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on Central and Western Asia |
| By: | Pradhan, Jaya Prakash |
| Abstract: | Indian outward FDI flows have declined in 2008 and the first half of 2009. The global financial and economic crisis appears to have seriously dented overseas investment plans of emerging Indian multinationals. This paper looks at the trends and patterns of Indian OFDI flows in the current crisis period, what led to its slowdown, how Indian multinationals have fared, and what is their revival prospect. |
| Keywords: | India; Outward FDI; Multinationals; Economic Crisis |
| JEL: | E32 O53 F23 G34 F21 |
| Date: | 2009–07–23 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:12324&r=cwa |
| By: | NR, Bhanumurthy |
| Abstract: | The present study tries to understand the trends and determinants of economic growth in Indian states. For this, it considers two important determinants such as infrastructure and financial development. With the help of panel time series models, the study concludes that although both the variables are highly correlated with economic growth, it is the social sector development that is having higher impact on the economic growth. In terms of the role of financial sector, the results show that although it is necessary to have development in terms of increase in number of bank branches, it is the extent of bank business that is more important in the growth process. |
| Keywords: | Growth; Infrastructure; Financial Development; Panel Time Series; India |
| JEL: | H54 N20 O16 F43 |
| Date: | 2009–05–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:16478&r=cwa |
| By: | Singh, Nirvikar |
| Abstract: | This paper examines India.s development strategy, and to what extent it may be considered a success. It provides a brief history of why and how the strategy was adopted, as well as of its implementation, including the role of initial conditions, such as human capital, geographical location, and infrastructure. It analyses the extent and reasons for success of the strategy, including policy, political economy, timing, and linkage of the strategy to economy-wide development. Particular attention is given to the relative roles of domestic and international actors, including the part played by foreign investment, trade, and other dimensions of openness. The paper considers the extent to which the strategy remains viable for the future, the challenges still faced, and what other strategies might be required. It concludes with possible lessons for |
| Keywords: | Development strategy, industrial policy, political economy, economic development |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:rp2009-31&r=cwa |
| By: | Das, Rituparna Das |
| Abstract: | Against the backdrop of interest rate risk in the fixed income portfolios of the financial institutions in India that arose since the first quarter of the current financial year 2008-09 the influence of monetary policy on the term structure emerged as an important issue for research purposes. In this context the findings in this paper are (i) strongest sensitivity of the term structure at the short end compared to other parts to expected changes in monetary policy, (ii) existence of unutilized arbitraged opportunities in the case of short term securities in absence of stripping, (iii) a mitigating tendency in the fluctuations of Nelson-Siegel-Svensson short rate and the proxy monetary policy rate during the post sample period and (iv) existence of a fear among the market participants about the future liquidity conditions during the last quarter of 2007-08. |
| Keywords: | term structure; liquidity; monetary policy; Nelson-Siegel-Svensson; Vasicek; federal funds target rate; MIBOR |
| JEL: | E43 E52 |
| Date: | 2009–07–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:16436&r=cwa |
| By: | Nadia Zakir (Pakistan Institute of Development Economics, Islamabad); Muhammad Idrees (Quaid-i-Azam Univesity, Islamabad) |
| Abstract: | The present study investigates the trends in inequality, welfare, and growth based on per capita household income/consumption in Pakistan, both its rural and urban areas, from 1963-64 to 2004-05. It employs Gini coefficient to measure inequalities and the Sen welfare index to estimate welfare. Real per capita mean incomes/consumption are worked out to analyse growth. The study finds fluctuating trends in inequality, and rising trends in both welfare and growth. In general, inequality, welfare, and growth remain higher in the urban areas. The study finds income inequality to be more severe as compared to consumption inequality. |
| Keywords: | Income Distribution, Welfare, Per Capita Income, Gini Coefficient, Pakistan |
| JEL: | D31 D63 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:pid:wpaper:2009:53&r=cwa |
| By: | Asghar, Zahid |
| Abstract: | Causality is important for empirical analysis in economics but not easily detected. Therefore, it is always important that one should investigate the problem not only on statistical grounds but also add extra statistical information which may come from economic events happening over a time about the problem under study. This extra statistical information helps in introducing asymmetry in the relationship. Most of the studies are based on Granger Causality for determining causal direction between export and economic growth for individual countries. In this paper we use a method suggested by Hoover (2001) for detecting causality which incorporates extra statistical information, economic theory and statistical analysis. We apply this technique to a simulated data and also apply it to the export-led growth hypothesis for India. Our results indicate that there is unidirectional causality from export to economic growth. |
| Keywords: | Structural Causality; Conditional and Marginal probability distributions; Granger Causality; Export Led Economic Growth |
| JEL: | E00 C01 |
| Date: | 2009–07–27 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:16429&r=cwa |
| By: | Johan Fourie (Department of Economics, University of Stellenbosch); Dieter von Fintel (Department of Economics, University of Stellenbosch) |
| Abstract: | One reason for the relatively poor development performance of many countries around the world today may be the high levels of inequality during and after colonisation. Evidence from colonies in the Americas suggests that skewed initial factor endowments could create small elites that owned a disproportionate share of wealth, human capital and political power. The Cape Colony, founded in 1652 at the southern tip of Africa, presents a case where a mercantilist company (the Dutch East India Company) settles the land and establishes a unique set of institutions within which inequality and development evolve. This paper provides a long-run quantitative analysis of trends in asset-based inequality (using Principle Components' Analysis on tax inventories) during the seventeenth and eighteenth century, allowing, for the first time, a dynamic rather than static analysis of inequality trends in a newly settled and pre-industrial society over this period. While theory testing in other societies has been severely limited because of a scarcity of quantitative evidence, this study presents a history with evidence, enabling an evaluation of the Engerman-Sokoloff and other hypotheses. |
| Keywords: | South Africa, settler societies, Kuznets, income distribution, asset index, institutions, mercantilism, Dutch East India Company |
| JEL: | N37 D31 D63 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:sza:wpaper:wpapers90&r=cwa |
| By: | Mughal, Mazhar |
| Abstract: | We study the effects of FDI inflows on the Pakistani economy over the period 1961-2005 using the Johansen co-integration technique and the Vector Error Correction Model. We determine that FDI does have a positive effect on the economy, particularly in the short term. Foreign investment is found to have a less important role than domestic investment. However, FDI impacts negatively on human capital. We can thus say that FDI has neither been an absolute boon nor a downright bane for Pakistan. On étudie l'impacte des IDE sur l'économie Pakistanaise pendant la période 1961-2005 en utilisant la technique de cointégration de Johansen et le VECM. On trouve que les IDE ont un effet positif sur l'économie particulièrement à court terme. Les investissements étrangers ont un rôle moins important que celui des investissements domestiques. En revanche, l'impacte sur le capital humain est négatif. Par conséquent, on peut conclure que les IDE ont été ni bénéfiques, ni néfastes. |
| Keywords: | Foreign direct investment; Economic growth; Pakistan; Human capital; Domestic investment. |
| JEL: | F21 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:16468&r=cwa |
| By: | Prasad, Eswar (Cornell University) |
| Abstract: | Rebalancing growth patterns of Asian economies is an important component of the overall rebalancing effort that will be required in the world economy. In this paper, I provide an empirical characterization of the composition of GDP levels and growth rates for the key emerging markets and other developing economies in Asia. China has by far the lowest share of private consumption to GDP in Asia and, during this decade, has recorded the lowest rate of employment growth relative to GDP growth. Investment growth has dominated GDP growth in China during this decade but is also important in the cases of India and Vietnam. To examine the global implications of domestic growth patterns in Asia, I analyze saving-investment balances, the composition of national savings, and the determinants of the evolution of household saving rates. During 2000-08, household saving rates (relative to household income) have risen gradually in China and India but fallen sharply in Korea. Corporate savings have surged across Asia during this period, becoming the main component of gross national savings in the region. In terms of sheer magnitudes, China's national savings and current account surpluses dominate the region's saving-investment balances. China accounts for just under half of GDP in Asia ex-Japan, but accounts for 60 percent of total gross national savings and nearly 90 percent of the current account surplus of the region. Finally, I discuss some policy implications that come out of the analysis on how to shift the patterns of growth, especially in China, from a welfare-enhancing perspective. |
| Keywords: | growth contributions, national savings and investment, current account balance, welfare consequences of growth |
| JEL: | E2 F3 F4 |
| Date: | 2009–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4298&r=cwa |
| By: | Rashida Haq (Pakistan Institute of Development Economics, Islamabad); Uzma Zia (Pakistan Institute of Development Economics, Islamabad) |
| Abstract: | Economic growth is a driving force in reducing poverty, but experience has shown that good governance and pro-poor choices are vitally important in the process of alleviating poverty. This paper explores linkages between governance and pro-poor growth in Pakistan for the period 1996 to 2005. The analysis indicates that governance indicators have low scores and rank at the lowest percentile as compared to other countries. The dimensions of pro-poor growth, which include poverty, inequality, and growth, demonstrate that the poor do not benefit proportionately from economic growth. It is found that poverty and inequality have worsened and the share in income and expenditure for the bottom 20 percent has also decreased, while inflation for this lowestincome group is high as compared to the highest-income group. It is also observed that approximately 25 percent households reported that their economic status was worse than in the previous year, 2004-05. The results of the study show that a strong link exists between governance indicators and pro-poor growth in the country. Econometric analysis shows that there is a strong relationship between good governance and reduction in poverty and inequality. It is concluded that greater voice and accountability, political stability, regulatory quality, and rule of law can control corruption and the pro-poor policies, which ultimately reduce poverty and inequality in the long run. To face the challenge of good governance, Pakistan needs to formulate, and implement effectively, its governance policies to improve the governance dimensions, taking account of both higher growth and the aim of achieving the Millennium Development Goals, which require halving poverty by 2015. |
| Keywords: | Governance Indicators, Pro-poor Growth, Poverty, Inequality |
| JEL: | I30 I32 O10 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:pid:wpaper:2009:52&r=cwa |
| By: | Mohammad Irfan (International Islamic University, Islamabad) |
| Abstract: | This paper attempts to document changes in the wage levels of different categories of workers employed in various segments of the labour market during the period 1990-91–2006-07, according to the information given in the labour force surveys. Wage structure can be analysed from different angles. Here we look at the levels and trends in the broad categories of industry. Further subdivided along the demarcation of formal/informal, and by worker characteristics such as age, sex, education, and occupational categories. Largescale Manufacturing Industries, Banking Sector, and Civil Servants’ salary structure are subjected to investigation for disuring wage trends in the formal sector. The impact of unionism and of the labour and wage policies of various regimes and upon wage outcome is also assessed. There appears to be a consonance between money wage growth at the aggregate level of the economy and GDP growth. The former registered a positive growth, with the exception of the 1999-2002 period, when the latter had low growth. Time trend of average wage works out to 7.6 percent, which, adjusted for inflation, yields a 0.7 percent trend growth rate in real wages for the 1990-07 period. Real wage growth rate at the aggregative level is characterised by substantial diversity. One finds an inverse relationship between the level of wage rate and real wage growth. Thus workers in the informal sector and commodity producing sectors like Agriculture and Manufacturing suffered a real wage decline during the period under study. That the real wage gains were denied to the majority of the workers (60 percent or so) lying at the lower rung of the wage distribution rendered the wage structure iniquitous wherein duality further accentuated. The character of the regime tends to have its mark. During the 1990s, the political leadership notwithstanding, low GDP growth and Pressler Amendment appeared to have sympathetic attitude towards labour, which was visible in the virulence of trade unions as well as announcement of the Minimum Wage Policy during early 1990s. However, in the context of labour supply pressure and subdued economic performance, stagnation and decline in real wage could not be avoided. In contrast, there hardly has been any sizeable positive impact on the real wages of the informal sector workers since the turnaround of the economy in 2003. The governmental attitude was reflective of the follow-up of the imperatives of globalisation, weakening of trade unions, and introduction of the changes in the procedures governing the tripartite mechanism and formulation of labour and wage policy. The need to have a fresh look at the labour and wage policy to ensure sustenance and to address inequality issues can hardly be overemphasised. |
| Keywords: | Wages; Wage Structure; Pakistan |
| JEL: | J3 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:pid:wpaper:2009:54&r=cwa |
| By: | Wodon, Quentin; Ying, Yvonne |
| Abstract: | This paper provides a comparative assessment of the market share, reach to the poor, and performance of faith-based and public schools in Sierra Leone using data from the 2004 Integrated Household Survey. One-third of primary school students attend government schools and more than half are in faith-based government-assisted schools. Faith-based schools tend to serve children who live in poverty more than public schools, and after controlling for student and household characteristics and school choice, they also perform slightly better than public schools. |
| Keywords: | Primary education; faith-based; poverty; performance; Sierra Leone |
| JEL: | Z12 H11 I21 L33 H44 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:16462&r=cwa |
| By: | Yochanan Shachmurove (Department of Economics, University of Pennsylvania) |
| Abstract: | The Sultanate of Oman has a diversified economy, unlike many of its neighboring nations that rely almost entirely on oil revenues. Natural gas and several non-energy business sectors, such as tourism, fishing, light manufacturing, and agriculture are expanding rapidly. The Omani economy is one of the freest in its region. A relatively stable government and low taxes make Oman a desirable location for entrepreneurial ventures. Furthermore, foreign direct investment is welcomed. Tourism is the most attractive area for international entrepreneurs. Oil revenues, coupled with increasing foreign investment are likely to both diversify the Omani economic base and strengthen it. |
| Keywords: | Entrepreneurship; Small and Medium Sized Enterprises (SMEs); Business Ventures; Oman; Middle East; Oil; Tourism; Natural Gas; Foreign Direct Investment; Index of Economic Freedom; Oman-U.S. Free Trade Zone |
| JEL: | D23 E0 F14 F16 F23 F3 G2 K33 L26 L83 O1 O53 P1 P2 Q4 |
| Date: | 2009–07–20 |
| URL: | http://d.repec.org/n?u=RePEc:pen:papers:09-026&r=cwa |
| By: | M. Idrees Khawaja (Pakistan Institute of Development Economics, Islamabad); Sajawal Khan (State Bank of Pakistan, Karachi) |
| Abstract: | No society is devoid of institutions but many live with poor institutions. Institutions promote growth. This is a view now held firmly and widely. The task then is to ‘engineer’ growth-promoting institutions. Endogeneity characterises institutions; for example, groups enjoying political power influence economic institutions, but political power itself is a function of wealth. Given endogeneity, if the task is to design institutional reforms, the question then arises, as to what to reform first. We use the theories of institutional evolution put forth by Douglas North, Darron Acemoglu and Dani Rodrik and the historical experiences of different countries in the context of development (or non-development) of institutions, to determine the starting-point of institutional reforms, if the objective is to design institutional reforms. We argue that in Pakistan, neither large commercial interest nor fiscal constraints can force the de jure power to reform institutions. Typically, large commercial interests in Pakistan have thrived on favours from de jure power, and therefore do not have teeth. Given strategic interests of foreign powers, foreign aid will alleviate the fiscal constraint and the ruler-citizens bargain—though reforming institution in exchange for tax revenue will remain a dream. The country does not seem ready for a revolution either; the thought process that typically precedes revolutions seems to have barely begun. The alternative, that remains, then is the gradualist approach preferred by North, Acemoglu, and Rodrik. Institutional reforms in Pakistan should begin with reform of the educational system—the introduction of a common educational system for all and sundry up to a certain level. Two reasons make us chose the educational system as the candidate to start the process of institutional reform. First, a common educational system will produce a shared value system which, in turn, will reduce the heterogeneity in the society. Lesser heterogeneity in society will then facilitate an agreement over the minimal set of institutional reforms. Second, politicians being myopic, the de jure power is more likely to concede to the demand for reform of the educational system as compared to the demand to, say, put an end to rent-seeking. The former will affect the de jure power a generation hence, while the latter will affect them today. |
| Keywords: | Institutional Evolution, Institutional Change, Human Behaviour |
| JEL: | D02 P16 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:pid:wpaper:2009:50&r=cwa |
| By: | Yochanan Shachmurove (Department of Economics, University of Pennsylvania) |
| Abstract: | The State of Qatar is driven mainly by hydrocarbon revenues, which are estimated to support this tiny country for hundreds of years. The Qatari economy is becoming diversified with industries such as manufacturing, banking, social services, and tourism. Additionally, government financed health and educational services have increased rapidly. However, the Qatari government is not able to establish necessary laws and procedures which business requires. Despite recent changes, Qatari laws and regulations are not always friendly towards business ventures or foreign investment, hindering economic growth. Furthermore, enforcement of existing business regulations and rules are occasionally lacking. |
| Keywords: | Entrepreneurship; Small and Medium Sized Enterprises; Business Ventures; Qatar; Middle East; Oil; Tourism; Natural Gas; Foreign Direct Investment; Index of Economic Freedom |
| JEL: | D23 E0 F14 F16 F23 F3 G2 K33 L26 L83 O1 O53 P1 P2 Q4 |
| Date: | 2009–07–20 |
| URL: | http://d.repec.org/n?u=RePEc:pen:papers:09-025&r=cwa |
| By: | Grancay, Martin |
| Abstract: | The paper introduces a concept of airport competitiveness index. The index consists of numerous indicators grouped into four categories: market potential, infrastructure, charges and recent traffic results. Another important factor we take into account is safety. We find that from the selected sample the most competitive airports are Singapore Changi, New York Kennedy, Newark Liberty and Dubai International. U.S. and South-East Asian airports in general are among the most competitive. |
| Keywords: | airport; air traffic; airport competitiveness index |
| JEL: | L93 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:16488&r=cwa |