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Unformatted text preview: market failure.”
market Romano (1993): Public Pension Fund Activism
– Pressure for social investing is not a problem
for private (corporate) pension funds. In
defined benefit plans, employer bears risk of
» Page 811. “ Public pension funds are backed by a
state’s taxing power… The cost of lowered
investment returns provides a weaker incentive for
public fund managers to avoid suboptimal social
investments than their private counterparts because
the bearers of the cost, taxpayers, are even more
diffuse group… than shareholders and are therefore
even less likely to monitor a (public) pension fund’s
management.” Romano (1993): Public Pension Fund Activism
s State statutes fix the composition of public
pension fund boards
– Gubernatorial appointees (57%)
Elected by beneficiaries (18%) s Table 3: Positive relation between fund
earnings and proportion of...
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This note was uploaded on 10/11/2012 for the course FINANCE 512 taught by Professor Care during the Spring '12 term at Keller Graduate School of Management.
- Spring '12