The emergence of entrepreneurial economics, by Vinig, T. And Van Der Voort, R. (eds.). Research on Technological Innovation, Management, and Policy, Vol. 9, Elsevier: Amsterdam, 2005, xvi +232 pp., GBP 66.00, USD 105.00, EUR 95.00 (cloth)

✍ Scribed by Russell S. Sobel

• Publisher: John Wiley and Sons
• Year: 2006
• Tongue: English
• Weight: 83 KB
• Volume: 27
• Category: Article
• ISSN: 0143-6570
• DOI: 10.1002/mde.1304

✦ Synopsis

strong case for how to strengthen the monitoring responsibilities of bankers. The need for this has arisen because 'the downside of securitization is that the banks don't retain the credit risk, which appears to lessen their due diligence, credit approval, and credit oversight intensity ' (p. 213). The widespread adoption of XBRL, he argues, could correct this side effect of an otherwise efficient banking tool. Practitioners may gain a glimpse into the future of SEC enforcement by reading his account of how he has developed and proposed 'a new XBRL Web-based corporate filing and screening system' (p. 235) for the SEC. Lamenting the woeful inadequacy of SEC oversight ('It was not a watchdog, or a lapdog, or even involved in Enron, except in several negative ways,' p. 231), McNamar suggests that his skillfully abbreviated TRUST-system (short for 'transparent reporting using standardized terminology') would make the SEC a monitor worthy of the title without imprudently increasing any of its regulatory powers.

A long-overdue and conveniently analytical examination of the 'Business Press as Corporate Monitor' by Paul H. Weaver and L. Jacobo Rodriguez's investigation of the role the creditrating agencies played complement this in-depth analysis of the various auditing agents. Weaver identifies three phases in the reporting on Enron and juxtaposes overcoverage of the scandal phase by the Wall Street Journal and undercoverage by Fortune Magazine, while putting forward a business model theory to explain these differences. Rodriguez, convincingly, lays out the case why the SEC should be enjoined from designating 'nationally recognized statistical rating organizations' (NRSRO), since this practice has created barriers to entry as well as monopoly rents from the '. . . increased use of credit ratings for regulatory purposes ' (p. 227).

Taking into account the complexity of the tax code, it is only fitting if not comical that Chris Edwards's impassioned plea to 'Replace the Scandal-Plagued Corporate Income Tax with a Cash-Flow Tax' takes up almost 50 pages. There is, undoubtedly, enough evidence to espouse fundamental changes to the tax code, not the least of which includes such statements by tax experts who looked into the Enron scandal as: 'I don't know if you could call it illegal' (p. 287). However, it is also unmistakable that the long-winded argument by Edwards is perilously unbalanced. In his eagerness to point out loopholes and deficiencies in the current corporate tax structure, he obviously (and, one hopes, unintentionally) underestimates the potential ingenuity of market participants to also exploit a cash-flow tax system. A more nuanced approach to this important question would have benefited the exposition.

In his essay on 'Corporate Governance' (part V), Niskanen again manages to jolt the reader's attention by dryly observing: '. . . that the Enron board was a model board, even by the