The Pakistan Development Review
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Welfare Potential of Zakat: An Attempt to Estimate Economy wide Zakat Collection in Pakistan
Get PDFIn Pakistan, Naveed and Ali (2012) in a most recent study
conclude that as many as 58.7 million people in Pakistan are living in
multidimensional poverty with 46 percent of the rural population and 18
percent of the urban households falling below the poverty line. It is
natural to ask what the government is doing for these poor people and
how much it can expend to end extreme poverty in Pakistan. If we look at
the fiscal position of the government, we see that Pakistan has a very
low tax to GDP ratio, i.e. 9 percent. As a result of low tax to GDP
ratio and high current expenditure, the government is suffering from a
large budget deficit. Often, the development spending is curtailed to
contain the large budget deficit due to high non-discretionary current
expenditures in debt servicing and security expenditure. Expenditure on
health and education is not even 5 percent of GDP in Pakistan. Due to
such a low expenditure on developing human capital and maintaining
health of the masses, poor people remain uneducated and unhealthy and
hence they find it very difficult to get out of the poverty
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Are Defense Expenditures Pro Poor or Anti Poor in Pakistan? An Empirical Investigation
Get PDFRecent increase in defense expenditure (Dexp hereinafter) in
Pakistan due to increase in internal security and terrorism is an issue
of concern to many Pakistani and other stakeholders in the Pakistan
economy. Presently, internal security issues especially that of the
increasingly violent homegrown terrorism is forcing increasing financial
cost on government‘s expenditure towards defense sector. According to
Budget documents, defense budget amounts to Rs 700. 2 billion for the
2014-15 fiscal year compared with Rs 627.2 billion allocated in the
preceding fiscal year, showing an increase of Rs 73 billion. However,
these figures do not include Rs 163.4 billion allocated for pensions of
the military personnel.1 In addition to this, military would also be
given Rs 165 billion under the contingent liability and Rs 85 billion
under the Coalition Support Fund (CSF). This means that in reality Rs
1113 billion has been allocated for the military which is about 28.2
percent of the country‘s total budget [Sheikh and Yousaf (2014)]. This
has led to diversion of the money needed for much-needed development
projects, as the share of current expenditure in total budgetary outlay
for 2014-15 is 80.5 percent.2 This diversion of funds has economic
implication since some social sectors are likely to suffer in
Pakista
The Development of India’s Financial Inclusion Agenda—Some Lessons for Pakistan
Get PDFFinancial Inclusion has assumed a vital position in the Public
Policy discourse of developing economies. Provision of financial
services to the otherwise excluded strata of the society enhances their
potential to climb the economic ladder of opportunity and prosperity.
Access to financial services to the otherwise excluded impacts their
quality of life and enables the less privileged to increase and
diversify their incomes, improve their social and economic conditions.
Due to lack of access to financial services, most poor households have
to rely on their meagre savings or money lenders which limit their
ability to actively participate and benefit from the development
process. The main theoretical arguments that economic theory postulates
regarding the failure of financial markets in percolating poor and rural
areas are of informational asymmetries, difficulties in contract
designing and enforcement, greater transaction costs. The demand side
aspects may be low demand for such services, arising from illiteracy,
less investment opportunities in rural areas and difficult loan
contracts [Basu (2006)]. When households are access constrained with
respect to financial services, it becomes one of the important reasons
for persisting inequalities. Economic theory suggests that unrelenting
inequalities has a negative impact on the long term growth prospects of
an economy [World Bank (2007)]. While establishing causality between
financial development and economic growth has been quite tedious, with
no simple answers, the evidence of a strong link between financial
development and economic growth has continued to rise [Gattoo and Akhtar
(2014)]. The interest in the financial inclusion discourse across
developing and developing world stems from the recognition that a strong
and vibrant financial system does not necessarily imply increasing
financial to all across the societal divide [Honohan (2003)]
Inaugural Address
Get PDFDr Asad Zaman, Distinguished Guests, Ladies and Gentlemen, I
am very pleased to return to this landmark event, the Annual Meeting of
Development Economists, after a long interval and that also on the 30th
Anniversary of PIDE. This gathering of intellectuals, economists, worthy
panelists and other participants of the conference is important for the
academic community and policy-makers alike, to debate current
socio-economic challenges and their solutions. The topics for discussion
by many eminent scholars and policy-makers over the next 3 days are both
important and topical. We would look forward to the recommendations
emerging from the Conference, specially on topics like “Inclusive
Growth”, “Addressing inequality”, and “Alternate Strategies of Poverty
Alleviation”
Are Our Export-Oriented Industries Technically More Efficient?
Get PDFThis paper makes a comparison of technical efficiency scores
between groups of exporting and non-exporting industries. Using data
from Census of Manufacturing Industries in Pakistan (2005-06), technical
efficiency scores of 102 large scale manufacturing industries are
estimated. Stochastic Frontier Analysis as well as Data Envelopment
Analysis technique are used to estimate technical efficiency scores. In
Stochastic Frontier Analysis Translog and Cobb-Douglass Production
Functions are specified, whereas in Data Envelopment Analysis technique,
efficiency scores are computed under the assumptions of Constant Returns
to Scale as well as Variable Returns to Scale. Industries showing high
technical efficiency include Tobacco Products, Refined Petroleum
Products, Carpets and Rugs, and Meat and Meat Products. Industries
showing low technical efficiency include Refractory Ceramic Products,
Electricity Distribution and Control Apparatus, Fish and Fish Products,
Basic Precious Metals and Aluminum and its Products. Comparison of mean
efficiency scores between exporting and non-exporting industries does
not indicate any significant difference between efficiency scores across
types of industries. JEL Classification: D24, L6, O14, F14 Keywords:
Manufacturing Industries, Technical Efficiency, Stochastic Frontier
Analysis, Data Envelopment Analysis, International Trad
Historical Role of Islamic Waqf in Poverty Reduction in Muslim Society
Get PDFSince the emergence of known civilisation poverty is a major
challenge and in the present era, it is a wide spread world problem
specifically afflicting the developing countries and also is a breeding
ground for terrorism and conflicts between nations [Shirazi and Khan
(2009)]. Poverty problem, with issues, of defining poverty, determining
who is poor and where to draw the poverty line has been at the forefront
of national and international policy-making forums, and a topic of
heated debates among economists and policy makers [Khan (2007)].
Increasing per capita income along with equal distribution of wealth
leading to better standard of life (with better facilities and
opportunities of: food, health, clothing, housing, drinking water,
income and employment, and social and cultural life) is pertinent way to
reduce poverty. Islam encourages with stress on working hard and
investment for earning the livelihood. For extremely poor who have no
means to meet basic needs, no sources to invest, and no opportunity to
earn, Islam suggested voluntary and compulsory endowments [Zakat, waqf,
sadqa] for catering the needs of different degrees of poor from
destitute to less poor, and also causing, circulation of wealth leading
to it equal distribution, which is also another way to reduce
poverty
Why Nations Fail? (Keynote Video Lecture)
No full textFirst of all, it is a great pleasure to be here. Thank you for
inviting me. Given that communicating from a far is not the easiest
thing to do, what I have decided to do is to give a quick overview of
the arguments that have emerged from the book that James and I wrote. In
fact, this book is a synthesis of about 16 years of research that James
and I did. I think it is fair to say that a lot of economic development
and economic growth is motivated by patterns that are reported in the
book. In particular, this is data from Angus Madison’s life’s work,
which is not entirely uncontroversial, but the overall pattern here is
fairly uncontroversial. The patterns that we observe have actually been
in the background of many attempts to understand long patterns of
economic development. I think they also point out that it is going to be
very difficult to understand why certain parts of the world that were
either on par with, say, Asia, in particular the Indian Subcontinent and
China, have increased their income per capita and their prosperity so
much in 500 years leading to today, particularly from the period around
early 1800s to essentially to the end of the World War II, where there
is this big divergence taking place. The trends in economic development
show that United States of America, Canada, New Zealand and Australia
have pulled so much ahead of, say, Asia, where both India, the Indian
Subcontinent in this case, and China more or less show the same picture,
where there is not much growth going on until the end of the World War
II
Microfinance Institutions and Poverty Reduction: A Cross Regional Analysis
Get PDFThe alleviation of poverty is one of the most debated issues
among the academicians and policy makers. From 1950s to 1980s the
poverty reduction program has been based on increase the participation
of poor into the economy by better macroeconomic performance. Though the
poor part of population mostly engaged in informal sector1 is identified
by researchers but has not become the part of economic models and
government policy [Robinson (2001)]. Poverty reduction has been
institutionalised in 1944 when World Bank was set up. The World Bank
worked through governments and institutions by giving loans to
developing countries called structural-adjustment programmes. These
programmes were highly unsuccessful, created dependence on aid with
little help to poor part of societies [Murduch (1999) and Diop, et al.
(2007)]
Endogenous Institutional Change and Privileged Groups
Get PDFSince the recent advances in the institutional perspective of
economic development, there is considerable increase in the literature
on the evolution of institutions. In this study, while employing the
game theoretic approach, we explore the rent-seeking fundamentals of
institutions. We model the manner in which the rent-seeking behaviour of
state actors results in inefficiency of the institutional framework. The
main focus is on the rents provided by the availability of natural
resources wealth, foreign aid or corruption potential. By originating a
framework where rulers, agents of the state, and citizens act
endogenously, we show that the rents from these resources can be a
significant constraint to institutional reforms. In order to come out of
the bad institutions trap, the society needs to offer a substantial
amount of incentives to the privileged groups. The focus is on two
privileged groups, i.e. the rulers and the state agents. In most of the
societies, these two groups have the highest bargaining power in the
negotiations over the rules and institutions. JEL Classification:JEL
Classification: P48, P16, P14, O43, D73 Institutional Reforms, Natural
Resources Wealth, Foreign Aid,Corruption Potential, Rulers, Agents of
the Stat
Measurement of Living Standards Deprivation in Punjab Using AF Method (Periodical Comparison Approach)
Get PDFIn spite of taking and implementing various special measures
by the government of Punjab and the Pakistan to alleviate poverty in
Punjab, poverty is still there and has become a constraint in the way of
economic progress and prosperity of the people of the Punjab-Pakistan.
Poverty is pronounced deprivation in well-being. The conventional view
links well-being primarily to command over commodities, so the poor are
those who do not have enough income or consumption to put them above
some adequate minimum threshold. The broadest approach to well-being and
hence poverty focuses on the capability of the individual to properly
function in the society. The poor lack key capabilities, and may have
inadequate income or education, and last but not the least living
standards. How we measure poverty can importantly influence how we come
to understand it, how we analyse it, and how we create policies to
influence it. In recent years, the literature on multidimensional
poverty measurement has blossomed in a number of different directions.
The 1997 Human Development Report vividly introduced poverty as a
multidimensional phenomenon, and the Millennium Declaration and
Millennium Development Goals (MDGs) have highlighted multiple dimensions
of poverty since 2000