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Inter-industry Wage Differentials in Pakistan
Get PDFThe essential feature of a perfectly competitive labour market
is that workers who accept jobs can expect to receive compensation equal
to their opportunity cost. Firms pay a wage which is just sufficient
enough, to attract workers of the quality they desire and no higher
[Krueger and Summers (1988)]. Overall, the markets do not follow the law
of one price, contradicting the competitive framework. This is where the
problem of wage differentials across different industries needs to be
assessed, and has also been the focus of many studies over the years,
mainly in the industrialised countries, e.g. USA, European Countries.
However, the issue of wage differentials has been addressed by very few
studies in the developing countries [Arbache (2001) and Erdil, et al.
(2001)]. Wage differentials analysis in developing countries should also
have equal importance as in the industrialised countries, in order to
gauge the effect of the corporate culture and
centralisation/decentralisation on the different industries and labour
market of those developing countries
Inflation Everywhere is a Monetary Phenomenon: An Introductory Note
Get PDFEver since the 1970s, when inflation became a virtually global
phenomenon, controlling inflation has become a high priority for
policy-makers. Given the well-known costs of inflation, policy now in
all countries is inflation-averse. Perhaps one of the more important
adverse consequences of inflation may be that high and persistent
inflation is a regressive tax1 which adversely impacts the poor.2 The
poor are extremely limited in their options to protect themselves
against inflation; they are normally asset-poor, while most of their
saving is in the form of cash. Inflation erodes cash savings and
protects the rich who hold real assets.3 It is not surprising that
inflation may be politically costly for the government. Studies have
also found that high and volatile inflation has been detrimental to
growth and financial sector development. Resource allocation is
inhibited as inflation obscures relative price changes and thus inhibits
optimal resource allocation. For policy to control inflation, it is
important to understand the factors that drive inflation.
Unquestionably, empirical evidence points to “inflation being always and
everywhere a monetary phenomenon” [Friedman (1963)]. However, there
still remains some debate on whether supply-side factors could cause
inflation without monetary accommodation.4 The structuralist school of
thought holds that supply constraints that drive up prices of specific
goods can have wider repercussions on the overall price level.
Similarly, there are a number of possible sources of rising costs such
as wages, profits, imported inflation-exchange rate, commodity prices,
external shocks, exhaustion of natural resources, and taxes. For
example, in Pakistan, increases in the wheat support price have
frequently been blamed for increasing inflation.5 .......
The Relationship between Income Distribution and the Cost of Environmental Management in Australia
Get PDFAustralia is highly dependent on its natural resources;
therefore it needs to develop a national accounting system whereby the
concept of natural resource asset depletion is incorporated into its
national income accounts. The present study suggests that if the
national income accounting system of the economy is deficient in
highlighting the gap in estimated income and sustainable income, then
such a system needs to be improved [Ahmed and Mallick (1997)]. In a
previous analysis of the Australian economy [Mallick, Sinden, and
Thampapillai (2000)], showed that reconciliation between the goals of
sustainability and employment may be achieved by a real wage reduction
of approximately 8-10 percent. The analysis was structured within the
framework of a simple Keynesian model of income determination and a
Cobb-Douglas production function
Stephen J. Glain. Mullahs, Merchants, and Militants: The Economic Collapse of the Arab World. New York: St. Martin’s Press, 2005. 350 pages. $25.95. Hardback.
Get PDFIn this book, Former Wall Street Journal reporter Stephen
Glain sets out to answer an extremely broad and difficult question:
namely why is it that the Arab world, specifically the Levantine region,
has consistently underperformed economically since the beginning of the
20th century. The book provides the reader with a somewhat in-depth
analysis of the political, social and economic state of six Arab nations
(Lebanon, Syria, Jordan, the Palestinian territories, Egypt, and Iraq).
By breaking down his analysis into country-specific chapters, Glain
enables the reader to understand the multi-faceted problems facing the
region as a whole. In doing so, Glain shows the reader a common thread
of bad governance, corruption, negative external interference, and
protectionism; the thread that runs through all these nations, causing
economic decay
PIDE-LUMS Seminar on the New Governance Effort
Get PDFPakistan Institute of Development Economics (PIDE) and Lahore
University of Management Sciences (LUMS) jointly organised a seminar to
discuss issues pertaining to “Law and Economics” and “Public Choice”,
and their relevance for the future growth prospects of Pakistan. Dr
Nadeem Ul Haque, Director, PIDE, and Osama Siddique, Head, Department of
Law and Policy, LUMS, highlighted the main issues in their welcome
remarks, and raised some basic questions: Can Pakistan achieve its
growth target of 10 percent under the current legal framework? Does our
law support free enterprise? Can the dual target of growth and free
enterprise development be realised under our existing constitution? Do
we need to review and make amendments to it? The high point of the
meeting was the coming together of eminent lawyers and economists (and
social scientists) on one forum and approaching the problem from a
multidisciplinary point of view. A healthy debate followed in which some
of our distinguished participants even turned the debate upside down by
posing question as to what form of economic system are we hoping for.
The main issues that emerged out of this deliberation are summarised
below
Japan’s ODA to Pakistan and Aid Coordination Beyond Aid Modalities
Get PDFBefore the Pakistan Development Forum (PDF) takes place in
April this year, we decided to organise this seminar today. There are
several reason for doing this. First, 9/11 in 2001, Pakistan as a
partner for Japan’s ODA has changed in a substantial way. Second, in
2005 Japan resumed its new commitments on yen loans, and it would be
appropriate to review our ODA policy to Pakistan before our yen loan
operation is put back in full swing. Third, Japan’s ODA to Pakistan has
mainly been delivered through projects. Facing the growing criticism
against the project approach, it would be our responsibility as a major
donor to review the effectiveness of our main aid modality. Fourth, aid
coordination in Pakistan has entered into a new era after Pakistan and
donors including Japan joined in the adoption of the Paris Declaration
on Aid Effectiveness in March 2005
Ahmed Galal and Nadeem Ul Haque (eds). Fiscal Sustainability in Emerging Markets: International Experience and Implications for Egypt. Cairo/ New York: The Egyptian Center for Economic Studies. 2006. ix+289 pages. Paperback. Price not given.
Get PDFFiscal sustainability is required to attain and maintain the
long-run steady-state growth in emerging markets, to create fiscal space
for rural and urban poverty, to safeguard financial stability, and to
achieve the overall Millennium Development Goals. This can be done by
providing financial support and by encouraging further research in this
area. This book analyses the issues in the context of international
experience and its implications for Egypt. It touches on issues of
fiscal deficit and public debt sustainability, debt management,
efficiency and equity of social expenditure, and public investment, the
will and power to achieve civil service reform, and transparency and
equitability of the budgetary process. It fills a gap in
research
The New Institutional Economics Approach to Economic Development: A Discussion of Social, Political, Legal, and Economic Institutions
Get PDFThe last 50 years of development economics have seen hopes for
global development raised high and dashed time and again. While there
has been positive, sometimes even impressive, growth in many countries,
in most of the world experience has not matched expectations. The
accumulation of physical capital and human capital, liberalisation and
privatisation have all been proposed as the elixirs of growth. While all
these arguments have some merit, by themselves they are incomplete
solutions to the problem of development. The disappointing performance
of the post-Communist transition, the slow growth of the 1970s and 80s
in Africa and Latin America, and the Asian financial crisis of the 1990s
were all rooted in poor governance. Good governance involves aligning
the incentives of agents with the interests of principals in both
economic and political spheres. This paper describes some insights from
New Institutional Economics on how best to design these
incentives
Corrupt Clubs and the Convergence Hypothesis
Get PDFConvergence is defined as the decreasing gap of GDP growth
rates between leading and lagging countries. This thesis is based on the
Veblen’s idea of “Advantages of Backwardness”. It states that a less
developed country tends to grow, at a rate which is inversely
proportional to its initial GDP per capita; that is, faster than more
advanced countries. There are several reasons for this convergence
across different countries. First, there is a scope for poor nations to
absorb existing technology and to catch up advanced countries if the gap
between country’s technologies is larger. Second, the development
process is often characterised by a shift of resources from low
productivity agriculture sector to high productivity industrial sector.
The process certainly benefits more the poor nations because the
capacity for such shift is more in poor countries than in rich
countries.
Women’s Autonomy and Happiness:The Case of Pakistan
Get PDFIt is generally believed that “autonomy” brings happiness and
satisfaction in women’s lives. In this study we examine whether or not
the established autonomy indicators are a source of “happiness” for
Pakistani women. By using the nationally representative data, only two
indicators, i.e., “women’s education” and “decisionmaking authority”,
prove to be important factors in finding “very happy” status in women’s
life. Additionally, “possession of assets” also proves to be an
important factor in providing the “very happy” status in a women’s life.
However, the “possession and utilisation of assets” and “going alone
outside the house” are not important indicators of a “very happy” status
in women’s life in Pakistan and “Labour force participation” is
indicative of unhappiness. The results of this study show that not all
established indicators of autonomy bring about happiness in the lives of
Pakistani women. This is because Pakistani society differs from other
societies, in particular the western society, and hence the concept of
“autonomy” in bringing about “happiness” in the lives of Pakistani women
yields effects different from those in other societies. Thus, there is a
need to focus on the advocacy of only those autonomy variables which
lead to happiness in a woman’s life, which is the end-goal for women,
who form a vital part of the society