S.97-50

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SIMON FRASER UNIVERSITY

OFFICE OF THE VICE-PRESIDENT, ACADEMIC

MEMORANDUM

To: ?

Senate

From: ?

D. Gagan, Chair

Senate Committee on Academic Planning

Subject:

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Centre for the Study of Government and Business

Date: ?

May 12, 1997

Action undertaken by the Senate Committee on Academic Planning gives rise

to the following motion:

Motion:

"that Senate approve and recommend to the Board of Governors

as set forth in S.97 - 50 , the establishment of a Centre for the

Study of Government and Business as a Schedule B Centre."

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SCAP 97 - 27

SIMON FRASER UNIVERSITY

MEMORANDUM

OFFICE OF VICE-PRESIDENT, RESEARCH

TO: Alison Watt

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FROM: Bruce P. Clayman

Secretary, Senate Committee

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Vice-President, Research

on Academic Planning (SCAP)

RE: Centre for the Study of Government DATE: March 21,1997

and Business

I attach a proposal from Dr. Stan Shapiro for the establishment of a Centre for the Study

of Government and Business as a Schedule B Centre (centres that have a university-

wide mandate).

The Governing Committee for Centres and Institutes recommends that the Centre be

granted approval by SCAP at its next meeting. Once approved by SCAP, the proposal

is to be forwarded to the next meeting of Senate, followed by a submission to the Board

of Governors.

Bruce P. Clayman

Vice-President, Research

David Gagan

Vice-President, Academic

Attachment

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UBC -

Signatun

The Simon Fraser University - University of British Columbia

CENTRE FOR THE STUDY OF

GOVERNMENT AND BUSINESS

Signature

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Date: ?

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Bruce P. Clayman, Vice-Pr ident, Research,

SFU and Administrative Officer of the Centre for

the Study of Government and Business

Signature:

Stanley J. Shpir Dean

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Date:

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Faculty of BUsiness Administration, SFU

Signature: ?

Aidan Vining,

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Faculty of Busip'ess Administration,

Date:

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SFU

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Signature:

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Date:

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Thomas W. Ross, Faculty of Commerce and

Business Administration, UBC

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THE SFU-UBC

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CENTRE FOR THE STUDY OF

GOVERNMENT AND BUSINESS

General Purpose

The purpose of the SFU-UBC Centre is to support theoretical and applied research into the role of

governments in the Canadian economy and into the relationship between government and business

in Canada. The Centre is jointly sponsored by the Faculty of Commerce and Business

Administration at UBC and the Faculty of Business Administration at SFU. The twin foci of this

research will be on normative questions about the way governments should operate to serve best

their constituents; and on positive questions about the causes and effects of actual government

activities.

The Centre will carry out its mandate through a number of activities including the support of

research through, for example, small research grants, commissioned papers and conferences. The

Centre will also support research through dissemination activities, including its own working paper

series, other publications, a seminar series and the establishment of a public web site. It is

proposed that the Centre will be a "Schedule B" Centre ( since it involves another university). Dr.

Bruce Clayman, the V.P. Research at SFU will be the administrative officer. The Centre will

conduct all its activities in accordance with existing Simon Fraser University policies.

Centre activities will be divided into three primary program areas: the Program on Privatization and

• Contracting-Out; the Program on Regulation and Competition Policy; and, the Program on

Productivity, Efficiency and Effectiveness in Government. These Programs are described in

greater detail below.

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Centre Structure and Programs

SFU-UBC Centre for the Study of

Government & Business

Program on

? Program on Regulation &

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ogram on Productivity,

Privatization ?

Competition Policy

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flciency & Effectiveness

Government

Activities

(Research Grants, Publications, Conferences, Seminars, etc.)

Program on Privatization and Contracting-Out in the Public Sector

There is enormous interest in Canada and elsewhere in the potential for increased productivity in

important sectors of the economy by substituting private for public enterprise. A large body of

evidence has accumulated suggesting that the private provision of goods and services is more

efficient than public provision in many circumstances. This fact, combined with the fiscal binds in

which many governments find themselves has put the sale of public enterprises on the political

agendas of countries

all

around the world.

By international standards, Canadian governments at the federal and provincial levels have been

relatively cautious. As a result, there have been only a few large scale privatizations (e.g. Air

Canada, Canadian National, part of Petro-Canada, Alberta Government Telephone). However, we

could soon be seeing at least the partial privatization of such important Crown Corporations as

B.C. Hydro, Ontario Hydro, Hydro Quebec and even Canada Post.

Additionally, many government departments are downsizing by contracting-out important activities

that were formerly conducted in-house.

This program will study

all

aspects of privatization with an emphasis on the role of public

enterprise at the federal and provincial levels. There are many fundamental questions about the

reasons for privatization, the proper way to structure and implement a public sale, what parts of a

large enterprise to sell, and, importantly, about the design and effects of past federal and provincial

privatizations in Canada. Finally, what are the efficient limits to privatization: when should

governments retain their control of "strategic" activities.

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Possible research projects in this program include:

Measuring the extent of privatization activity at the federal and provincial level in

Canada. This would include not only the standard transfer of enterprise ownership,

but also the increasingly important contracting out of services.

Measuring the performance of privatized Crown Corporations, mixed enterprises

and contracted out activities.

Determining what motivates decisions to privatize. Are such decisions driven more

by ideology, by economic efficiency or by fiscal pressures?

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Work on the theory of joint public/private productive enterprises. Which of these

arrangements are likely to be the most efficient and which have the necessary

-poliflcal-appeaFto-make-them-attractivetopoliticians?-

Measuring the efficiency of public enterprises in light of the fact that most have

multi-attribute objective functions. Replacing a public enterprise with a somewhat

more efficient private one will not necessarily produce a social gain if the other

"outputs" of the public enterprise are lost.

Assessing the impact of privatization on the labour force and industrial relations in

Canada.

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Assessing the role of "strategic assets" and when they preclude contracting out.

Program on Regulation and Competition Policy

This program will consider both positive and normative questions related to government

interventions in markets. The last 15 years have seen dramatic changes in the regulatory

environment facing Canadian firms including, of course, the truly significant regulatory reforms in

transportation, telecommunications and financial services but including also the new Competition

Act which is framework law with considerable breadth. On the horizon almost certainly are further

changes in the regulation of financial services, telecommunications, broadcasting and

transportation. There will be increasing attention paid to the way we regulate activities with

negative affects on the environment. And there may be changes in the way we control the

distribution of certain drugs. Finally, competition law is itself evolving through court and

Competition Tribunal decisions and through policy decisions made by the Centre of Competition

Policy.

There is much we do not yet know about the regulatory reforms accomplished to date and those to

come. This program will support research that attempt to explain the causes and effects of current

regulatory regimes and, where appropriate, why past reforms were implemented and how

successful they have been. It will also support research that offers new proposals for reform or

evaluates proposals put forward by others.

Possible research projects under this program include:

. • When deregulation is not possible, are there regulatory reforms that can improve

market efficiency? For example, will price-cap regulation be an improvement over

rate-of-return regulation for telecommunications pricing in Canada?

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Is Canadian competition law ready for the 21St century? For example, does the

Canadian law on price fixing prevent firms from establishing socially valuable joint

ventures or strategic alliances? Is the regulation of vertical relations between firms

inefficiently invasive? Is the efficiency defense in merger law workable?

Which government policies help, and which hurt, new firms as they attempt to enter

and expand in Canadian markets?

Program on Productivity,

Efficiency

and Effectiveness in Government

Taxpayers and users of government services continue to pressure for increased efficiency and

effectiveness in government. Each year the Auditor General releases a report which identifies areas

where substantial improvements can be made. The purpose of this Program is to co-ordinate, fund

and conduct theoretical and applied research concerning the efficiency and effectiveness of

government services, policies, projects and organizations, especially the role of cost-benefit

analysis and other measurement procedures.

Possible research projects under this program include:

Developing a framework that clearly delineates between effectiveness analysis,

revenue-expenditure analysis, cost-effectiveness analysis and cost-benefit analysis.

• Empirical studies of the efficiency or effectiveness of government services or

government organizations. These may be longitudinal studies of one service or a

group of services provided by similar organizations, or panel studies.

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Cost-benefit studies of major policies, projects or regulations. These may be either

studies of proposed policies or projects, or analyses of current on-going projects.

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Theoretical research in the area of the measurement of productivity, efficiency and

effectiveness.

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Assessing the accuracy of cost-benefit forecasts.

Proposed Activities

The following list of Centre activities indicates more specifically the activities to be undertaken.

These will, in general, be shared activities in the sense that they will support work in all Centre

Programs.

1. ?

Direct Research Support:

This activity will support, with small seed grants, original research into questions of interest to the

Centre. In addition, some funds could be provided to support the dissemination of completed or

nearly complete work of significance. ?

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2. ?

Working Paper Series:

This program will produce working papers based upon Program-supported research and

disseminate them widely to universities, government agencies and private businesses.

3.

Seminar Series:

Speakers from Canada and elsewhere will be invited to present their research ideas and spend a day

or longer discussing their work with members of the Centre.

4.

Conferences:

The Centre hopes to organize and sponsor at least one conference annually on topics related to its

mandate. These will be small conferences and will include the existing IJBC Summer Conference

onindustriaLOrganization-series-that-began--in- 1993—Each-will-bring-a-smaThnumber of-scholars

with common interests to Vancouver to present and debate their work with each other and with

members of the Centre.

5.

Government and Industry Executive Education:

The Centre will assist in the provision of customized seminars for executives in government and

business on questions of interest that fall within the area of expertise of Centre-affiliated scholars.

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Current Initiatives That Will Be Folded Into the Centre

6.

Review of Canadian Competition Policy after Ten Years of the

Competition Act

This project involves the preparation of a series of research papers reviewing the successes and

failures of competition law under the 1996

Competition Act.

With some support from the

Competition Bureau, and under the editorship of Tom Ross, these papers will be published as a

special issue of the

Review of Industrial Organization

in 1997.

7.

UBC Summer Conference on Industrial Organization

The Centre will assume responsibility for this annual summer conference, held at UBC since 1993

(and before that at Carleton University from 1987). Each year the conference brings six or seven

outstanding scholars to the UBC to discuss their current research in a workshop environment.

8.

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political parties. Market prices have been excellent predictors of election outcomes. The market is

currently operating for the Federal Election to be held on June 2, 1997.

Preliminary Centre Initiatives

OProfessor AidanVining ?

Business

Professor Mark Wexler ?

Business

Professor Richard Smith ?

Communication

Universit y of British Columbia

Professor Richard Barricello

Professor Anthony Boardman

Professor James Brander

Professor Thomas Ross

Professor Barbara Spencer

Professor William Stanbury

Professor Ilan Vertinsky

Professor William Waters

----ProfessorWernerAntwei1er-----------

Professor James Vercammen

Professor Jonathan Kesselman

Agricultural Economics

Commerce

Commerce

Commerce

Commerce

Commerce

Commerce

Commerce

Comnirce

Commerce

Economics

Professor Robert Heisley ?

Commerce

Professor William Strange ?

Commerce

The C.V.'s of the co-directors Professors' Tom Ross and Aidan Vining are attached. Available from the Senat

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Secretariat Office.

Budget

The Centre has a commitment of seed support from both the Dean of Business Administration at

SF0 and the Dean of Commerce at UBC. In both cases this support ($5,000 for two years from

each Dean, for a total of $20,000) is coming from "soft" money. The Centre will be housed at

SFU, Harbour Centre. However this will involve no incremental costs because Aidan Vining

teaches at Harbour Centre on an ongoing basis and will use his existing office space. The Centre

will impose no direct financial burden on the University. There will be no curriculum impact on

the University. Upon approval, the Centre will begin to seek grant money from both public and

private sources.

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