be allocated efficiently within the project. Finally, the complexity involved in the collective production of tens of thousands of lines of computer code without explicit coordination creates a situation of technological ambiguity supported by a radically decentralized activity of organizational problem finding and problem solving. In this paper we take these broad similarities as point of departure to specify an empirical model that captures some of the garbage can properties of organizational problem-solving activities in the context of a specific F/OSS project followed throughout a complete release cycle. We examine the interconnected system of individual decisions emerging from problem-solving activities performed by the 135 contributors involved in the F/OSS project on the 719 software bugs reported during the period of observation. We treat the evolving two-mode network produced by encounters between carriers of organizational solutions (contributors) and organizational problems (software bugs) as a dynamic opportunity structure that constrains and enables organizational decision making. We document how stable local configurations linking problems and solutions are induced by – and at the same time sustain – decentralized problem-solving activities with meaningful self-organizing properties.

Until recently, financial intermediaries have behaved as though immune from the bite of intellectual property law. However, recent decisions of the federal courts and acquiescence by Congress have created a new legal landscape. This article explores the basic principles and implications of patent law for risk finance, specifically in terms of emerging opportunities and incentives related to structured risk management solutions. In so doing, the discussion introduces the trade‐off between past reliance on trade secret law versus the evolving trend toward financial patents. The author addresses its influence within the convergence markets, and argues that patents may play a significant role in future financial and insurance innovation.