nep-cwa New Economics Papers
on Central and Western Asia
Issue of 2009‒02‒28
eighteen papers chosen by
Nurdilek Hacialioglu
Open University

  1. Big Reforms but Small Payoffs: Explaining the Weak Record of Growth and Employment in Indian Manufacturing By Gupta, Poonam; Hasan, Rana; Kumar, Utsav
  2. The Redistributive Effects of Political Reservation for Minorities: Evidence from India By Prakash, Nishith; Chin, Aimee
  3. Cities with Suburbs: Evidence from India By Kala Seetharam Sridhar
  4. The Missing Middle By Anne O. Krueger
  5. Informal water suppliers meeting water needs in the peri-urban territories of Mumbai, an Indian perspective By Anastasia Angueletou-Marteau
  6. The Puzzle of Muslim Advantage in Child Survival in India By Bhalotra, Sonia R.; Valente, Christine; van Soest, Arthur
  7. Does Employment Quota Explain Occupational Choice Among Disadvantaged Groups? A Natural Experiment from India By Prakash, Nishith; Howard, Larry
  8. Powerful Women: Does Exposure Reduce Bias? By Beaman, Lori; Chattopadhyay, Raghabendra; Duflo, Esther; Pande, Rohini; Topalova, Petia
  9. Quantifying the Impact of Chikungunya and Dengue on Tourism Revenues By Dileep V Mavalankar
  10. Rethinking Pakistan's Development Strategy By Hamid, Naved
  11. Compromising social justice in fairtrade?: case study of a fairtrade organization in India By Ranjana Das
  12. Wake up and smell the ginseng: International trade and the rise of incremental innovation in low-wage countries By Diego Puga; Daniel Trefler
  13. Employment Laws in Developing Countries By Djankov, Simeon; Ramalho, Rita
  14. Religious Freedom and Minority Rights in Greece: the case of the Muslim minority in western Thrace By Iris Boussiakou
  15. Oil Exports, Non Oil GDP and Investment in the GCC Countries By Harb, Nasri
  16. Economic Implications of Deeper Asian Integration By Francois, Joseph; Wignaraja, Ganeshan
  17. Economic growth, employment and poverty in the Middle East and North Africa By Mahmood Messkoub
  18. Railway and Ports Organization in the Republic of South Africa and Turkey: The Integrator’s Paradise? By Louis S. Thompson

  1. By: Gupta, Poonam; Hasan, Rana; Kumar, Utsav
    Abstract: India has undertaken extensive reforms in its manufacturing sector over the last two decades. However, an acceleration of growth in manufacturing, and a corresponding increase in employment, has eluded India. Why have the reforms not produced the intended results? Using Annual Survey of Industries data at the three digit level for major Indian states, for 1980-2004, we analyze the effects of the reforms that liberalized India’s industrial licensing regime on the performance of registered manufacturing. We find that the performance of the manufacturing sector is heterogeneous across states, as well as across industries. In particular, labor intensive industries and industries dependent on infrastructure have not benefited much from reforms. Industrial performance appears to be contingent on the state specific policy and economic environment. States with relatively inflexible labor regulations have experienced slower growth of labor-intensive industries and slower employment growth overall. Additionally, states with relatively competitive product market regulations and with better infrastructure have experienced larger benefits from reforms.
    Keywords: India; Manufacturing; Product Market Deregulation; Labor Laws; Infrastructure
    JEL: H54 L51 O53 L52 P23 L50 L60
    Date: 2009–02–18
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:13496&r=cwa
  2. By: Prakash, Nishith; Chin, Aimee
    Abstract: We examine the impact of political reservation for disadvantaged minority groups on poverty. To address the concern that political reservation is endogenous in the relationship between poverty and reservation, we take advantage of the state-time variation in reservation in state legislative assemblies in India that arises from national policies that cause reservations to be revised and the time lags with which the revised reservations are implemented due to the timing of state elections. Using data on sixteen major Indian states for the period 1960-1992, we find that increasing the share of seats reserved for Scheduled Tribes significantly reduces poverty while increasing the share of seats reserved for Scheduled Castes has no impact on poverty. Political reservation for Scheduled Tribes has a greater effect on rural poverty than urban poverty, and appears to benefit people near the poverty line as well as those far below it.
    Keywords: Affirmative Action; Poverty; Minorities; India.
    JEL: I38 J15 J78
    Date: 2009–02–18
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:13571&r=cwa
  3. By: Kala Seetharam Sridhar
    Abstract: For a country like India that contains a large number of Urban Agglomerations (UAs), suburbanisation has drawn little attention of the literature. I focus on this sparsely studied issue in this work. Population, household and employment density gradients for India's UAs, using Mills' two-point technique are calculated. Next, population, household and employment gradient regressions are estimated.
    Keywords: literature, urban agglomeratinos, India, suburbanisation, density gradient, Mill's two point technique, population gradient, employment, household, regressions, exponential density function, business, UAs, metro area
    Date: 2009
    URL: http://d.repec.org/n?u=RePEc:ess:wpaper:id:1867&r=cwa
  4. By: Anne O. Krueger
    Abstract: The purpose of this paper is to provide evidence, and argue, that stunning as India’s success is, the potential – and need – is for still more reform and more rapid growth. 8 percent is a good rate of growth, but many are destined needlessly to be left behind for years to come if current trends persist: if growth in output and employment of unskilled-laborintensive manufacturing industries remains on its current trajectory, India is at risk of bifurcating the economy, with those benefiting from growth and those left out.
    Keywords: India, potential, economy, growth, rate, labor intensive, manufacturing industries, industry, reform
    Date: 2009
    URL: http://d.repec.org/n?u=RePEc:ess:wpaper:id:1864&r=cwa
  5. By: Anastasia Angueletou-Marteau (LEPII - Laboratoire d'Économie de la Production et de l'Intégration Internationale - CNRS : UMR5252 - Université Pierre Mendès-France - Grenoble II)
    Abstract: This paper addresses the issue of informal water providers in the peri-urban areas of Mumbai. The term “informal water providers” refers to all the types of water suppliers who are not operating in the legal framework of water management in a given area.The paper examine whether we are heading towards new forms of urban governance, where informal actors no longer compete with each other, but cooperate with public utilities and emerge as an extension of the public utility.
    Keywords: informal water providers ; peri-urban territories ; India
    Date: 2008–09–01
    URL: http://d.repec.org/n?u=RePEc:hal:journl:halshs-00363464_v1&r=cwa
  6. By: Bhalotra, Sonia R. (University of Bristol); Valente, Christine (University of Nottingham); van Soest, Arthur (Tilburg University)
    Abstract: The socio-economic status of Indian Muslims is, on average, considerably lower than that of upper caste Hindus. Muslims have higher fertility and shorter birth spacing and are a minority group that, it has been argued, have poorer access to public goods. They nevertheless exhibit substantially higher child survival rates, and have done for decades. This paper documents and analyses this seeming puzzle. The religion gap in survival is much larger than the gender gap but, in contrast to the gender gap, it has not received much political or academic attention. A decomposition of the survival differential reveals that some compositional effects favour Muslims but that, overall, differences in characteristics between the communities and especially the Muslim deficit in parental education predict a Hindu advantage. Alternative outcomes and specifications support our finding of a Muslim fixed effect that favours survival. The results of this study contribute to a recent literature that debates the importance of socioeconomic status (SES) in determining health and survival. They augment a growing literature on the role of religion or culture as encapsulating important unobservable behaviours or endowments that influence health, indeed, enough to reverse the SES gradient that is commonly observed.
    Keywords: religion, caste, gender, child survival, anthropometrics, Hindu, Muslim, India
    JEL: O12 I12 J15 J16 J18
    Date: 2009–02
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp4009&r=cwa
  7. By: Prakash, Nishith; Howard, Larry
    Abstract: This paper examines the effect of a federally-mandated public sector employment quota policy for minorities on their occupational choice. We utilize multiple logit models to estimate the effect of the policy on the choice between a high, middle, or low-skill public sector occupation during the 1980s and 1990s. The main findings are, first, the policy has a significant effect on the choice of occupation for both groups. The policy increases the probability of the scheduled caste group choosing high-skill occupations and decreases the probability of choosing middle-skill occupations. In contrast, the policy decreases the probability of the scheduled tribe group choosing high-skill occupations and increases their probability of choosing low-skill occupations. Second, the influence of the policy is interrelated with an individual's years of schooling. Third, we find evidence of employment quota externalities in that a policy targeted at one group affects the occupational choice of the other group. Overall, the results suggest that federally-mandated employment quotas do change occupational choice for the target disadvantaged groups and contribute to their improved socio-economic standing.
    Keywords: Occupational choice; Skill; Caste; India
    JEL: J62 O10 O2 J61 J24
    Date: 2008–11–29
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:13573&r=cwa
  8. By: Beaman, Lori; Chattopadhyay, Raghabendra; Duflo, Esther; Pande, Rohini; Topalova, Petia
    Abstract: We exploit random assignment of gender quotas across Indian village councils to investigate whether having a female chief councillor affects public opinion towards female leaders. Villagers who have never been required to have a female leader prefer male leaders and perceive hypothetical female leaders as less effective than their male counterparts, when stated performance is identical. Exposure to a female leader does not alter villagers' taste preference for male leaders. However, it weakens stereotypes about gender roles in the public and domestic spheres and eliminates the negative bias in how female leaders' effectiveness is perceived among male villagers. Female villagers exhibit less prior bias, but are also less likely to know about or participate in local politics; as a result, their attitudes are largely unaffected. Consistent with our experimental findings, villagers rate their women leaders as less effective when exposed to them for the first, but not second, time. These changes in attitude are electorally meaningful: after 10 years of the quota policy, women are more likely to stand for and win free seats in villages that have been continuously required to have a female chief councillor.
    Keywords: development planning and policy; economics of gender; non-labour descrimination; political economy
    JEL: J16 O2 P16
    Date: 2008–07
    URL: http://d.repec.org/n?u=RePEc:cpr:ceprdp:6922&r=cwa
  9. By: Dileep V Mavalankar
    Abstract: The objective of this paper is to predict the order of magnitude of possible reduction in tourism revenues if a major epidemic of chikungunya or dengue were to discourage visits by international tourists, and to prove that even a conservative estimate can be comparable to or even greater than the cost of illness and intervention programmes combined, and therefore should not be ignored in the estimation of the overall burden. [IIMA WP No. 2009-02-03].
    Keywords: chikumgunya, dengue, disease burden Gujarat, Malaysia, Thailand, revenues, epidemic, tourism, public funded, direct, indirect, costs, revenues, tourists, illness, india,
    Date: 2009
    URL: http://d.repec.org/n?u=RePEc:ess:wpaper:id:1865&r=cwa
  10. By: Hamid, Naved
    Abstract: The objective of this paper is to set out the key components of a development strategy for Pakistan. A fundamental premise of our analysis is that the world economic environment is changing dramatically and a development strategy today must position itself to take advantage of the changes taking place. The paper is divided into five sections: First we provide a brief review of Pakistan's experience with development strategies so far. next we discuss the changes that have occurred, or taking place in the global economy, which have strategic relevance for Pakistan. In the third section we look at the current situation in Pakistan with regard to the potential drivers of growth, based on the earlier discussion of the global developments. In the final section key elements of an alternative development strategy for Pakistan are outlined.
    Keywords: Development Strategy; Growth; Globalization
    JEL: O11 O20 O40
    Date: 2008–11–02
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:13491&r=cwa
  11. By: Ranjana Das
    Abstract: The study investigates whether Fair Trade Organizations (FTOs) are able to adhere to their principles of social justice and development goals as they enter mainstream markets which are dominated by neo-liberalism, unequal terms of trade and propagation of the ‘free market’ principle. Through a case study of Kala-a craft marketing Fair Trade Organization in West Bengal, India, the paper shows shifts in the development of the FTO, the introduction of a certification regime and the emerging contradiction between the intentions of the FTO and its actual practice in the contemporary period. The implications of shifts in orientation from solidarity based notions of social justice to market oriented social justice, in particular on the weakest link and most vulnerable section who are women craft workers at the bottom of the production chain are investigated. A production chain analysis of handicraft production gives evidence of violation of FT principles and ILO’s decent work norms and also reveals characteristics of the informal economy with producers having no entitlements to minimum wages, or social security benefits. There remains gender bias in the employment of women in the fair-trade production chain. The data shows that there is no challenge to gender segmentation and in fact a reinforcement of the feminine stereotype. Declining partnership with cooperatives, rising partnership with large scale NGOs and setting up of a Business Development Unit within the organization are some of the strategic shifts in the FTO. These shifts and the lack of implementation of FT principles indicate that the FTO is succumbing to the logic of the neo liberal mainstream market resulting in a drift away from the social justice principles within the Fairtrade Network. While onstage FTO’s use the principle of ‘fairness’ particularly in relation to Northern Corporations, this notion of fairness is not extended to the lower end producers through which they are expanding in the global market.
    Keywords: fair trade, social justice, neoliberal market, gender, production chain
    Date: 2009
    URL: http://d.repec.org/n?u=RePEc:iss:wpaper:467&r=cwa
  12. By: Diego Puga (IMDEA Social Sciences, Universidad Carlos III de Madrid, and CEPR); Daniel Trefler (Rotman School of Management and Department of Economics, University of Toronto)
    Abstract: Increasingly, a small number of low-wage countries such as China and India are involved in incremental innovation. That is, they are responsible for resolving production line bugs and suggesting product improvements. We provide evidence of this new phenomenon and develop a model in which there is a transition from old style product cycle trade to trade involving incremental innovation in low-wage countries. The model explains why levels of involvement in incremental innovation vary across low-wage countries and across firms within each low-wage country. We draw out implications for sectoral earnings, living standards, the capital account and, foremost, international trade in goods.
    Keywords: international trade; low-wage country innovation
    JEL: F1
    Date: 2009–01–27
    URL: http://d.repec.org/n?u=RePEc:imd:wpaper:wp2009-01&r=cwa
  13. By: Djankov, Simeon; Ramalho, Rita
    Abstract: We survey the research on the effect of employment laws in developing countries, using papers published since 2004. The survey is further supported by cross-country correlation analyses. Both exercises show that developing countries with rigid employment laws tend to have larger informal sectors and higher unemployment, especially among young workers. A number of countries, especially in Eastern Europe and West Africa, have recently undergone significant reforms to make employment laws more flexible. Conversely, several countries in Latin America have made employment laws more rigid. These reforms are larger in magnitude than any reforms in developed countries and their study can produce new insights on the benefits of labor regulation.
    Keywords: employment regulation; India; Latin America
    JEL: J53 J54
    Date: 2008–12
    URL: http://d.repec.org/n?u=RePEc:cpr:ceprdp:7097&r=cwa
  14. By: Iris Boussiakou
    Abstract: The status of religious freedom of the Muslim minority in Western Thrace (northern Greece) is protected according to the Treaty of Lausanne and international human rights instruments. According to the Treaty the members of the Muslim minority have the right to elect their own religious leader (Mufti) and resolve disputes of a family and personal nature based on Islamic Law. The process of the appointment of the Mufti constitutes a point of friction between the state and the minority. The institution of the Mufti has become a political issue causing tension between the state and the minority and even among the minority members themselves. On the other hand, the argument persists that the application of Islamic law in family matters within the Muslim minority quite often leads to the violation of the provisions of the Constitution and international treaties regarding the principles of equality and non-discrimination. The paper, thus examines the proposition that the present minority regime inevitably leads to the violation of the provisions of the Constitution and international human rights norms regarding the principles of equality, non-discrimination and women’s rights.
    Keywords: minorities; religious freedom; international human rights treaties; cultural relativism; women’s rights; equality; non-discrimination..
    Date: 2008–12
    URL: http://d.repec.org/n?u=RePEc:hel:greese:21&r=cwa
  15. By: Harb, Nasri
    Abstract: This paper studies the long and short-run relationship between oil exports, non oil GDP and investment in five major oil exporting countries. Its goal is to verify the effect of natural resources exports on the economic performance. It considers the effect of cross sectional correlations and uses the corresponding panel unit root tests to study the long-run characteristics of our series. The results show that resources' exports have no long-run relationship with the macro variables. A VAR analysis is used to estimate the short-run dynamics and shows that the effect of oil exports on those variables depends on local policies.
    Keywords: GCC; Natural Resources; Oil; Productivity; Investment; Labor Force; Unit root; Growth; Cointegration; VAR.
    JEL: O53 C23 C22 O40 F43
    Date: 2008–06
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:13602&r=cwa
  16. By: Francois, Joseph; Wignaraja, Ganeshan
    Abstract: The Asian countries are once again focused on options for large, comprehensive regional integration schemes. In this paper we explore the implications of such broad-based regional trade initiatives in Asia, highlighting the bridging of the East and South Asian economies. We place emphasis on the alternative prospects for insider and outsider countries. We work with a global general equilibrium model of the world economy, benchmarked to a projected 2017 sets of trade and production patterns. We also work with gravity-model based estimates of trade costs linked to infrastructure, and of barriers to trade in services. Taking these estimates, along with tariffs, into our CGE model, we examine regionally narrow and broad agreements, all centered on extending the reach of ASEAN to include free trade agreements with combinations of the northeast Asian economies (PRC, Japan, Korea) and also the South Asian economies. We focus on a stylized FTA that includes goods, services, and some aspects of trade cost reduction through trade facilitation and related infrastructure improvements. What matters most for East Asia is that China, Japan, and Korea be brought into any scheme for deeper regional integration. This matter alone drives most of the income and trade effects in the East Asia region across all of our scenarios. The inclusion of the South Asian economies in a broader regional agreement sees gains for the East Asian and South Asian economies. Most of the East Asian gains follow directly from Indian participation. The other South Asian players thus stand to benefit if India looks East and they are a part of the program, and to lose if they are not. Interestingly, we find that with the widest of agreements, the insiders benefit substantively in terms of trade and income while the aggregate impact on outside countries is negligible. Broadly speaking, a pan-Asian regional agreement would appear to cover enough countries, with a great enough diversity in production and incomes, to actually allow for regional gains without substantive third-country losses. However, realizing such potential requires overcoming a proven regional tendency to circumscribe trade concessions with rules of origin, NTBs, and exclusion lists. The more likely outcome, a spider web of bilateral agreements, carries with it the prospect of signficant outsider costs (i.e. losses) both within and outside the region.
    Keywords: ASEAN; Asian FTAs; gravity model of services; preferential trade; regionalism; trade costs and infrastructure
    JEL: F13 F17
    Date: 2008–09
    URL: http://d.repec.org/n?u=RePEc:cpr:ceprdp:6976&r=cwa
  17. By: Mahmood Messkoub
    Abstract: This paper  provides an assessment of economic growth, employment and poverty reduction in the Arab MENA region. Considering the high rate of unemployment (especially the youth unemployment) and poverty in most countries in the region employment and poverty impacts of growth are of particular concern to policy makers. In the short run for employment growth to be faster than output growth the employment elasticity of growth has to be greater than unity. This is an important condition that is rarely satisfied across all sectors and countries in the region, for good analytical and empirical reasons. For example growth in high productivity sectors will not boost total employment nor reduce poverty substantially in the short run, yet growth in high productivity sectors is essential for accumulation and long term growth. Moreover, if the poor were to benefit from an employment policy they should have been integrated in the sectors where jobs are created – the so called integrability condition of the ‘employment-poverty nexus. Public work projects have been one of the main short term instruments of job creation for the poor in the region, but there the long term impact on poverty has varied and depended crucially on their sustainability, their contribution to improving local infrastructure and economies. These mixed results in no way invalidate the importance of economic growth for unemployment and poverty reduction, but brings into focus the importance of going beyond short term policies for job creation and poverty reduction as well as complementing such policies with social policies both for poverty alleviation and improving skill levels of the work force.
    Keywords: economic growth, employment, unemployment, poverty, poverty alleviation, Middle East, North Africa
    Date: 2008
    URL: http://d.repec.org/n?u=RePEc:iss:wpaper:460&r=cwa
  18. By: Louis S. Thompson
    Abstract: This paper looks in detail at the cases of two countries that exhibit extreme cases of transport organization. In both countries, the railway and most of the ports are under unitary control, with essentially no regulation and only limited information available to assess behavior. If economies of scale are important, if the “integration” achieved by organizational unification is truly beneficial, and if competition is not needed to limit the behavior of the unified organizations, then these countries should be at the cutting edge of system performance, with high efficiency, low costs and excellent service. If the reverse is true, then they furnish at least a few data points for the analysis of the importance of diversity of organization and competition within the system.
    Date: 2009–02
    URL: http://d.repec.org/n?u=RePEc:oec:itfaaa:2009/5-en&r=cwa

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