The Pakistan Development Review
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Economic Growth-Female Labour Force Participation Nexus: An Empirical Evidence for Pakistan
Get PDFEconomic literature shows significant attention towards the
role played by female labour force in the economic development of
nations. The structural changes of economies from agriculture to
industrial and services sector reduce the female labour force
participation in case of developing nations. The activities of female
labour force increases in the later stage of economic development due to
increase in education and dynamics of economic activity. As the size of
the economy expands females have easier and better access of jobs thus
are encouraged to become economically active, it leads to increase
female participation in the productive activities. The participation of
female labour force is desirable for both equity and efficiency reasons.
The equity aspect shows that the women’s participation in the labour
market ultimately improves their relative economic position, increase
the overall economic efficiency by enhancing the development potential
of the country. Moreover, the increasing integration of women in the
economy helps in reducing gender disparities in education, improving
maternal health, increasing sectoral share of female employment in
different sectors of the economy, demonstrating the hidden contribution
of women as unpaid family worker especially in agriculture sector.
According to the modernisation theorists, economic development is
positively associated with female labour force participation through
change in the occupational structure and increase in educational
opportunities along with the household responsibilities. The
modernisation process is linked with increased demand for labour, a
general social acceptance of women’s education and employment as well as
lower fertility [Heckman (1980); Standing (1981); Bauer and Shin
(1987)]. A body of theoretical and empirical literature provides
evidence that female labour force participation has a positive and
strong relationship with economic growth [Tansel (2002) and Fatima and
Sultana (2009)]
“Saving the Euro: A Test for Globalisation” (The Allama Iqbal Lecture)
No full textThe sovereign debt crisis originating in the eurozone
immediately after the eruption of the global financial crash represents
a significant challenge not only for the European but also for the world
economy. Overcoming it will contribute to creating the conditions for
sustained global economic recovery and also provide a testing ground for
our capabilities to control the dangers surrounding the globalisation
process which is unfolding over the recent decades. The integration of
markets in products and finance, and less so in services, coupled with
enormous technological progress in communications and transport diffused
growth to regions and continents that, during the last centuries, had
been left behind the dramatic rise in living standards witnessed in
Europe, North America and Japan since the Industrial Revolution. The
opening up of markets led to more efficient use of global resources
allowing productivity to grow while billions of people transgressed
poverty lines and joined the modern world. The downside of this process
is that national control over economic policy has been significantly
diminished, even vanished for small economies, while intricate problems
emerged for international economic governance. These problems were
brought to the fore during the recent crisis at the global and eurozone
level. As markets integrate and systems converge, controlling imbalances
in either the real economy or the financial sector becomes increasingly
difficult since it requires much more advanced policy cooperation than
allowed for in institutional set-ups corresponding to nation-centred
economic models. The extent of the changes that are needed will become
clearer as we review the origins of the present crisis. At the global
level the huge current account imbalances that have been built up over
the last decades produced an unusual pattern of savings flows. Poor
countries, chiefly China, have been financing rich ones, such as the
United States. This pattern reflects the fact that emerging countries
have had large current account surpluses, whereas developed economies
have accumulated sizeable deficits. The imbalances led capital to flow
‘the wrong way’ from the developing to the advanced economies,
destabilising the financial system and thus creating the conditions for
the economic crisis
Market Diversification and Firms’ Characteristics of Export-Oriented Manufacturers in Pakistan
Get PDFThis paper explores the determinants of market diversification
by export-oriented manufacturing firms using the logistic regression
framework. The results show that firm level characteristics including
age of the enterprise, managerial expertise, type of ownership, and size
of the enterprise play a key role in determining the probability of
market diversification by firms. These findings highlight the salience
of firm level capacities in achieving export diversification in
Pakistan. JEL Classification: F14, L25 Keywords: Exports, Firms, Market
Diversification, Manufacturin
Precise Estimates of the Unrecorded Economy
Get PDFInformal economy in Pakistan is the backbone of the economy.
However, the problem is that we do not know how big it is due to
non-availability of the precise estimates of unrecorded1 economy.
Precise estimates of the unrecorded economy would help policy-makers to
make better macroeconomic policies. If unrecorded economy becomes part
of the recorded economy government can seek revenues from it and rest of
the sectors may have to take lesser burden of taxes. This would be a
win-win situation for the government and for those sectors that are part
of the documented system. In return, by becoming part of the documented
economic system the undocumented sector can enjoy all those benefits and
incentives that are available to the formal sector
Allan H. Meltzer. Why Capitalism? USA: Oxford University Press. 2012. 145 pages. US $ 21.95. Hardbound.
Get PDFWhy Capitalism? is written in response to the popular belief
of “end of capitalism” that emerged in the aftermath of the 2008
financial crisis. In this book, the author criticises the
anti-capitalism claim advocated by numerous writers who welcomed
regulated markets and essential government intervention at the time of
recession to fix the problems, which free markets cannot resolve by
itself. While praising capitalism, the author argues that the success of
capitalist system was inevitable over the last half decade in most of
the countries. He believes that democracy along with capitalism is the
best system since people, by their voting rights, choose their own tax
rates and way of redistribution of wealth. Furthermore, according to him
it is the only system, which faced many challenges, but not only
survived but came out stronger and dominated the world. Theoretically,
the author’s arguments, in this book are very attractive but in practice
give rise to several questions
Fiscal Decentralisation and Economic Growth: Role of Democratic Institutions
No full textThis study attempts to analyse the impact of fiscal
decentralisation on economic growth. It also examines the
complementarity between fiscal decentralisation and democratic
institutions in promoting growth. The modelling framework is the
endogenous growth model augmented with measures of fiscal
decentralisation through democratic institutions. To capture the
multidimensionality, three different measures of fiscal decentralisation
are used. The overall analysis shows that revenue decentralisation
promotes economic growth while expenditure decentralisation retards
economic growth. Composite decentralisation positively influences
economic growth implying that simultaneous decentralisation of revenue
and expenditure reinforce each other to promote economic growth.
Analysis also shows that democratic institutions play a significant role
in realising the benefits of fiscal decentralisation. Various policy
implications emerge from this study. JEL Classification: C26, E02, H11,
H72, O11 Keywords: Fiscal Decentralisation, Democracy, Economic Growth,
Pakista
External Debt Accumulation and Its Impact on Economic Growth in Pakistan
Get PDFThe accumulation of external debt is common phenomenon of the
developing countries and it has become a common feature of the fiscal
sectors of most of the economies. A country with lower saving rate needs
to borrow more to finance the given rate of economic growth. So external
debt is obtained to sustain the growth rate of the economy, which is
otherwise not feasible with the given domestic resources. Pakistan is
one of the developing countries and faces serious debt problems,
according to World Bank Report 2000-2001, Pakistan is among the Highly
Indebted Countries (HICs); because Pakistan’s present and future debt
situation is very grim. According to the World Bank total external debt
may be defined as debt owed to non-resident repayable in terms of
foreign currency, goods or services. External debt is the composition of
long term debt (public and publicly guaranteed debt plus private non
guaranteed debt), short term commercial debt and International Monetary
Fund (IMF) loans. Prior to early 1970s the external debt of developing
countries was primarily small and official phenomenon, the majority of
creditors being foreign governments and international financial
institutions offer loan for development project [Todaro (1988)]. At the
same time current account deficit was common which increased the
external indebtedness of the developing countries, until when Mexico,
despite an oil exporter, declared in august, 1992 that it could not
services its debt ever since, the issue of external debt and its
servicing has assumed critical importance and introduced the debt crises
debate [Were (2001)]
Analysis of Revenue Potential and Revenue Effort in Developing Asian Countries
Get PDFCountries around the world are increasingly recognising that
the effective revenue system is the most important factor for economic
development. Factors effecting revenue potential measured as the revenue
to GDP has been one of the most important issues that concerns to
policy-makers from last three decades. Many developing countries face
difficulties in generating sufficient revenues for public expenditure.
In some countries budget deficits and the unproductive use of public
expenditures have narrow the vital investments in both human resources
and basic infrastructure that are necessary for providing base for
sustainable economic growth and development. Too much dependence on
foreign financing may cause problems of debt sustainability; therefore
developing countries will need to depend substantially on domestic
revenue generation. There is a large body of literature on tax revenue
potential in developing countries [Bahl (1971); Tanzi (1987); Leuthold
(1991); and Stotsky and Mariam (1997); Gupta (2007)]. However, there is
few studies that examine institutional and governance quality as a
factor influencing tax collection and tax revenue potential. According
to Tanzi and Davoodi (1997) and Gupta (2007) these factors are
responsible for low tax collection in developing countries by allowing
citizens inappropriate tax exemptions and enabling tax evasion due to
bad tax administration. Therefore, a precondition for ensuring adequate
revenue collection is a legitimate and responsive institutions following
the rule of law with control on corruption and having high quality
bureaucracy to administer. Studies also confirm that a strong political
will to reform is required for successful reform process [Bird (2004)].
Alm, et al. (2003) suggest that tax records of countries are reflection
of their political or societal institutions
Darn Acemoglu and James A. Robinson. Why Nations Fail: The Origins of Power, Prosperity, and Poverty. New York: Crown Business. 2012. 529 pages. U.S $ 17.00.
Get PDF“Why Nations Fail: The Origins of Power, Prosperity and
Poverty” is an impressive book by Daron Acemoglu and James A. Robinson.
In this book, the authors attempt to solve the longstanding puzzle that
why some nations, such as the United Sates, Great Britain, Germany, etc.
are rich today, and why the others, such as Zimbabwe, Ghana, Egypt, etc.
are poor. The authors show with the help of substantial historical
evidence that man-made economic and political institutions matter for
the vast differences in the level of economic development among
countries. They argue history is the key to understand the difference
and evolution of economic and political institutions in different parts
of the world. During historical evolution of the institutions, small
differences and contingency (e.g., Black Death) matter a lot. According
to them, it is not the geography, culture, weather or the choice of
wrong policies that make countries rich or poor but it is the
institutions that make countries rich or poor
