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Internal Migration Patterns in Pakistan— The Case for Fiscal Decentralisation
Get PDFThe cornerstone of fiscal federalism is to empower provinces
through fiscal decentralisation, thereby reducing the friction between
them. This is achieved if the distribution of resources between
provinces is judicial and equitable, reducing the biases and divides
amongst the provinces and leading to a stronger federation. In Pakistan,
the National Finance Commission (NFC) awards are constituted to decide
the share of the provinces in the federal revenues and to redistribute
this share to the provinces. Over the years, there has been a gradual
increase in federal shares. The federal government has also stretched
itself into several matters that fall under the provincial purview (for
instance roads, irrigation, culture and tourism and rural development)
[Shah (1997)]. With the aimed devolution of power from the centre to the
local government, it is imperative that these provincial governments
have adequate finances to effectively carry out the subjects that fall
under their domain. Moreover, there has been no serious shift in
resource distribution amongst the provinces themselves, in spite of the
disparities in economic and social development as well as varying
political and security situations. This has, in turn, contributed in
aggravating the differences between provinces over time, bringing into
question the success of the NFC awards in fostering
integration
Reminiscing the PIDE (Honouring Prof. A. R. Khan)
No full textI first arrived at the Pakistan Institute of Development
Economics, then simply the Institute of Development Economics, at the
beginning of October 1960. It was located on the top floor of the Old
Sindh Assembly Building on Bunder Road in Karachi. At the time the Joint
Director, the resident head of the Institute, was Irving Brecher, a
Canadian economist. The Director of the Institute was Emile Despres, the
ex-officio head of Ford Foundation’s Pakistan Project administered from
Williams College, later from Stanford University, who spent only a few
weeks each year at the Institute. The Institute had a number of foreign
research advisers funded by the Ford Foundation Project and a handful of
Pakistani staff members, very few of them at senior levels. For me the
Institute was a refuge. Since my graduation from the Dhaka University at
the end of 1959 I had been teaching in the Department of Economics. I
had also been selected for graduate studies in England starting the fall
of 1960 under an award of the newly-instituted Commonwealth Scholarship
programme. In July 1960 I was dismissed from my teaching position at the
University due to alleged undesirable political antecedents during my
student days. A few weeks later my scholarship for study abroad was also
withdrawn by the Government of Pakistan whose approval was a
prerequisite for the finalisation of the award. The prospect of
alternative employment was bleak with little private sector demand for
economics graduates at the time. I had been interviewed by Emile Despres
and his colleagues who were on a recruitment mission the previous winter
in Dhaka. The teaching appointment at the University, coming on the
heels of the interview, had preempted a possible offer from them. A few
weeks after I lost my scholarship, I received a telegram from the
Institute offering me the position of a Research Officer (later named
Staff Economist). This rescued me from what appeared to be virtual
banishment from all possibility of a meaningful career. This was the
beginning of the series of many kind acts by the Institute and its
members which over time made me accustomed to treating it as a home even
after my formal employment in it ended
The Unchanging Profile of Development: A Historical Study of the Punjab 1961-2008
Get PDFIn recent years, the importance of historic events in the
socioeconomic development of countries has emerged as an important area
of research. There is a growing interest in determining the impact of
historic events and conditions such as colonial rules, institutions, and
factor endowments on the economic and social circumstances of countries
today. Furthermore, the levels of development in the early decades of
newly independent territories can have long term effects on the progress
of those regions [Nunn (2007, 2009); Olsson and Hibbs (2005); Acemoglu,
Johnson, and Robinson (2001); Engerman and Sokoloff (2000); La Porta, et
al. (1998)]
Relational Contracting in Pakistan’s Surgical Instrument Cluster: An Empirical Study
Get PDFThis paper tests an idea from relational contracting theory
[Macauley (1963); North (1990); Greif (1994); Kranton (1996)] that
informal relationships can substitute for formal contract enforcement
through the judicial system, from the analysis of a new survey of the
surgical instrument cluster in Sialkot, Pakistan. Inter-firm trust is
thought to lead to reduced transaction costs (a passive benefit of a
cluster). Considered here are exchanges of goods between clustered
suppliers and their customers, who are either members of the cluster or
firms that interact frequently with it. Inter-firm trust is measured as
the amount of trade credit offered to customers. The results show that
suppliers are more likely to offer trade credit when they believe in the
effectiveness of formal contract enforcement and when they participate
in business networks (proxied by inter-firm communication). There is
also some evidence that customer lock-in helps to develop inter-firm
trust since firms give more credit when relationships are of longer
duration, and as locked-in customers are less able to find alternate
suppliers
Inaugural Address
Get PDFMy fellow social scientists, economists, scholars, thinkers,
observers. Welcome to the 26th Annual General Meeting and Conference of
the Pakistan Society of Development Economists—a society that prides
itself on being the only “professional association of economists and
other social scientists” in the country. This annual event serves many
purposes: it is an intellectual exchange allowing a stock taking of
research and ideas; it is a showcase of fresh understandings and
analyses of the Pakistani economy and society; it is a place to review
policy and develop constructive policy debates to improve economic
management; and it is also a place to develop economists and prepare
them to lead development thinking in the country. I was happy to see
that the agenda contains a number of panels with leading Pakistani
economists discussing a burning issue of the day—fiscal federalism which
we are facing with the 18th amendment and the NFC award. We will all
await ideas that are generated from the PSDE
A Comparison of Fiscal Effort by Provincial Governments in Pakistan
Get PDFConsiderable variation exists among Provinces of Pakistan with
respect to their abilities to raise revenues. This is due to underlying
varied provincial characteristics like area, resources, population,
nature of economic activities and provincial GDPs. The main focus of
this paper is to make inter-provincial comparison of their fiscal
efforts after allowing for difference in taxable capacity. Therefore,
objective of such inter-provincial comparisons of fiscal effort is to
identify whether provincial revenue collection is limited by capacity
(revenue base) or if a province is unwilling to exploit the available
capacity to generate revenues.12 This will enable development of the
appropriate resource mobilisation strategy for each province and help in
enhancing the overall provincial tax revenue to GDP ratio which is
currently below 1 percent of the GDP. This analysis will also help
policy-makers in designing fiscal equalisation formulae for assisting
those provinces which have demonstrated lesser capacity to raise
revenues from their own sources
Reformed GST: Challenges and Opportunities (PANEL DISCUSSION-II)
No full textReformed GST as you know is a law which we have introduced in
National Assembly. Its main features are that we are proposing minimum
exemptions because our present law gives lot of exemptions. The second
basic thing is about zero rating. Presently we have zero rated even
domestic supplies for five exports sectors and even others sectors also.
We are restricting zero rating for exports only and for domestic
supplies it will be taxable. The third major thing is that we are
increasing registration threshold from Rs 5 million to Rs 7.5 million.
This proposal will spare smaller tax payers from incurring the
compliance cost related to keeping of records and filing of returns.
Then the fourth major change in the new law is that buyers have to give
their CNIC or NTN to the sellers. This provision will help in keeping
smaller taxpayer outside tax net and bringing bigger ones in tax net.
Then there are lot of distortions in the existing law in the form of
special schemes and fixed tax schemes. These schemes will not be part of
the new law. The new law has been discussed in Senate’s Finance
Committee where there have been objections about certain provisions
which have been considered as very harsh and government has promised to
consider softening them
The Relative City Price Convergence in Pakistan: Empirical Evidence from Spatial GLS
Get PDFIt is evident from general experience that price of same good
may differ considerably among countries, regions, cities in same country
and even adjacent shopping malls and outlets. It is also common
knowledge that stronger competitive forces and information about market
price tend to ensure convergence of prices. In the presence of these
forces price differentials cannot be persistent and are hence short
lived. The recent literature on price convergence has focused on country
studies using regional commodity prices and Consumer Price Index (CPI)
data.1 The analysis of relative prices or real exchange rates between
regions or cities in a country has certain advantages in estimating
Purchasing Power Parity (PPP) puzzle. There are no trade barriers and
non tradable goods in a single country. Krugman and Obstfeld (2007)
consider transportation costs, trade barriers and goods market
segmentations as obstacles to hold international Ppp.Furthermore they
mention that countries have different endowments, baskets of goods and
consumption weights in their inflation index. So PPP may not hold even
if there are no non tradable goods and barriers. The PPP theory is
related to the law of one price through arbitrage of international
goods. The estimation of real exchange rates among countries shows that
the convergence towards PPP is very slow.2 This study attempts to use
overall Consumer Price Index (CPI) data on 35 Pakistani cities from July
2001 to June 2008 to estimate relative city price convergence with
Karachi and Lahore, two numeraire cities. The case of Pakistan is
interesting primarily due to the following reasons
Variation in the Quality of Life within Punjab: Evidence from MICS, 2007-08
Get PDFSince quality of life research is essentially concerned with
measuring and monitoring welfare. In order to measure quality of life,
one must have a theory of what makes up a good life [Cobb (2000)]. There
is a variety of such theories and notions of what constitutes a ‗good
life‘ and correspondingly different concepts of welfare and quality of
life have been developed. Various approaches and operationalisations are
to be distinguished, each of which reveals a different concept of
welfare and thus highlights different components and dimensions [Noll
(2000)]. Among the various efforts to operationalise welfare in general
and the quality of life concept in particular, two contrary approaches
are to be distinguished, which define the two extreme positions on a
broad continuum of concepts currently available: the Scandinavian level
of living approach [Erickson (1993)] and the American quality of life
approach [Campbell (1976)]. The Scandinavian approach focuses almost
exclusively on resources and objective living conditions, whereas the
American approach emphasises the subjective well-being of individuals as
a final outcome of conditions and processes
Environmental Efficiency Analysis of Basmati Rice Production in Punjab, Pakistan: Implications for Sustainable Agricultural Development
Get PDFThe intensive use of chemicals worked as a catalyst to shift
the production frontier but the most critical factor of maintaining a
clean environment was totally ignored. The present study attempts to
estimate the environmental efficiency of rice production by employing
the translog stochastic production frontier approach. The data are
collected from five major Basmati rice growing districts (Gujranwala,
Sheikupura, Sialkot, Hafizabad, and Jhang) of Punjab in 2006. Chemical
weedicides and nitrogen are treated as environmentally detrimental
inputs. The mean technical efficiency index is sufficiently high (89
percent) but the environmental efficiency index of chemical weedicides
alone is 14 percent while the joint environmental efficiency index of
chemical weedicides and nitrogen is 24 percent implying that joint
environmental efficiency is higher than chemical weedicide alone. It
indicates that substantial reduction (86 percent) in chemical weedicide
use is possible with higher level of productivity. Moreover, it is
likely to contribute a considerable decrease in environmental pollution
which is expected to enhance the performance of agriculture labour. The
reduction in chemical weedicides will save Rs 297 per acre and Rs 1307.3
million over all from the rice crop in Punjab, improving the
profitability of rice growing farmers by the same proportion. Empirical
analysis indicates that reduction in environmental pollution together
with higher level of profitability in rice production is achievable. JEL
classification: N5, O13 Keywords: Rice Production, Environmental
Efficiency, Weedicide, Fertiliser (NPK), Stochastic Translog
Frontie