Women Quota: Bad, Bad Idea

FEATURE_YenYen_GlassCeilingIn past years government bodies have become louder and louder about women quota. An often-heard goal is to have ‘40% of boardroom members to be female’. The European Commission states in their definition of a quota:

The quota-instrument is a positive measure that establishes a fixed percentage or number for the representation of a specific category of persons.

To me, that sounds very suspicious – without any argumentation it is somehow deemed to be positive. Regardless, countries are following up. For instance, Germany is set to introduce legislation that will require German firms to allot 30 per cent of their non-executive board seats to women from 2016. But why? Why do we want 30% or 40%,  or even 50% of boardroom members to be female? There can be 2 reasons:

  1. Having more women in boardrooms would be fairer
  2. Having more women in boardrooms would be better

Continue reading


Increasing tax rates may not… increase taxes!

If governments face a budget deficit that is deemed to be too high, two actions can be taken: government spending is lowered, or government income is increased. The lion’s share of government income comes from taxes; increasing government income as a way of reducing budget deficits therefore translates to increasing taxes. But taxes are not increased, really; tax rates are increased.

But what few people know is that in certain situations raising tax rates will actually reduce government income from taxes.

Continue reading

Why the Rest of the World Gains from U.S. Inequalities

Innovation is deemed crucial to sustained economic growth and welfare improvement. One may subsequently pose, as I do, that innovations require some sort of inequality before they can blossom. This does not mean that some people need to be kept poor so that others can innovate; it means that those individuals who have the potential to significantly improve things for society should be enabled (or left free) to act on that potential.

One of my favourite writers (and speakers), Milton Friedmanexplains that experimentation, which is closely related to innovation, can bring tomorrow’s laggards above today’s mean. I’ve drawn the picture below to illustrate what he means (or at least how I understood he meant it):

Bringing tomorrow's laggards above today's mean

Bringing tomorrow’s laggards above today’s mean

Thus, if we accept that today some inequities exist, which means that some are poorer than others, tomorrow the poorest (the “laggards”, on the left end of the graph) may be better off than the average today. The crucial insight is that inequalities are relative. Even though some may be better off relatively, everyone is better off absolutely.

Continue reading

Implementing Venture Capital Policies in Europe Requires more than a Casual Look at Silicon Valley

Much of the literature on venture capital (VC) policies is inspired by the success of a handful highly visible companies such as Microsoft, Compaq, Intel, Google, and Apple. These companies, nowadays, are huge and extremely powerful, but at some point in their development they had to resort to VC. These companies are, of course, the envy of many countries – who wouldn’t want to have such firms flourishing in his or her country?


Continue reading

Venture Capital Policies in the Netherlands: Lessons from the Literature and Benchmark Countries


In recent months I have been on an internship with the Dutch Ministry of Finance in order to write my Master’s Thesis for the MSc in Finance. Two weeks ago I graduated from Tilburg University based on the research I did at the Ministry. The Dutch Venture Capital Association (the NVP) even published my work (here’s a PDF).

Working at the Ministry of Finance in the Hague was a very pleasant and rewarding experience, despite the lengthy daily train journeys. I worked in a directorate with young people, who helped me enormously with my research. I have been there for over 4 fulltime months. At the beginning I had no real clue about venture capitalism aside from a general understanding of its mechanisms, let alone about public policies that optimally support venture capital investments.


Continue reading

Could Game Theoretic Price Collusion be Legal?

Price fixing or price collusion occurs when companies agree to keep the price of a product or service at an elevated level (or limit production) with the goal of receiving large profits or cornering the market. This is deemed illegal. I am wondering whether price fixing could be legal if it is the result of so-called repeated or iterated games. Continue reading