294 research outputs found
How May International Trade affect Poverty in a Developing Country Setup? The Inequality Channel
Get PDFRecently there has been an influx of literature which tries to find out relationship between trade and poverty. Right is of the view that more international trade is good for the poor whereas left is quite skeptical of pro poor effects of trade. The paper provides a comprehensive review of recent literature on the topic in order to reach some neutral grounds. The paper finds out that though trade might carry positive affects for the poor in developing countries through growth, such gains are not equally distributed among the rich and the poor. The paper identifies at least 8 different effects of international trade which result in unequal outcomes and thus defies Heckscher-Ohlin-Samuelson theorem in a developing country set up. Since per decomposition, poverty is affected by growth or inequality, evidence of unequal gains from trade does imply that the relationship between trade and poverty is not as simple as the right seems to suggest. To this effect, the paper calls for more empirical work on trade and inequality especially as single country case studies.Economic Integration; Welfare and Poverty
How Does Democracy fare with Economic Welfare for a Trading Nation?
Get PDFThe paper examines how political institutions in comparison to legal, social and economic institutions fare with different measures of inequality in a cross section framework. The empirical analysis suggests that countries which practice democracy are less prone to unequal outcomes especially when it comes to wage inequality and income inequality whereas autocracy is associated with higher level of wage inequalities but its impact on income inequalities are insignificant. Though under good economic management, even autocracies may redistribute incomes from the richest to the poorest, more generally an autocratic set up violates the median voter hypothesis. The results also show that political stability is more sensitive to inequalities than democracy and autocracy which is to say that the countries which are internally politically stable also form more equal societies.Institutions, Trade Liberalisation, Redistribution, Wage Inequality
On the Conflict Mitigating Effects of Trade: The India-Pakistan Case
Get PDFWe examine whether greater inter-state trade, democracy and reduced military spending lower belligerence between India and Pakistan. We begin with theoretical models covering the opportunity costs of conflict in terms of trade losses and security spending, as well as the costs of making concessions to rivals. Conflict between the two nations can be best understood in a multivariate framework where variables such as economic performance, integration with rest of the world, bilateral trade, military expenditure, democracy scores and population are simultaneously considered. Our empirical investigation based on time series econometrics from 1950-2005 suggests that reduced bilateral trade, greater military expenditure, less development expenditure, lower levels of democracy, lower growth rates and less general trade openness are all conflict enhancing. Globalization, or a greater openness to international trade with the rest of the world, is the most significant driver of a liberal peace, rather than a common democratic orientation suggested by the pure form of the democratic peace.Inter-state conflict and trade, democracy and conflict, conflict and economic development
What May Constitute an Equal Society? Addressing Externalities of Globalization:
Get PDFThis paper is a short review of Mamoon (2007) analysis on inequality where it is contrasted with growth. The economic processes or institutional dynamics that are good for growth may not be a priority if inequalities are the prime consideration. For example rule of law and control for corruption are the most salient factors to mitigate inequality but though they are also good for growth, it is good regulation that takes the lead in growth promotion. China has been benefitting from good market regulation - a pro capitalist economic tool kit while suffering from rising inequality that may be due to less emphasis on control for corruption
What May Constitute an Equal Society? Addressing Externalities of Globalization:
Get PDFThis paper is a short review of Mamoon (2007) analysis on inequality where it is contrasted with growth. The economic processes or institutional dynamics that are good for growth may not be a priority if inequalities are the prime consideration. For example rule of law and control for corruption are the most salient factors to mitigate inequality but though they are also good for growth, it is good regulation that takes the lead in growth promotion. China has been benefitting from good market regulation - a pro capitalist economic tool kit while suffering from rising inequality that may be due to less emphasis on control for corruption
Destination EU and USA: Improving Export Potential of Pakistan by Trading with India
Get PDFThis paper is the extension of popular work of Murshed and Mamoon(2010) that suggests that India Pakistan proximity to global trade can significantly mitigates conflict between these two nations. The paper analyses bilateral trade patterns between India Pakistan with its major exporting destinations in a simple OLS framework. It finds that if bilateral trade between two nations increases that will improve exports of Pakistan in US, EU and UAE. This finding has significant implications for improvement of ties between the two countries. Furthermore, trading with India also full fills Pakistani Government’s emphasis on Trade not Aid. This aspect of India Pakistan trade has not been investigated before
Missing the Peace Train in 2006: Economic and Political Dynamics of India Pakistan Hostility?
Get PDFThe paper discusses the dynamics of peace initiatives made by Pakistan in 2006 and their importance in changing the regional dynamics in favour of increased economic cooperation in the light of the study undertaken by Murshed and Mamoon (2007) which has analysed the multiple determinants of conflict between India and Pakistan. The paper highlights the importance of peace in the region especially for Pakistan where the development potential of the country have been stifled greatly due to a long history of political and economic volatility while linking Pakistan’s progress with that of its neighbours through conflict mitigation process. The paper also presents the possibility of such dyadic economic and conflict trade off in 1990s where India may have utilised hostilities to curtail Pakistani economic potential to pressurise Pakistan to forego its support of insurgency in Indian held Kashmir. Pakistani peace initiatives in 2006 made the country as a leading factor in South Asia with a valid possibility of determining the pace and potential to realise long sought process of regional progress through greater integration of interests. However, the tangible response from Indian side was not forthcoming leading to loss of opportunities and thus creating a good explanation of Hawkish Indian behaviour 10 years down the time line in 2017
Labour Markets, Education and Duality of Returns
Get PDFThe aim of this paper is to examine the impact of increased trade on wage inequality in developing countries, and whether a higher human capital stock moderates this effect. We look at the skilled-unskilled wage differential. When better educated societies open up their economies, increased trade is likely to induce less inequality on impact because the supply of skills better matches demand. But greater international exposure also brings about technological diffusion, further raising skilled labour demand. This may raise wage inequality, in contrast to the initial egalitarian level effect of human capital. We attempt to measure these two opposing forces. We also employ a broad set of indicators to measure trade liberalization policies as well as general openness, which is an outcome, and not a policy variable. We further examine what type of education most reduces inequality. Our findings suggest that countries with a higher level of initial human capital do well on the inequality front, but human capital which accrues through the trade liberalization channel has inegalitarian effects. Our results also have implications for the speed at which trade policies are liberalized, the implication being that better educated nations should liberalize faster.Integration, Trade Liberalization, Wage Inequality
Transitioning Democracies are a Risky Business in the South
Get PDFThe paper finds that trade is insignificant in explaining income inequality. The results also suggest institutions are good for inequality mitigation for a larger sample of developed and developing countries. Though, the results do not change for some institutions like rule of law when the sample is restricted to developing countries. However, for other institutions like democracy and autocracy, the author finds that former is positively related with inequality and later is negatively related. The results shed light on the fact that transition to democracies come with higher risks for the developing countries and stable economies even with autocratic setup may have more equal societies when compared to newly adopted democratic set ups
Mapping an outside the Box Approach towards Ensuring Economic Effectiveness of Higher Education Reforms in Pakistan
Get PDFThe paper suggests that current higher education policy of government of Pakistan is being pursued at the cost of primary education. The paper points out that the higher education bias is common among developing countries because growth and processes of growth are more responsive to higher education than primary or secondary education. Such unequal education policies are the main reason as to why inequalities are increasing in one of the fastest growing economies of the world namely India and China
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