|
on Central and Western Asia |
| By: | Branko Milanovic (The World Bank and Carnegie Endowment for International Peace) |
| Abstract: | The paper studies regional (spatial) inequality in the five most populous countries in the world: China, India, the United States, Indonesia, and Brazil in the period 1980-2000. They are all federations or quasi-federations composed of entities with substantial economic autonomy. Two types of regional inequalities are considered: Concept 1 inequality, which is inequality between mean incomes (GDP per capita) of states/provinces, and Concept 2 inequality, which is inequality between population-weighted regional mean incomes. The first inequality speaks to the issue of regional convergence, the second, to the issue of overall inequality as perceived by citizens within a nation. All three Asian countries show rising inequality in terms of both concepts in the 1990s. Divergence in income outcomes is particularly noticeable for the most populous states/provinces in China and India. The United States, where regional inequality is the least, shows further convergence. Brazil, with the highest level of regional inequality, displays no trend. A regression analysis fails to establish robust association between the usual macroeconomic variables and the two types of regional inequality. |
| Keywords: | Poverty |
| Date: | 2005–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:3699&r=cwa |
| By: | Yesim Kustepeli (Department of Economics, Faculty of Business, Dokuz Eylül University) |
| Abstract: | Using a panel data analysis, the relationship between government size and economic growth is investigated for the 1994-2001 period. The results show that relatively small sizes of government are detrimental to economic growth, while medium sized government affects it positively. |
| Keywords: | government size, economic growth, panel data, new European Union members and candidates |
| JEL: | E62 O40 |
| Date: | 2005–12 |
| URL: | http://d.repec.org/n?u=RePEc:deu:dpaper:0605&r=cwa |
| By: | Thorsten Beck (The World Bank); Asli Demirguc-Kunt (The World Bank); Maria Soledad Martínez Pería (The World Bank) |
| Abstract: | The authors (1) present new indicators of banking sector penetration across 99 countries based on a survey of bank regulatory authorities, (2) show that these indicators predict household and firm use of banking services, (3) explore the association between the outreach indicators and measures of financial, institutional, and infrastructure development across countries, and (4) relate these banking outreach indicators to measures of firms' financing constraints. In particular, they find that greater outreach is correlated with standard measures of financial development, as well as with economic activity. Controlling for these factors, the authors find that better communication and transport infrastructure and better governance are also associated with greater outreach. Government ownership of financial institutions translates into lower access, while more concentrated banking systems are associated with greater outreach. Finally, firms in countries with higher branch and ATM penetration and higher use of loan services report lower financing obstacles, thus linking banking sector outreach to the alleviation of firms' financing constraints. |
| Keywords: | Domestic finance |
| Date: | 2005–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:3754&r=cwa |
| By: | Eugenio Cerutti (Johns Hopkins University); Giovanni Dell'Ariccia (International Monetary Fund); Maria Soledad Martínez Pería (The World Bank) |
| Abstract: | The authors examine the factors that influence banks' type of organizational form when operating in foreign markets using an original database of the branches and subsidiaries in Latin America and Eastern Europe of the top 100 international banks. They find that regulation, taxation, the degree of desired penetration in the local market, and host-country economic and political risks matter. Banks are more likely to operate as branches in countries that have higher corporate taxes and when they face lower regulatory restrictions on bank entry, in general, and on foreign branches, in particular. Subsidiaries are the preferred organizational form by banks that seek to penetrate the local market establishing large and mostly retail operations. Finally, there is evidence that economic and political risks have opposite effects on the type of organizational form, suggesting that legal differences in the degree of parent bank responsibility vis-à-vis branches and subsidiaries under different risk scenarios play an important role in the kind of operations international banks maintain overseas. |
| Keywords: | Domestic finance |
| Date: | 2005–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:3753&r=cwa |
| By: | Vijayendra Rao (The World Bank) |
| Abstract: | Most economists think of common property as physical-a body of water, a forest-and as bounded within geographic space. In this paper, building on work in social theory, the author argues that common property can also be social-defined within symbolic space. People can be bound by well-defined symbolic agglomerations that have characteristics similar to common property. He calls these "symbolic public goods" (SPGs) and make the case that such constructs are central to understanding collective action. He illustrates the point by contrasting how conceptions of nationalism in Indonesia and India created SPGs that resulted in very different strategies of local development. Indonesia emphasized collective action by the poor that resulted in a form of regressive taxation, enforced by the ideology of svadaya gotong royong (community self-help) that was both internalized and coercively enforced. India emphasized democratic decentralization through the panchayat system driven by the Gandhian ideology of gram swaraj (self-reliant villages). This has resulted in an unusual equity-efficiency tradeoff. Indonesia has delivered public services much more efficiently than India did, but at the cost of democratic freedoms and voice. The author argues that the challenge for these countries is not to undermine their existing SPGs but to build on them. Indonesia should retain the spirit of svadaya gotong royong but channel it in an equitable and democratic direction, while India should build the capacity of the panchayat system by giving it fiscal teeth, while promoting underutilized institutions such as Gram Sabhas (village meetings) that encourage accountability and transparency. |
| Keywords: | Governance, Urban development, Poverty, Rural development, Social Development |
| Date: | 2005–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:3685&r=cwa |
| By: | Saumitra Jha (Stanford University); Vijayendra Rao (The World Bank); Michael Woolcock (The World Bank) |
| Abstract: | The authors use detailed ethnographic evidence to design and interpret a broad representative survey of 800 households in Delhi's slums, examining the processes by which residents gain access to formal government and develop their own informal modes of leadership. While ethnically homogeneous slums transplant rural institutions to the city, newer and ethnically diverse slums depend on informal leaders who gain their authority through political connections, education, and network entrepreneurship. Education and political affiliation are more important than seniority in determining a leader's influence. Informal leaders are accessible to all slum dwellers, but formal government figures are most accessed by the wealthy and the well-connected. |
| Keywords: | Governance, Urban development, Poverty, Social Development |
| Date: | 2005–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:3694&r=cwa |
| By: | Mohan Lal Kolhe |
| Abstract: | The use of pay-back period analysis for economic evaluation of solar photovoltaic (PV) system reinforces the importance of the duration of the system. In a dynamic economic environment, the cost of energy increases at a faster rate than the common inflation rate. A time can be ascertained at which the market entry of the PV system will be profitable, i.e. at which the pay-back time drops below a value considered as the market threshold, provided the parameters describing the dynamic economic system remain unchanged. The market penetration of the PV system has been determined in Indian economic conditions and found to depend mainly on PV array costs and energy income reinvestment rate. The low PV array cost, high-energy income reinvestment rate, high solar cell reference efficiency and high battery efficiency have a substantial effect on the reduction of the energy price and pay-back period with early market penetration by the PV system. Keywords: photovoltaic (PV) system; pay-back period; market penetration; renewable energy economics. |
| Keywords: | renewable energy economics, pay-back period, market penetration, solar photovoltaic (PV) system. |
| JEL: | A |
| Date: | 2005–12–07 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpgt:0512004&r=cwa |
| By: | Deepak Shah (Gokhale Institute of Politics & Economics, B.M.C.C. Road, Deccan Gymkhana, Pune 411004, Maharashtra, India) |
| Abstract: | An analysis encompassing two case studies conducted in forward and backward regions of Maharashtra (India) has shown deterioration in the financial health of central level credit cooperatives (Sangli District Central Cooperative Bank (SDCCB)) in forward region and gross inefficiency in their functioning (Buldana District Central Cooperative Bank (BDCCB)) in the backward region of the state, due mainly to their mounting NPAs or overdues’. Because of substantially high NPAs, the fixed expenses of these institutions have been adversely affected, which in turn have grossly affected the break-even levels of loan advances and deposits of these credit institutions, so much so that there has been huge gap between the break-even levels of loan advances and deposits and the actual loan advances and deposits. In the case of BDCCB, the deficit between actual and the break-even levels are so high (about 60 per cent) that it will be well-nigh impossible for it to overcome this situation. High transaction costs, poor repayment performance, and mounting NPAs are the root causes of the moribund state of rural credit delivery through these cooperatives. Further, it is to be noted that the estimated trend over the past two decades in Maharashtra shows a slower growth in institutional finances through credit cooperatives and also in their membership during the decade of economic reforms (1991-2000) as against the decade preceding it (1980-1990). On the other hand, the outstanding loans of these cooperatives have grown at much faster rate as compared to their loan advances during both pre- and post economic reform periods. The slower growth in institutional finance through credit cooperatives during the decade of 1991-2000 is mainly due to adverse environment created by the financial sector reforms. Due to unfavourable policy framework, much of the deposits of the credit cooperatives are going into investments, instead of advancing loans to the farming sector. As a result, the C-D ratios of these credit cooperatives have been adversely affected. With a view to revive agricultural credit delivery through cooperatives, the need of the hour is to adopt innovative approaches like linking of SHGs and NGOs with mainstream financial institutions, including cooperatives. Such linkages are reported to have not only reduced transaction costs but also ensured better repayment performance. In brief, in order to rejuvenate rural credit delivery system through cooperatives, the root problems facing the system, viz., high transaction cost, poor recovery performance, and NPAs, need to be tackled with more fiscal jurisprudence reserving exemplary punishment for willful defaults, especially by large farmers, and the individual cases who have borrowed credit from these institutions. In fact, insofar as rural credit delivery through credit cooperatives is concerned, the focus should be on strategies that are required for tackling issues such as sustainability and viability, operational efficiency, recovery performance, small farmer coverage and balanced sectoral development. |
| Keywords: | Financial Health of Credit Cooperatives in India |
| JEL: | G |
| Date: | 2005–12–07 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpfi:0512007&r=cwa |
| By: | Jishnu Das (The World Bank); Jeffrey Hammer (The World Bank) |
| Abstract: | The quality of medical care received by patients varies for two reasons: differences in doctors' competence or differences in doctors' incentives. Using medical vignettes, the authors evaluated competence for a sample of doctors in Delhi. One month later, they observed the same doctors in their practice. The authors find three patterns in the data. First, what doctors do is less than what they know they should do-doctors operate well inside their knowledge frontier. Second, competence and effort are complementary so that doctors who know more also do more. Third, the gap between what doctors do and what they know responds to incentives: doctors in the fee-for-service private sector are closer in practice to their knowledge frontier than those in the fixed-salary public sector. Under-qualified private sector doctors, even though they know less, provide better care on average than their better-qualified counterparts in the public sector. These results indicate that to improve medical services, at least for poor people, there should be greater emphasis on changing the incentives of public providers rather than increasing provider competence through training. |
| Keywords: | Private sector development, Governance, Poverty, Health and population |
| Date: | 2005–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:3669&r=cwa |
| By: | Deepak Shah (Gokhale Institute of Politics & Economics, B.M.C.C. Road, Deccan Gymkhana, Pune 411004, Maharashtra, India) |
| Abstract: | The results revealed that the supply of milk through Crossbred cows is sensitive to the price change in area covered under the umbrella of cooperatives. The milk yield of Crossbred cows being higher and the potentiality of increasing the milk through cross-breeding, feeding and management being high, the liquid milk supply could be increased substantially with proper pricing policy of Crossbred cow milk. Further, since the price of milk of Crossbred cow was lower compared to Murrah buffaloes (superior breed of buffalo), this breed of cattle showed higher sensitivity to unit increase in the price of milk and it was particularly true in the case of area covered by cooperatives. The study, therefore, suggest that the price of milk should be increased at an appropriate level so as to tap the additional milk supply and thus bridging the gap of shortage of milk in the area covered in the study. |
| Keywords: | Milk Supply Responce in India |
| JEL: | P Q Z |
| Date: | 2005–12–07 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpot:0512006&r=cwa |
| By: | Rinku Murgai (The World Bank); Martin Ravallion (The World Bank) |
| Abstract: | Minimum wages are generally thought to be unenforceable in developing rural economies. But there is one solution - a workfare scheme in which the government acts as the employer of last resort. Is this a cost-effective policy against poverty? Using a microeconometric model of the casual labor market in rural India, the authors find that a guaranteed wage rate sufficient for a typical poor family to reach the poverty line would bring the annual poverty rate down from 34 percent to 25 percent at a fiscal cost representing 3-4 percent of GDP when run for the whole year. Confining the scheme to the lean season (three months) would bring the annual poverty rate down to 31 percent at a cost of 1.3 percent of GDP. While the gains from a guaranteed wage rate would be better targeted than a uniform (untargeted) cash transfer, the extra costs of the wage policy imply that it would have less impact on poverty. |
| Keywords: | Poverty, Rural development, Labor and employment |
| Date: | 2005–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:3640&r=cwa |
| By: | Vijay Kalavakonda (The World Bank); Olivier Mahul (The World Bank) |
| Abstract: | The authors examine the performance of the crop insurance scheme in Karnataka, a southern state of India and the second driest state in the country. Their analysis highlights weaknesses in product design, implementation challenges, and operational problems. The authors' finding is that the crop insurance scheme in its current form does not achieve its objectives, either explicit (risk management) or implicit (safety net and containment of both the central and state governments' contingent liability). The crop insurance scheme performs poorly both in terms of coverage (number of hectares insured and number of farmers purchasing insurance) and financial performance. The authors provide a framework for designing a crop insurance scheme based on the premise that insurance is a cost effective risk management techniques. They also provide some new ideas and thinking toward both improving the existing crop insurance scheme and exploring alternatives to the current product, based on an area-yield approach. |
| Keywords: | Agriculture, Rural development |
| Date: | 2005–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:3654&r=cwa |
| By: | Rajashri Chakrabarti (Harvard University) |
| Abstract: | This paper analyzes the impact of a redrawing of political boundaries on voting patterns. It investigates whether secession of states leads to gains in terms of better conformity of the electorate's political preferences with those of the elected representatives. We study these issues in the context of reorganization of states in India. Madhya Pradesh, the biggest state in India before the reorganization, was subdivided into Madhya Pradesh and Chhattisgarh in 2000, the latter accounting for less than one-fourth of the electorate of undivided Madhya Pradesh. Using socio-economic composition and traditional voting patterns, we argue that there were differences in political preferences between Madhya Pradesh and Chhattisgarh. However, in electoral democracies, the amount of transfers that a constituency gets depends crucially on whether the local representative belongs to the ruling party. Under these circumstances, we show in a theoretical context that when it is part of the same state, the smaller region would vote strategically to elect representatives with preferences more closely aligned to those of the bigger region. Once it constitutes a separate state however, this motive would no longer operate. Exploiting detailed data on state elections in Madhya Pradesh and Chhattisgarh in 1993, 1998 and 2003 and a difference-in-differences estimation strategy, we show that these predictions are validated empirically - there is a significant divergence in voting behavior between the two regions in 2003 compared to the pre-reorganization period. |
| Keywords: | Political boundaries, Voting, Redistribution |
| JEL: | P16 H0 O1 |
| Date: | 2005–12–02 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpot:0512002&r=cwa |
| By: | Yaprak Gulcan (Department of Economics, Faculty of Business, Dokuz Eylül University); Mustafa Erhan Bilman (Department of Economics, Faculty of Business, Dokuz Eylül University) |
| Abstract: | This study investigates the effect of budget deficit reduction on exchange rate between US dollar and Turkish lira (TL). Our article aims to illustrate that the evidence on the relationship between budget deficits and exchange rates is not clear-cut and to explain why the theoretical approaches that underlie the relationship are ambiguous while there is general agreement that cutting budget deficits and debt will lower interest rates. The relationship between deficit reduction and exchange rates has caused a debate among the most famous monetary policy makers and researchers. [Melvin (1989), Mishkin (1992), Greenspan (1995), Thiessen (1995), Krugman (1995), Feldstein (1995)] In addition, budget deficit can be counted as one of the most common and major problem that influences the macroeconomic stability in developing economies. In this sense, cointegration method and causality tests were used in order to find out the possible effects of budget deficit reduction on exchange rates during the period of 1960-2003 in Turkey. |
| Keywords: | Budget deficits, exchange rates, cointegration analysis |
| JEL: | H62 F31 |
| Date: | 2005–12–12 |
| URL: | http://d.repec.org/n?u=RePEc:deu:dpaper:0705&r=cwa |
| By: | Deepak Shah (Gokhale Institute of Politics & Economics, B.M.C.C. Road, Deccan Gymkhana, Pune 411004, Maharashtra, Pune) |
| Abstract: | Maharashtra has 720 km. of coastline with the continental shelf area of 111512 sq. km. There are as many as 32 inland varieties of fish produced in this state. Among these varieties, shrimps, prawns, harpodon neherias, ribbon fish, otalithes, pomfrets, anchoviella, mackeral and cattle fish put together account for over 70 per cent share in total inland fish production of Maharashtra. Brihan Mumbai and Thane are the only two major regions of the state accounting for bulk of the total inland fish production. Though Maharashtra accounts for a significant share in total marine fish production of India, her share in total fish production of India has declined over the past two decades mainly due to a sharp decline in her share in total marine fish production of India. The major problem faced by the marine fisheries of Maharashtra is relating to depletion of resources due to illegal presence of foreign vessels and vessels belonging to other states, which appeared to have created pressure on the coast line. As a result, the marine fish production of Maharashtra has grown at very low pace during the last two decades. In order to tackle this problem, there is need for the Government of India to introduce zonalisation of coast line in the National Fishing Policy. This will certainly help in checking the depletion of marine resources. In fact, the present fishing fleet of the state is not capable of exploiting the deep sea resources. It is to be further noted that there has been decline in inland water spread area and numerical strength of fish curing yards in the state. The number of fishery schools in the state has also stagnated over the last two decades. These are certainly disturbing features of the fisheries sector of Maharashtra. Although in order to develop fisheries sector, the department of fisheries in the state is conducting various training programme relating to carp fish seed production, fresh water prawn culture, integrated fish farming and management of aquarium, etc., there is also need to educate fishermen with respect to dissemination of information relating to modern fishing techniques and efficient marketing of fish catch. Equally important is the need for more innovative technologies in this sector, diffusion of developed technology by extension workers and adoption by the clients. Education of fishermen about modern fishing techniques has significant impact on adoption of recommended fish culture practices by the farmers. Further, extension and mass media participation have strong positive relationship with adoption of fish culture practices. Nonetheless, inadequate infrastructure and flow of information technology are the major barriers for better market integration in the existing marine fish markets of India. |
| Keywords: | Lessons From Fisheries Development |
| JEL: | P Q Z |
| Date: | 2005–12–04 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpot:0512005&r=cwa |
| By: | Somik V. Lall (The World Bank); Ajay Suri (Society for Development Studies, Delhi, India); Uwe Deichmann (The World Bank) |
| Abstract: | Strategies to help the one billion people worldwide who live in informal settlements have mainly focused on slum upgrading, sites and services programs, and tenure security. In contrast, there has been less attention on what enables slum dwellers to transition into the formal housing sector, which has the dual benefits of improving service access and escaping social stigma. In this paper the authors investigate residential mobility among slum dwellers in Bhopal, India. Their analysis shows that one in five households succeeds in getting out of a slum settlement, and a major determinant is the household's ability to save on a regular basis. Due to limited outreach of institutional housing finance, most slum dwellers rely solely on household savings for purchasing a house. These findings underscore the urgent need to improve savings instruments for slum dwellers and to downmarket housing finance to reach the poorest residents of rapidly growing cities in developing countries. |
| Keywords: | Urban development |
| Date: | 2005–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:3596&r=cwa |
| By: | Elena Glinskaya (The World Bank); Michael Lokshin (The World Bank) |
| Abstract: | The authors use 1993-94 and 1999-2000 India Employment and Unemployment surveys to investigate wage differentials between the public and private sectors as well as workers' decisions to join a particular sector. To obtain robust estimates of the wage differential, they apply three econometric techniques each relying on a different set of assumptions about the process of job selection. All three methods show that differences in wages between public sector workers and workers in the formal-private and informal-casual sectors are positive and high. Estimates show that, on average, the public sector premium ranges between 62 percent and 102 percent over the private-formal sector, and between 164 percent and 259 percent over the informal-casual sector, depending on the choice of methodology. The authors' review of wage differentials (estimated using similar methodologies) across the world shows that India has one of the largest differentials between wages of public workers and workers in the formal private sector. The wage differentials in India tend to be higher in rural as compared with urban areas, and are higher among women than among men. The wage differential also tends to be higher for low-skilled workers. There is considerable evidence of an increase in the wage differential between 1993-94 and 1999-2000. |
| Keywords: | Private sector development, Labor and employment, Public sector management |
| Date: | 2005–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:3574&r=cwa |
| By: | Somik V. Lall (The World Bank); Taye Mengistae (The World Bank) |
| Abstract: | How do differences in the local business environment influence location of industry within countries? How do the benefits of a good business environment compare with those from good market access and agglomeration economies from industry clustering? The authors examine these questions by analyzing location decisions of individual firms. Using data from a recently completed survey of manufacturing firms in India, they find that both the local business environment and agglomeration economies significantly influence business location choices across cities. In particular, excessive regulation of labor and of other industrial activities reduces the probability of a business locating in a city. The authors' findings imply that in order to attract industrial activity, smaller or remoter cities need to offer even more attractive policy concessions or reforms to offset the effects of their relatively adverse (economic) geography. Their methodology pays special attention to the identification of agglomeration economies in the presence of unobserved sources of natural advantage. |
| Keywords: | Infrastructure, Industry, Private sector development, Governance, Urban development, Macroeconomics and growth |
| Date: | 2005–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:3675&r=cwa |
| By: | Somik V. Lall (The World Bank); Taye Mengistae (The World Bank) |
| Abstract: | The authors' analysis of manufacturing plants sampled from India's major industrial centers shows large productivity gaps across cities. The gaps partly reflect differences in agglomeration economies and in market access. However, they are also explained to a greater extent by differences in the degree of labor regulation and in the severity of power shortages. This is an indication that governments can help narrow regional disparities in industrial growth by fostering the "right business environment" in locations where industry might otherwise be held back by powerful forces of economic geography. There is indeed a pattern in the data whereby geographically disadvantaged cities seem to compensate partially for their natural disadvantage by having a better business environment than more geographically advantaged locations. |
| Keywords: | Infrastructure, Industry, Private sector development, Governance, Urban development, Macroeconomics and growth |
| Date: | 2005–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:3664&r=cwa |
| By: | Monica Das Gupta (The World Bank); Michael Lokshin (The World Bank); Michele Gragnolati (The World Bank); Oleksiy Ivaschenko (The World Bank) |
| Abstract: | Levels of child malnutrition in India fell only slowly during the 1990s, despite significant economic growth and large public spending on the Integrated Child Development Services (ICDS) program, of which the major component is supplementary feeding for malnourished children. To unravel this puzzle, the authors assess the program's placement and its outcomes using National Family Health Survey data from 1992 and 1998. They find that program placement is clearly regressive across states. The states with the greatest need for the program - the poor northern states with high levels of child malnutrition and nearly half of India's population - have the lowest program coverage and the lowest budgetary allocations from the central government. Program placement within a state is more progressive: poorer and larger villages have a higher probability of having an ICDS center, as do those with other development programs or community associations. The authors also find little evidence of program impact on child nutrition status in villages with ICDS centers. |
| Keywords: | Poverty, Rural development, Health and population, Public sector management |
| Date: | 2005–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:3647&r=cwa |
| By: | Priya Basu (The World Bank); Pradeep Srivastava (National Council of Applied Economic Research, India) |
| Abstract: | This paper reviews the current level and pattern of access to finance for India's rural poor and examines some of the key microfinance approaches in India, taking a close look at the most dominant among these, the Self Help Group (SHG) Bank Linkage initiative. It empirically analyzes the success with which SHG Bank Linkage has been able to reach the poor, examines the reasons behind this, and the lessons learned. The analysis draws heavily on a recent rural access to finance survey of 6,000 households in India undertaken by the authors. The main findings and implications of the paper are as follows: India's rural poor currently have very little access to finance from formal sources. Microfinance approaches have tried to fill the gap. Among these, the growth of SHG Bank Linkage has been particularly remarkable, but outreach remains modest in terms of the proportion of poor households served. The paper recommends that, if SHG Bank Linkage is to be scaled-up to offer mass access to finance for the rural poor, then more attention will need to be paid toward the promotion of high quality SHGs that are sustainable, clear targeting of clients, and ensuring that banks linked to SHGs price loans at cost-covering levels. At the same time, the paper argues that, in an economy as vast and varied as India's, there is scope for diverse microfinance approaches to coexist. Private sector microfinanciers need to acquire greater professionalism, and the government can help by creating a flexible architecture for microfinance innovations, including through a more enabling policy, legal, and regulatory framework. Finally, the paper argues that, while microfinance can, at minimum, serve as a quick way to deliver finance to the poor, the medium-term strategy to scale-up access to finance for the poor should be to "graduate" microfinance clients to formal financial institutions. The paper offers some suggestions on what it would take to reform these institutions with an eye to improving access for the poor. |
| Keywords: | Domestic finance, Poverty, Rural development |
| Date: | 2005–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:3646&r=cwa |
| By: | Deepak Shah (Gokhale Institute of Politics & Economics, B.M.C.C. Road, Deccan Gymkhana, Pune 411004, Maharashtra, India) |
| Abstract: | Developing countries like India should find potentiality in non- traditional exports at a time when growth in the traditional ones is foundering. At the same time, it deserves mention that the future growth in horticultural production in developing world mainly depend on future price mechanism and also on the import demand of these high value crops in various regions of the world. The production deficit of various regions in fruits and vegetables will act as engine of export growth of the same for developing nations. Import demand for fruits and vegetables has already been predicted to grow sharply in developed region of the world in the near future. This will lead to rise in export prices, especially for fruits. Production deficit of other countries and regions and a likelihood of rise in export prices of these high value crops may serve as a catalyst for significant expansion in the production of horticultural crops, particularly in developing world. India is expected to take advantage of this situation and cooperatives are likely to play a key role in shaping India’s exports. However, in order to exploit this situation cooperatives have to be developed as economically effective organizations, capable of meeting the challenges of the new, liberalized economic environment. Besides, they have to achieve full utilization of the existing infrastructural facilities with due emphasis on scaling up of the economy through expansion of production capacity and upgradation of technology. |
| Keywords: | Role of Cooperatives in Horticultural Exports |
| JEL: | F1 F2 |
| Date: | 2005–12–07 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpit:0512007&r=cwa |
| By: | Deepak Shah (Gokhale Institute of Politics & Economics, B.M.C.C. Road, Deccan Gymkhana, Pune 411004, Maharashtra, India) |
| Abstract: | The opening up of the national economy to the international market in the era of liberalization has certainly boosted country’s trade in various livestock products. The successful GATT negotiations have provided India an opportunity to compete on a more equal footing in the global livestock trade. Nonetheless, the point that merits attention is how international prices of livestock products will react to free trade regime. Who will gain and who will lose from the possible outcome of trade liberalization is again central point of discussion. According to Baxi (1994), there would be an upward increase in the international prices of dairy products. The long term implications of this can be :(a) EC would lose markets to the US, New Zealand and Australia, (b) A significant rise in cheese export prices, (c) Effect on SMP and Butter prices would be marginal, and (d) The benefit to India through SMP exports would be gradual and modest. One of the arguments put forward by Baxi (1994) is that India will gain from the possible outcome of the changes as the EC will have to raise export prices by 15 per cent to adjust lower inward tariffs. On the whole, India needing a modest share in the world export market for various dairy products will be able to realize better prices in future. Nevertheless, such realization will be possible only when India produces and exports sufficient quantities of these valued products in the years to come. |
| Keywords: | Livestock Trade of India |
| JEL: | F1 F2 |
| Date: | 2005–12–07 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpit:0512006&r=cwa |
| By: | Eli Berman (University of California, San Diego and National Bureau of Economic Research); Rohini Somanathan (University of Michigan and Indian Statistical Institute); Hong W. Tan (The World Bank) |
| Abstract: | Most high and middle-income countries showed symptoms of skill-biased technological change in the 1980s. India-a low income country-did not, perhaps because India's traditionally controlled economy may have limited the transfer of technologies from abroad. However the economy underwent a sharp reform and a manufacturing boom in the 1990s, raising the possibility that technology absorption may have accelerated during the past decade. The authors investigate the hypothesis that skill-biased technological change did in fact arrive in India in the 1990s using panel data disaggregated by industry and state from the Annual Survey of Industry. These data confirm that while the 1980s were a period of falling skills demand, the 1990s showed generally rising demand for skills, with variation across states. They find that increased output and capital-skill complementarity appear to be the best explanations of skill upgrading in the 1990s. Skill upgrading did not occur in the same set of industries in India as it did in other countries, suggesting that increased demand for skills in Indian manufacturing is not due to the international diffusion of recent vintages of skill-biased technologies. |
| Keywords: | Private sector development |
| Date: | 2005–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:3761&r=cwa |
| By: | Deepak Shah (Gokhale Institute of Politics & Economics, B.M.C.C. Road, Deccan Gymkhana, Pune 411004, Maharashtra, India) |
| Abstract: | India is known for its livestock wealth and ranks high among the nations having bovine population. However, despite having huge livestock population, India stands insignificant in the world trade of livestock products. The recent concerted efforts made by the government in the era of liberalization after opening up of the national economy to the international market have certainly boosted India’s export trade of livestock products to newer heights. The dairy industry of India is already at a take-off stage and the entry of the corporate sector following the liberalized policies of government is bound to complement the efforts of National Dairy Development Board (NDDB) to usher in a white revolution. The most important achievement of the dairy industry is the near-self sufficiency in milk production. Nonetheless, the possibility of India emerging as a potential exporter of various livestock products will largely depend on India’s own ability to exploit her potential in this sector and generate exportable surplus of these commodities, aside her competitive strength in the world market. |
| Keywords: | Trade Performance of India in Livestock Sector |
| JEL: | F1 F2 |
| Date: | 2005–12–04 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpit:0512004&r=cwa |