The Pakistan Development Review
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Environmental Pollution and Sustainable Development in Developing Countries
Full text linkEnvironmental Pollution is cost of economic growth via
increased industrialisation, urbanisation, mechanisation, use of
fertiliser and pesticides in agriculture and mismanagement to dump human
waste, especially in developing countries, where environmental laws
usually are relatively less strict. Hence growth and pollution are
positively linked in developing countries expectedly. Sustainable
development may be defined as continuous increase in the socio-economic
standard of living of a country‘s population, normally accomplished by
improving the quality of its physical and human capital. The research‘s
foremost objective is the generation of environmental pollution index
that incorporate various production and consumption side indicators that
are majorly responsible for pollution. While, the at-most objective of
the study is to examine the causal relationship between the generated
pollution index and human development through a panelcausality analysis
using a panel of 32developing countries over the period 2000-2013. JEL
Classification:Q2, Q3, Q4, O13 Keywords:Pollution Indices, HDI,
Renewable Energy, Panel Causality, Sustainable Developmen
Inclusive Agricultural Growth in Pakistan— Understanding Some Basic Constraints
Full text linkInclusive agricultural growth is important for overall
economic growth and particularly critical for rural socio-economic
stability and poverty reduction in Pakistan. The majority of Pakistan‘s
population and 44 percent of the overall labour force are dependent upon
agriculture which only accounts for a little over 20 percent of national
GDP. The paper highlights some basic constraints that have not been
explicitly addressed in the policy research and implementation and have
impeded inclusive agriculture growth. A descriptive analysis based on
data from the Agriculture Census of Pakistan and the Pakistan Household
Income and Economic Survey—both of which were conducted in 2010-11—is
used to show how high levels of poverty and its disparity across
regions, combined with the declining size of operated holdings and
associated fragmentation especially in the smallest size categories
which now form over 60 percent of the agricultural holdings in Pakistan,
are fundamental constraints. Poverty is both the result as well as the
consequence of fragmented markets, weak institutions including
governance; and, inadequate policy research and implementation. A better
research based policy understanding of some basic constraints, and the
variations across regions in such factors such as the declining size and
fragmentation of operated farms, rural poverty; and, the levels of
market development and institutions is essential along with effective
implementation. One size fits all policies have not and will not work.
JEL Classification: O40, Q15, I32, P46 Keywords: Inclusive Growth, Land
Holding, Land Tenure, Income Distribution, Povert
Hello Folk: We Are Responsible for What We Will Face in 2025; Evidence from Philosophical Underpinnings of Social Capital
Full text linkSocial capital is a very important facet of society and has
strong relevance to economic landscape of a country. There are different
theories about the nature, accumulation, growth and validity of social
capital as an instrument of economy. This paper explains the
philosophical context of social capital and validate through a model
using Berg, Dickhaut and McCabe trust game that we all transfer a set of
values to our next generation, which ultimately manifest as social
capital in the real world. The transferred values affects each agent‟
decision whether to trust other members of the society and participate
in a socio-economic exchange or not. If he trusts, he reaps substantial
gains from exchange, and ultimately social capital will be concreted.
But if he does not, he will face a major loss and overall social capital
will be dented. A distrustful ancestor will further induce agents to
withdraw from the market and not to invest. This will lead a society to
an overall mistrust paradigm and eventual downfall. On the other hand,
the level of cooperation in the members of society increases as the good
experience is transferred across generations. Economic impacts of social
capital have been elucidated using Leonhard Euler function and Newton
Leibniz integration processes. The ethical framework for society and
role of literature in transfer of beliefs, values and culture from one
generation to other has also been discussed at length. The paper is a
unique study of how we all will be responsible for the kind of social
capital will have in 2025. JEL Classification: D71, D72, Z11, Z12, Z13
Keywords: Social, Capital, Model, Transfer, Generations, Values, Trust,
Beliefs, Cooperation, Ethics, Literatur
Reconstructing Development Economics: Overcoming Rent for Constructing Capitalism
Full text linkThe purpose of the following article is to show that for its
survival capitalism requires expanding mass incomes and that the
dominant interpretation of growth relying on ever increasing shares of
the rich in national income is misguided. Capitalism is an achievement
involuntarily imposed by the poor onto the rich of society. The rich
gain wealth by a large variety of means, very often not by the
discipline capitalism requires and imposes through competition. The
article concentrates on two aspects: the conditions of making expanding
mass incomes the basis of capitalist transition in not yet capitalist
underdeveloped economies, and the importance of such a transition for
maintaining capitalism at the global level where a globalisation of rent
against globalisation of profit is the intention of the forces of
capital. Therefore many other very relevant aspects of the theoretical
model can only be shortly outlined
Is Innovation in Pakistan Driven by Specialisation or Diversity?
Full text linkInnovation is among the main drivers of industrial development
leading to economic growth. However, the question triggers that what
drives innovation? Is innovation driven by specialisation or
diversification? The literature has supported both, the specialisation
and diversification as driver of innovation. Therefore, the purpose of
this paper is to explore the determinants of innovation in Pakistan with
a special emphasis on specialisation and diversity. The analysis is
based on the cross sectional data set of 784 firms across 13 different
cities of Pakistan, i.e. Investment Climate Survey (ICS) 2007, compiled
by the World Bank Enterprise Group. Our findings have showed the
positive relation between innovation and diversity i.e. diversity is
conducive to innovation. On the other hand, specialisation has a
negative effect i.e. it hinders innovation in cities of Pakistan. JEL
Classification: C21, C25, O31, O32 Keywords: Innovation, Specialisation,
Diversity, Logistic Regressio
Financial Sector, Democracy and Economic Growth: A Panel Data Analysis
Full text linkEconomic growth depends on many factors like the traditional
factors of capital, labour and technological advancement and the
somewhat novel factors of financial development and the nature of
political regime. The relationship between the nature of political
structure and economic growth is quite complicated. There may be direct
and indirect impacts of the nature of political set up on economic
growth. However, these channels remain un-explored to larger extent. The
present study is conducted to analyse economic growth under democracy
and dictatorship for a considerably larger set of countries from 1974 to
2013. The indirect impact of democracy on economic growth is analysed
through an unexplored channel of financial sector performance, which is
expected to be sensitive to regime type. The direct impact of democracy
is found to be positively significant on economic growth. Likewise,
direct impact of financial sector performance on economic growth is also
found to be positive and significant. However, democracy had negative
indirect impact on economic growth through financial sector but the
magnitude of this indirect negative impact is minute enough to be
ignored as compared to large individual direct effects of democracy and
financial sector. JEL Classification: O40, O43, O16 Keywords: Economic
Growth, Democracy, Dictatorship, Financial Sector Performanc
Replacing Contracts with Handshakes: A Study of Social Networks of Entrepreneurs in the Weaving Sector
Full text linkInformal institutions like kinship based networks play a
crucial role in business activity. The flow of information in such
networks, based on trust and reciprocity helps in creating an
environment where opportunism is curtailed and relational based
governance mechanism prevails. This paper studies, whether such factors
play a role as an alternative governance mechanism for contracts as
opposed to the formal institutions or not. The effectiveness of such
network factors hinges on the network structure, and therefore network
density and network size are taken as independent variables. Though
network density was positively and significantly related to the use of
social networks for management of breach of contracts, network size was
negatively related to management of breach of contracts. Network size
and network density were positively related to ex-post transaction costs
of dispute resolutions however, they were not statistically significant.
JEL Classification: D850, O17, L14 Keywords: Social Capital, SMEs,
Transaction Costs, Entrepreneurship, Network
Governance, Institutional Reforms and Modernisation of Public Sector (The Quaid-i-Azam Lecture )
No full textIt is a matter of great honour for me to deliver the
Quaid-i-Azam memorial lecture. He is an everlasting source of
inspiration for me due to his two unmatched attributes, i.e. tolerance
and determination. To me, this combination of qualities in Jinnah made
him a symbol of glory and grandeur. Tolerance in particular can play an
instrumental role in changing a society’s outlook, and Jinnah set an
example for us for being an emblem of tolerance. Tolerance with all its
manifestations in different facets of life is direly needed in our
society. For instance, religious, ethnic and racial tolerance can be
considered as the first step towards forming a sound and rational
society. In the same way, this gathering today has given me immense
satisfaction, as different views from different schools of thought are
assimilated and tolerated
From Fiscal Decentralisation to Economic Growt The Role of Complementary Institutions
Full text linkDecentralisation is theoretically expected to be a platform
towards efficient provision of the local public goods and services. This
is expected to boost economic growth due to efficient and effective
utilisation of scarce fiscal resources. Nevertheless, the existing
empirical studies present mixed results on this expected positive
relationship among decentralisation and economic growth. Recently, the
theories of fiscal federalism have also pressed upon the enabling
environment for effective decentralisation; talking explicitly, an
enabling institutional setup is required. The current study explores the
complementarity between fiscal decentralisation and other institutions
for stimulating growth and the study uses rich crosscountry panel data
for the period 1984 to 2012, covering both the developing and developed
countries of the world. The results suggest that positive relationship
exist between fiscal decentralisation and economic growth for the
developed countries while evidence was not found in the case of
developing countries. Further, it was found that fiscal decentralisation
and quality institutions are complementary for economic growth. JEL
Classification: C22, H11, H77, O40 Keywords: Fiscal Decentralisation,
Institutions, Economic Growth, Panel Data, unequally spaced panel
dat