Articles de revues sur le sujet « Portfolio allocation, co-variance, co-skewness and co-kurtosis »

Due to many theoretical and practical shortcomings of the traditional CAPM model, this study aims at analyzing the CAPM with possible extensions. The analysis aims to know the empirical soundness of Conditional Higher Moment CAPM in emerging India’s capital market. The sample consists of 69 company’s daily stock price data from April 2004 to March 2019 from NSE 100. Panel data analysis is used on 21 cross-sections. The overall results show that when both up and down markets are incorporated separately, all three moments, namely, co-variance, co-skewness, and co-kurtosis, are priced during the normal Indian economy phase. Further, this study states that including higher moments (co-skewness and co-kurtosis) in the two-moment model provides symmetry in both the up and down markets. This is one of the first studies in the Indian Stock market explaining the variation in portfolio returns through panel data analysis by extending CAPM with conditional higher-order co-moments. The portfolio managers should consider skewness and kurtosis along with variance in constructing the optimal portfolios.

Sustainable economic growth and development of stock market plays an important role in diversifying the investment opportunities that can be assessed accordingly. However, a true diversification in portfolio is impossible without inclusion of higher-order moments, skewness and kurtosis. However, the risk-taking behavior of investors is modelled with the help of higher-order moments of risk. Therefore, this study is intended to construct optimal portfolios and efficient frontiers with the inclusion of higher-order moments of risk. The findings show that optimized portfolios with inclusion of skewness and kurtosis are sustainable and significantly different than those from mean-variance optimized portfolios which show asymmetric and fat-tail risk. Results further confirm its significance in balancing the additional risk dimensions and returns in Asian emerging stock markets for sustainable returns. The results also endorse that induction of skewness and kurtosis affects portfolio allocation weights and expected returns. Therefore, this study strongly recommends the inclusion of higher moments of risk for optimization to curtail their effect and sub-optimal decisions.

In this paper, we quantify the impact on the representative agent's welfare of the presence of derivative products spanning covariance risk. In an asset allocation framework with stochastic (co)variances, we allow the agent to invest not only in the stocks but also in the associated variance swaps. We solve this optimal portfolio allocation program using the Wishart Affine Stochastic Correlation framework, as introduced in Da Fonseca, Grasselli and Tebaldi (2007): it shares the analytical tractability of the single-asset counterpart represented by the [36] model and it seems to be the natural framework for studying multivariate problems when volatilities as well as correlations are stochastic. What is more, this framework shows how variance swaps can implicitly span the covariance risk. We provide the explicit solution to the portfolio optimization problem and we discuss the structure of the portfolio loadings with respect to model parameters. Using real data on major indexes, we find that the impact of covariance risk on the optimal strategy is huge. It first leads to a portfolio that is mostly driven by the market price of volatility-covolatility risks. It is then strongly leveraged through variance swaps, thus leading to a much higher utility, when compared to the case when investing in such derivatives is not possible.

Purpose This paper aims to explore the impact of Sharīʿah-compliant stocks on other investor risk preferences beyond the risk aversion, namely, prudence and temperance. Design/methodology/approach This paper uses the non-parametric model data envelopment analysis with the shortage function as a measure of performance. The model uses three specifications considering skewness and kurtosis that describe according to expected utility theory, prudence and temperance. Findings Results show that first, efficient portfolios consist mainly of conventional stocks in the three-model specification. Second, the skewness improvement is achieved only when considering conventional stocks while Sharīʿah-compliant assets do not exhibit any impact on the third moment. Finally, diversification through both conventional and Sharīʿah-compliant stocks does not lead to kurtosis reduction. Sharīʿah-compliant stocks in efficient portfolios are sensitive to return and risk solely, and hence, prudence and temperance as related to skewness and kurtosis measures can be ignored in optimal portfolio selection during normal market conditions. Research limitations/implications Findings suggest the same conclusions for four Islamic screening methods; however, readers should be prudent due to the limited sample. Results show that Sharīʿah-compliant assets do not have an impact on higher-order moments optimal portfolio returns, and hence, question the commonly admitted assumption of non-normality return distributions at least for Sharīʿah-compliant stocks. Practical implications The research findings suggest that Islamic investor preferences are described only by return and risk along with Sharīʿah criteria for stock selection and portfolio allocation. Portfolio managers should not care about higher-order moments to manage Sharīʿah-compliant funds. The traditional mean-variance Markowitz framework will be sufficient for investment or allocation decision-making. Description of Sharīʿah-compliant portfolio returns with only the first two order moments gives such asset more resiliency to extreme events like a crisis. Originality/value This research is the first in literature exploring whether prudence and temperance defined by higher-order moments can be drivers, besides Sharīʿah criteria, in portfolio allocation decision-making. This study is unique in terms of methodology and application. It uses individual stock data on the Casablanca Stock Exchange.

It has been widely studied how investors will allocate their assets to an investment when the return of assets is normally distributed. In this context usually, the problem of portfolio optimization is analyzed using mean-variance. When asset returns are not normally distributed, the mean-variance analysis may not be appropriate for selecting the optimum portfolio. This paper will examine the consequences of abnormalities in the process of allocating investment portfolio assets. Here will be shown how to adjust the mean-variance standard as a basic framework for asset allocation in cases where asset returns are not normally distributed. We will also discuss the application of the optimum strategies for this problem. Based on the results of literature studies, it can be concluded that the expected utility approximation involves averages, variances, skewness, and kurtosis, and can be extended to even higher moments.

The traditional models to optimize portfolios based on mean-variance analysis aim to determine the portfolio weights that minimize the variance for a certain return level. The covariance matrices used to optimize are difficult to estimate and ad hoc methods often need to be applied to limit or smooth the mean-variance efficient allocations recommended by the model. Although the method is efficient, the tracking error isn’t certainly stationary, so the portfolio can get distant from the benchmark, requiring frequent re-balancements. This work uses cointegration methodology to devise two quantitative strategies: index tracking and long-short market neutral. We aim to design optimal portfolios acquiring the asset prices’ co-movements. The results show that the devise of index tracking portfolios using cointegration generates goods results, replicating the benchmark’s return and volatility. The long-short strategy generated stable returns under several market circumstances, presenting low volatility.

Abstract A classical portfolio theory deals with finding the optimal proportion in which an agent invests a wealth in a risk-free asset and a probabilistic risky asset. Formulating and solving the problem depend on how the risk is represented and how, combined with the utility function defines a notion of expected utility. In this paper the risk is a fuzzy variable and the notion of expected utility is defined in the setting of Liu’s credibility theory. Thus, the portfolio choice problem is formulated as an optimization problem in which the objective function is a credibilistic expected utility. Different approximation calculation formulas for the optimal allocation of the credibilistic risky asset are proved. These formulas contain two types of parameters: Various credibilistic moments associated with fuzzy variables (expected value, variance, skewness and kurtosis) and the risk aversion, prudence and temperance indicators of the utility function.

AbstractThis article examines whether international investors benefit from adding real estate investment trusts (REITs) to a mixed asset portfolio consisting of global stocks, bonds, hedge funds, and commodities. Previous literature has shown that REITs provide a strong co-movement with direct real estate in the long run. We therefore test the diversification potential of international REITs within the strategic asset allocation. Using the Johansen cointegration technique, we show that there is no long-term co-movement between REITs and the other asset classes in the period from January 1990 to December 2009. Thus, the empirical evidence suggests that REITs improve the diversification potential for active investors and those with a long-term investment horizon by simultaneously generating continuous cash flows.

This paper focuses on three “safe haven” assets (gold, oil, and the Swiss Franc) and examines the impact of recent financial crises and some macroeconomic variables on their return co-movements during the last two decades. All financial crises produced significant increases in conditional correlations between these asset returns, thus revealing consistent portfolio shifts from more traditional towards safer financial instruments during turbulent periods. The world equity risk premium stands out as the most relevant macroeconomic variable affecting return co-movements, while economic policy uncertainty indicators also exerted significant effects. Overall, this evidence points out that gold, oil, and the Swiss currency played an important role in global investors’ portfolio allocation choices, and that these assets preserved their essential “safe haven” properties during the period examined.

Purpose This study aims to analyze the dynamic relationship between the Bitcoin market and the conventional asset classes in India Design/methodology/approach This paper aims to cast light on the dynamic linkages between Bitcoin prices and other conventional asset classes in India by using the wavelet transform frameworks, which can allow us to analyze components of time series without losing the information. To do that, the techniques used with the data set include wavelet-based covariance, correlation, coherence spectrum, continuous power spectrum and Granger causality test. Findings The findings of the study suggest that interrelationships between Bitcoin and the key financial asset returns are statistically significant at low, medium and high frequencies. This study also finds the existence of the unidirectional connectedness between Bitcoin the other assets in India. Practical implications The outcome of the analysis calls for substantial policy implications for investors, portfolio management in India. This research on the existence of the interconnectedness between Bitcoin and other conventional asset classes in a specific country context, India can, therefore, make a significant contribution to the contemporary debate about the speculative nature of the cryptocurrencies. It casts light on whether Bitcoin provides any diversification and risk management benefits for Indian, as well as global investors. Originality/value To the best of the author’s knowledge, this is the first paper investigating the interrelatedness between Bitcoin and key conventional asset classes in India. This research makes methodological advancements by using the wavelet coherence transform. The findings provide empirical bases from which to deal with issues regarding hedging purposes and optimal portfolio allocation for an increasing number of investors in the Indian context. Therefore, the main contribution of this study to related literature in this field is significant.

This study investigates the impact of commodity price volatility (including soft commodities, precious metals, industrial metals, and energy) on the dynamics of corporate sukuk returns. Using a sample of sukuk indices from Gulf Cooperation Council (GCC) countries, we study the dynamic conditional correlation using a multivariate generalized autoregressive conditional heteroskedasticity dynamic conditional correlation (GARCH-DCC) process. Empirical results show a time-varying negative correlation between GCC sukuk returns and commodity prices. In fact, a negative conditional correlation among assets of a given portfolio implies higher gain-to-risk ratios. An understanding of volatility and dynamic co-movements in financial and commodity markets is important for portfolio allocation and risk management practices.

PurposeResidential Real Estate Investment Trusts in Japan (residential J-REITs) have become an increasingly significant listed property sector recently. The purpose of this paper is to assess the effectiveness of residential J-REITs in a mixed-asset portfolio context in Japan by assessing the significance, risk-adjusted performance and portfolio diversification benefits of residential J-REITs over July 2006–August 2018. The ongoing property investment implications for residential J-REITs are also identified.Design/methodology/approachUsing monthly total returns, the risk-adjusted performance and portfolio diversification benefits for residential J-REITs over July 2006–August 2018 are assessed. An asset allocation diagram is employed to assess the role of residential J-REITs in a mixed-asset portfolio context in Japan.FindingsResidential J-REITs generally delivered superior risk-adjusted returns compared with the other sub-sector J-REITs, stocks and bonds in Japan over July 2006–August 2018, with desirable portfolio diversification benefits in the full mixed-asset portfolio context. Importantly,residential J-REITs are observed as strongly contributing to the mixed-asset portfolio context in Japan across the portfolio risk spectrum, particularly in a post-GFC context. This also reflects that residential J-REITs provide high portfolio returns and strong portfolio diversification benefits in a mixed-asset portfolio context in Japan.Practical implicationsResidential J-REITs are effective and liquid residential property investment exposure in Japan. The results highlight the strong risk-adjusted performance of residential J-REITs in Japan’s mixed-asset portfolio context. This suggests institutional investors, particularly Japan institutional investors, should consider including residential J-REITs in their mixed-asset portfolios, as residential J-REITs are seen as a compelling investment product co-existing alongside the other sub-sector REITs and major asset classes in institutional investor portfolios in the context of Japan. This also confirms the effectiveness of institutionalised residential J-REITs. Given the solid residential property market fundamentals in Japan, an increased level of the institutionalisation of residential J-REITs can be expected.Originality/valueThe study is the first study to assess the effectiveness of residential J-REITs, via assessing the significance, risk-adjusted performance and portfolio diversification benefits of residential J-REITs and their role in a mixed-asset portfolio context in Japan. This research enables more informed and practical property investment decision making regarding the value-added and strategic role of residential J-REITs as effective and liquid residential property investment exposure in Japan, as well as an increasingly institutionalised property sector going forward.

Abstract The aim of the paper is to analyze the transmission of shocks from selected developed and Southeastern European stock markets to the stock market of North Macedonia. Using the Bae, Karolyi, and Stulz (2003) co-exceedance methodology, we find that the probability of contagion from the stock markets of United States, Serbia and Bosnia and Herzegovina to the Macedonian stock market increased during the Global Financial Crisis. Regarding the asset classes, we show that contagion is positively associated with the volatility of Eurostoxx50 index, while negatively with the return of the euro dollar exchange rate and the yield of the 10-year US Treasury Note. The results have important implications for portfolio diversification and the asset allocation decisions of investors.

PurposeAs significant listed property investment vehicles, industrial and logistics REITs (I&L REITs) have recently enhanced their property portfolios, often replacing the traditional industrial properties with logistic properties to gain strategic exposure to recent e-commerce trends. This paper aims to assess the investment performance of I&L REITs by assessing the significance, risk-adjusted performance and portfolio diversification benefits of I&L REITs in the Pacific Rim region from July 2011 to December 2018. The strategic property investment implications for I&L REITs are also identified.Design/methodology/approachMonthly total returns from July 2011 to December 2018 were used to analyse the risk-adjusted performance and portfolio diversification benefits for I&L REITs in the United States, Japan, Australia and Singapore. An asset allocation diagram was employed to assess the strategic role of I&L REITs in a mixed-asset portfolio in each case.FindingsI&L REITs generally possessed superior average annual returns compared with the other sub-sector REITs, stocks and bonds in the United States, Japan, Australia and Singapore between July 2011 and December 2018, with desirable portfolio diversification benefits. Importantly, a more significant role for I&L REITs was generally observed in the mixed-asset portfolio compared to the other sub-sector REITs in each of these four markets across the broad portfolio risk spectrum. This reflects I&L REITs delivering enhanced portfolio returns and offering portfolio diversification benefits in a mixed-asset portfolio in the United States, Japan, Australia and Singapore.Practical implicationsProperty investors, particularly property securities funds (PSFs) and income-oriented investors, should consider including I&L REITs in their mixed-asset portfolios, as Pacific Rim–based I&L REITs provided an attractive REIT investment sub-sector, co-existing alongside the other sub-sector REITs and major asset classes in a mixed-asset portfolio in a Pacific Rim context, as well as being a portfolio diversifier. These results confirm the added-value and strategic role of I&L REITs in a mixed-asset portfolio, seeing I&L REITs as an effective investment pathway for I&L property exposure in the Pacific Rim region.Originality/valueThis is the first study to assess the investment performance of I&L REITs in the Pacific Rim region, evaluating their significance, risk-adjusted performance and portfolio diversification benefits, and the role of I&L REITs in a mixed-asset portfolio in the United States, Japan, Australia and Singapore. More importantly, this research is the first paper to provide empirical evidence on I&L REITs, which have often transformed their traditional industrial property portfolios with increased levels of logistics property to gain exposure to recent e-commerce trends. This research enables more informed and practical property investment decision-making regarding I&L REITs and their added-value and strategic role in a mixed-asset portfolio, as well as delivering effective I&L property exposure in the Pacific Rim region, with the added benefits of liquidity, transparency and fiscal efficiency.

This study investigates stock-bond correlation in 17 countries of emerging markets during 2011 to 2018 using monthly price data. Data was analyzed using ARCH-LM test, GJR GARCH and Multivariate GARCH type Asymmetric DCC model. Findings of this paper revealed that sequence of return series are stationary containing white noise error, past return volatilities do not have the ability to predict future volatilities and conditional volatility is higher and negative momentum of the market increase the correlation of stock and bond in a country or vice versa and hence increase the diversification benefit for asset allocation in a portfolio construction and provide hedging assets characteristics among countries and it is found that there is a co-movement between stock and bond in a country of emerging markets.

e13549 Background: The scientific literature experienced an unprecedented growth in archived pre-prints and peer-reviewed COVID-19 related publications with regional variations making the task of synthesizing the information burdensome. This study aims to characterize global patterns and domains of COVID-19 research in cancer. Methods: We used the NIH COVID-19 portfolio and Web of Science (WOS) curated databases to extract abstracts using standard search terms for COVID-19 and cancer between Nov 1 2019 and Dec 31 2020. A total of 21,325 publications matched the study search criteria (NIH: 18,029 records; WOS: 3512 records; 204 records overlapped). We performed a descriptive analysis to calculate country citations and intercountry collaboration networks. The Jaccard similarity index was utilized to identify the most frequently co-occurring terms. Latent Dirichlet Allocation (LDA) was used for classifying publications into corresponding research topics. Results: The most productive period was May 2020 with 3,181 published articles, mean citation rate per paper was highest in Jan 2020 (1,620.5) followed by Feb 2020 (236.7), highest mean use rate in the last 12 months was March 2020. Top productive countries are classified as High and Upper Middle-income countries, 17% of research contributed by USA, 12% by China PR, and 11.4% by Italy. Linkage between top 30 productive countries show USA, Italy, and England with the highest inter-country co-ordination. Analysis of keywords co-occurring at least 5 times resulted in 12 major clusters including: 1) cancer treatment and mortality; 2) inflammation and immunology; 3) chronic diseases and co-morbidities; and 4) mental health and social psychology. Ranked topics with the highest volume of publications include 1) effect of COVID-19 on treatment outcomes; 2) individual risk factors of COVID-19 severity and mortality, and 3) novel treatment options relevant to cancer patients [Table]. Growth of articles peaked between Mar and Apr 2020 with a steady decline across all topics in Sept 2020. Conclusions: Global cancer –related research productivity peaked following the declaration of the pandemic and first wave in Mar- Apr 2020. Systematic synthesis of a large volume of COVID-19 literature revealed the global research landscape highlighting focus on the study of outcomes in cancer patients.[Table: see text]

Purpose – Since 2008, the German open-ended real estate fund (GOEREF) industry has experienced a critical phase of suspensions of redemption of fund shares, announced fund terminations and, eventually, introduction of a new regulation. With assets under the management of over 80 billion, GOEREFs are the dominant indirect real estate investment vehicle in Germany. Thus, it is extremely important to study the effects of this crisis on the risk and return characteristics of the respective funds. The paper aims to discuss these issues. Design/methodology/approach – Both net asset values (NAVs) and potential secondary market prices of the shares of funds with suspended redemptions are used. The resulting total return patterns are analysed on an index basis for fund groups that best represent the most important investor groups for GOEREFs. Findings – Groups that comprised a higher number of funds with suspended redemptions were considerably worse off and less attractive in an asset allocation context than the others given the often much lower secondary market prices. However, changes in return and risk must also be considered in terms of NAVs. The fund group comprising co-operative savings banks' funds was virtually unaffected by the liquidity crisis and continued to deliver stable and non-volatile returns, while the other fund groups exhibited a clear shift in their respective return profiles. Originality/value – This study analyses fund groups that reflect the most important investor groups by using both types of important prices in a comprehensive industry sample. It, thus, provides valuable insights into the changing profiles of the funds and groups and their favourability from an asset allocation perspective.

PurposeThe rising interconnectedness between international banks, at one end, allow participants to share risk and diversification which leads to stable local lending and increase in competitiveness, however, at the other end poses potential for volatility spillover and thereby contagion phenomena. Therefore, investigating the presence of co-integration amongst international banks can provide useful information about risk spillover in times of financial turbulenceDesign/methodology/approachThe authors employ wavelet correlation and wavelet multiple cross-correlation strategies, following an initial decomposition of returns series through maximal overlap discrete wavelet transformation (MODWT).FindingsThe results indicate high integration level between Citibank and Deutsche Bank whereas potential of diversification exists between pairs of Citibank–Hong Kong and Shanghai Banking Corporation and Bank of America–Deutsche Bank, with former more evident in short- and medium-term relationship and later in long-run investment horizon. This paper carries implications for investors, fund managers and policymakers in foreseeing the prospects of contagion attributable to high level integration levels.Practical implicationsImplications for cross-border banking integration includes the presence of common lender effect which appears as a dominant factor for cross-border contagion. Therefore, banks based in different countries should focus more on funds diversification rather than borrowing much from any single creditor. Furthermore, foreign operations based on subsidiaries instead of relying on direct cross-border lending can help in reducing volatility of the foreign financial resources. Nevertheless, based on the results and significant strand of existing literature, the presence of contagion is inevitable, and therefore, a careful consideration of cross-border banking supervision and co-operation by the financial authorities can help in mitigating the volatility of global capital flows.Originality/valueFirst, this study fills gap in the existing literature regarding the discussion on portfolio diversification opportunities in the banking sector. The banking sector is usually perceived as a main source of fixed income securities or financing; however, on the contrary, investors may also be interested for investments in publicly listed bank's stock. Most of the work regarding portfolio diversification revolves around capital market instruments; however, publicly listed shares of largest bank also present an avenue for diversification. Second, major fundamentals and the associated factor for banks performance are reflected in the its profits, either these profits result from large customer base or proper allocation of bank's assets, etc. Therefore, returns of these banks serve as a barometer for their performance and co-movement between any two banks can highlight the presence and extent of their underlying association. Third, the authors apply the latest extensions in wavelet techniques after decomposing returns series through the MODWT framework. This decomposition followed by wavelet estimations allow us to investigate banks integration level across different time and frequency space thereby carrying implications for both short- and long-run investors. Fourth, by analysing the presence of returns co-movements, the authors can predict the extent of plausible contagion since the recent global financial crisis of 2008–2009 used banks as the main medium of propagation of shocks. Fifth, the work presents many implications for the investment community, major trading partners associated with banks through different instruments and for policymakers so that the effect of contagion can be anticipated or at least mitigated in case of future financial turbulence.HighlightsWe investigate portfolio diversification opportunities in the banking sector.Time-frequency returns co-movements is measures by applying wavelet multiple correlation and cross-correlation techniques on decomposed return series.Deutsche Bank and Bank of America act as highest transmitter and recipient of volatility, respectively using the spillover approach of Diebold and Yilmaz (2012).Citibank and Deutsche Bank exhibit high pairwise correlation indicating no diversification benefits.Citibank exhibits high level of integration with other banks in the short- and medium-run whereas Deutsche Bank exercises high integration levels in the long-run investment period.

This study aims to investigate the financial contagion during and after Greek Crisis to observe the impact on global economy. Financial contagion may affect the portfolio risk management, the formulation of monetary, fiscal policy, strategic asset allocation and pricing. To analyse the contagion after Greek Crisis, the co-movements of six stock exchange markets have been studied for an 8-year term. For this study between countries’ time series, bivariate wavelet technique called wavelet coherence is employed, and Matlab 2016a wavelet tool is used for the analysis. Daily closing prices of stock market indices of six countries, Greece (ASE), UK (FTSE100), Germany (DAX), Hungary (BUX), Poland (WIG) and Turkey (BIST100) are used in this analysis between 06 March 2009 and 28 February 2017.This paper targets to show if there is a certain sign for a co-movement between markets during and after Greek Debt Crisis. Therefore, it eventually sets out the benefits or harm of integration in the financial markets by using Wavelet Method. This study contributes the literature by analyzing the effects of contagion among stock markets by using wavelet method. This analysis has been filling the gap in the literature by employing a new technique to explain leverage effect with financial time series data. As wavelet tool displays the leverage effect by comparing crisis and non-crisis periods, the study supports the idea that convergence is adversely affecting the connected markets. According to the results of the study, the contagion is high especially during crisis within European financial markets. whereas positive improvements have less impact on markets.

Gold is a traditional favorite investment avenue for investors all over the globe, particularly during the crisis period. Irrespective of the nature of the crisis, investors are allocating their funds to different gold-backed assets. This paper uses various globally traded gold-backed assets to identify its role and market linkages during the Covid 19 pandemic. Daily prices of assets from March 2020 to January 2022 were employed. DCC GARCH model is used to ascertain time-varying correlations and quantile regression was employed to examine the relationship between assets in different quantiles. Based on the analysis, safe haven property of all the assets is revealed and it is associated with the severity of the stock market crash as specified by the quantiles. Moreover, double exposure of gold mining stock results in different flights to quality. Co-movement of gold bullion, gold futures, and gold volatility index is visible during this crisis. Gold Exchange Traded Funds and gold-backed cryptocurrency offer diversification by decoupling with gold bullion in the portfolio. The paper highlights the importance of the choice of gold-backed assets along with gold bullion in the investment portfolio based on its role and market linkages.

Purpose – The purpose of this paper is to examine weekly dynamic conditional correlations (DCC) and vector autoregressive (VAR)-based volatility spillover effects within the three Greater China (GC) public property markets, as well as across the GC property markets, three Asian emerging markets and two developed markets of the USA and Japan over the period from January 1999 through December 2013. Design/methodology/approach – First, the author employ the DCC methodology proposed by Engle (2002) to examine the time-varying nature in return co-movements among the public property markets. Second, the author appeal to the generalized VAR methodology, variance decomposition and the generalized spillover index of Diebold and Yilmaz (2012) to investigate the volatility spillover effects across the real estate markets. Finally, the spillover framework is able to combine with recent developments in time series econometrics to provide a comprehensive analysis of the dynamic volatility co-movements regionally and globally. The author also examine whether there are volatility spillover regimes, as well as explore the relationship between the volatility spillover cycles and the correlation spillover cycles. Findings – Results indicate moderate return co-movements and volatility spillover effects within and across the GC region. Cross-market volatility spillovers are bidirectional with the highest spillovers occur during the global financial crisis (GFC) period. Comparatively, the Chinese public property market's volatility is more exogenous and less influenced by other markets. The volatility spillover effects are subject to regime switching with two structural breaks detected for the five sub-groups of markets examined. There is evidence of significant dependence between the volatility spillover cycles across stock and public real estate, due to the presence of unobserved common shocks. Research limitations/implications – Because international investors incorporate into their portfolio allocation not only the long-term price relationship but also the short-term market volatility interaction and return correlation structure, the results of this study can shed more light on the extent to which investors can benefit from regional and international diversification in the long run and short-term within and across the GC securitized property sector, with Asian emerging market and global developed markets of Japan and USA. Although it is beyond the scope of this paper, it would be interesting to examine how the two co-movement measures (volatility spillovers and correlation spillovers) can be combined in optimal covariance forecasting in global investing that includes stock and public real estate markets. Originality/value – This is one of very few papers that comprehensively analyze the dynamic return correlations and conditional volatility spillover effects among the three GC public property markets, as well as with their selected emerging and developed partners over the last decade and during the GFC period, which is the main contribution of the study. The specific contribution is to characterize and measure cross-public real estate market volatility transmission in asset pricing through estimates of several conditional “volatility spillover” indices. In this case, a volatility spillover index is defined as share of total return variability in one public real estate market attributable to volatility surprises in another public real estate market.

This study aims to investigate the co-movement and lead–lag relationship between carbon prices and energy prices in the time–frequency domain in the carbon emission trading system (ETS) of Beijing. Based on wavelet analysis method, this study examines the weekly data on oil and natural gas prices and carbon prices in Beijing ETS from its establishment in November 2013 to April 2019. Empirical results show the following important findings: (1) Carbon and natural gas prices are mainly negatively correlated, with natural gas prices occupying a leading position in the 12–20 weeks frequency band, indicating that the increase (decrease) of natural gas price will lead to the decrease (increase) of carbon price; (2) carbon and oil prices show an unstable dependence relationship, and their leadership position in the market constantly changes. The partial wavelet coherency and partial phase differences vary greatly in different time–frequency domains, indicating that there is no stable coherency between oil prices and carbon prices. The estimation results prove the existence of coherency between the carbon and energy prices in the Beijing ETS. The research findings of this paper provide quantifiable references for investors to achieve risk control in asset allocation and investment portfolio in the ETS market.

This study aims to investigate the co-movement and lead–lag relationship between carbon prices and energy prices in the time–frequency domain in the carbon emission trading system (ETS) of Beijing. Based on wavelet analysis method, this study examines the weekly data on oil and natural gas prices and carbon prices in Beijing ETS from its establishment in November 2013 to April 2019. Empirical results show the following important findings: (1) Carbon and natural gas prices are mainly negatively correlated, with natural gas prices occupying a leading position in the 12–20 weeks frequency band, indicating that the increase (decrease) of natural gas price will lead to the decrease (increase) of carbon price; (2) carbon and oil prices show an unstable dependence relationship, and their leadership position in the market constantly changes. The partial wavelet coherency and partial phase differences vary greatly in different time–frequency domains, indicating that there is no stable coherency between oil prices and carbon prices. The estimation results prove the existence of coherency between the carbon and energy prices in the Beijing ETS. The research findings of this paper provide quantifiable references for investors to achieve risk control in asset allocation and investment portfolio in the ETS market.

AbstractIn the new ecosystem for financing the sustainable development goals (SDGs), private actors are no longer passive bystanders in the development process, nor engaged merely as clients or contractors but as co-investors and co-producers in development projects and programmes. This ‘private turn’ in the financing of international development and other global public goods sees the enmeshment of public and private finance that brings aid and other forms of official development finance into sharp contact with regulatory regimes commonly associated with commercial investments, capital markets and corporate activity. The shift away from public resources for financing (e.g., multilateral sovereign loans) to leveraging financial markets for development capital (e.g., equity and portfolio investments) will insert countries into global financial markets and engagements with corporate actors in ways that will change forms of regulation, accountability and transparency of public finance. Zooming in on the creation of markets for sustainable development investments (SDI), this paper explores how this broader ‘reengineering of public finance’ is establishing new forms of governance that are restructuring the relationship between states and markets and between transnational capital and their host communities. Specifically, the movement towards private investments and financial markets as key drivers of financing for sustainable development has two critical impacts on transnational governance: (a) the use of private markets, in their capital allocation roles, as quasi-regulatory tools for achieving the SDGs and other global public goods; and (b) the deployment of private regulatory regimes (e.g., contracts, codes of conduct, corporate governance codes) as mechanisms to govern the social and environmental externalities of transnational economic activity. These developments have wide-ranging impacts on the domestic legal, political and civic constitution of states that can paradoxically constrain fiscal and policy space for enabling the attainment of the SDGs.

A comparison of the 2005-2009 cabinet Merkel I (the “Grand“ Coalition) and the Christian Democrat-Liberal coalition cabinet Merkel II formed in 2009 presents an interesting puzzle. Political commentators and coalition theorists alike would have expected the CDU/CSU-SPD coalition to experience a relatively high, and the CDU/CSU-FDP coalition a relatively low level of overt inter-party conflict. In reality, however, relations in the CDU/CSU-FDP coalition were relatively conflictive, whereas the Grand Coalition seemed to manage conflict between reluctant partners successfully. This article seeks to explain these seemingly paradoxical differences between the two coalitions. It demonstrates that both the positioning of the coalition parties in the policy space and important institutions constraining coalition bargaining after the formation of the cabinet Merkel II (portfolio allocation, role of the CDU/CSU state minister presidents) disadvantaged the FDP in pursuing its key policy goals (especially tax reform). As a result, the Liberals resorted to “noisy“ tactics in the public sphere. The grand coalition, by contrast, was an alliance of co-equals, which facilitated a more consensual management of inter-party conflict.

BackgroundAlthough it is difficult to quantify, previous estimates suggested that China’s global health aid has increased sharply since the early 2000s. Unlike many donors, China has no official aid reporting obligations, nor does it voluntarily disclose detailed aid information. Our study aimed to create a standardised estimate using commonly accepted definitions of aid and frameworks for categorising health projects.MethodsWe categorised AidData’s Chinese Official Finance Dataset health-related projects according to health aid frameworks from the Organisation for Economic Co-operation and Development (OECD) and the Institute for Health Metrics and Evaluation (IHME). Only projects that complied with the definition of official development assistance were included. We analysed the project count and financial value to assess China’s priority health aid areas.FindingsBetween 2000 and 2017, China funded 1339 health-related aid projects, or 13% of its total aid project portfolio. Most of these projects were located in sub-Saharan Africa. According to the OECD framework, the priority focus areas of these projects were: medical services, such as specialty equipment and tertiary services (n=489, 37%); basic health care, such as basic medical services and drugs (n=251, 19%); malaria control (n=234, 18%) and basic health infrastructure (n=178, 13%). Under the IHME framework, health systems strengthening accounted for 74% (n=991) of total projects, primarily due to China’s contributions to human resources for health, infrastructure and equipment. The only other major allocation under the IHME framework was malaria (n=234, 18%). When we estimated missing financial values under the OECD framework, China was the fifth largest health aid donor to African countries from 2002 to 2017, after the USA, the UK, Canada and Germany.ConclusionOur findings enable a better understanding of Chinese health aid in the absence of transparent aid reporting, which could contribute to better coordination, collaboration and resource allocation for both donor and recipient countries.

In this paper we examine the optimal composition of global portfolios of bank stocks, expressed in both local currencies and in US dollar terms, over the period January 1992 to June 2001. We estimate optimal global bank stock portfolios using two covariance optimisation algorithms the Markowitz expected return/variance algorithm (MPT), and the Elton, Gruber and Padberg average correlation algorithm (EGP) and compare the composition and performance of these portfolios with a portfolio comprising equally-weighted bank stocks. Our study also includes measures of skewness and kurtosis, and risk adjusted return measures based on variance, semi-variance and portfolio betas. The purpose of our study is twofold. First, we wish to examine whether the covariance optimisation approaches produce significantly different portfolio allocations over the period of the study. Second, we wish to determine if the two significant events for the global banking sector in this period the implementation of global risk-based capital adequacy standards in 1992 and the Asian banking crisis of 1997 may have had any influence on the optimal allocation of global bank stocks in an investment portfolio. To achieve this we construct the optimal bank portfolios, using both optimisation algorithms, for the period 1992-1996 and 1997-2001. We include bank stock returns for 26 countries in the study. We find that the MPT and EGP optimisation algorithms do produce different portfolio allocations during both periods of the study. If return is measured against variance, the MPT algorithm produces the best performing portfolio. However if return is measured against semi-variance, the results are mixed. We also find that bank portfolios performed better on a risk-adjusted basis in the period leading up to the Asian crisis of 1997. Our most interesting finding is that if the highest risk bank stocks are removed from the portfolio, the terminal wealth of the portfolio falls by around half in each period. This suggests that higher-risk bank stocks are needed to achieve sufficient diversification to protect the return for a global portfolio of bank stocks.

AbstractThis paper investigates a multivariate, dynamic, continuous-time optimal consumption and portfolio allocation problem when the investor faces recursive utilities. The economy we are considering is described through both diffusion and discontinuities in the dynamics. We derive an approximated closed-form solution to optimal rules by exploiting standard dynamic programming techniques. Our findings are manifold. First, we obtain dynamic optimal weights, inversely proportional to volatility. Second, we show that both co-jumps frequency and intensity play a crucial role, as they considerably limit potential losses in the investors’ wealth. Third, we prove that jumps in precision reinforce the effect of jumps in price, further reducing optimal allocation. Finally, we highlight how co-jumps may influence investors’ choices regarding intertemporal consumption.

AbstractA measure for portfolio risk management is proposed by extending the Markowitz mean-variance approach to include the left-hand tail effects of asset returns. Two risk dimensions are captured: asset covariance risk along risk in left-hand tail similarity and volatility. The key ingredient is an informative set on the left-hand tail distributions of asset returns obtained by an adaptive clustering procedure. This set allows a left tail similarity and left tail volatility to be defined, thereby providing a definition for the left-tail-covariance-like matrix. The convex combination of the two covariance matrices generates a “two-dimensional” risk that, when applied to portfolio selection, provides a measure of its systemic vulnerability due to the asset centrality. This is done by simply associating a suitable node-weighted network with the portfolio. Higher values of this risk indicate an asset allocation suffering from too much exposure to volatile assets whose return dynamics behave too similarly in left-hand tail distributions and/or co-movements, as well as being too connected to each other. Minimizing these combined risks reduces losses and increases profits, with a low variability in the profit and loss distribution. The portfolio selection compares favorably with some competing approaches. An empirical analysis is made using exchange traded fund prices over the period January 2006–February 2018.

AbstractThis study investigates the impact of liquidity risk on stock returns of 149 firms in the industrial products and services sectors of Bursa Malaysia from January 2000 to December 2018 with a monthly frequency dataset. This study employed the two-stage standard procedures in asset pricing to estimate the significant effect of liquidity risk on industrial products and services stock returns. The results show that the investors require liquidity premium for stocks whose illiquidity co-moves with market illiquidity and market return while shifting their investment to liquid stocks when the market becomes illiquid, thus positive premium for stocks whose return is higher during the illiquid market. It suggests that two liquidity risks, namely commonality in liquidity and the covariances between stock illiquidity and market returns, and aggregate liquidity risk explain the cross-sectional returns variations across stocks in the industrial products and services sector, thus partly support the LCAPM model. We provide evidence on the important role of liquidity risks on the cross-sectional industrial products and services stock returns in Bursa Malaysia in the LCAPM framework. The findings of this study may be useful for investment decision-making and portfolio allocation strategy under the liquid and illiquid securities conditions. For policymakers, understanding the impact of liquidity risks on stock returns for the industrial products and services sectors may help enhance market liquidity for economic growth. Therefore, our findings contribute to the practical and policy implications.

In recent years ecological thinking has been applied to a range of social, cultural, and aesthetic systems, including performing arts as a living system of policy makers, producers, organisations, artists, and audiences. Ecological thinking is systems-based thinking which allows us to see the performing arts as a complex and protean ecosystem; to explain how elements in this system act and interact; and to evaluate its effects on Australia’s social fabric over time. According to Gallasch, ecological thinking is “what we desperately need for the arts.” It enables us to “defeat the fragmentary and utilitarian view of the arts that dominates, to make connections, to establish overviews of the arts that can be shared and debated” (Gallasch NP). The ecological metaphor has featured in debates about the performing arts in Brisbane, Australia, in the last two or three years. A growing state capital on Australia’s eastern seaboard, Brisbane is proud of its performing arts culture. Its main theatre organisations include the state flagship Queensland Theatre Company; the second major presenter of adapted and new text-based performances La Boite Theatre Company; venues which support local and touring performances such as the Judith Wright Centre for Contemporary Arts and the Brisbane Powerhouse; emerging talent incubator Metro Arts; indigenous companies like Kooemba Jdarra; independent physical theatre and circus companies such as Zen Zen Zo and Circa; and contemporary play-producing company 23rd Productions (cf. Baylis 3). Brisbane aspires to be a cultural capital in Australia, Australasia, and the Asia Pacific (Gill). Compared to Australia’s southern capitals Sydney and Melbourne, however, Brisbane does have a relatively low level of performing arts activity across traditional and contemporary theatre, contemporary performance, musicals, circus, and other genres of performance. It has at times been cast as a piecemeal, potentially unsustainable arts centre prone to losing talent to other states. In 2009, John Baylis took up these issues in Mapping Queensland Theatre, an Arts Queensland-funded survey designed to map practices in Brisbane and in Queensland more broadly, and to provide a platform to support future policy-making. This report excited debate amongst artists who, whilst accepting the tenor of Baylis’s criticisms, also lamented the lack of nuanced detail and contextualised relationships its map of Queensland theatre provided. In this paper we propose a new approach to mapping Brisbane’s and Queensland’s theatre that extends Baylis’s “value chain” into a “value ecology” that provides a more textured picture of players, patterns, relationships, and activity levels. A “value chain” approach emphasises linear relationships and gaps between production, distribution, and consumption in a specific sector of the economy. A “value ecology” approach goes further by examining a complex range of rhizomatic relationships between production, distribution, and consumption infrastructure and how they influence each other within a sector of the economy such as the performing arts. Our approach uses a “value ecology” model adapted from Hearn et al. and Cherbo et al. to map and interpret information from the AusStage performing arts database, the Australian Bureau of Statistics, and other sources such as previews, reviews, and an ongoing local blogosphere debate. Building upon Baylis’s work, our approach produces literal and conceptual maps of Queensland’s performing arts as they change over time, with analysis of support, infrastructure, and relationships amongst government, arts organisations, artists, and audiences. As debate on Mapping Queensland Theatre gives way to more considered reflection, and as Baylis develops a follow-up report, our approach captures snapshots of Queensland’s performing arts before, during, and after such policy interventions. It supports debate about how Queensland artists might manage their own sustainability, their own ability to balance artistic, cultural, and economic factors that influence their work in a way that allows them to survive long term, and allows policy makers, producers, and other players to better understand, articulate, assess, and address criticisms. The Ecological Metaphor In recent years a number of commentators have understood the performing arts as an “ecology,” a system characterised by interacting elements, engagements, flows, blockages, breaks, and breakthroughs whose “health” (synonymous in this context with sustainability) depends on relationships between players within and without the system. Traditionally, performing arts policies in Australia have concentrated on singular elements in a system. They have, as Hunt and Shaw argue, “concentrate[d] on individual companies or an individual artist’s practice rather than the sector as a whole” (5, cf. 43). The focus has been on how to structure, support, and measure the success—the aesthetic and social benefits—of individual training institutions, artists, administrators, and arts organisations. The “health” of singular elements has been taken as a sign of the “health” of the system. An ecologies approach, by contrast, concentrates on engagements, energies, and flows as signs of health, and thus sustainability, in a system. Ecological thinking enables policy makers, practitioners, and scholars to go beyond debate about the presence of activity, the volume of activity, and the fate of individual agents as signs of the health or non-health of a system. In an ecologies context, level of activity is not the only indicator of health, and low activity does not necessarily equate with instability or unsustainability. An ecological approach is critical in Brisbane, and in Queensland more broadly, where attempts to replicate the nature or level of activity in southern capitals are not necessarily the best way to shore up the “health” of our performing arts system in our own unique environment. As the locus of our study Queensland is unique. While Queensland has 20% of Australia’s population (OESR; ABS ‘ Population Projections’), and is regularly recognised as a rapidly growing “lifestyle superstate” which values innovation, creativity, and cultural infrastructure (Cunningham), it is still home to significantly less than 20% of Australia’s performing arts producers, and many talented people continue to migrate to the south to pursue career opportunities (Baylis 4, 28). An ecologies approach can break into oft-cited anxieties about artist, activity, and audience levels in Brisbane, and in Queensland, and create new ideas about what a “healthy” local performing arts sector might look like. This might start to infuse some of the social media commentary that currently tends to emphasise the gaps in the sector. Ecologies are complex systems. So, as Costanza says, when we consider ecosystem health, we must consider the overall performance of the system, including its ability to deal with “external stress” (240) from macro-level political, legal, social, cultural, economic, or technological currents that change the broader society this particular sector or ecosystem sits within. In Brisbane, there is a growing population and a desire to pursue a cultural capital tag, but the distinctive geographic, demographic, and behavioural characteristics of Brisbane’s population—and the associated ‘stresses’, conditions, or constraints—mean that striving to replicate patterns of activity seen in Sydney or Melbourne may not be the straightest path to a “healthy” or “sustainable” sector here. The attitudes of the players and the pressures influencing the system are different, so this may be like comparing rainforests with deserts (Costanza), and forgetting that different elements and engagements are in fact “healthy” in different ecosystems. From an ecologies point of view, policy makers and practitioners in Brisbane and in Queensland more broadly might be well advised to stop trying to match Sydney or Melbourne, and to instead acknowledge that a “healthy” ecosystem here may look different, and so generate policy, subsidy, and production systems to support this. An ecological approach can help determine how much activity is in fact necessary to ensure a healthy and sustainable local performing arts sector. It can, in other words, provide a fresh approach that inspires new ideas and strategies for sector sustainability. Brisbane, Baylis and the Blogosphere Debate The ecological metaphor has clearly captured the interest of policy makers as they consider how to make Queensland’s performing arts more sustainable and successful. For Arts Queensland: The view of the sector as a complex and interdependent ‘ecosystem’ is forging new thinking, new practices and new business models. Individual practitioners and organisations are rethinking where they sit within the broader ecology, and what they contribute to the health and vitality of the sector, and how they might address the gaps in services and skills (12). This view informed the commissioning of Mapping Queensland Theatre, an assessment of Queensland’s theatre sector which offers a framework for allocation of resources under the Queensland Arts & Cultural Sector Plan 2010-2013. It also offers a framework for negotiation with funded organisations to ensure “their activities and focus support a harmonious ecology” (Baylis 3) in which all types and levels of practice (emerging, established, touring, and so on) are functioning well and are well represented within the overall mix of activities. Utilising primary and secondary survey sources, Mapping Queensland Theatre seeks: to map individuals, institutions, and organisations who have a stake in developing Queensland’s professional theatre sector; and to apply a “value chain” model of production from supply (training, creation, presentation, and distribution) to demand (audiences) to identify problems and gaps in Queensland’s professional theatre sector and recommend actions to address them. The report is critical of the sector. Baylis argues that “the context for great theatre is not yet in place in Queensland … therefore works of outstandingly high quality will be rare” (28).Whilst acknowledging a lack of ready answers about how much activity is required in a vibrant theatre culture, Baylis argues that “comparisons are possible” (27) and he uses various data sets to compare numbers of new Australian productions in different states. He finds that “despite having 20% of the Australian population, [Queensland] generates a dramatically lower amount of theatre activity” (4, cf. 28). The reason, according to Baylis (20, 23, 25, 29, 32, 40-41, 44), is that there are gaps in the “value chain” of Queensland theatre, specifically in: Support for the current wave of emerging and independent artistsSpace for experimentation Connections between artists, companies, venues and festivals, between and within regional centres, and between Queensland companies and their (inter)national peers Professional development for producers to address the issue of market distributionAudience development “Queensland lacks a critical mass of theatre activity to develop a sustainable theatre culture” (48), and the main gap is in pathways for independent artists. Quality new work does not emerge, energy dissipates, and artists move on. The solution, for Baylis, is to increase support for independent companies (especially via co-productions with mainstage companies), to improve (inter)national touring, and to encourage investment in audience development. Naturally, Queensland’s theatre makers responded to this report. Responses were given, for example, in inaugural speeches by new Queensland Theatre Company director Wesley Enoch and new La Boite Theatre Company director David Berthold, in the media, and in blogosphere commentary on a range of articles on Brisbane performing arts in 2010. The blogosphere debate in particular raged for months and warrants more detailed analysis elsewhere. For the purposes of this paper, though, it is sufficient to note that blogosphere debate about the health of Queensland theatre culture acknowledged many of the deficits Baylis identified and called for: More leadershipMore government supportMore venuesMore diversityMore audience, especially for risky work, and better audience engagementMore jobs and retention of artists Whilst these responses endorse Baylis’s findings and companies have since conceived programs that address Baylis’s criticisms (QTC’s introduction of a Studio Season and La Boite’s introduction of an Indie program in 2010 for example) a sense of frustration also emerged. Some, like former QTC Chair Kate Foy, felt that “what’s really needed in the theatre is a discussion that breaks out from the old themes and encourages fresh ideas—approaches to solving whatever problems are perceived to exist in ‘the system’.” For commentators like Foy the blogosphere debate enacted a kind of ritual rehearsal of an all-too-familiar set of concerns: inadequate and ill-deployed funding, insufficient venues, talent drain, and an impoverished local culture of theatre going. “Value Chains” versus “Value Ecologies” Why did responses to this report demand more artists, more arts organisations, more venues, and more activities? Why did they repeat demands for more government-subsidised venues, platforms, and support rather than drive toward new seed- or non- subsidised initiatives? At one level, this is to do with the report’s claims: it is natural for artists who have been told quality work is “rare” amongst them to point to lack of support to achieve success. At another level, though, this is because—as useful as it has been for local theatre makers—Baylis’s map is premised on a linear chain from training, to first productions, to further developed productions (involving established writers, directors, designers and performers), to opportunities to tour (inter)nationally, etc. It provides a linear image of a local performing arts sector in which there are individuals and institutions with potential, but specific gaps in the production-distribution-consumption chain that make it difficult to deliver work to target markets. It emphasises gaps in the linear pathway towards “stability” of financial, venue, and audience support and thus “sustainability” over a whole career for independent artists and the audiences they attract. Accordingly, asking government to plug the gaps through elements added to the system (venues, co-production platforms, producer hubs, subsidy, and entrepreneurial endeavours) seems like a logical solution. Whilst this is true, it does not tell the whole story. To generate a wider story, we need to consider: What the expected elements in a “healthy” ecosystem would be (e.g. more versus alternative activity);What other aesthetic, cultural, or economic pressures affect the “health” of an ecosystem;Why practices might need to cycle, ebb, and flow over time in a “healthy” ecosystem. A look at the way La Boite works before, during, and after Baylis’s analysis of Brisbane theatre illustrates why attention to these elements is necessary. A long-running company which has made the transition from amateur to professional to being a primary developer of new Australian work in its distinctive in-the-round space, La Boite has recently shifted its strategic position. A focus on text-based Australian plays has given way to adapted, contemporary, and new work in a range of genres; regular co-productions with companies in Brisbane and beyond; and an “Indie” program that offers other companies a venue. This could be read as a response to Baylis’s recommendation: the production-distribution-consumption chain gap for Brisbane’s independents is plugged, the problem is solved, the recommendation has led to the desired result. Such a reading might, though, overlook the range of pressures beyond Brisbane, beyond Queensland, and beyond the Baylis report that drive—and thus help, hinder, or otherwise effect—the shift in La Boite’s program strategies. The fact that La Boite recently lost its Australia Council funding, or that La Boite like all theatre companies needs co-productions to keep its venue running as costs increase, or that La Boite has rebranded to appeal to younger audiences interested in postdramatic, do-it-your-self or junkyard style aesthetics. These factors all influence what La Boite might do to sustain itself, and more importantly, what its long-term impact on Brisbane’s theatre ecology will be. To grasp what is happening here, and get beyond repetitive responses to anxieties about Brisbane’s theatre ecology, detail is required not simply on whether programs like La Boite’s “plugged the gap” for independent artists, but on how they had both predicted and unpredicted effects, and how other factors influenced the effects. What is needed is to extend mapping from a “value chain” to a full ”value ecology”? This is something Hearn et al. have called for. A value chain suggests a “single linear process with one stage leading to the next” (5). It ignores the environment and other external enablers and disregards a product’s relationship to other systems or products. In response they prefer a “value creating ecology” in which the “constellation of firms are [sic] dynamic and value flow is multi-directional and works through clusters of networks” (6). Whilst Hearn et al. emphasise “firms” or companies in their value creating ecology, a range of elements—government, arts organisations, artists, audiences, and the media as well as the aesthetic, social, and economic forces that influence them—needs to be mapped in the value creating ecology of the performing arts. Cherbo et al. provide a system of elements or components which, adapted for a local context like Brisbane or Queensland, can better form the basis of a value ecology approach to the way a specific performing arts community works, adapts, changes, breaks down, or breaks through over time. Figure 1 – Performing Arts Sector Map (adapted from Cherbo et. al. 14) Here, the performing arts sector is understood in terms of core artistic workers, companies, a constellation of generic and sector specific support systems, and wider social contexts (Cherbo et al. 15). Together, the shift from “value chain” to “value ecology” that Hearn et al. advocate, and the constellation of ecology elements that Cherbo et al. emphasise, bring a more detailed, dynamic range of relations into play. These include “upstream” production infrastructure (education, suppliers, sponsors), “downstream” distribution infrastructure (venues, outlets, agents), and overall public infrastructure. As a framework for mapping “value ecology” this model offers a more nuanced perspective on production, distribution, and consumption elements in an ecology. It allows for analysis of impact of interventions in dozens of different areas, from dozens of perspectives, and thus provides a more detailed picture of players, relationships, and results to support both practice and policy making around practice. An Aus-e-Stage Value Ecology To provide the more detailed, dynamic image of local theatre culture that a value ecology approach demands—to show players, relations between players, and context in all their complexity—we use the Aus-e-Stage Mapping Service, an online application that maps data about artists, arts organisations, and audiences across cityscapes/landscapes. We use Aus-e-Stage with data drawn from three sources: the AusStage database of over 50,000 entries on Australian performing arts venues, productions, artists, and reviews; the Australian Bureau of Statistics (ABS) data on population; and the Local Government Area (LGA) maps the ABS uses to cluster populations. Figure 2 – Using AusStage Interface Figure 3 – AusStage data on theatre venues laid over ABS Local Government Area Map Figure 4 – Using Aus-e-Stage / AusStage to zoom in on Australia, Queensland, Brisbane and La Boite Theatre Company, and generate a list of productions, dates and details Aus-e-Stage produces not just single maps, but a sequential series of snapshots of production ecologies, which visually track who does what when, where, with whom, and for whom. Its sequences can show: The way artists, companies, venues, and audiences relate to each other;The way artists’ relationship to companies, venues, and audiences changes over time;The way “external stressors” changes such as policy, industrial, or population changes affect the elements, roles, and relationships in the ecology from that point forward. Though it can be used in combination with other data sources such as interviews, the advantage of AusStage data is that maps of moving ecologies of practice are based not on descriptions coloured by memory but clear, accurate program, preview, and review data. This allows it to show how factors in the environment—population, policy, infrastructure, or program shifts—effect the ecology, effect players in the ecology, and prompt players to adapt their type, level, or intensity of practice. It extends Baylis’s value chain into a full value ecology that shows the detail on how an ecology works, going beyond demands that government plug perceived gaps and moving towards data- and history- based decisions, ideas and innovation based on what works in Brisbane’s performing arts ecology. Our Aus-e-Stage mapping shows this approach can do a number of useful things. It can create sequences showing breaks, blockages, and absences in an individual or company’s effort to move from emerging to established (e.g. in a sudden burst of activity followed by nothing). It can create sequences showing an individual or company’s moves to other parts of Australia (e.g. to tour or to pursue more permanent work). It can show surprising spaces, relations, and sources of support artists use to further their career (e.g. use of an amateur theatre outside the city such as Brisbane Arts Theatre). It can capture data about venues, programs, or co-production networks that are more or less effective in opening up new opportunities for artists (e.g. moving small-scale experiments in Metro Arts’ “Independents” program to full scale independent productions in La Boite’s “Indie” program, its mainstage program, other mainstage programs, and beyond). It can link to program information, documentation, or commentary to compare anticipated and actual effects. It can lay the map dates and movements across significant policy, infrastructure, or production climate shifts. In the example below, for instance, Aus-e-Stage represents the tour of La Boite’s popular production of a new Australian work Zig Zag Street, based on the Brisbane-focused novel by Nick Earls about a single, twentysomething man’s struggles with life, love, and work. Figure 5 – Zig Zag Street Tour Map In the example below, Aus-e-Stage represents the movements not of a play but of a performer—in this case Christopher Sommers—who has been able to balance employment with new work incubator Metro Arts, mainstage and indie producer La Boite, and stage theatre company QTC with his role with independent theatre company 23rd Productions to create something more protean, more portfolio-based or boundary-less than a traditional linear career trajectory. Figure 6 – Christopher Sommers Network Map and Travel Map This value of this approach, and this technology, is clear. Which independents participate in La Boite Indie (or QTC’s “Studio” or “Greenroom” new work programs, or Metro’s emerging work programs, or others)? What benefits does it bring for artists, for independent companies, or for mainstage companies like La Boite? Is this a launching pad leading to ongoing, sustainable production practices? What do artists, audiences or others say about these launching pads in previews, programs, or reviews? Using Aus-e-Stage as part of a value ecology approach answers these questions. It provides a more detailed picture of what happens, what effect it has on local theatre ecology, and exactly which influences enabled this effect: precisely the data needed to generate informed debate, ideas, and decision making. Conclusion Our ecological approach provides images of a local performing arts ecology in action, drawing out filtered data on different players, relationships, and influencing factors, and thus extending examination of Brisbane’s and Queensland’s performing arts sector into useful new areas. It offers three main advances—first, it adopts a value ecology approach (Hearn et al.), second, it adapts this value ecology approach to include not just companies by all up- and down- stream players, supporters and infrastructure (Cherbo et. al.), and, thirdly, it uses the wealth of data available via Aus-e-Stage maps to fill out and filter images of local theatre ecology. It allows us to develop detailed, meaningful data to support discussion, debate, and development of ideas that is less likely to get bogged down in old, outdated, or inaccurate assumptions about how the sector works. Indeed, our data lends itself to additional analysis in a number of ways, from economic analysis of how shifts in policy influence productivity to sociological analysis of the way practitioners or practices acquire status and cultural capital (Bourdieu) in the field. Whilst descriptions offered here demonstrate the potential of this approach, this is by no means a finished exercise. Indeed, because this approach is about analysing how elements, roles, and relationships in an ecology shift over time, it is an ever-unfinished exercise. As Fortin and Dale argue, ecological studies of this sort are necessarily iterative, with each iteration providing new insights and raising further questions into processes and patterns (3). Given the number of local performing arts producers who have changed their practices significantly since Baylis’s Mapping Queensland Theatre report, and the fact that Baylis is producing a follow-up report, the next step will be to use this approach and the Aus-e-Stage technology that supports it to trace how ongoing shifts impact on Brisbane’s ambitions to become a cultural capital. This process is underway, and promises to open still more new perspectives by understanding anxieties about local theatre culture in terms of ecologies and exploring them cartographically. References Arts Queensland. Queensland Arts & Cultural Sector Plan 2010-2013. Brisbane: Arts Queensland, 2010. 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Cambridge: Cambridge University Press, 2005. Foy, Kate. “Is There Anything Right with the Theatre?” Groundling. 10 January (2010). 20 June 2011 ‹http://katefoy.com/2010/01/is-there-anything-right-with-the-theatre/›. Hearn, Gregory N., Simon C. Roodhouse, and Julie M. Blakey. ‘From Value Chain to Value Creating Ecology: Implications for Creative Industries Development Policy.’ International Journal of Cultural Policy 13 (2007). 20 June 2011 ‹http://eprints.qut.edu.au/15026/›. Hunt, Cathy and Phyllida Shaw. A Sustainable Arts Sector: What Will It Take? Strawberry Hills: Currency House, 2007. Knell, John. Theatre’s New Rules of Evolution. Available from Intelligence Agency, 2008. Office of Economic and Statistical Research. “Information Brief: Australian Demographic Statistics June Quarter 2009.” Canberra: OESR (2010). 20 June 2012 ‹http://www.oesr.qld.gov.au/queensland-by-theme/demography/briefs/aust-demographic-stats/aust-demographic-stats-200906.pdf›.

In mid-2001, in a cultural policy discussion at Arts Queensland, an Australian state government arts policy and funding apparatus, a senior arts bureaucrat seeking to draw a funding client’s gaze back to the bigger picture of what the state government was trying to achieve through its cultural policy settings excused his own abstracting comments with the phrase, “but then I might just be a policy ‘wank’”. There was some awkward laughter before one of his colleagues asked, “did you mean a policy ‘wonk’”? The incident was a misstatement of a term adopted in the 1990s to characterise the policy workers in the Clinton Whitehouse (Cunningham). This was not its exclusive use, but many saw Clinton as an exemplary wonk: less a pragmatic politician than one entertained by the elaboration of policy. The policy work of Clinton’s kitchen cabinet was, in part, driven by a pervasive rationalist belief in the usefulness of ordered policy processes as a method of producing social and economic outcomes, and, in part, by the seductions of policy-play: its ambivalences, its conundrums, and, in some sense, its aesthetics (Klein 193-94). There, far from being characterised as unproductive “self-abuse” of the body-politic, policy processes were alive as a pragmatic technology, an operationalisation of ideology, as an aestheticised field of play, but more than anything as a central rationalist tenant of government action. This final idea—the possibilities of policy for effecting change, promoting development, meeting government objectives—is at the centre of the bureaucratic imagination. Policy is effective. And a concomitant belief is that ordered or organised policy processes result in the best policy and the best outcomes. Starting with Harold Lasswell, policy theorists extended the general rationalist suppositions of Western representative democracies into executive government by arguing for the value of information/knowledge and the usefulness of ordered process in addressing thus identified policy problems. In the post-war period particularly, a case can be made for the usefulness of policy processes to government—although, in a paradox, these rationalist conceptions of the policy process were strangely irrational, even Utopian, in their view of transformational capacities possibilities of policy. The early policy scientists often moved beyond a view of policy science as a useful tool, to the advocacy of policy science and the policy scientist as panaceas for public ills (Parsons 18-19). The Utopian ambitions of policy science finds one of their extremes in the contemporary interest in whole-of-government approaches to policy making. Whole-of-governmentalism, concern with co-ordination of policy and delivery across all areas of the state, can seen as produced out of Western governments’ paradoxical concern with (on one hand) order, totality, and consistency, and (on the other) deconstructing existing mechanisms of public administration. Whole-of-governmentalism requires a horizontal purview of government goals, programs, outputs, processes, politics, and outcomes, alongside—and perhaps in tension with—the long-standing vertical purview that is fundamental to ministerial responsibility. This often presents a set of public management problems largely internal to government. Policy discussion and decision-making, while affecting community outcomes and stakeholder utility, are, in this circumstance, largely inter-agency in focus. Any eventual policy document may well have bureaucrats rather than citizens as its target readers—or at least as its closest readers. Internally, cohesion of objective, discourse, tool and delivery are pursued as a prime interests of policy making. Failing at Policy So what happens when whole-of-government policy processes, particularly cultural policy processes, break down or fail? Is there anything productive to be retrieved from a failed fantasy of policy cohesion? This paper examines the utility of a failure to cohere and order in cultural policy processes. I argue that the conditions of contemporary cultural policy-making, particularly the tension between the “boutique” scale of cultural policy-making bodies and the revised, near universal, remit of cultural policy, require policy work to be undertaken in an environment and in such a way that failure is almost inevitable. Coherence and cohesions are fundamental principles of whole-of-government policy but cultural policy ambitions are necessarily too comprehensive to be achievable. This is especially so for the small arts or cultural offices government that normally act as lead agencies for cultural policy development within government. Yet, that these failed processes can still give rise to positive outcomes or positive intermediate outputs that can be taken up in a productive way in the ongoing cycle of policy work that categorises contemporary cultural governance. Herein, I detail the development of Building the Future, a cultural policy planning paper (and the name of a policy planning process) undertaken within Arts Queensland in 1999 and 2000. (While this process is now ten years in the past, it is only with a decade past that as a consultant I am in apposition to write about the material.) The abandonment of this process before the production of a public policy program allows something to be said about the utility and role of failure in cultural policy-making. The working draft of Building the Future never became a public document, but the eight months of its development helped produce a series of shifts in the discourse of Queensland Government cultural policy: from “arts” to “creative industries”; and from arts bureaucracy-centred cultural policy to the whole-of-government policy frameworks. These concepts were then taken up and elaborated in the Creative Queensland policy statement published by Arts Queensland in October 2002, particularly the concern with creative industries; whole-of-government cultural policy; and the repositioning of Arts Queensland as a service agency to other potential cultural funding-bodies within government. Despite the failure of the Building the Future process, it had a role in the production of the policy document and policy processes that superseded it. This critique of cultural policy-making rather than cultural policy texts, announcements and settings is offered as part of a project to bring to cultural policy studies material and theoretical accounts of the particularities of making cultural policy. While directions in cultural policy have much to do with the overall directions of government—which might over the past decade be categorised as focus on de-regulation, out-sourcing of services—there are developments in cultural policy settings and in cultural policy processes that are particular to cultural policy and cultural policy-making. Central to the development of cultural policy studies and to cultural policy is a transformational broadening of the operant definition of culture within government (O'Regan). Following Raymond Williams, the domain of culture is broadened to include the high culture, popular culture, folk culture and the culture of everyday life. Accordingly, in some sense, every issue of governance is deemed to have a cultural dimension—be it policy questions around urban space, tourism, community building and so on. Contemporary governments are required to act with a concern for cultural questions both within and across a number of long-persisting and otherwise discrete policy silos. This has implications for cultural policy makers and for program delivery. The definition of culture as “everyday life”, while truistically defendable, becomes unwieldy as an imprimatur or a container for administrative activity. Transforming cultural policy into a domain incorporating most social policy and significant elements of economic policy makes the domain titanically large. Potentially, it compromises usual government efforts to order policy activity through the division or apportionment of responsibility (Glover and Cunningham 19). The problem has given rise to a new mode of policy-making which attends to the co-ordination of policy across and between levels of government, known as whole-of government policy-making (see O’Regan). Within the domain of cultural policy the task of whole-of-government cultural policy is complicated by the position of, and the limits upon, arts and cultural bureaux within state and federal governments. Dedicated cultural planning bureaux often operate as “boutique” agencies. They are usually discrete line agencies or line departments within government—only rarely are they part of the core policy function of departments of a Premier or a Prime Minister. Instead, like most line agencies, they lack the leverage within the bureaucracy or policy apparatus to deliver whole-of-government cultural policy change. In some sense, failure is the inevitable outcome of all policy processes, particularly when held up against the mechanistic representation of policy processes in policy typical of policy handbooks (see Bridgman and Davis 42). Against such models, which describe policy a series of discrete linear steps, all policy efforts fail. The rationalist assumptions of early policy models—and the rigid templates for policy process that arise from their assumptions—in retrospect condemn every policy process to failure or at least profound shortcoming. This is particularly so with whole-of-government cultural policy making To re-think this, it can be argued that the error then is not really in the failure of the process, which is invariably brought about by the difficulty for coherent policy process to survive exogenous complexity, but instead the error rests with the simplicity of policy models and assumptions about the possibility of cohesion. In some sense, mechanistic policy processes make failure endogenous. The contemporary experience of making policy has tended to erode any fantasies of order, clear process, or, even, clear-sightedness within government. Achieving a coherence to the policy message is nigh on impossible—likewise cohesion of the policy framework is unlikely. Yet, importantly, failed policy is not without value. The churn of policy work—the exercise of attempting cohrent policy-making—constitutes, in some sense, the deliberative function of government, and potentially operates as a force (and site) of change. Policy briefings, reports, and draft policies—the constitution of ideas in the policy process and the mechanism for their dissemination within the body of government and perhaps to other stakeholders—are discursive acts in the process of extending the discourse of government and forming its later actions. For arts and cultural policy agencies in particular, who act without the leverage or resources of central agencies, the expansive ambitions of whole-of-government cultural policy makes failure inevitable. In such a circumstance, retrieving some benefits at the margins of policy processes, through the churn of policy work towards cohesion, is an important consolation. Case study: Cultural Policy 2000 The policy process I wish to examine is now complete. It ran over the period 1999–2002, although I wish to concentrate on my involvement in the process in early 2000 during which, as a consultant to Arts Queensland, I generated a draft policy document, Building the Future: A policy framework for the next five years (working draft). The imperative to develop a new state cultural policy followed the election of the first Beattie Labor government in July 1998. By 1999, senior Arts Queensland staff began to argue (within government at least) for the development of a new state cultural policy. The bureaucrats perceived policy development as one way of establishing “traction” in the process of bidding for new funds for the portfolio. Arts Minister Matt Foley was initially reluctant to “green-light” the policy process, but eventually in early 1999 he acceded to it on the advice of Arts Queensland, the industry, his own policy advisors and the Department of Premier. As stated above, this case study is offered now because the passing of time makes the analysis of relatively sensitive material possible. From the outset, an abbreviated timeframe for consultation and drafting seem to guarantee a difficult birth for the policy document. This was compounded by a failure to clarity the aims and process of the project. In presenting the draft policy to the advisory group, it became clear that there was no agreed strategic purpose to the document: Was it to be an advertisement, a framework for policy ideas, an audit, or a report on achievements? Tied to this, were questions about the audience for the policy statement. Was it aimed at the public, the arts industry, bureaucrats inside Arts Queensland, or, in keeping with the whole-of-government inflection to the document and its putative use in bidding for funds inside government, bureaucrats outside of Arts Queensland? My own conception of the document was as a cultural policy framework for the whole-of-government for the coming five years. It would concentrate on cultural policy in three realms: Arts Queensland; the arts instrumentalities; and other departments (particularly the cultural initiatives undertaken by the Department of Premier and the Department of State Development). In order to do this I articulated (for myself) a series of goals for the document. It needed to provide the philosophical underpinnings for a new arts and cultural policy, discuss the cultural significance of “community” in the context of the arts, outline expansion plans for the arts infrastructure throughout Queensland, advance ideas for increased employment in the arts and cultural industries, explore the development of new audiences and markets, address contemporary issues of technology, globalisation and culture commodification, promote a whole-of-government approach to the arts and cultural industries, address social justice and equity concerns associated with cultural diversity, and present examples of current and new arts and cultural practices. Five key strategies were identified: i) building strong communities and supporting diversity; ii) building the creative industries and the cultural economy; iii) developing audiences and telling Queensland’s stories; iv) delivering to the world; and v) a new role for government. While the second aim of building the creative industries and the cultural economy was an addition to the existing Australian arts policy discourse, it is the articulation of a new role for government that is most radical here. The document went to the length of explicitly suggesting a series of actions to enable Arts Queensland to re-position itself inside government: develop an ongoing policy cycle; position Arts Queensland as a lead agency for cultural policy development; establish a mechanism for joint policy planning across the arts portfolio; adopt a whole-of-government approach to policy-making and program delivery; use arts and cultural strategies to deliver on social and economic policy agendas; centralise some cultural policy functions and project; maintain and develop mechanisms and peer assessment; establish long-term strategic relationships with the Commonwealth and local government; investigate new vehicles for arts and cultural investment; investigate partnerships between industry, community and government; and develop appropriate performance measures for the cultural industries. In short, the scope of the document was titanically large, and prohibitively expansive as a basis for policy change. A chief limitation of these aims is that they seem to place the cohesion and coherence of the policy discourse at the centre of the project—when it might have better privileged a concern with policy outputs and industry/community outcomes. The subsequent dismal fortunes of the document are instructive. The policy document went through several drafts over the first half of 2000. By August 2000, I had removed myself from the process and handed the drafting back to Arts Queensland which then produced shorter version less discursive than my initial draft. However, by November 2000, it is reasonable to say that the policy document was abandoned. Significantly, after May 2000 the working drafts began to be used as internal discussion documents with government. Thus, despite the abandonment of the policy process, largely due to the unworkable breadth of its ambition, the document had a continued policy utility. The subsequent discussions helped organise future policy statements and structural adjustments by government. After the re-election of the Beattie government in January 2001, a more substantial policy process was commenced with the earlier policy documents as a starting point. By early 2002 the document was in substantial draft. The eventual policy, Creative Queensland, was released in October 2002. Significantly, this document sought to advance two ideas that I believe the earlier process did much to mobilise: a whole-of-government approach to culture; and a broader operant definition of culture. It is important not to see these as ideas merely existing “textually” in the earlier policy draft of Building the Future, but instead to see them as ideas that had begun adhere themselves to the cultural policy mechanism of government, and begun to be deployed in internal policy discussions and in program design, before finding an eventual home in a published policy text. Analysis The productive effects of the aborted policy process in which I participated are difficult to quantify. They are difficult, in fact, to separate out from governments’ ongoing processes of producing and circulating policy ideas. What is clear is that the effects of Building the Future were not entirely negated by it never becoming public. Instead, despite only circulating to a readership of bureaucrats it represented the ideas of part of the bureaucracy at a point in time. In this instance, a “failed” policy process, and its intermediate outcomes, the draft policy, through the churn of policy work, assisted government towards an eventual policy statement and a new form of governmental organisation. This suggests that processes of cultural policy discussion, or policy churn, can be as productive as the public “enunciation” of formal policy in helping to organise ideas within government and determine programs and the allocation of resources. This is even so where the Utopian idealism of the policy process is abandoned for something more graspable or politic. For the small arts or cultural policy bureau this is an important incremental benefit. Two final implications should be noted. The first is for models of policy process. Bridgman and Davis’s model of the Australian policy cycle, despite its mechanistic qualities, is ambiguous about where the policy process begins and ends. In one instance they represent it as linear but strictly circular, always coming back to its own starting point (27). Elsewhere, however, they represent it as linear, but not necessarily circular, passing through eight stages with a defined beginning and end: identification of issues; policy analysis; choosing policy instruments; consultation; co-ordination; decision; implementation; and evaluation (28–29). What is clear from the 1999-2002 policy process—if we take the full period between when Arts Queensland began to organise the development of a new arts policy and its publication as Creative Queensland in October 2002—is that the policy process was not a linear one progressing in an orderly fashion towards policy outcomes. Instead, Building the Future, is a snapshot in time (namely early to mid-2000) of a fragmenting policy process; it reveals policy-making as involving a concurrency of policy activity rather than a progression through linear steps. Following Mark Considine’s conception of policy work as the state’s effort at “system-wide information exchange and policy transfer” (271), the document is concerned less in the ordering of resources than the organisation of policy discourse. The churn of policy is the mobilisation of information, or for Considine: policy-making, when considered as an innovation system among linked or interdependent actors, becomes a learning and regulating web based upon continuous exchanges of information and skill. Learning occurs through regulated exchange, rather than through heroic insight or special legislative feats of the kind regularly described in newspapers. (269) The acceptance of this underpins a turn in contemporary accounts of policy (Considine 252-72) where policy processes become contingent and incomplete Policy. The ordering of policy is something to be attempted rather than achieved. Policy becomes pragmatic and ad hoc. It is only coherent in as much as a policy statement represents a bringing together of elements of an agency or government’s objectives and program. The order, in some sense, arrives through the act of collection, narrativisation and representation. The second implication is more directly for cultural policy makers facing the prospect of whole-of-government cultural policy making. While it is reasonable for government to wish to make coherent totalising statements about its cultural interests, such ambitions bring the near certainty of failure for the small agency. Yet these failures of coherence and cohesion should be viewed as delivering incremental benefits through the effort and process of this policy “churn”. As was the case with the Building the Future policy process, while aborted it was not a totally wasted effort. Instead, Building the Future mobilised a set of ideas within Arts Queensland and within government. For the small arts or cultural bureaux approaching the enormous task of whole-of government cultural policy making such marginal benefits are important. References Arts Queensland. Creative Queensland: The Queensland Government Cultural Policy 2002. Brisbane: Arts Queensland, 2002. Bridgman, Peter, and Glyn Davis. Australian Policy Handbook. St Leonards: Allen & Unwin, 1998. Considine, Mark. Public Policy: A Critical Approach. South Melbourne: Palgrave Macmillan, 1996. Cunningham, Stuart. "Willing Wonkers at the Policy Factory." Media Information Australia 73 (1994): 4-7. Glover, Stuart, and Stuart Cunningham. "The New Brisbane." Artlink 23.2 (2003): 16-23. Glover, Stuart, and Gillian Gardiner. Building the Future: A Policy Framework for the Next Five Years (Working Draft). Brisbane: Arts Queensland, 2000. Klein, Joe. "Eight Years." New Yorker 16 & 23 Oct. 2000: 188-217. O'Regan, Tom. "Cultural Policy: Rejuvenate or Wither". 2001. rtf.file. (26 July): AKCCMP. 9 Aug. 2001. ‹http://www.gu.edu.au/centre/cmp>. Parsons, Wayne. Public Policy: An Introduction to the Theory and Practice of Policy Analysis. Aldershot: Edward Edgar, 1995.Williams, Raymond. Key Words: A Vocabulary of Culture and Society. London: Fontana, 1976.

Alfred Hermida recently posited ‘ambient journalism’ as a new framework for para- and professional journalists, who use social networks like Twitter for story sources, and as a news delivery platform. Beginning with this framework, this article explores the following questions: How does Hermida define ‘ambient journalism’ and what is its significance? Are there alternative definitions? What lessons do current platforms provide for the design of future, real-time platforms that ‘ambient journalists’ might use? What lessons does the work of Brian Eno provide–the musician and producer who coined the term ‘ambient music’ over three decades ago? My aim here is to formulate an alternative definition of ambient journalism that emphasises craft, skills acquisition, and the mental models of professional journalists, which are the foundations more generally for journalism practices. Rather than Hermida’s participatory media context I emphasise ‘institutional adaptiveness’: how journalists and newsrooms in media institutions rely on craft and skills, and how emerging platforms can augment these foundations, rather than replace them. Hermida’s Ambient Journalism and the Role of Journalists Hermida describes ambient journalism as: “broad, asynchronous, lightweight and always-on communication systems [that] are creating new kinds of interactions around the news, and are enabling citizens to maintain a mental model of news and events around them” (Hermida 2). His ideas appear to have two related aspects. He conceives ambient journalism as an “awareness system” between individuals that functions as a collective intelligence or kind of ‘distributed cognition’ at a group level (Hermida 2, 4-6). Facebook, Twitter and other online social networks are examples. Hermida also suggests that such networks enable non-professionals to engage in ‘communication’ and ‘conversation’ about news and media events (Hermida 2, 7). In a helpful clarification, Hermida observes that ‘para-journalists’ are like the paralegals or non-lawyers who provide administrative support in the legal profession and, in academic debates about journalism, are more commonly known as ‘citizen journalists’. Thus, Hermida’s ambient journalism appears to be: (1) an information systems model of new platforms and networks, and (2) a normative argument that these tools empower ‘para-journalists’ to engage in journalism and real-time commentary. Hermida’s thesis is intriguing and worthy of further discussion and debate. As currently formulated however it risks sharing the blind-spots and contradictions of the academic literature that Hermida cites, which suffers from poor theory-building (Burns). A major reason is that the participatory media context on which Hermida often builds his work has different mental models and normative theories than the journalists or media institutions that are the target of critique. Ambient journalism would be a stronger and more convincing framework if these incorrect assumptions were jettisoned. Others may also potentially misunderstand what Hermida proposes, because the academic debate is often polarised between para-journalists and professional journalists, due to different views about institutions, the politics of knowledge, decision heuristics, journalist training, and normative theoretical traditions (Christians et al. 126; Cole and Harcup 166-176). In the academic debate, para-journalists or ‘citizen journalists’ may be said to have a communitarian ethic and desire more autonomous solutions to journalists who are framed as uncritical and reliant on official sources, and to media institutions who are portrayed as surveillance-like ‘monitors’ of society (Christians et al. 124-127). This is however only one of a range of possible relationships. Sole reliance on para-journalists could be a premature solution to a more complex media ecology. Journalism craft, which does not rely just on official sources, also has a range of practices that already provides the “more complex ways of understanding and reporting on the subtleties of public communication” sought (Hermida 2). Citizen- and para-journalist accounts may overlook micro-studies in how newsrooms adopt technological innovations and integrate them into newsgathering routines (Hemmingway 196). Thus, an examination of the realities of professional journalism will help to cast a better light on how ambient journalism can shape the mental models of para-journalists, and provide more rigorous analysis of news and similar events. Professional journalism has several core dimensions that para-journalists may overlook. Journalism’s foundation as an experiential craft includes guidance and norms that orient the journalist to information, and that includes practitioner ethics. This craft is experiential; the basis for journalism’s claim to “social expertise” as a discipline; and more like the original Linux and Open Source movements which evolved through creative conflict (Sennett 9, 25-27, 125-127, 249-251). There are learnable, transmissible skills to contextually evaluate, filter, select and distil the essential insights. This craft-based foundation and skills informs and structures the journalist’s cognitive witnessing of an event, either directly or via reconstructed, cultivated sources. The journalist publishes through a recognised media institution or online platform, which provides communal validation and verification. There is far more here than the academic portrayal of journalists as ‘gate-watchers’ for a ‘corporatist’ media elite. Craft and skills distinguish the professional journalist from Hermida’s para-journalist. Increasingly, media institutions hire journalists who are trained in other craft-based research methods (Burns and Saunders). Bethany McLean who ‘broke’ the Enron scandal was an investment banker; documentary filmmaker Errol Morris first interviewed serial killers for an early project; and Neil Chenoweth used ‘forensic accounting’ techniques to investigate Rupert Murdoch and Kerry Packer. Such expertise allows the journalist to filter information, and to mediate any influences in the external environment, in order to develop an individualised, ‘embodied’ perspective (Hofstadter 234; Thompson; Garfinkel and Rawls). Para-journalists and social network platforms cannot replace this expertise, which is often unique to individual journalists and their research teams. Ambient Journalism and Twitter Current academic debates about how citizen- and para-journalists may augment or even replace professional journalists can often turn into legitimation battles whether the ‘de facto’ solution is a social media network rather than a media institution. For example, Hermida discusses Twitter, a micro-blogging platform that allows users to post 140-character messages that are small, discrete information chunks, for short-term and episodic memory. Twitter enables users to monitor other users, to group other messages, and to search for terms specified by a hashtag. Twitter thus illustrates how social media platforms can make data more transparent and explicit to non-specialists like para-journalists. In fact, Twitter is suitable for five different categories of real-time information: news, pre-news, rumours, the formation of social media and subject-based networks, and “molecular search” using granular data-mining tools (Leinweber 204-205). In this model, the para-journalist acts as a navigator and “way-finder” to new information (Morville, Findability). Jaron Lanier, an early designer of ‘virtual reality’ systems, is perhaps the most vocal critic of relying on groups of non-experts and tools like Twitter, instead of individuals who have professional expertise. For Lanier, what underlies debates about citizen- and para-journalists is a philosophy of “cybernetic totalism” and “digital Maoism” which exalts the Internet collective at the expense of truly individual views. He is deeply critical of Hermida’s chosen platform, Twitter: “A design that shares Twitter’s feature of providing ambient continuous contact between people could perhaps drop Twitter’s adoration of fragments. We don’t really know, because it is an unexplored design space” [emphasis added] (Lanier 24). In part, Lanier’s objection is traceable back to an unresolved debate on human factors and design in information science. Influenced by the post-war research into cybernetics, J.C.R. Licklider proposed a cyborg-like model of “man-machine symbiosis” between computers and humans (Licklider). In turn, Licklider’s framework influenced Douglas Engelbart, who shaped the growth of human-computer interaction, and the design of computer interfaces, the mouse, and other tools (Engelbart). In taking a system-level view of platforms Hermida builds on the strength of Licklider and Engelbart’s work. Yet because he focuses on para-journalists, and does not appear to include the craft and skills-based expertise of professional journalists, it is unclear how he would answer Lanier’s fears about how reliance on groups for news and other information is superior to individual expertise and judgment. Hermida’s two case studies point to this unresolved problem. Both cases appear to show how Twitter provides quicker and better forms of news and information, thereby increasing the effectiveness of para-journalists to engage in journalism and real-time commentary. However, alternative explanations may exist that raise questions about Twitter as a new platform, and thus these cases might actually reveal circumstances in which ambient journalism may fail. Hermida alludes to how para-journalists now fulfil the earlier role of ‘first responders’ and stringers, in providing the “immediate dissemination” of non-official information about disasters and emergencies (Hermida 1-2; Haddow and Haddow 117-118). Whilst important, this is really a specific role. In fact, disaster and emergency reporting occurs within well-established practices, professional ethics, and institutional routines that may involve journalists, government officials, and professional communication experts (Moeller). Officials and emergency management planners are concerned that citizen- or para-journalism is equated with the craft and skills of professional journalism. The experience of these officials and planners in 2005’s Hurricane Katrina in the United States, and in 2009’s Black Saturday bushfires in Australia, suggests that whilst para-journalists might be ‘first responders’ in a decentralised, complex crisis, they are perceived to spread rumours and potential social unrest when people need reliable information (Haddow and Haddow 39). These terms of engagement between officials, planners and para-journalists are still to be resolved. Hermida readily acknowledges that Twitter and other social network platforms are vulnerable to rumours (Hermida 3-4; Sunstein). However, his other case study, Iran’s 2009 election crisis, further complicates the vision of ambient journalism, and always-on communication systems in particular. Hermida discusses several events during the crisis: the US State Department request to halt a server upgrade, how the Basij’s shooting of bystander Neda Soltan was captured on a mobile phone camera, the spread across social network platforms, and the high-velocity number of ‘tweets’ or messages during the first two weeks of Iran’s electoral uncertainty (Hermida 1). The US State Department was interested in how Twitter could be used for non-official sources, and to inform people who were monitoring the election events. Twitter’s perceived ‘success’ during Iran’s 2009 election now looks rather different when other factors are considered such as: the dynamics and patterns of Tehran street protests; Iran’s clerics who used Soltan’s death as propaganda; claims that Iran’s intelligence services used Twitter to track down and to kill protestors; the ‘black box’ case of what the US State Department and others actually did during the crisis; the history of neo-conservative interest in a Twitter-like platform for strategic information operations; and the Iranian diaspora’s incitement of Tehran student protests via satellite broadcasts. Iran’s 2009 election crisis has important lessons for ambient journalism: always-on communication systems may create noise and spread rumours; ‘mirror-imaging’ of mental models may occur, when other participants have very different worldviews and ‘contexts of use’ for social network platforms; and the new kinds of interaction may not lead to effective intervention in crisis events. Hermida’s combination of news and non-news fragments is the perfect environment for psychological operations and strategic information warfare (Burns and Eltham). Lessons of Current Platforms for Ambient Journalism We have discussed some unresolved problems for ambient journalism as a framework for journalists, and as mental models for news and similar events. Hermida’s goal of an “awareness system” faces a further challenge: the phenomenological limitations of human consciousness to deal with information complexity and ambiguous situations, whether by becoming ‘entangled’ in abstract information or by developing new, unexpected uses for emergent technologies (Thackara; Thompson; Hofstadter 101-102, 186; Morville, Findability, 55, 57, 158). The recursive and reflective capacities of human consciousness imposes its own epistemological frames. It’s still unclear how Licklider’s human-computer interaction will shape consciousness, but Douglas Hofstadter’s experiments with art and video-based group experiments may be suggestive. Hofstadter observes: “the interpenetration of our worlds becomes so great that our worldviews start to fuse” (266). Current research into user experience and information design provides some validation of Hofstadter’s experience, such as how Google is now the ‘default’ search engine, and how its interface design shapes the user’s subjective experience of online search (Morville, Findability; Morville, Search Patterns). Several models of Hermida’s awareness system already exist that build on Hofstadter’s insight. Within the information systems field, on-going research into artificial intelligence–‘expert systems’ that can model expertise as algorithms and decision rules, genetic algorithms, and evolutionary computation–has attempted to achieve Hermida’s goal. What these systems share are mental models of cognition, learning and adaptiveness to new information, often with forecasting and prediction capabilities. Such systems work in journalism areas such as finance and sports that involve analytics, data-mining and statistics, and in related fields such as health informatics where there are clear, explicit guidelines on information and international standards. After a mid-1980s investment bubble (Leinweber 183-184) these systems now underpin the technology platforms of global finance and news intermediaries. Bloomberg LP’s ubiquitous dual-screen computers, proprietary network and data analytics (www.bloomberg.com), and its competitors such as Thomson Reuters (www.thomsonreuters.com and www.reuters.com), illustrate how financial analysts and traders rely on an “awareness system” to navigate global stock-markets (Clifford and Creswell). For example, a Bloomberg subscriber can access real-time analytics from exchanges, markets, and from data vendors such as Dow Jones, NYSE Euronext and Thomson Reuters. They can use portfolio management tools to evaluate market information, to make allocation and trading decisions, to monitor ‘breaking’ news, and to integrate this information. Twitter is perhaps the para-journalist equivalent to how professional journalists and finance analysts rely on Bloomberg’s platform for real-time market and business information. Already, hedge funds like PhaseCapital are data-mining Twitter’s ‘tweets’ or messages for rumours, shifts in stock-market sentiment, and to analyse potential trading patterns (Pritchett and Palmer). The US-based Securities and Exchange Commission, and researchers like David Gelernter and Paul Tetlock, have also shown the benefits of applied data-mining for regulatory market supervision, in particular to uncover analysts who provide ‘whisper numbers’ to online message boards, and who have access to material, non-public information (Leinweber 60, 136, 144-145, 208, 219, 241-246). Hermida’s framework might be developed further for such regulatory supervision. Hermida’s awareness system may also benefit from the algorithms found in high-frequency trading (HFT) systems that Citadel Group, Goldman Sachs, Renaissance Technologies, and other quantitative financial institutions use. Rather than human traders, HFT uses co-located servers and complex algorithms, to make high-volume trades on stock-markets that take advantage of microsecond changes in prices (Duhigg). HFT capabilities are shrouded in secrecy, and became the focus of regulatory attention after several high-profile investigations of traders alleged to have stolen the software code (Bray and Bunge). One public example is Streambase (www.streambase.com), a ‘complex event processing’ (CEP) platform that can be used in HFT, and commercialised from the Project Aurora research collaboration between Brandeis University, Brown University, and Massachusetts Institute of Technology. CEP and HFT may be the ‘killer apps’ of Hermida’s awareness system. Alternatively, they may confirm Jaron Lanier’s worst fears: your data-stream and user-generated content can be harvested by others–for their gain, and your loss! Conclusion: Brian Eno and Redefining ‘Ambient Journalism’ On the basis of the above discussion, I suggest a modified definition of Hermida’s thesis: ‘Ambient journalism’ is an emerging analytical framework for journalists, informed by cognitive, cybernetic, and information systems research. It ‘sensitises’ the individual journalist, whether professional or ‘para-professional’, to observe and to evaluate their immediate context. In doing so, ‘ambient journalism’, like journalism generally, emphasises ‘novel’ information. It can also inform the design of real-time platforms for journalistic sources and news delivery. Individual ‘ambient journalists’ can learn much from the career of musician and producer Brian Eno. His personal definition of ‘ambient’ is “an atmosphere, or a surrounding influence: a tint,” that relies on the co-evolution of the musician, creative horizons, and studio technology as a tool, just as para-journalists use Twitter as a platform (Sheppard 278; Eno 293-297). Like para-journalists, Eno claims to be a “self-educated but largely untrained” musician and yet also a craft-based producer (McFadzean; Tamm 177; 44-50). Perhaps Eno would frame the distinction between para-journalist and professional journalist as “axis thinking” (Eno 298, 302) which is needlessly polarised due to different normative theories, stances, and practices. Furthermore, I would argue that Eno’s worldview was shaped by similar influences to Licklider and Engelbart, who appear to have informed Hermida’s assumptions. These influences include the mathematician and game theorist John von Neumann and biologist Richard Dawkins (Eno 162); musicians Eric Satie, John Cage and his book Silence (Eno 19-22, 162; Sheppard 22, 36, 378-379); and the field of self-organising systems, in particular cyberneticist Stafford Beer (Eno 245; Tamm 86; Sheppard 224). Eno summed up the central lesson of this theoretical corpus during his collaborations with New York’s ‘No Wave’ scene in 1978, of “people experimenting with their lives” (Eno 253; Reynolds 146-147; Sheppard 290-295). Importantly, he developed a personal view of normative theories through practice-based research, on a range of projects, and with different creative and collaborative teams. Rather than a technological solution, Eno settled on a way to encode his craft and skills into a quasi-experimental, transmittable method—an aim of practitioner development in professional journalism. Even if only a “founding myth,” the story of Eno’s 1975 street accident with a taxi, and how he conceived ‘ambient music’ during his hospital stay, illustrates how ambient journalists might perceive something new in specific circumstances (Tamm 131; Sheppard 186-188). More tellingly, this background informed his collaboration with the late painter Peter Schmidt, to co-create the Oblique Strategies deck of aphorisms: aleatory, oracular messages that appeared dependent on chance, luck, and randomness, but that in fact were based on Eno and Schmidt’s creative philosophy and work guidelines (Tamm 77-78; Sheppard 178-179; Reynolds 170). In short, Eno was engaging with the kind of reflective practices that underpin exemplary professional journalism. He was able to encode this craft and skills into a quasi-experimental method, rather than a technological solution. Journalists and practitioners who adopt Hermida’s framework could learn much from the published accounts of Eno’s practice-based research, in the context of creative projects and collaborative teams. In particular, these detail the contexts and choices of Eno’s early ambient music recordings (Sheppard 199-200); Eno’s duels with David Bowie during ‘Sense of Doubt’ for the Heroes album (Tamm 158; Sheppard 254-255); troubled collaborations with Talking Heads and David Byrne (Reynolds 165-170; Sheppard; 338-347, 353); a curatorial, mentor role on U2’s The Unforgettable Fire (Sheppard 368-369); the ‘grand, stadium scale’ experiments of U2’s 1991-93 ZooTV tour (Sheppard 404); the Zorn-like games of Bowie’s Outside album (Eno 382-389); and the ‘generative’ artwork 77 Million Paintings (Eno 330-332; Tamm 133-135; Sheppard 278-279; Eno 435). Eno is clearly a highly flexible maker and producer. 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