The Pakistan Development Review
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Which Institutions Are More Relevant Than Others in Inequality Mitigation?
Get PDFDuring the 1950s, 1960s and most of the 1970s inequality
followed declining trends in the most developed and developing
countries. However, the inequality trends have been reversed in most
countries since the early 1980s. First, inequality started rising in the
mid- to late- 1970s in the United States, United Kingdom, Australia and
the New Zealand, which were the first among the OECD countries to adopt
a neoliberal policy approach. In United Kingdom the increase in
inequality was quite pronounced as the Gini coefficient of the
distribution of net disposable income rose more than 30 percent between
1978 and 1991, which was twice as fast as that recorded in United States
for the same period. The Scandinavian countries and the Netherlands were
next to follow where inequality followed a U-shaped pattern. From 1970
to 80, Finland and France also experienced a halt in declining trends in
inequality. In Italy inequality rose by 4 points between 1992 and 1995.
In 1993 the Gini coefficient for Japan stood at 0.44, which is
approximately the same as United States and far higher than the likes of
Sweden and Denmark. Most of this increase in income inequality in these
industrialised countries is explained by a rise in earnings inequality
[Cornia, et al. (2004)]. Since 1989, inequality in the transition
countries of Central Europe has also witnessed increasing trends but
they remain modest when compared to former USSR and Southeastern Europe
where the Gini coefficients rose on average by 10-20 points which is 304
times faster than the Gini in Central Europe. The rise in inequality in
this region has been attributed to rise in returns to education
following liberalisation [Rutkowski (1999)]
Export Function Estimates for the Pakistan Carpet Industry
Get PDFThis paper explores the behaviour of exports of ‘exotic’
carpets/rugs from Pakistan over the period from 1970-2003. These rugs
are sold purely for decorative purposes mainly to the major Western
economies. This sector of world trade has been neglected by economists
as there is only one study of Iranian carpet trade [Karimi (2003)] which
has so far only been presented as a short abstract. In this paper we
review the historic background to the carpet making industry in Pakistan
and look at its current conditions of production. We then go on to
estimate an error correction model using conventional trade-related
explanatory variables which include the volatility of exchange rates
which has been increasingly a focus of such research. The results are
broadly supportive of the existing aggregate and disaggregate literature
for other countries. Given that the dominant rival supplier—Iran was
subjected to constant and varying trade volume rationing activities by
the USA, we then attempt to take this into account using measures of
Iranian trade disadvantage. These results show that the problems faced
by Iranian exporters have had a statistically significant positive
impact on the Pakistan carpet export supply function
Poverty and Hunger in India: What is Needed to Eliminate Them
Get PDFThere is a widespread impression among the Indian
intelligentsia, foreign scholars, and residents of developed/rich
countries that India’s economic growth has not reduced poverty, that
globalisation has worsened poverty and/or income distribution, and that
there are hundreds of millions of hungry people in India. These
arguments are buttressed by recourse to India’s ranking on several
social indicators. Esoteric debates about the comparability of survey
data and gaps between NSS and NAS add to the confusion and allow
ideologues to believe and assert whatever information suits the
argument. What are the basic facts about poverty, income distributions,
and hunger at an aggregate level? This paper reviews the available data
and debates on this subject and comes to a commonsense view. It then
tries to link some of the outcomes to the policy framework and
programmes of the government. The paper finds that India’s poverty ratio
of around 22 percent in 1999-2000 is in line with that observed in
countries at similar levels of per capita income. The ratio is
relatively high because India is a relatively poor/ low-income country,
i.e., with low average income. 90 percent of the countries in the world
have a higher per capita (average) income than India. The number of the
poor is very high because India’s population is very large, the
secondhighest in the world. India’s income distribution as measured by
the Gini co-efficient is better than three-fourths of the countries of
the world. The consumption share of the poorest 10 percent of the
population is the sixth best in the world. Where India has failed as a
nation is in improving its basic social indicators like literacy and
mortality rates. Much of the failure is a legacy of the three decades of
Indian socialism (till 1979-80). The rate of improvement of most
indicators has accelerated during the market period (starting in
1980-81). The gap between its level and that of global benchmarks is
still wide and its global ranking on most of these social parameters
remains very poor. This is the result of government failure. The
improvement in social indicators has not kept pace with economic growth
and poverty decline, and this has led to increasing interstate
disparities in growth and poverty. JEL classification: I3, I32, I38
Keywords: Hunger, Poverty, Public Goods, Public and Quasi-Public Goods
and Services, Basic Education, Public Health, Sanitatio
Three Attempts at Inflation Forecasting in Pakistan
Get PDFThis paper presents three empirical approaches to forecasting
inflation in Pakistan. The preferred approach is a leading indicators
model, in which broad money growth and private sector credit growth help
forecast inflation. A univariate approach also yields reasonable
forecasts, but seems less suited to capturing turning-points. A vector
autoregressive (VAR) model illustrates how monetary developments can be
described by a Phillips-curve-type relationship. We deal with potential
parameter instability on account of fundamental changes in Pakistan’s
economic system by restricting our sample to more recent observations.
Aspects of Gregorian and Islamic calendar seasonality are addressed by
using 12-month moving averages
Land-locked: An Examination of Some of the Inefficiencies Affecting Transactions Involving Immovable Property
Get PDFIn the study of law and economics, the Coase Theorem posits
that an efficient allocation of resources will result when transactions
costs are zero.1 These “transaction costs” may be viewed as impediments
to an efficient allocation of resources and can take many forms. For
example, long distances between a prospective vendor and purchaser of
property and a lack of communication facilities between them would
impede even the best of intentions to enter into a bargain. Similarly,
the cost of mobilising labour and materials might impede a property
developer from pursuing a tender for civil works. In some cases, a high
rate of Stamp Duty on transactions can result in the parties
reconsidering their decision to enter into such bargains. To the extent
this author can claim knowledge of economics, the Coase Theorem also
suggests that transaction costs and inefficiencies hamper the natural
flow of bargains, result in inefficient allocation of resources and thus
impact the economy. Some transaction costs are small enough to ignore
whereas some, imposed, for example, by the law, are unavoidable. In such
cases, a mutual understanding between the parties may see the burden of
these transaction costs shared or, in others, avoided altogether. For
example, the statutory requirements that all leases purporting to grant
a term in excess of one year or which reserve an annual rent must be
registered and stamped2 often results, in owners of residential property
granting indefinitely renewable leases of 11 months and thus avoiding
such requirements
Governing the Labour Market: The Impossibility of Corporatist Reforms
Get PDFThis paper argues that a return to corporatist governance
structures is impossible in Pakistan. Section 1 outlines neo-classical
labour market regulation rationalities presented by Hayek, Wieser, and
Sen. Section 2 compares and contrasts Fordist and Post-Fordist modes of
labour market regulation. And Section 3 seeks to establish the
impossibility of institutionalising corporatist governance structures in
the labour markets of Pakistan. Neo-classical theory sees relations
between labour and the representatives of capital (‘managers’) as
relations created spontaneously by individuals in the pursuit of their
rational self-interest. The capitalist individual, be he labourer or
manager, defines ‘maximisation of utility’ as his ‘rational self
interest’, and order within the labour market requires a reconciliation
of individual (the labourer’s) and aggregate (the manager’s) utility
maximisation (with aggregate utility maximisation being represented by
shareholders value). Labour market order is thus impeded if
Competitiveness and Policy Analysis of Potato Production in Different Agro-ecological Zones of Northern Areas: Implications for Food Security and Poverty Alleviation
Get PDFPotato (L. Solanum tuberosum) belongs to Solanaceae family. It
is the most important dicotyledonous tuber crop and possesses major
socio-economic importance worldwide. It is the fourth most cultivated
food crop after wheat, rice and maize in world. Potato is a good and
cheaper source of carbohydrates, vitamins, minerals and proteins and
also provides most of the trace elements, which can meet the energy
requirement of the people living in the developing countries like
Pakistan [Rahman (1986)]. About 325 million metric ton of potato is
produced annually throughout the world [World Book (2001)]. This crop is
financially more remunerative than cereals from food security and can be
recommended as a partial replacement of cereals
Translating Khan on Singer: Global Solvent Versus Local Interpretation
Get PDFThis work focuses on Peter Singer’s book, One World: The
Ethics of Globalisation, and a reading of it recently presented by M.
Ali Khan. Khan’s response to Singer is acutely critical, but ultimately
fails to situate Singer’s offering in its proper historical context. In
this sense, Khan’s response is not sufficient. We demonstrate that
Singer’s offering is permeated by a universalising discourse marked by
asymmetric power relations clearly described by Edward Said in
Orientalism and, more surprisingly, by Fyodor Dostoyevsky in The
Possessed. We illustrate how Singer’s narrative and the
counter-narrative of Khan represent a continuation of a longer
historical disputation between the West and the East. JEL
classifications: J7, B31 Keywords: Orientalism, Globalisation, Economy,
Language, Translation, Communication, Domination, Dialogue, Local,
Global, Community ...It is a sign of the decay of nations when they
begin to have gods in common. —Fyodor Dostoyevsky (1872)1 ...Political
imperialism governs an entire field of study, imagination, and scholarly
institutions—in such a way as to make its avoidance an intellectual and
historical impossibility. —Edward Said (1979)
Steven D. Levitt and Stephen J. Dubner. Freakonomics: A Rogue Economist Explores the Hidden Side of Everything. New York: William Morrow/Haper Collins. 2005. xii+242 pages. Paperback. $17.00.
Get PDFOne should give full marks to the authors for coming up with a
most unusual title for a book on economics—a title that grabs one’s
attention. The book was most popular having reached the Number Two rank
on the New York Times bestseller list for nonfiction. It consists of a
number of articles (six to be precise) authored by Levitt and addressed
to a largely lay audience. Although Levitt would like to see himself as
a “rogue economist”, in this book he does apply “the basic microeconomic
theory of rational utility-maximisation” to subjects that would not be
covered in standard economic textbooks. In that sense, his rogue
economist’s status becomes doubtful. This apart, the book makes for some
interesting reading. Chapter 1 examines the issue of cheating. One would
think that students taking their examinations normally cheat. This
chapter introduces the notion that teachers also cheat, if the
incentives are right. So do Sumo Wrestlers, as Levitt uses statistical
analyses to prove how this is done. So one should not be too surprised
when people cheat. Morality has no role to play in the decision to
cheat
First Meeting of the PIDE Committee on Devolution Reforms in Pakistan
Get PDFThe Local Government Ordinance (LGO), formulated by the
National Reconstruction Bureau (NRB) in 2000 and promulgated by
provincial governments in August 2001, assigns powers, responsibilities,
and service delivery functions to three levels of local governments:
district, tehsil, and union. Responsibilities for the delivery of social
and human development services, such as primary and basic health,
education and social welfare, are delegated to the district level,
whereas municipal services, such as water, sanitation and urban services
are assigned to the tehsil level. The LGO does not only deal with the
delivery of public services in its plan but also stresses the need for
fiscal decentralisation, claiming that “Fiscal decentralisation is the
heart of any devolution exercise. Without fiscal decentralisation no
authority is devolved.