The Pakistan Development Review
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Welfare Impact of the Lady Health Workers Programme in Pakistan
Get PDFWith the year 2015 fast approaching, Pakistan is not likely to
achieve most of the health targets set in the Millennium Development
Goals [Pakistan (2010)]. High levels of child and maternal mortality and
child malnutrition are among the major health challenges facing the
country. Along with this enhanced vulnerability for children and women
there is also an economic divide in the society because these health
challenges are more profound for the poor segment of the population than
for the better off. Another divide is between the rural and urban
populations due to concentration of health facilities in urban centres
of the country. The high cost of dealing with health issues adversely
affects the poor and rural population, lowering their productivity and
limiting their lifetime achievements. Without substantially improved
health outcomes it is impossible to break out of the cycle of poverty
[OECD (2003)]
The Impact of Institutional Quality on Economic Growth: Panel Evidence
Get PDFThe aim of the present study is twofold. First, we develop a
theoretical model which incorporates the role of institutions in
promoting economic growth. The theoretical model predicts that rent
seeking activities decrease as institutional quality improves, and hence
income increases and vice versa. Second, we conduct an empirical
analysis to quantify the impact of institutions on economic growth in
selected Asian economies over the period 1996- 2012 by employing both
static and dynamic panel system Generalised Method of Moments (GMM)
technique with fixed effects. The empirical results reveal that
institutions indeed are important in determining the long run economic
growth in Asian economies. However, the impact of institutions on
economic growth differs across Asian economies and depends on the level
of economic development. The results reveal that institutions are more
effective in developed Asia than developing Asia. This evidence implies
that different countries require different set of institutions to
promote long term economic growth. Keywords: Institutions, Economic
Growth, Panel Evidence, Asi
Rural Poverty Dynamics in Pakistan: Evidence from Three Waves of the Panel Survey
Get PDFPoverty analysis in developing countries including Pakistan
has in general focused on poverty trends based on cross-sectional
datasets, with very little attention being paid to dynamics—of
transitory or chronic poverty. Transitory poor are those who move out or
fall into poverty between two or more points of time whereas the chronic
poor remain in the poverty trap for a significant period of their lives.
The static measures of households’ standard of living do not necessarily
provide a good insight into their likely stability over time. For
instance, a high mobility into or out of poverty may suggest that a
higher proportion of a population experiences poverty over time than
what the cross-sectional data might show. 1 It also implies that a much
smaller proportion of the population experiences chronic poverty
contrary to the results of cross-sectional datasets in a particular year
[Hossain and Bayes (2010)]. Thus, the analysis of poverty dynamics is
important to uncover the true nature of wellbeing of population. Both
the micro and macro level socio-demographic and economic factors are
likely to affect poverty movements and intergenerational poverty
transmission [Krishna (2011)]
Effectiveness of Cash Transfer Programmes for Household Welfare in Pakistan: The Case of the Benazir Income Support Programme
Get PDFCash transfer programmes are widely considered a ‘magic
bullet’ for reducing poverty. Whether they actually have such an
incredible impact on poverty reduction is debatable but they surely are
gaining credibility as an effective safety net mechanism and
consequently an integral part of inclusive growth strategies in many
developing countries. As shown by Ali (2007), inclusive growth rests on
three basic premises. First, productive employment opportunities should
be created to absorb labour force. Second, capability enhancement and
skill development should be focused in order to broaden people’s access
to economic opportunities. And lastly, a basic level of well-being has
to be guaranteed by providing social protection. Safety nets are at the
core of the last pillar, provided mainly through cash transfers, which
can be both conditional and unconditional
Income Growth, School Enrolment and the Gender Gap in Schooling: Evidence from Rural Pakistan
Get PDFHousehold panel data document a remarkable closing of the
gender gap in school enrolment in rural Pakistan between 2001 and 2004.
During this 3-year period, there was an 8 point increase in the
percentage of girls entering school, while the corresponding increase
for boys was less than 2 percentage points. More than half of the rise
for girls can be explained by the substantial increase in household
incomes, whereas comparatively little is accounted for by increased
school availability. Unpacking these enrolment trends and their
determinants requires solving the classic period-age-cohort
identification problem. The paper shows how to do so using auxiliary
information on the distribution of school entry ages. JEL
Classification: O15, O40, I 25, I21 Keywords: School Enrolment, Gender,
Income Growth, Gender Ga
Energy Smart Buildings: Potential for Conservation and Efficiency of Energy
Get PDFEnergy is the basic ingredient for economic growth and
development [Lorde, et al. (2010)]. Presently demand for energy has
significantly increased due to the overall expansion of economic and
industrial activity in all important economic sectors e.g. industry,
agriculture, and services. In addition to the expansion of economic
activity and subsequent increase in energy demand at industrial level,
population growth and increased consumption are also adding to the
demand for energy [OECD (2011)]. In other words, modern economy has
become highly dependent on energy resources. In order to meet the
increased energy demand and ensure its sustainable supply, there is a
need to have strong and robust plans with all options to consider at
various levels
Mitigating Vulnerability to Oil Price Risk— Applicability of Risk Models to Pakistan’s Energy Problem
Get PDFThe paper examines the prospects of reducing the price risk of
Pakistan’s oil imports through hedging in the oil futures market. The
paper evaluates the ex-ante cross hedge strategies over the 1990–2013
period using 1–4 months futures NYMEX in order to see how to reduce
price risk? Our results indicate that in all cases except one, ex-ante
hedging would have been effective in reducing price risk. We provide
quantitative estimates of the return/risk tradeoffs from hedging
Pakistan’s oil imports, and find that futures hedging offers the country
significant risk-reduction potential. Keywords: Risk-return Trade-off,
Hedging, Oil Prices JEL Classification: G100, G13
Is Negative Profitability-Leverage Relation the only Support for the Pecking Order Theory in Case of Pakistani Firms?
No full textPrevious studies on capital structure in Pakistan have
reported evidence in support of the pecking order theory. However, this
evidence is largely based on testing one dimensional relationship
between leverage ratios and firms’ profitability. The objective of this
paper is to extensively test the pecking order theory in Pakistan with
well-known pecking order testing models. Specifically, we use a sample
of 321 firms listed on the Karachi Stock Exchange from 2000 to 2009 and
test pecking order theory with models suggested by Shyam-Sunder and
Myers, Frank and Goyal, Watson and Wilson, and Rajan and Zingales.
Results of these models indicate that there exits only weak evidence in
support of pecking order theory in Pakistan. However, strong support is
found for pecking order theory when leverage ratios are regressed on
profitability ratio, along with a set of control variables. This
discrepancy in the results of the two sets of models needs further
investigation, as well as care in interpreting the results of existing
studies on capital structure in Pakistan. Our results show robustness
even after controlling for possible profits understatements or weak
corporate governance practices. JEL Classification: G10, G21, G32
Keywords: Pecking Order Theory, Profitability-Leverage Relation,
KS
The Effect of Oil Price Shocks on the Dynamic Relationship between Current Account and Exchange Rate: Evidence from D-8 Countries
Get PDFThe effect of oil price shocks on global economy has been a
great concern since 1970s and has instigated a great deal of research
investigating macroeconomic consequences of oil price fluctuations.
Later on, the instability in the Middle East and recent oil price hike
confirmed the enduring significance of the issue. Though a voluminous
body of literature has evolved examining the bearings of oil prices for
internal sectors of economies [to name a few, e.g., Barsky and Kilian
(2004); Kilian (2008a,b); Hamilton (2008)], the studies analysing the
external sector response to oil price shocks are very few [see, e.g.
Kilian, et al. (2007)]. The determination of current account and
exchange rate—the two major indicators of external sector—has been
studied widely in theoretical and empirical literature but mostly the
discussion of the two variables largely remained separate [Lee and Chinn
(1998)]. Similarly, investigation of simultaneous response of these two
variables to an oil price shock remained relatively less ventured avenue
of research. Initial work done on the relationship between current
account and oil price could not ascertain conclusive link between these
two variables.1 Recent work on the issue revealed the diversity of
responses of current account of different countries to an oil price
shock. For instance, oil price increase deteriorates current account
balance of developing countries [OECD (2004); Rebucci and Spatafora
(2006); Killian, et al. (2007)] but may improve it if the country
happens to be a net oil-exporter. This implies that the relationship
depends on the number of factors among which oil dependency of country,
oil-intensity of production process2 and responses of non-oil trade
balance3 and sources of oil price fluctuations4are of particular
significance
What Inspires Electricity Crises at the Micro Level: Empirical Evidence from Electricity Consumption Pattern of Households from Karachi
Get PDFWith urbanisation1 and modernisation of the economy, the use
of electrical appliances has increased manifold in Pakistan. Now,
household shares in the total electricity use account for 46.5 percent.
While other users have lower shares that are industrial 27.5 percent,
agriculture 11.6 percent, commercial 7.5 percent and the government 6.2
percent only [Pakistan (2012-13)]. Overtime, the household electricity
consumption has also increased because of the increase in electricity
consumers2 and of village electrification.3 Other important reasons
include the use of modern appliances including both locally made and
smuggled and increase in the share of urban women in the labour force by
6.5 percent during 2007-08 and 2012- 13 [Pakistan (2012-13)]. These
reasons are also responsible for enlarging electricity demand and supply
gap over the years and have led to the electricity shortage to alarming
proportions in March 2012. The electricity gap increased to 57,754 GW
from 56,930 GW showing an increase of 1.4 percent from the corresponding
period of the last year. The acute electricity shortage has caused long
hours of the electricity load shedding in the country. The population
living in urban areas bears the direct fall out of the electricity
breakdown because of the modern lifestyle and sheer dependence on
electricity [Pakistan (2012-13)]