Back to the failure of DeLorean
Introduction: John De Lorean, his company, and the failure of his iconic gull-winged car is often presented as a story of greed and irrationality, involving either his flawed psychology or failed government industrial policy.
Research: Graham’s motivation was a reaction to the incoherence of some existing literature and a desire to use simple economic concepts as part of a reinterpretation. Graham draws on newlyreleased official documents and government reports, integrated with contemporary media, data analysis and applied economics, as well as interviews with former De Lorean employees and policymakers from the period 1978-82.
Outcome: He found that the institutional environment was to blame for the company’s rise and fall. Because Northern Ireland inward investment had dried up, government money was made available to stabilise the economy in the belief that this would reduce unemployment and civil unrest. Consequently, official monitoring was weaker and the subsidy package more generous than elsewhere. It is plausible to argue that De Lorean calculated rationally that the more workers he hired, the more generous his subsidy package would be and the more politically difficult for the authorities to close the project. But he eventually overplayed his hand. Correcting the mythology surrounding De Lorean illustrates that the rise and fall of businesses must be better understood in order to learn policy lessons and nurture economic progress. The De Lorean story is a cautionary tale for industrial policy in a world of imperfect institutions
The economics of religion
Introduction: How do religious beliefs, cultural norms and personal values influence decision making in society?
Research: Chris tested Max Weber’s century-old hypothesis on the relationship between religion and capitalism using recent surveys of Christians located around the world. Central to Weber's thesis is the difference between Protestants and Catholics in terms of attitudes towards work, thrift and self-improvement. Chris conducted an econometric analysis using data from the two most recent waves of the International Social Survey Programme's enquiry into religious values. He found very little evidence of a distinct work ethic among Protestants. His analysis is instead consistent with an alternative hypothesis; Protestants have a unique social ethic rather than a work ethic. This social ethic manifests itself in a greater effort of trust towards their Church, education system and government.
Outcome: The economics of religion is a controversial field of inquiry which has recently seen a resurgence in interest among academics and policymakers. Exploring the economic impact of religious differences is particularly important in the context of Northern Ireland, which remains to this day a religiously-divided society. Chris’s work is the result of a close collaboration with Matthew McCracken, who completed his BSc Economics at Queen’s Management School in 2014 and is currently enrolled in the MSc Economics programme. Their co-authored research has now been published, following peer review, in the Journal of Applied Econometrics.
The financial crisis and a culture of silence
Introduction: In the recent financial crisis, with its profound and crippling consequences for economies and societies across Europe, a widespread culture of silence contributed to what happened. Professional people within banking and finance organisations failed to speak out about wrongdoing but few studies have specifically looked at the issue of whistleblowing – or its absence.
Research: Kate was motivated to ask whether organisation theory could shed any light. Drawing on her experience of researching organisational identity and culture, the research is based mainly on interviews with whistleblowers in high-profile banks in the UK, Ireland, USA, Switzerland and other countries. This is complemented by court transcripts, newspaper articles and interviews with policymakers and experts. The project was funded by NUI Galway’s Millennium fund and by the JE Safra Centre for Ethics at Harvard University.
Outcome: The research found that the majority of whistleblowers were compliance personnel. The fact that their efforts to disclose were thwarted within the organisation implies that even the safety officers were prevented from doing their jobs properly. Those that did pursue claims of wrongdoing had to overcome forms of influence from colleagues that were both subtle and overt. Kate has written a book on the topic and has been asked to share her findings with whistleblowing advocacy groups as well as engaging with regulatory authorities. The research has implications for proposed reforms of banking culture world-wide.