HERBERT J. HOVENKAMP, University of Iowa - College of Law
Email: herbert-hovenkamp@uiowa.edu

In "The Problem of Social Cost" Ronald Coase was highly critical of the work of Cambridge University Economics Professor Arthur Cecil Pigou, presenting him as a radical government interventionist. In later work Coase's critique of Pigou became even more strident. In fact, however, Pigou's Economics of Welfare created the basic model and many of the tools that Coase's later work employed. Much of what we today characterize as the "Coase Theorem" was either stated or anticipated in Pigou's work. Further, Coase's extreme faith in private bargaining led him to fail to see problems that Pigou saw quite clearly and that remain with us to this day.

HOKKY SITUNGKIR, Bandung Fe Institute
Email: hs@compsoc.bandungfe.net

The paper draws issue on the evolutionary economics that open our mind on seeing economy as growing and living organism with any characters of robustness, self-organization, adaptation, and evolution. This has been recognized, as in global picture, we enter the phase in which information and knowledge acquisition rapidly plays a major role in economy. The discussions is presented by demonstrating some qualitative properties and theoretical explorations on long range historical economic growth and development and thus followed by some highlights on innovation, creativity and elaborations regarding to fitness landscapes incorporating memetics, as works related to social and cultural aspects of social system, while talking about economic system in general. The discussions depicts some important notions on market and product diversifications that have been the source of the economic growth in general.

PAUL W. RHODE, University of North Carolina at Chapel Hill - Department of Economics, National Bureau of Economic Research (NBER), University of Arizona
Email: prhode@email.unc.edu
KOLEMAN S. STRUMPF, University of Kansas - School of Business
Email: cigar@ku.edu

Political future markets, in which investors bet on election outcomes, are often thought a recent invention. Such markets in fact have a long history in many Western countries. This paper traces the operation of political futures markets back to 16th Century Italy, 18th Century Britain, and 19th Century United States. In the United States, election betting was a common part of political campaigns in the antebellum period, but became increasingly concentrated in the organized futures markets in New York City over the postbellum period.

ARUP MAHARATNA, Gokhale Institute of Politics and Economics
Email: arupmaha@yahoo.com

It could possibly be a sheer historical coincidence that development economics as a distinct branch of economics was being born at a time when the cold war was blossoming too. But the question as to what has subsequently happened to the fate of the sub-field along with the trajectory of the cold war - the protracted 'invisible' battle fought mainly in the spheres of ideology, economics, politics, and propaganda between the capitalist and socialist blocs - cannot be similarly left as a historic fluke. A detailed substantive academic attempt at examining/establishing the latter apprehension has so far remained suspended and/or at best muted or sometimes just taken for granted in most retrospective accounts of development economics. This paper makes a systematic visit to the issue, and argues that evolution of development economics has been heavily mediated by domineering international politics, and that development economics, as it exists in the post-cold war era, entails a great delusion in relation to its original purpose, promise, and priorities.

CAROLYN FOWLER, Victoria University of Wellington
Email: Carolyn.Fowler@vuw.ac.nz

There is little knowledge about financing and accounting activities within the early colonial New Zealand settlements. This paper investigates the financing, accounting, and accountability practices instituted by Nelson settlers between 1842 and 1852, when setting up education for the children of the settlement. This archival-based history provides insights into these practices by using the Nelson School Society (NSS), a nineteenth century social institution, as a case study. The surviving archival evidence allows us to make tentative conclusions about accounting and financing practices in colonial Nelson. Firstly, the Nelson settlers provided the capital and revenue required to establish schools and operate them. This capital was provided by community donations and subscriptions while revenue was in the form of pupil fees. The institution was accountable to the capital providers and other stakeholders within the community through annual public meetings, published reports and public examinations. Later, due to expansion, application was made to the Government for help in defraying continuing losses. This could be seen as desire for public funding of what might still, at that time, be considered private benefits. Additionally, the expansion from a single site to a geographically dispersed multisite operation necessitated the implementation of governance arrangements. Each of the multisite operations had little centralised control but were accountable to the general management committee of the NSS. The accounting records appear to have been kept mainly to record the money owing to the treasurer and to demonstrate to potential funding providers the need for more money to cover this debt and expand the NSS. These accounts from 1846 were examined or audited and balanced. Overall this archival history suggests that early settlers in colonial Nelson had a good grasp of and applied financing, accounting, governance and accountability concepts and practices that are commonly found today.

CELSO PEREIRA NUNES, Madeira University
Email: clpnunes@uma.pt

This essay describes the evolution of the Economics of Poverty. It shows how the leading objectives of its authors changed over the decades. The description is roughly exhaustive from the end of the nineteenth-century to the "rediscovering poverty era" in the 1960s. After that, it concentrates in the fundamental ideas that constitute the existing theoretical framework of the poverty measurement, with an extended comment on the more relevant issues.

ASAD ZAMAN, International Institute of Islamic Economics
Email: asadzaman@alum.mit.edu

A central thesis of this paper is that social science is the study of human experience, and hence strongly conditioned by history. Modern Western political, economic and social structures have emerged as a consequence of the repudiation of religion, and are based on secular principles. Many of these are inimical to Islamic principles, and cannot be adapted to an Islamic society. Muslim societies achieved freedom from colonial rule in the first half of the twentieth century and sought to construct institutions in conformity with Islam. The development of Islamic economics is part of this process of transition away from Western colonial institutions. This paper focuses on the contrasts between Western economic theories and Islamic approaches to organization of economic affairs.

Neoclassical theory is centered around the acquisitive instinct of humans, and makes competition the driving force of economic analysis. Islamic approaches foster cooperation and encourage generosity as the fundamental principle for handling economic affairs. Human beings have potential for good and evil, and are free to choose between the two; their behavior is not subject to mathematical laws postulated by neoclassical economic theory. The main message of Islam is that we must strive to achieve the potential for good both at the individual and at the social level. Behavior in the economic realm is also governed by this goal.

Islamic law (Shari'ah) provides the framework for all activity within an Islamic society. In the economic domain, Islamic law regulates both methods by which money may be earned and also the ways it may be spent. Acquisition of wealth is permissible only in ways which are just to all parties concerned; exploitation, arbitrary taxation, and individual profit resulting in social harm is not permissible in Islamic law. This puts numerous restrictions on business practices utilized to make profits. For example, polluting the environment, or selling products which lead to moral corruption would not be permissible in Islamic law. Wealth which has been acquired becomes private property, which is both a trust and a test according to Islamic concepts. The "trust" aspect means that property must be used in ways beneficial to the individual and society. The "test" aspect means that those who have more than they need should take care of those who are in need. Ways in which acquired wealth can be spent is also subject to Islamic law. People are expected to strive to be self-sufficient and not ask from others. Thus striving to acquire wealth and spending it on personal and family needs is encouraged by Islamic law. Islam does not preach austerity and encourages a comfortable standard of living. At the same time, it strongly discourages spending on idle desires, luxuries, and ostentation. There is also a strong encouragement to spend what is beyond ones needs on social welfare.

These fundamental principles for acquiring wealth, using property (acquired wealth), and spending it impact on all realms of economic activity. Since these are substantially different from Western ideas in all three areas, there are substantial contrasts between Western economic institutions and Islamic ones. The paper traces out these differences in many realms of economic activity. The primary objective of an Islamic state is to provide justice, and Islamic public finance is concerned with tracing the concrete implications of this abstraction in the economic realm. Western financial institutions have the acquisition and multiplication of wealth as their prime objective. Since acquisition of wealth can only be a means to an end, these institutions require modification in an Islamic society. Similarly, Islamic imperatives for social welfare require construction of certain uniquely Islamic types of institutions which do not have counterparts in the West. The paper discusses these issues in some detail.