Template-Type: ReDIF-Article 1.0
Author-Name: Mahmood Hasan Khan
Author-X-Name-First: Mahmood Hasan
Author-X-Name-Last: Khan
Author-Workplace-Name: Department of Economics, Simon Fraser University, Canada.
Title: Agricultural 'Crisis' in Pakistan: Some Explanations and Policy Options
Abstract: This paper is about public policy and agricultural growth in Pakistan. The
author takes the position that, in a historical perspective, public policy has been a
large part of the erratic, maybe unsustainable, growth of agriculture in Pakistan. The
most important policy issue, therefore, is to radically restructure the existing
bureaucratic, patronage-ridden, rent-seeking, and wasteful system of institutions and
services. Governments have been far too active in some areas and far too inactive in
others, affecting perversely farm productivity and farmers' economic well-being. The
flaws in public policy reflect two important aspects of governments: (i) their
inability—reflecting both inadequate will and administrative capacity—to implement
what needs to be done and (ii) their wrong diagnosis of, hence prescription for, the
problems.
Journal: The Pakistan Development Review
Pages: 419-466
Volume: 36
Issue: 4
Year: 1997
File-URL: http://www.pide.org.pk/pdf/PDR/1997/Volume4/419-466.pdf
File-Format: Application/pdf
Handle: RePEc:pid:journl:v:36:y:1997:i:4:p:419-466
 
Template-Type: ReDIF-Article 1.0
Author-Name: Razzaque H. Bhatti
Author-X-Name-First: Razzaque H.
Author-X-Name-Last: Bhatti
Author-Workplace-Name: International Institute of Islamic Economics, International Islamic University, Islamabad.
Title: Do Expectations Play Any Role in Determining Pak Rupee Exchange Rates?
Abstract: This paper presents some evidence on the role of expectations in the determination of
Pak rupee exchange rates vis-à-vis the dollar, pound, and yen over the period 1982:1–
1993:7. Results of cointegration and coefficient restriction tests in two out of three cases are
supportive of the view of exchange rate determination in postulating that in efficient markets
in which uncertainty and expectations about the future are dominant, the equilibrium
nominal exchange rate is determined not only by current relative prices but also by the
expected real exchange rate. These results are supportive of ex ante purchasing power
parity, implying that the real exchange rate follows a random walk. These results also
suggest that the anticipated inflation rate is higher in Pakistan than in other countries, which
tends to encourage the domestic residents to convert their current balances into foreign
currency, so that the terms of trade deteriorate and offset much of gains of the continuous
devaluation of Pak rupee by undermining external competitiveness.
Journal: The Pakistan Development Review
Pages: 263-273
Volume: 36
Issue: 3
Year: 1997
File-URL: http://www.pide.org.pk/pdf/PDR/1997/Volume3/263-273.pdf
File-Format: Application/pdf
Handle: RePEc:pid:journl:v:36:1997:i:3:p:263-273
 
Template-Type: ReDIF-Article 1.0
Author-Name: Mark Speece
Author-X-Name-First: Mark
Author-X-Name-Last: Speece
Author-Workplace-Name: School of Management, Asian Institute of Technology, Bangkok, Thailand.
Title: Economic Policy and Desertification in Arid and Semi-arid Developing Countries
Abstract: Environmental degradation in arid and semi-arid regions often results from trade-offs
between immediate and long-term needs. Ecological (and ultimately economic) benefits of
restrained, sustainable resource use are well-understood by scientists, and are usually
apparent to local farmers and herders as well. However, immediate economic needs often
conflict, and excessive exploitation of resources may be necessary to subsistence producers’
survival. Such issues are illustrated in a variety of settings. Solutions to problems containing
important economic components require appropriate economic policies, as well as technical
action. Long-term sustainable resource utilisation rather than short-term exploitation must
be made more attractive to local producers in their daily lives.
Journal: The Pakistan Development Review
Pages: 191-201
Volume: 36
Issue: 2
Year: 1997
File-URL: http://www.pide.org.pk/pdf/PDR/1997/Volume2/191-201.pdf
File-Format: Application/pdf
Handle: RePEc:pid:journl:v:36:y:1997:i:2:p:191-201
 
Template-Type: ReDIF-Article 1.0
Author-Name: Abid A. Burki
Author-X-Name-First: Abid A.
Author-X-Name-Last: Burki
Author-Workplace-Name: =Department of Economics, Quaid-i-Azam University, Islamabad.
Title: Estimating Consumer Preferences for Food, Using Time Series Data of Pakistan
Abstract: Consumer preferences for food and non-food items in Pakistan are frequently estimated
by using data from the household surveys. However, structural change in consumer
preferences, caused by changes in tastes, can be studied by using the annual time series data,
a time series of cross sections, or the panel data. This paper uses Pakistan’s annual time
series disappearance data for eight food commodities from 1972 to 1991 to study consumer
behaviour. The existence and the nature of structural change is tested by using both the
generalised axiom of revealed preference (GARP) and the first-difference LA/AIDS model.
It turns out that GARP tests are low-powered as tests of structural change on our data-set.
However, the results from the LA/AIDS model show a shift in consumer demand from gram
(split) to chicken after 1982. The data set satisfies symmetry and homogeneity. The
estimates of price and income elasticities are also consistent with economic theory. The
implications of these results for policy are also discussed.
Journal: The Pakistan Development Review
Pages: 131-153
Volume: 36
Issue: 2
Year: 1997
File-URL: http://www.pide.org.pk/pdf/PDR/1997/Volume2/131-153.pdf
File-Format: Application/pdf
Handle: RePEc:pid:journl:v:36:y:1997:i:2:p:131-153
 
Template-Type: ReDIF-Article 1.0
Author-Name: Zafar Iqbal
Author-X-Name-First: Zafar
Author-X-Name-Last: Iqbal
Author-Workplace-Name: Pakistan Institute of Development Economics, Islamabad.
Title: Foreign Aid and the Public Sector: A Model of Fiscal Behaviour in Pakistan
Abstract: The main aim of this paper is to demonstrate the impact of foreign capital inflows on
government’s fiscal behaviour in Pakistan. Government’s fiscal response is measured in
terms of social, non-development, and development expenditures as well as revenues. This
paper specifies and estimates a fiscal behaviour model for the period 1976–95. The threestage
least squares results suggest that foreign capital flows into the public sector have strong
positive impact on social and non-development expenditures and, in contrast to what the
government and donor agencies believe, have little effect on development spending. In other
words, proceeds from foreign loans and aid are largely consumed rather than invested
productively. The results also reveal the strong substitutable interdependence between social
and non-development expenditures. Furthermore, the finding clearly demonstrates that
foreign assistance causes a strong shift of public domestic resources from development
projects to non-development activities. In addition to the above, the results show that a large
fraction of government revenues is used to finance social and non-development
expenditures. The results also demonstrate that foreign assistance enhances taxation efforts
of the Government of Pakistan.
Journal: The Pakistan Development Review
Pages: 115-129
Volume: 36
Issue: 2
Year: 1997
File-URL: http://www.pide.org.pk/pdf/PDR/1997/Volume2/115-129.pdf
File-Format: Application/pdf
Handle: RePEc:pid:journl:v:36:y:1997:i:2:p:115-129
 
Template-Type: ReDIF-Article 1.0
Author-Name: Zubair Tahir
Author-X-Name-First: Zubair
Author-X-Name-Last: Tahir
Author-Workplace-Name: International Irrigation Management Institute (IIMI), Pakistan.
Author-Name: Khalid Riaz
Author-X-Name-First: Khalid
Author-X-Name-Last: Riaz
Author-Workplace-Name: UN Department of Economic and Social Affairs, Sustainable Water Resources Management Project, Yemen.
Title: Integration of Agricultural Commodity Markets in Punjab
Abstract: Efficiency of resource allocation in agriculture depends on the functioning of
commodity markets. Although the larger markets that are better connected with the
transport and communication network are expected to be well-integrated, the same cannot
be said about the smaller, more remote markets. This paper tests integration of
agricultural commodity markets in Southeastern Punjab. The region is located off the
main trading axis of Pakistan, the Peshawar-Karachi highway, and is mostly served by
relatively small markets known as mandis. This study focuses on markets for cotton,
wheat, and rice in five towns in the region. Cotton and wheat are the main crops in the
area while rice is mostly grown as part of crop rotation aimed at controlling salinity. The
analytical framework developed by Ravallion was used to conduct tests of market
integration for the three selected commodities. Within this framework, it is possible to
test for short-run integration, long-run integration or complete market segmentation. The
results indicate that, generally, markets are integrated only in the long run, with short-run
integration limited to some special cases. Moreover, the smaller markets are more likely
to be isolated as compared to the larger markets. The small markets also take longer to
fully adjust to the price shock originating from a more dominant central market. Finally,
in the case of rice, it is more likely that a market would be isolated if it were small. This
implies that farmers’ incentives to grow rice as a means of combating salinity may be
constrained by local demand conditions.
Journal: The Pakistan Development Review
Pages: 241-262
Volume: 36
Issue: 3
Year: 1997
File-URL: http://www.pide.org.pk/pdf/PDR/1997/Volume3/241-262.pdf
File-Format: Application/pdf
Handle: RePEc:pid:journl:v:36:y:1997:i:3:p:241-262
 
Template-Type: ReDIF-Article 1.0
Author-Name: Pervez Hasan
Author-X-Name-First: Pervez
Author-X-Name-Last: Hasan
Author-Workplace-Name: World Bank, and The Government of West Pakistan.
Title: Learning from the Past: A Fifty-year Perspective on Pakistan's Development
Abstract: In some ways, Pakistan’s economic growth since 1947 has been
remarkable. The country’s economic viability was considered, in some quarters,1
in serious doubt at its emergence, but it has managed, despite a quadrupling of
the population, to bring about significant improvement in the average living
standards. Per capita GNP growth, on average around 2 percent per annum over a
long stretch of nearly fifty years, has been the best among countries of the
subcontinent. This growth has meant an increase in average income of about 150
percent over 1950–96. But Pakistan, like many other developing countries, has
not been able to narrow the gap between itself and rich industrial nations which
have grown faster on a per head basis. Also, Pakistan has lost substantial
economic ground to the rapidly growing economies of East Asia notably China,
South Korea, Thailand, Malaysia and Indonesia. In 1960, South Korea’s per
capita income was only marginally ahead of Pakistan’s. In the short period of
one generation, Korea had an income level which on purchasing power parity
basis five times that of Pakistan in 1995. On the same basis, Thailand and
Malaysia enjoyed a per capita income advantage of 200 to 300 percent over
Pakistan.
Journal: The Pakistan Development Review
Pages: 355-402
Volume: 36
Issue: 4
Year: 1997
File-URL: http://www.pide.org.pk/pdf/PDR/1997/Volume4/355-402.pdf
File-Format: Application/pdf
Handle: RePEc:pid:journl:v:36:y:1997:i:4:p:355-402
 
Template-Type: ReDIF-Article 1.0
Author-Name: Rashid Amjad
Author-X-Name-First: Rashid
Author-X-Name-Last: Amjad
Author-Workplace-Name: International Labour Office, Geneva, Switzerland.
Author-Name: A.R. Kemal
Author-X-Name-First: A.R.
Author-X-Name-Last: Kemal
Author-Workplace-Name: The Planning Commission, Government of Pakistan, Islamabad.
Title: Macroeconomic Policies and their Impact on Poverty Alleviation in Pakistan
Abstract: The paper provides a consistent time-series of poverty estimates for the period 1963-
64 to 1992-93 for both the rural as well as the urban areas, examines the influence of macroeconomic
policies on the poverty levels, analyses the impact of Structural Adjustment
Programmes on the levels of poverty, and suggests a strategy for poverty alleviation in
Pakistan. The paper explores in particular the influence on poverty of such factors as
economic growth, agricultural growth, terms of trade for the agriculture sector, industrial
production, rate of inflation, employment, wages, remittances, and the tax structure. While
the paper cautions that on account of the limited number of observations the results of the
study should be interpreted cautiously, the study does suggest that the growth above a
threshold level of about 5 percent, increase in employment, and remittances are the most
important variables explaining the change in poverty over time. The paper also comes to the
conclusion that the policies pursued under the Structural Adjustment Programme have
tended to increase the poverty levels mainly because of decline in growth rates, withdrawal
of subsidies on agricultural inputs and consumption, decline in employment, increase in
indirect taxes, and decline in public expenditure on social services. The paper also outlines a
strategy for poverty eradication and argues that besides the safety nets, the employment
programmes, as well as promotion of informal sector enterprises, are essential.
Journal: The Pakistan Development Review
Pages: 39-68
Volume: 36
Issue: 1
Year: 1997
File-URL: http://www.pide.org.pk/pdf/PDR/1997/Volume1/39-68.pdf
File-Format: Application/pdf
Handle: RePEc:pid:journl:v:36:y:1997:i:1:p:39-68
 
Template-Type: ReDIF-Article 1.0
Author-Name: Hilton L. Root
Author-X-Name-First: Hilton L.
Author-X-Name-Last: Root
Author-Workplace-Name: Hoover Institution, Stanford University, USA.
Title: Pakistan's Managerial Dilemmas
Abstract: Discretion without accountability is deeply rooted in Pakistan's political history,
profoundly shaping the country's administrative system. Pakistan's political institutions
offer the leadership many opportunities for violating citizen trust. Institutional change is
proposed as a tool for politicians to maintain their authority through policy reform rather
than patronage. Institutions are needed that allow politicians to lead while preserving the
impartiality, permanence, and expertise of a public bureaucracy.
Journal:Pakistan Development Review
Pages: 467-496
Volume: 36
Issue: 4
Year: 1997
File-URL: http://www.pide.org.pk/pdf/PDR/1997/Volume4/467-496.pdf
File-Format: Application/pdf
Handle: RePEc:pid:journl:v:36:y:1997:i:4:p:467-496
 
Template-Type: ReDIF-Article 1.0
Author-Name: Gustav Ranis
Author-X-Name-First: Gustav
Author-X-Name-Last: Ranis
Author-Workplace-Name: Yale Centre for International and Area Studies, Yale University, USA.
Author-Name: Frances Stewart
Author-X-Name-First: Frances
Author-X-Name-Last: Stewart
Author-Workplace-Name: Queen Elizabeth House, International Development Centre, Oxford University, UK.
Title: Growth and Human Development: Pakistan in Comparative Perspective
Abstract: This paper will, at the outset, present a conceptual framework which
constitutes an extension of the Human Development Report of 1996. Then in
Section III, it will offer some cross-country as well as country-specific, particularly
Pakistan-specific, evidence. In Section IV it will examine some possible reasons
thrown up by the conceptual framework as to why Pakistan's performance has
indeed been "mixed". Finally, in Section V, it suggests a few actions Pakistani
policy-makers might consider if the past unsatisfactory situation is to be repaired.
Journal: The Pakistan Development Review
Pages: 333-352
Volume: 36
Issue: 4
Year: 1997
File-URL: http://www.pide.org.pk/pdf/PDR/1997/Volume4/333-352.pdf
File-Format: Application/pdf
Handle: RePEc:pid:journl:v:36:y:1997:i:4:p:333-352
 
Template-Type: ReDIF-Article 1.0
Author-Name: G.M. Arif
Author-X-Name-First: G.M.
Author-X-Name-Last: Arif
Author-Workplace-Name: Pakistan Institute of Development Economics, Islamabad.
Author-Name: M. Irfan
Author-X-Name-First: M.
Author-X-Name-Last: Irfan
Author-Workplace-Name: Pakistan Institute of Development Economics, Islamabad.
Title: Return Migration and Occupational Change: The Case of Pakistani Migrants Returned from the Middle East
Abstract: This paper examines the factors affecting occupational composition of Pakistani
workers upon their return from Middle East employment by using the 1986 ILO/ARTEP
Survey of Return Migrant Households. In view of the concentration of workers in lowstatus
occupations prior to migration, there was a great incentive for them to change
these occupations after return. The study shows that the economic resources gained from
overseas employment gave migrants the strength to seek independent employment, and
there was a clear move out of the production-service occupations into business and
agriculture occupations. This movement was strongly related to migrants’ length of stay
in the Middle East. Since the occupational structure of the general population remained
almost unchanged in the 1970s and 1980s, the employment trends exhibited by return
migrants could largely be attributed to overseas migration. However, the study shows
that businesses and farms established by migrant workers were small-scale.
Journal: The Pakistan Development Review
Pages: 1-37
Volume: 36
Issue: 1
Year: 1997
File-URL: http://www.pide.org.pk/pdf/PDR/1997/Volume1/1-37.pdf
File-Format: Application/pdf
Handle: RePEc:pid:journl:v:36:y:1997:i:1:p:1-37
 
Template-Type: ReDIF-Article 1.0
Author-Name: S.M. Younus Jafri
Author-X-Name-First: S.M. Younus
Author-X-Name-Last: Jafri
Author-Workplace-Name: Federal Bureau of Statistics, Islamabad.
Author-Name: Raishad
Author-X-Name-First: Raishad
Author-Workplace-Name: Federal Bureau of Statistics, Islamabad.
Title: Some Dimensions of Child Labour in Pakistan
Abstract: Child Labour between 5–14 years is prevalent in Pakistan. But no reliable and
comprehensive data on this age group are available to tackle this issue. Though the Labour
Force Survey, the main source of labour statistics, includes information on workforce above
the age of 10 years, no study on the nature and extent of child labour between 10–14 years of
age is available. Accordingly, this study, based on micro data of three labour force surveys
from 1990-91 to 1992-93, has been carried out to fill this gap. The study indicates that the
quantum of child labour age cohort of 10–14 years grew from 1.8 million in 1990-91 to 2
million in 1992-93. The growth of girl workers is higher as compared to boys. Industrial
structure shows that at the national level and in the rural area, agriculture engaged the
maximum number of children, followed by services, whereas in the urban area the services
sector dominated. As for employment status, most of the children are unpaid family helpers.
The occupational pattern indicates that the majority of them work on farms and on production
activities. The data reveals that about three-fourths worked beyond the normal 35 hours per
week. It is observed that in order to gain a deeper insight into the socio-economic
characteristics of child labour, particularly that between 5–14 years, and the hazardous work
performed by them, independent household and establishment surveys are imperative.
Journal: The Pakistan Development Review
Pages: 69-86
Volume: 36
Issue: 1
Year: 1997
File-URL: http://www.pide.org.pk/pdf/PDR/1997/Volume1/69-86.pdf
File-Format: Application/pdf
Handle: RePEc:pid:journl:v:36:y:1997:i:1:p:69-86
 
Template-Type: ReDIF-Article 1.0
Author-Name: Sayed Afzal Peerzade
Author-X-Name-First: Sayed Afzal
Author-X-Name-Last: Peerzade
Author-Workplace-Name: Centre for Islamic Studies, Jamia Hazrat Hashimpeer, Bijapur, India.
Title: The Definition and Measurement of Poverty: An Integrated Islamic Approach
Abstract: In this paper an attempt is made to learn as to how the Islamic shariah defines and
measures the phenomenon of poverty. A systematic study of the Qur’an, the traditions of Holy
Prophet Muhammad (peace be upon him), the conduct of righteous caliphs, and the writings of
early Muslim jurists would make it clear that the poor, indigent, and destitute are given
adequate importance. The early Islamic state, where necessary, made serious efforts to assist
and rehabilitate the poor and the needy. One of the means of assistance and rehabilitation was
zakat. The disbursement of zakat funds required that the poor should be unambiguously and
convincingly separated from the non-poor. How was it done in the past? Traditions of the
Prophet (the sunnah) throw sufficient light on this issue. When we carefully go through the
traditions, it would be clear that the explanation of poverty as given by the Prophet is dynamic.
It defies time and space limitations. A deeper probe of the traditions would reveal that, for all
practical purposes, the Prophet has stressed on an integrated approach. His explanation is far
more comprehensive, integrated, and meaningful than the one expressed today in terms of
daily intake of certain minimum calories. Present-day Muslim countries should redefine their
approach towards the definition and measurement of poverty to reflect the essence of Islamic
shariah.
Journal: The Pakistan Development Review
Pages: 87-97
Volume: 36
Issue: 1
Year: 1997
File-URL: http://www.pide.org.pk/pdf/PDR/1997/Volume1/87-97.pdf
File-Format: Application/pdf
Handle: RePEc:pid:journl:v:36:y:1997:i:1:p:87-97
 
Template-Type: ReDIF-Article 1.0
Author-Name: Syed Muhammad Tariq
Author-X-Name-First: Syed Muhammad
Author-X-Name-Last: Tariq
Author-Workplace-Name: State Bank of Pakistan, Karachi.
Author-Name: Kent Matthews
Author-X-Name-First: Kent
Author-X-Name-Last: Matthews
Author-Workplace-Name: Cardiff Business School, University of Wales College of Crdiff, Cardiff, Wales, UK.
Title: The Demand for Simple-sum and Divisia Monetary Aggregates for Pakistan: A Cointegration Approach
Abstract: Financial liberalisation and the advance of financial innovation in a number of
developed economies has been blamed for the break-down in the demand for money
based on simple sum measures. This break-down has prompted research into Divisia
measures of the demand for money. Like many developing countries, Pakistan is going
through a period of financial deregulation which goes hand in hand with financial
innovation due to increased competition in the banking industry. This paper employs the
methodology of cointegration to compare simple-sum and Divisia level estimates of the
demand for money for Pakistan for the period 1974Q4 to 1992Q4. Simple sum measures
of M1 and M2 were compared with Divisia versions. The paper reports little evidence in
support of the superiority of the Divisia monetary aggregates. Both types of measure
produce a stable demand for money and perform satisfactorily in post-sample stability
tests, although the Divisia measure appears to perform marginally better on conventional
statistical criteria. However, our conclusions have to be qualified by the limitations of the
data and the knowledge that the period of financial innovation and deregulation has been
relatively recent. The policy significance of the results suggests that currently there is no
advantage from switching from simple-sum to Divisia aggregates at the existing level of
official aggregation as the proper indicator of monetary policy. However, if financial
deregulation and innovation continues at the current pace, the Divisia aggregates may in
future prove to be the better indicator.
Journal: The Pakistan Development Review
Pages: 275-291
Volume: 36
Issue: 3
Year: 1997
File-URL: http://www.pide.org.pk/pdf/PDR/1997/Volume3/275-291.pdf
File-Format: Application/pdf
Handle: RePEc:pid:journl:v:36:y:1997:i:3:p:275-291
 
Template-Type: ReDIF-Article 1.0
Author-Name: Stephen Guisinger
Author-X-Name-First: Stephen
Author-X-Name-Last: Guisinger
Author-Workplace-Name: International Management at the University of Texas at Dallas, Ricardson, Texas, USA.
Title: The Effects of the Foreign Direct Investment: Liberalisation on Pakistan
Abstract: Pakistan for many years maintained strict controls on foreign direct
investment. However, over the past decade controls on foreign investment in
manufacturing have diminished sharply, though less so for the service sector. The
government continues to impose restrictions on foreign trade, which adversely affect
foreign direct investors in several ways. Nonetheless, Pakistan has moved a
substantial distance toward liberalising direct foreign investment.
There are two obvious policy issues related to foreign investment raised by
these developments. First, should Pakistan proceed further toward liberalisation and
at what pace? Second, with a liberalised investment sector, should Pakistan become
an active protagonist among developing countries for a multilateral agreement on
investment?
This paper explores the macroeconomic effects of foreign direct investment
liberalisation on developing countries that have yet to substantially and fully
liberalise. The principal focus will be on relatively short term effects—those changes
that will occur between one and five years after liberalisation, although long-term
effects are also discussed. Unfortunately, very little is known about the repercussions
of foreign direct investment liberalisation on host economies. There is a rich
literature on the effects of trade policy liberalisation on macroeconomic variables.
Considerable scholarly work has been done on the impact of foreign direct
investment on host economies under existing investment regimes. However, for a
variety of reasons discussed below the link between investment liberalisation and
macroeconomic performance has received scant attention from researchers.
This study summarises a few pieces of this small body of research on foreign
direct investment, but this only takes us part of the way. As Sebastian Edwards
noted in a recent study, “applied economists often ask too much of their data sets,
and try to extract information that is simply not there” [Edwards (1993)]. With that
caveat in mind, the paper takes two approaches to achieving its stated purpose of
exploring the macroeconomic effects of investment liberalisation.
Journal: The Pakistan Development Review
Pages: 403-418
Volume: 36
Issue: 4
Year: 1997
File-URL: http://www.pide.org.pk/pdf/PDR/1997/Volume4/403-418.pdf
File-Format: Application/pdf
Handle: RePEc:pid:journl:v:36:y:1997:i:4:p:403-418
 
Template-Type: ReDIF-Article 1.0
Author-Name: Muhammad A. Quddus
Author-X-Name-First: Muhammad A.
Author-X-Name-Last: Quddus
Author-Workplace-Name: Pakistan Agricultural Research Council.
Author-Name: Stephen P. Davies
Author-X-Name-First: Stephen P.
Author-X-Name-Last: Davies
Author-Workplace-Name: Department of Agricultural and Resource Economics, Colorado State University, Fort Collins, Colorado, USA.
Author-Name: Donald W. Lybecker
Author-X-Name-First: Donald W.
Author-X-Name-Last: Lybecker
Author-Workplace-Name: Pakistan Agricultural Research Council.
Title: The Livestock Economy of Pakistan: An Agricultural Sector Model Approach
Abstract: The Pakistan Agricultural Sector Model (PASM) developed by Davies et al. (1991)
was modified to enhance the livestock sub-sector. Nutrient-based rations replaced
feedstuff-based rations and dry matter minimum and maximum constraints (stomach
capacity) were added. Several initial simulations were undertaken to examine the
structure of the modified model and its impact across the crop and livestock sub-sectors.
These simulations included relaxing exogenous livestock numbers and selected crop
hectarage constraints, and requiring that green forage be fed in the season grown. Most
importantly, the results demonstrated that fodder hectarage will grow with livestock
numbers to insure that sufficient green forage is available seasonally.
Two other analyses were performed to demonstrate the need to specify linkages
between the crop and livestock sub-sectors. An analysis of transforming the livestock
sub-sector from traditional to feedlot-based technology demonstrated that the reduced
numbers of non-milking cattle needed for a given output of meat would provide the
potential for increased production of various crops and other livestock products. Also,
expanded cotton and Irri rice exports, hypothesised to occur through trade liberalisation
from the Uruguay Round of the GATT, highlighted other inter-relationships between the
crop and livestock sub-sectors. Greater production of both livestock and other crops
might accompany the expansion of cotton production but less livestock feed would be
available with expanded exports of Irri rice.
Journal: The Pakistan Development Review
Pages: 171-190
Volume: 36
Issue: 2
Year: 1997
File-URL: http://www.pide.org.pk/pdf/PDR/1997/Volume2/171-190.pdf
File-Format: Application/pdf
Handle: RePEc:pid:journl:v:36:y:1997:i:2:p:171-190
 
Template-Type: ReDIF-Article 1.0
Author-Name: Fazal Husain
Author-X-Name-First: Fazal
Author-X-Name-Last: Husain
Author-Workplace-Name: Pakistan Institute of Development Economics, Islamabad.
Title: The Random Walk Model in the Pakistani Equity Market: An Examination
Abstract: This paper examines the validity of the Random Walk Model in the Pakistani equity
market. The model, extensively tested in other equity markets, implies that past movements
in a stock price are not helpful in predicting future prices of that stock. The model states that
changes in stock prices are serially independent and conform to some probability
distribution. Conventionally, the independence part is examined through Serial Correlation
Test, whereas the distributional aspect is analysed through Frequency Distributions. Same
techniques are applied in this paper on daily closing prices of 36 individual stocks, 8 sector
indices, and a market index from January 1, 1989 to December 30, 1993.
The analysis indicates that the Random Walk Model is not valid in the Pakistani equity
market as is the case in other emerging markets. The results show the presence of strong
serial dependence in stock returns and indicate the slow adjustment of the market to new
information. This points to the weaknesses of the market regarding the dissemination of
pertinent information to potential investors, indicating that effective measures should be
taken in this regard. The shape of the distribution reveals that stock returns in the Pakistani
market, like in other equity markets, do not comply with the normal distribution, implying
that theoretical models must be used with caution.
Journal: The Pakistan Development Review
Pages: 221-240
Volume: 36
Issue: 3
Year: 1997
File-URL: http://www.pide.org.pk/pdf/PDR/1997/Volume3/221-240.pdf
File-Format: Application/pdf
Handle: RePEc:pid:journl:v:36:y:1997:i:3:p:221-240

Template-Type: ReDIF-Article 1.0
Author-Name: Anwar Shah
Author-X-Name-First: Anwar
Author-X-Name-Last: Shah
Author-Workplace-Name: World Bank, Washington, D.C.
Title: Federalism Reform Imperatives, Restructuring Principles and Lessons for Pakistan
Abstract: In spite of several decades of sustained growth, Pakistan remains in the company of
"failed" states on account of its quality of governance. This paper presents an institutional
framework for improving the quality of governance in Pakistan. This framework suggests that a
major challenge facing the public sector in Pakistan is to harmonise its authorising
environment and operational capacity with its mission and values. It provides a broad outline of
how such a difficult task can be accomplished. The paper provides an analysis of the fiscal
federalism dimensions of the authorising environment and presents directions for reform. The
paper recognises various political, bureaucratic and institutional impediments that stand in the
way of such reform. Finally, the paper distils lessons on institutional reform of relevance to
Pakistan and other non-industrialised countries.
Journal: The Pakistan Development Review
Pages: 499-536
Volume: 36
Issue: 4
Year: 1997
File-URL: http://www.pide.org.pk/pdf/PDR/1997/Volume4/499-536.pdf
File-Format: Application/pdf
Handle: RePEc:pid:journl:v:36:y:1997:i:4:p:499-536

Template-Type: ReDIF-Article 1.0
Author-Name: Qazi Masood Ahmed
Author-X-Name-First: Qazi Masood
Author-X-Name-Last: Ahmed
Author-Workplace-Name: Applied Economics Research Centre, Karachi.
Author-Name: S. Moquet Ahsan
Author-X-Name-First: S. Moquet
Author-X-Name-Last: Ahsan
Author-Workplace-Name: Applied Economics Research Centre, Karachi.
Title: Tax Concessions and Investment Behaviour
Abstract: The Government of Pakistan, like many other developing countries, has opted for
tax holidays as an important fiscal measure to encourage rapid industrialisation in the
backward areas. This concession is also supplemented by several other economic and
non-economic measures including import duty, and depreciation allowances. Mintz
(1990) discusses the efficacy of tax holidays in the presence of accelerated depreciation
allowances concludes that tax holidays which are designed to increase capital formation
may end up penalising capital formation. Mintz’s (1990) conclusion is based on the
assumption that if the assets are long-lived, and the income tax system allows
deductibility of accelerated depreciation but cannot be deferred, then the tax holidays, by
preventing depreciation deduction in the early period may actually penalise investment
during the tax holiday period. If on the other hand the depreciation allowance is
deferred till the end of tax holiday period, the tax system is genuinely generous and
provides a real incentive for capital formation.
In Pakistan the tax code are such that the firms in the tax holidays region are not
allowed to claim or defer accelerated depreciation allowance but can claim normal
depreciation allowance only after the expiry of tax holidays period. Whereas the firms in
developed areas can claim both accelerated (25 percent) and normal depreciation
allowances (10 percent) annually. Import duty concession is given for most of the
underdeveloped areas and few of the developed areas.
These different sets of incentives affects the cost of capital and hence investment
differently. The purpose of the present paper is to see these effects by computing the
cost of capital for developed and under developed areas. This will help us to examine
whether the tax holidays as an incentive is effective or act as a barrier to claim other
generous concession like the depreciation allowance.
Journal: The Pakistan Development Review
Pages: 537-562
Volume: 36
Issue: 4
Year: 1997
File-URL: http://www.pide.org.pk/pdf/PDR/1997/Volume4/537-562.pdf
File-Format: Application/pdf
Handle: RePEc:pid:journl:v:36:y:1997:i:4:p:537-562

Template-Type: ReDIF-Article 1.0
Author-Name: Rashid Faruquee
Author-X-Name-First: Rashid
Author-X-Name-Last: Faruquee
Author-Workplace-Name: World Bank, Dhaka, Bangladesh.
Title: Future of Irrigation and Drainage in Pakistan
Abstract: The future of Pakistan’s agriculture depends on the future of its irrigation and drainage
system, which currently faces major problems. Increasing water logging and salinity, overexploitation
of fresh groundwater, low efficiency in delivering and use, inequitable
distribution, unreliable delivery, and insufficient cost recovery are some of these problems.
These problems, however, are only symptoms of a deeper problem—the treatment by the
government of irrigation water as a public good. Such a treatment has caused inefficient
pricing of water, misallocation of resources and widespread rent-seeking behaviour.
The future strategy for irrigation and drainage will require a major change in the public
sector’s approach. An efficient self-sustaining irrigation and drainage system can be achieved
only by promoting market-determined incentives for improved management of the irrigation
and drainage services and giving the private sector a greater stake in the system. The process
could begin by developing commercially-oriented public utilities on a canal-command basis,
developing suitable farmer organisations around distributaries/minors, formalising water rights,
developing autonomous provincial water authorities, and developing provincial regulatory
bodies for regulating public utilities, water rights, and groundwater resources.
Journal: The Pakistan Development Review
Pages: 565-591
Volume: 36
Issue: 4
Year: 1997
File-URL: http://www.pide.org.pk/pdf/PDR/1997/Volume4/565-591.pdf
File-Format: Application/pdf
Handle: RePEc:pid:journl:v:36:y:1997:i:4:p:565-591

Template-Type: ReDIF-Article 1.0
Author-Name: M. Ghaffar Chaudhry
Author-X-Name-First: M. Ghaffar
Author-X-Name-Last: Chaudhry
Author-Workplace-Name: Pakistan Institute of Development Economics, Islamabad.
Author-Name: Ghulam Mustafa Chaudhry
Author-X-Name-First: Ghulam Mustafa
Author-X-Name-Last: Chaudhry
Author-Workplace-Name: Pakistan Institute of Development Economics, Islamabad.
Title: Pakistan’s Agricultural Development since Independence: Intertemporal Trends and Explanations
Abstract: The main objective of this paper has been to review Pakistan’s historical experience in
agricultural development in terms of growth, income distribution, and rural poverty. While the
long-term growth rates between 1949-50 and 1994-95 were satisfactory, the variations around
the average have been rather too large over the various decades. Beginning with a stagnating
sector of the 1950s, agriculture witnessed record growth rates during the Sixties. This was
followed by the lowest growth rates of the early Seventies, and acceleration in the second half
of the Seventies. The experience since 1979-80 has been mixed, but the growth rates have been
rather low through the Eighties and the Nineties. The trends in income distribution and poverty
varied directly in relation to the agricultural growth rates, especially when they were in excess
of the threshold level of 4.5–5.0 percent per annum. In general, a growth rate of 5.0 percent or
higher has induced positive changes in income distribution and poverty. In view of this
positive association, the pursuit of a high growth policy in agriculture should guide Pakistan’s
future development strategy. The efficiency of resource use, a greater dependence on modern
technologies, and a minimisation of government intervention in the market mechanism are the
essential pillars of the high growth strategy.
Journal: The Pakistan Development Review
Pages: 593-612
Volume: 36
Issue: 4
Year: 1997
File-URL: http://www.pide.org.pk/pdf/PDR/1997/Volume4/593-612.pdf
File-Format: Application/pdf
Handle: RePEc:pid:journl:v:36:y:1997:i:4:p:593-612

Template-Type: ReDIF-Article 1.0
Author-Name: Marie Jose Smits
Author-X-Name-First: Marie Jose
Author-X-Name-Last: Smits
Author-Workplace-Name: Centre for World Food Studies, Amsterdam.
Author-Name: Wouter Tims
Author-X-Name-First: Wouter
Author-X-Name-Last: Tims
Author-Workplace-Name: Centre for World Food Studies, Amsterdam.
Title: The Distribution of New Wheat Varieties in the Pakistan Punjab: The Role and Functioning of Institutions
Abstract: This case study concerns the technology choice of farmers in the Pakistan Punjab
with regard to wheat varieties. It argues that profitability of new crop technologies can
only partly explain their adoption, as access to inputs limits the choice of farmers. In
Pakistan, access to inputs is limited due to market structures and associated institutional
factors.
In applied microeconomics, technology choice is commonly estimated with the use
of adoption models: the (expected) profitability of prevailing and the new technologies
are compared, and it is assumed that the farmers opt for the most profitable one (taking
account of risk aversion and incomplete information). A simplification often made is to
assume that everyone has unlimited access to all relevant goods and services. In this
paper the latter assumption is tested. More specifically, the paper is concerned with the
consequences of limits due to the organisational infrastructure of markets.
A so-called "bivariate probit model with partial observability" is applied in order
to estimate adoption behaviour. Such a model makes it possible to distinguish two
classes of explanatory variables; in this case one with variables concerning profitability
and one with variables concerning accessibility. The model assumes that both
profitability (depending, among others, on production means of the farmer) and
accessibility (depending, among others, on the social network of the farmer) have to
reach a certain threshold before the farmer will adopt the new technology.
Econometric results confirm that the assumption that all actors have access to all
goods which are sold in markets is indeed too rigid in the case described here.
Journal: The Pakistan Development Review
Pages: 613-643
Volume: 36
Issue: 4
Year: 1997
File-URL: http://www.pide.org.pk/pdf/PDR/1997/Volume4/613-643.pdf
File-Format: Application/pdf
Handle: RePEc:pid:journl:v:36:y:1997:i:4:p:613-643

Template-Type: ReDIF-Article 1.0
Author-Name: Akhtar Hasan Khan
Author-X-Name-First: Akhtar Hasan
Author-X-Name-Last: Khan
Author-Workplace-Name: Government of Pakistan.
Title: Education in Pakistan: Fifty Years of Neglect
Abstract: Pakistan was created in the name of Islam under the outstanding leadership of
Quaid-i-Azam. The Quran placed great emphasis on education. The Quaid as quoted
above also highlighted its importance for the new nation. Unfortunately, despite high
and repeated rhetoric, education remained the most neglected aspect of national life
during the last half century. The literacy level are low, the female literacy levels are
among the lowest in the world and the lowest in the Muslim countries. The emphasis
in education is still on a general and liberal type of B.A. or M.A. degree. The change
towards scientific and technical education has still not taken place. The quality of
education is low, the teachers are under-paid, under-trained and dispirited. The
students are apathetic as they see no relationship betVveen education and higher
earnings or status in the society.
A few decades ago education was sought for cultural, religious and social
progress. In 1960s, the pioneering work of Schultz and Becker working on the concept
of investment in human capital proved that a high level of education is a necessary
condition for economic growth and no country can make significant economic
progress if majority of its citizens are illiterate. The rapid progress of East Asian
Countries is largely attributed to their excellent system of education.
Despite the exhortation of Quran and the Quaid as well as the international
experience of education promoting rapid economic growth, Pakistan's planners
continued to allocate insufficient resources for education, especially for primary
education. Moreover, the money allocated was not effectively spent. The hostility of
the feudals and the indifference of the educated elite (who educated their children in
English medium schools in Pakistan and sent them abroad for higher education) are
primarily responsible for the neglect of education in Pakistan.
As we are on the threshold of a new millennium, we must turn towards the high
road of education, knowledge, leaning, sciences and technology. We are living in an
age revolution through knowledge. It is only by education at all levels, specially
technical education that Pakistan can enter the privileged club of developed nations.
Journal: The Pakistan Development Review
Pages: 647-667
Volume: 36
Issue: 4
Year: 1997
File-URL: http://www.pide.org.pk/pdf/PDR/1997/Volume4/647-667.pdf
File-Format: Application/pdf
Handle: RePEc:pid:journl:v:36:y:1997:i:4:p:647-667

Template-Type: ReDIF-Article 1.0
Author-Name: M. Aynul Hasan
Author-X-Name-First: M. Aynul
Author-X-Name-Last: Hasan
Author-Workplace-Name: Acadia University, Wolfville, Nova Scotia, Canada.
Author-Name: Hafiz A. Pasha
Author-X-Name-First: Hafiz A.
Author-X-Name-Last: Pasha
Author-Workplace-Name: Planning Commission, Government of Pakistan, Islamabad.
Author-Name: Ajaz M. Rasheed
Author-X-Name-First: Ajaz M.
Author-X-Name-Last: Rasheed
Author-Workplace-Name: Social Policy and Development Centre, Karachi.
Title: Can Cost-effective Reallocation of Inputs Increase the Efficiency of the Public Health System in Pakistan?
Abstract: Heavy investment in many developing countries in the social sector including
health is based on the premise that human capital is vital to the growth and development
of a nation. However, Pakistan's spending on this sector has been one of the lowest in the
region. In the present environment of high budget deficits, one does not expect
substantial public funds to be forthcoming and diverted towards the social sector in the
intermediate- or medium-term future. The critical issue facing the public sector should
then be to design health policies which must be cost-effective and efficient. This study
examines these health policy issues within the context of an optimisation framework for
public health system, forecasts future upto (2002-03) and discusses an efficient optimal
mix of health inputs, outputs, expenditures, and wage policies under alternative scenarios.
The study recommends that, first, growth of health infrastructure building in the urban
areas be slowed down in the short-term (two to three years), and some of the resources
reallocated towards the rural sector either in terms of building new Basic Health Units or
upgrading the existing Rural Health Centres. Second, not only attractive wage policies be
formulated for health personnel, but the status of nurses in the public health system be
also elevated by giving them higher grades. Third, for every rupee of development
expenditure incurred, Public Health Department must plan or keep provisions for
recurring outlays. All this reallocation of resources is feasible within the projected actual
budget and it will lead to efficiency gains in the order of 8 to 10 percent for the entire
public health system.
Journal: The Pakistan Development Review
Pages: 669-693
Volume: 36
Issue: 4
Year: 1997
File-URL: http://www.pide.org.pk/pdf/PDR/1997/Volume4/669-693.pdf
File-Format: Application/pdf
Handle: RePEc:pid:journl:v:36:y:1997:i:4:p:669-693

Template-Type: ReDIF-Article 1.0
Author-Name: Yasuyuki Sawada
Author-X-Name-First: Yasuyuki
Author-X-Name-Last: Sawada
Author-Workplace-Name: Ph.D. candidate in the Department of Economics, Stanford University, USA.
Title: Human Capital Investments in Pakistan: Implications of Micro Evidence from Rural Households
Abstract: A number of cross-country studies suggest that the Pakistani aggregate human
capital investments, measured by educational performance, are low relative to other
countries of similar per capita income levels. This paper investigates the implications of
micro evidence on schooling from rural Pakistan for an understanding of the cases of low
human capital investments. The results of school-entrant and dropout regressions using
household panel data indicate that the permanent and transitory income movements affect
children’s schooling behaviour, indicating credit market imperfections. Hence, the
human capital investments in rural Pakistan may be discouraged by poverty, combined
with incompletely insured income volatility. Moreover, our analysis points out that there
is a distinct gender difference in education.
Journal: The Pakistan Development Review
Pages: 695-712
Volume: 36
Issue: 4
Year: 1997
File-URL: http://www.pide.org.pk/pdf/PDR/1997/Volume4/695-712.pdf
File-Format: Application/pdf
Handle: RePEc:pid:journl:v:36:y:1997:i:4:p:695-712

Template-Type: ReDIF-Article 1.0
Author-Name: Mohammad Waseem
Author-X-Name-First: Mohammad
Author-X-Name-Last: Waseem
Author-Workplace-Name: St. Antony's College, Oxford University, U.K.
Title: Political Development and Conflict Resolution in Pakistan
Abstract: Conflicts in Pakistan emanate from a configuration of factors relating to the state
system, the unstable regional setting, and the global system at large. The state system in
Pakistan has been characterised by problems of constitutionally underdeveloped provincial
set-ups, dysfunctionality of elections for the prevalent system perceived by a privileged
migrant leadership, a centralist authority structure, and a domineering role of army. During
the last five decades, the state system passed through various phases of centralism,
populism, and constitutional engineering by the military-bureaucratic establishment as well
as Islamisation, largely at the expense of provincial autonomy and a sense of participation in
the business of the state shared by all communities. Non-recognition of electoral mandate as
the final source of legitimacy led to the emergence of ethnic movements in East Pakistan,
the NWFP, Balochistan, and Sindh. The perceived Punjabisation of the state has created
feelings of ethnic hostility among all regions other than Punjab. Social insecurities caused by
rapid social change, such as urbanisation in general and in-migration in Karachi in
particular, have fuelled ethnic hatred all around. Similarly, the influx of refugees from
neighbouring countries, along with arms and drug trafficking, has led to new pattems of
identity politics and higher levels of political violence. The state's relative non-performance
at the local level has pushed many sectarian groups to exit from the parliamentary
framework of politics towards a blatant use of arms. What is needed is the creation of a third
tier of government at the district and sub-district levels. At the top of the priority list should
be a policy of decentralisation and a continuity in the electoral process to bring the
recalcitrant elements into the mainstream, de-weaponisation, and strengthening of political
parties as interest-aggregating and policy-bearing institutions.
Journal: The Pakistan Development Review
Pages: 715-742
Volume: 36
Issue: 4
Year: 1997
File-URL: http://www.pide.org.pk/pdf/PDR/1997/Volume4/715-742.pdf
File-Format: Application/pdf
Handle: RePEc:pid:journl:v:36:y:1997:i:4:p:715-742

Template-Type: ReDIF-Article 1.0
Author-Name: Mohammad Qadeer
Author-X-Name-First: Mohammad
Author-X-Name-Last: Qadeer
Author-Workplace-Name: Urban and Regional Planning, Queen's University, Kingston, Canada.
Title: The Evolving Structure of Civil Society and the State in Pakistan
Abstract: The 'Civil Society' is the newest factor in the development equation, and the
strengthening of civil society is the latest addition to the agenda of development. This
emphasis necessitates a probe into the structure of Pakistan's civil society.
The civil society in Pakistan---or anywhere else—has both the traditional and modern
components. It is made up of institutions and organisations that stand between the state and
the individuals as well as communities. They regulate the collective life at the intermediate
level and act as mobilisers of people's opinions and actions. Pakistan's civil society is not
entirely constituted by NGOs and special interest groups. It has both Beradaris, bazaar
associations, and NGOs. The paper offers two conclusions: (1) Pakistans civil society has
evolved through three phases and is divided in the traditional and modern tracks. In recent
times, it has fractured along ethnic and sectarian lines and the denominational interests have
come to dominate. (2) The state and the civil society evolve in tandem. Without an effective
state, there can not be a strong and democratic civil society.
Journal: The Pakistan Development Review
Pages: 743-762
Volume: 36
Issue: 4
Year: 1997
File-URL: http://www.pide.org.pk/pdf/PDR/1997/Volume4/743-762.pdf
File-Format: Application/pdf
Handle: RePEc:pid:journl:v:36:y:1997:i:4:p:743-762

Template-Type: ReDIF-Article 1.0
Author-Name: S.I. Cohen
Author-X-Name-First: S.I.
Author-X-Name-Last: Cohen
Author-Workplace-Name: Faculty of Economic Sciences, Erasmus University, Rotterdam, The Netherlands.
Title: Economic Growth of Rich and Poor Countries: A Social Accounting Matrix Approach
Abstract: Many recent empirical studies on comparative growth focus on the supply side
determinants of growth. This paper highlights the insights to be gained from employing a
demand-determined growth model. A modelling framework along the Social Accounting
Matrix, empirically analysed for a group of sixteen countries at different stages of economic
development, gives support to the convergence thesis.
Journal: The Pakistan Development Review
Pages: 765-790
Volume: 36
Issue: 4
Year: 1997
File-URL: http://www.pide.org.pk/pdf/PDR/1997/Volume4/765-790.pdf
File-Format: Application/pdf
Handle: RePEc:pid:journl:v:36:y:1997:i:4:p:765-790

Template-Type: ReDIF-Article 1.0
Author-Name: Nasir M. Khilji
Author-X-Name-First: Nasir M.
Author-X-Name-Last: Khilji
Author-Workplace-Name: U.S. Bureau of the Census, and U.S./Saudi Arabian Joint Commission for Economic Cooperation, Riyadh, Saudi Arabia.
Author-Name: Akhtar Mahmood
Author-X-Name-First: Akhtar
Author-X-Name-Last: Mahmood
Author-Workplace-Name: Government of Pakistan.
Title: Military Expenditures and Economic Growth in Pakistan
Abstract: This paper explores the impacts of defence expenditures on economic growth and
other major economic variables in the Pakistan economy over the period 1972-1995. The
results of Granger-causality tests show that there is bi-directional feedback between the
defence burden and GDP growth. We test four different single equation models that are
widely used in the defence literature. In these frameworks we generally find the defence
burden to be negatively related to GDP growth. Finally, we specify a three-equation
model which explains GDP growth, average propensity to save, and the defence ratio. In
single equation estimations of the savings ratio and the defence burden, we uncover some
interesting relationships. The savings ratio is affected positively by the defence ratio, and
negatively by the inflation rate. The Pakistani defence burden is impacted negatively by
the Indian defence burden and positively by the government budget. When all three
equations are estimated as a system to account for feedback and covariance between
these equations, these effects are diminished and go down in statistical significance.
Journal: The Pakistan Development Review
Pages: 791-808
Volume: 36
Issue: 4
Year: 1997
File-URL: http://www.pide.org.pk/pdf/PDR/1997/Volume4/791-808.pdf
File-Format: Application/pdf
Handle: RePEc:pid:journl:v:36:y:1997:i:4:p:791-808

Template-Type: ReDIF-Article 1.0
Author-Name: Nadeem Ul Haque
Author-X-Name-First: Nadeem Ul
Author-X-Name-Last: Haque
Author-Workplace-Name: International Monetary Fund, Washington, D.C., USA.
Title: Financial Market Reform in Pakistan
Abstract: The paper argues that the finance diménsion of economic development has often been
treated as an afterthought by researchers and politicians alike, because it is considered to be
too "sophisticated" to matter for "simple" economies. The role of the financial sector was
considered to be primarily for mobilising resources to increase growth. However, experience
has also revealed that financial development, including stock market development, is
correlated with current and future economic growth, capital accumulation, and productivity
improvements. It is suggested that a strategy for financial market development in emerging
economies is better evolved from the perspective of the "functions" of financial markets as
envisaged in modern financial literature. It is also argued that financial sector policies in
emerging economies should focus on enhancing, rather than inhibiting, the multiple roles of
financial markets.
Journal: The Pakistan Development Review
Pages: 839-854
Volume: 36
Issue: 4
Year: 1997
File-URL: http://www.pide.org.pk/pdf/PDR/1997/Volume4/839-854.pdf
File-Format: Application/pdf
Handle: RePEc:pid:journl:v:36:y:1997:i:4:p:839-854

Template-Type: ReDIF-Article 1.0
Author-Name: Tayyeb Shabbir
Author-X-Name-First: Tayyeb
Author-X-Name-Last: Shabbir
Author-Workplace-Name: Pakistan Institute of Development Economics, Islamabad.
Title: Financial Intermediation and Growth: Theory and Some Cross-Country Evidence
Abstract: Well-functioning financial markets can have a positive effect on economic growth
by facilitating savings and more efficient allocation of capital. This paper characterises
some of the recent theoretical developments that analyse the relationship between
financial intermediation and economic growth and presents empirical estimates based on
a model of the linkage between financially intermediated investment and growth for two
separate groups of countries, developing and advanced. Empirical estimates for both
groups suggest that financial intermediation through the efficiency of investment leads to
a higher rate of growth per capita. The relevant coefficient estimates show a higher level
of significance for the developing countries. This financial liberalisation in the form of
deregulation and establishment and development of stock markets can be expected to
lead to enhanced economic growth.
Journal: The Pakistan Development Review
Pages: 855-862
Volume: 36
Issue: 4
Year: 1997
File-URL: http://www.pide.org.pk/pdf/PDR/1997/Volume4/855-862.pdf
File-Format: Application/pdf
Handle: RePEc:pid:journl:v:36:y:1997:i:4:p:855-862

Template-Type: ReDIF-Article 1.0
Author-Name: Fazal Hussain
Author-X-Name-First: Fazal
Author-X-Name-Last: Hussain
Author-Workplace-Name: Pakistan Institute of Development Economics, Islamabad.
Author-Name: Muhammad Ali Qasim
Author-X-Name-First: Muhammad Ali
Author-X-Name-Last: Qasim
Author-Workplace-Name: Pakistan Institute of Development Economics, Islamabad.
Title: The Pakistani Equity Market in 50 Years: A Review
Abstract: The equity market plays an important role in the economic development of a country.
However, in Pakistan the equity market has not played its due role because of interventionist
economic policies and over reliance on debt financing. It was not until the middle of 1980s
that the importance of the equity market was recognised and steps were taken to activate the
market. However, the market actually became active in the beginning of 1991 when it was
opened to foreign investors, besides other liberalisation measures. Since then the market has
made considerable progress and improved in size and depth.
This paper reviews the performance of the Pakistani equity market in the background
of Pakistan's'Golden Jubilee programme. The information was collected from the Corporate
Law Authority (the regulatory body), the State Bank of Pakistan (the central hank), and
International Finance Corporation (a branch of the World Bank). The paper shows that the
Pakistani equity market gained momentum in the 1960s and made significant progress in
listings and market capitalisation. However, the market lost its momentum in the 1970s due
to political turmoil in the country and the nationalisation policies adopted by the then
government. Though the policy of greater reliance on private enterprise restored the market
sentiments in the 1980s, the market actually regained its momentum in early 1990s when it
was opened to international investors. In terms of its performance. the market was ranked
third in 1991 among the emerging markets. Unfortunately, the market could not maintain its
performance in later years because of economic and political instability. A series of political
changes in the country, ethnic violence in Karachi, increasing inflation and unemployment
rates, widening budget deficits, etc., proved to be detrimental to business activities.
Journal: The Pakistan Development Review
Pages: 863-872
Volume: 36
Issue: 4
Year: 1997
File-URL: http://www.pide.org.pk/pdf/PDR/1997/Volume4/863-872.pdf
File-Format: Application/pdf
Handle: RePEc:pid:journl:v:36:y:1997:i:4:p:863-872

Template-Type: ReDIF-Article 1.0
Author-Name: Naushin Mahmood
Author-X-Name-First: Naushin
Author-X-Name-Last: Mahmood
Author-Workplace-Name: Pakistan Institute of Development Economics, Islamabad.
Author-Name: Syed Mubashir Ali
Author-X-Name-First: Syed Mubashir
Author-X-Name-Last: Ali
Author-Workplace-Name: Pakistan Institute of Development Economics, Islamabad.
Title: Population Planning in Pakistan: Issues in Implementation and its Impact
Abstract: It is over three decades now that we have official family planning programme in
Pakistan. However, because of the absence of a coherent approach to overcome the
social and cultural obstacles to the use of family planning in conjunction with poor
service delivery and outreach activities; ineffective information, education and
communication campaign; frequent changes in the organisational set up of the
programme; inefficient management and lack of political commitment to family
planning, the programme failed to achieve tangible success.
Nevertheless, recent demographic and fertility surveys indicated some positive
changes in the demographic indicators. This suggest that the population programme may
be in the right direction. In order to accelerate the pace of these changes, intensive and
concerted efforts are needed.
Journal: The Pakistan Development Review
Pages: 875-888
Volume: 36
Issue: 4
Year: 1997
File-URL: http://www.pide.org.pk/pdf/PDR/1997/Volume4/875-888.pdf
File-Format: Application/pdf
Handle: RePEc:pid:journl:v:36:y:1997:i:4:p:875-888

Template-Type: ReDIF-Article 1.0
Author-Name: Sarfraz K. Qureshi
Author-X-Name-First: Sarfraz K.
Author-X-Name-Last: Qureshi
Author-Workplace-Name: Pakistan Institute of Development Economics, Islamabad.
Author-Name: Musleh-Ud Din
Author-X-Name-First: Musleh-Ud
Author-X-Name-Last: Din
Author-Workplace-Name: Pakistan Institute of Development Economics, Islamabad.
Author-Name: Ejaz Ghani
Author-X-Name-First: Ejaz
Author-X-Name-Last: Ghani
Author-Workplace-Name: Pakistan Institute of Development Economics, Islamabad.
Author-Name: Kalbe Abbas
Author-X-Name-First: Kalbe
Author-X-Name-Last: Abbas
Author-Workplace-Name: Pakistan Institute of Development Economics, Islamabad.
Title: Domestic Resource Mobilisation for Development in Pakistan
Abstract: This paper examines the determinants of private, domestic, and household savings in
Pakistan. The analysis shows that private savings can be expected to grow gradually as a
result of rising per capita income, falling dependency burden, improved financial deepening,
and macro stability. Bivariate causality tests between GNP and savings show that GNP
causes both domestic and public savings. However, the causality test is inconclusive in the
case of causation between GNP and private savings. This finding has important policy
implication in the sense that once a virtual cycle succeeds in accelerating growth, saving
would catch up with a lag. In this sense, financing of investment is not a major constraint.
The paper underlines the following policy options: (i) a strong effort spread over tax policy
(tax reforms as well as tax administration), expenditure restraint, effective expenditure
management, and public sector corporate reforms should aim at raising public savings to
about 6 percent of the GDP; (ii) the incentives for private savings in Pakistan need to be
revamped.
Journal: The Pakistan Development Review
Pages: 891-912
Volume: 36
Issue: 4
Year: 1997
File-URL: http://www.pide.org.pk/pdf/PDR/1997/Volume4/891-912.pdf
File-Format: Application/pdf
Handle: RePEc:pid:journl:v:36:y:1997:i:4:p:891-912

Template-Type: ReDIF-Article 1.0
Author-Name: Azizur Rahman Khan
Author-X-Name-First: Azizur Rahman
Author-X-Name-Last: Khan
Author-Workplace-Name: University of California, Riverside, California.
Title: Globalisation, Liberalisation, and Equitable Growth: Lessons from Contemporary Asian Experience
Abstract: Since the beginning of the 1980s the less developed countries (LDCs) have been
getting integrated with the global economy at a rapidly accelerating rate. The impetus for
the process came from the need to make adjustment in the unsustainable imbalance in
the external account that most of these countries experienced in the aftermath of the oil
shocks of the 1970s and the declining demand for their exports due to the recession in
the OECD countries during the 1980s. Many of these countries had to subject
themselves to structural adjustment programmes at the behest of the multilateral donor
agencies, led by the World Bank and the International Monetary Fund, who emphasised
the urgency of reforming the protectionist trade regimes of these countries.
Simultaneously, these countries came to realise the inefficiency of resource use fostered
by their past strategy of import-substituting industrialisation (ISI) characterised by a
trade and investment regime that enshrined overvalued exchange rates, quantitative
import controls, high and non-uniform rates of effective protection, discrimination
against export and strong impediments to foreign direct investment.
The reform programme that these countries gradually implemented during the
1980s and the early 1990s dismantled many of the components of the ISI strategy. The
extent of dependence on quantitative import controls was sharply curtailed. The
exchange rate came to be increasingly determined by market forces. The rates of tariff
were brought down. The discrimination against exports, relative to import substitutes,
was reduced. There was also a sharp reduction in restrictions to which foreign direct
investment had been subjected in the past.
Journal: The Pakistan Development Review
Pages: 915-928
Volume: 36
Issue: 4
Year: 1997
File-URL: http://www.pide.org.pk/pdf/PDR/1997/Volume4/915-928.pdf
File-Format: Application/pdf
Handle: RePEc:pid:journl:v:36:y:1997:i:4:p:915-928

Template-Type: ReDIF-Article 1.0
Author-Name: A.R. Kemal
Author-X-Name-First: A.R.
Author-X-Name-Last: Kemal
Author-Workplace-Name: Ministry of Planning and Development, Planning and Development Division, Islamabad.
Title: Pakistan’s Industrial Experience and Future Directions
Abstract: This paper examines the growth and patterns of industrial production and investment
activities in Pakistan during the last fifty years, 1947–1997. The industrial strategies pursued
so far and the levels of efficiency and protection in the manufacturing industries are also
examined. It shows that the growth rate of the manufacturing sector exceeded 8 percent up to
the 1980s, but in the recent years, it has slipped to around 3 percent. Keeping in view the
current sluggish output growth and inadequate investments in the industrial sector, it is
recommended that Pakistan must pursue the efficient industrialisation strategy. For this
purpose, the country has to pursue the sole objective of accelerating the pace of industrial
investment activities and the tariff structure has to be changed in such a way that the activities
chosen accord with her dynamic comparative advantage. In addition, the government will need
to influence the structure of incentives, which are largely governed in Pakistan by the
protection structure. The government must provide the necessary physical and social
infrastructure for efficient industrialisation. Augmenting the science and technology apparatus
of the private sector, bringing research institutions up to the international standards, and
streamlining of technology creation, absorption and diffusion systems are essential to diversify
production towards new technology-based industries. Cluster approach (i.e., an agglomeration
of key industries, supporting sectors, infrastructures, and institutions that are interlinked and
interdependent) can be quite useful in the development of vendors. The regulatory framework
needs to be streamlined. There is also a need to improve outdated and overlapping laws
regarding the industrial sector. Human resource development (through cluster approach) would
improve industrial efficiency through innovations. Consistent and stable policies and improved
law and order situation are pre-requisites for efficient industrial development in Pakistan.
Journal: The Pakistan Development Review
Pages: 929-944
Volume: 36
Issue: 4
Year: 1997
File-URL: http://www.pide.org.pk/pdf/PDR/1997/Volume4/929-944.pdf
File-Format: Application/pdf
Handle: RePEc:pid:journl:v:36:y:1997:i:4:p:929-944

Template-Type: ReDIF-Article 1.0
Author-Name: Shahrukh Rafi Khan
Author-X-Name-First: Shahrukh Rafi
Author-X-Name-Last: Khan
Author-Workplace-Name: Sustainable Development Policy Institute, Islamabad.
Title: Has Aid Helped in Pakistan?
Abstract: This paper has a two-fold objective: first, to examine the terms on which Pakistan
receives aid and whether its debt situation is sustainable, and second, to examine the
impact of aid and debt on economic growth. It is found that there is little encouraging
that can be said about how the terms on which Pakistan has received aid over time have
changed, and its current debt situation is not sustainable. Also reported is the analysis
done elsewhere which shows that aid has a negative (Granger) causal impact on GDP,
and aid has a robust negative impact on economic growth after controlling for supplyside
shocks. We provide various reasons for this negative association.
Journal: The Pakistan Development Review
Pages: 947-957
Volume: 36
Issue: 4
Year: 1997
File-URL: http://www.pide.org.pk/pdf/PDR/1997/Volume4/947-957.pdf
File-Format: Application/pdf
Handle: RePEc:pid:journl:v:36:y:1997:i:4:p:947-957

Template-Type: ReDIF-Article 1.0
Author-Name: Ashfaque H. Khan
Author-X-Name-First: Ashfaque H.
Author-X-Name-Last: Khan
Author-Workplace-Name: Pakistan Institute of Development Economics, Islamabad.
Title: Foreign Direct Investment in Pakistan: Policies and Trends
Abstract: Recent years have seen a sharp change in the attitude of developing countries
regarding Foreign Direct Investment (FDI).. The growing balance-of-payments
difficulties as well as the decline in concessional aid live forced many developing
countries to reassess their stances on FDI and to take substantial unilateral steps to
liberalise their inward FDI regimes. In spite of liberalising the inward FDI regime,
tempering or removal of obstacles to foreign investors, and according liberal incentives,
Pakistan's has been a lacklustre performance in attracting FDI. This paper attempts to
find out the reasons why Pakistan has not been able to attract sufficiently large FDI
despite liberalisation measures.
The analysis identifies a number of factors responsible for low FDI in Pakistan.
These include the lack of political stability particularly during the last eight years, and
unsatisfactory law and order situation particularly in the, city of Karachi, the largest
industrial and commercial centre and the only port of the country. The macroeconomic
imbalances and the slowing down of economic activity together with inconsistent
economic policies have also discouraged foreign investors to increase their participation
in Pakistan. The slow bureaucratic process, inappropriate business environment, and
inadequate infrastructure facilities have played their role in discouraging foreign
. investors to undertake investment initiative in Pakistan. The lack of trained, educated,
and disciplined labour force, along with complicated and overprotective labour laws,
have inhibited business expansion and frightened away productive investment. The
cultural and social taboos as well as the quality of life are not conducive to attracting
foreign investors to Pakistan. The lack of welcome to foreign investors by government
agencies and officials has also been a problem.
Journal: The Pakistan Development Review
Pages: 959-985
Volume: 36
Issue: 4
Year: 1997
File-URL: http://www.pide.org.pk/pdf/PDR/1997/Volume4/959-985.pdf
File-Format: Application/pdf
Handle: RePEc:pid:journl:v:36:y:1997:i:4:p:959-985

Template-Type: ReDIF-Article 1.0
Author-Name: G.M. Arif
Author-X-Name-First: G.M.
Author-X-Name-Last: Arif
Author-Workplace-Name: Pakistan Institute of Development Economics, Islamabad.
Author-Name: Mohammad Irfan
Author-X-Name-First: Mohammad
Author-X-Name-Last: Irfan
Author-Workplace-Name: Pakistan Institute of Development Economics, Islamabad.
Title: Population Mobility across the Pakistani Border: Fifty Years Experience
Abstract: This paper describes population mobility across borders experienced by Pakistan
during the past fifty years. Some consequences of this mobility have also been briefly
mentioned. The dichotomy of this population mobility into inward and outward flow reveals
that while the former can be traced to political factors like the partition of the Subcontinent
and the Afghan war, the latter mostly represents a job-oriented move. Every flow is
associated with its own set of effects, difficult to be encompassed by a single research
exercise. Migration from India in the wake of partition is associated with a higher level of
urbanisation and a rise in religious homogeneity associated at the same time with increased
ethnic diversity, which according to some can be linked with the current Karachi situation.
Pakistan also engaged in manpower export and experienced brain-drain. Both of these
outward flows, to some extent rooted in history, have particular effects for the society and
economy. These differences emanate from the pattern of permanent or temporary settlement
abroad, characteristics of the emigrants particularly in terms of human capital endowments,
and the nature of links maintained with families in Pakistan which have a bearing on the
inflow of remittances. Illegal migration to Pakistan from the surrounding countries is alleged
to be substantial at present. The ease with which the identity cards and passports of Pakistan
are acquired by these illegal migrants simply reveals the level of control and the standard of
honesty prevailing in the situation. In this context, the importance of peace and economic
stability in the neighbouring countries emerges to be quite obvious for Pakistan.
Journal: The Pakistan Development Review
Pages: 989-1009
Volume: 36
Issue: 4
Year: 1997
File-URL: http://www.pide.org.pk/pdf/PDR/1997/Volume4/989-1009.pdf
File-Format: Application/pdf
Handle: RePEc:pid:journl:v:36:y:1997:i:4:p:989-1009