• Somebody owns

    AnduLiberas new research director Anders Ekholm in this fall’s first blog:

    “Looking after something is an unpleasant business. Therefore it makes sense that we look after things when it is beneficial for us, but we avoid looking after things when it is not. Sometimes there are situations where looking after things and benefit do not meet, which easily leads to so-called moral hazard. A carton of milk on the kitchen table at the office and scratches on a rental car are everyday examples of a moral hazard. At home, the milk carton would have found its way back into the fridge fresh, and your own car into the parking space with no damages.

    In a firm, the situation is similar. Each shareholder must look after the firm’s operations – or perhaps ‘somebody’ takes care of it? Traditionally, financial research has documented that the shareholder base’s concentration has a positive effect on the firm’s success. The underlying explanation is that significant shareholders enhance governance through their (voting) rights. An underlying assumption here is also that significant shareholders are committed to looking after the firm. Somewhat surprisingly, there is weak scientific evidence to back up this assumption. So, is ‘someone’ looking after things?”

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Lack of tuition fees and the illusion of equality

Matias MakelaLSE master’s student Matias Mäkelä in our summer blog:

“In societies, where tuition fees for higher education are in use, you rarely hear people say ‘entrance into university and graduating from university are difficult, but the part in between is easier’. This is not because it would be easier to get into universities with tuition fees, but graduation rarely poses a problem for the student. This is simply due to the fact that the students’ motivation rarely collapses when they receive their certificate of attendance, but they have to work hard in order to not have to pay tuition fees for additional years. 

In Finland, the discussion regarding tuition fees is lagging. Arguments both for and against are hastily prepared, and it is rare to hear anything but comments exclaimed in a tumult of emotion. This is understandable. University education is not only a cost item at the time of acquisition, but it may have both positive and negative effects on the future economic well-being of the individual and the whole society. In this sense, higher education without tuition fees sounds like a smart and fair solution.

However, this is not necessarily the case if we take another look at the issue.”

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