Template-Type: ReDIF-Article 1.0 Author-Name: Zafar Iqbal Author-X-Name-First: Zafar Author-X-Name-Last: Iqbal Author-Workplace-Name: International Monetary Fund, Islamabad, Pakistan. Author-Name: Rizwana Siddiqui Author-X-Name-First: Rizwana Author-X-Name-Last: Siddiqui Author-Workplace-Name: Pakistan Institute of Development Economics, Islamabad Title: Impact of Fiscal Adjustment on Income Distribution in Pakistan Abstract: This study provides a quantitative assessment of selected fiscal adjustment policies on income distribution in Pakistan. Using a latest social accounting matrix for the year 1989-90 and the static fixed-price model, various simulation exercises have been performed. The results show that reduction in subsidies has more adverse impact on the incomes of the richest rural and urban households, implying that the richest people in the country are the greater beneficiaries of subsidies provided by the government. The evidence also suggests that a contraction in government current spending appears to have a negative impact on the incomes of all urban and rural household groups but the largest reduction appears in the income of the richest rural, followed by the poorest urban. The simulation results indicate that a decline in public expenditure on education and health affects the poorest urban and poorest rural more than the relatively better-off urban and rural income groups. Further, the estimates of Gini-coefficients show that reduction in consumption subsidies improves income distribution in both rural and urban areas of Pakistan. Conversely, reduction in subsidies on production worsens income distribution both in urban and rural areas, while reducing overall govemment current expenditure leads to deterioration of income distribution in urban areas but improves it in rural areas marginally. Similarly, reduction in govemment expenditure on education and health adversely affects income distribution in both urban and rural areas of Pakistan. Journal: The Pakistan Development Review Pages: 1-24 Volume: 38 Issue: 1 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume1/1-24.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:1:p:1-24 Template-Type: ReDIF-Article 1.0 Author-Name: Akhtar Hossain Author-X-Name-First: Akhtar Author-X-Name-Last: Hossain Author-Workplace-Name: IMF—Singapore Regional Training Institute, Singapor. Author-Name: Rizwana Salim Rashid Author-X-Name-First: Salim Author-X-Name-Last: Rashid Author-Workplace-Name: University of Illinois at Urbana-Champaign, lllinois, USA. Title: The Political Economy of Bangladesh's Large and Growing Trade Deficits with India Abstract: After remaining low throughout the 1970s and 1980s, Bangladesh's trade deficits (as percent of GDP) with India have been rising sharply since 1993. The size of its illegal trade deficits with India is also large and perceived to be rising since the early 1990s. Thus, instead of interdependence between two trading neighbours at the same stage of development, the Bangladesh-India trade relations suggest an absolute dependence of Bangladesh on India. The debate that has now generated in Bangladesh from such a onesided trade flow has two polar themes. At one extreme are those commentators who consider Bangladesh's large and growing trade deficits with India as a "natural and positive development" on the grounds that India is believed to be at a higher stage of development and to have gained technological maturity in the production of those goods that Bangladesh imports from India. The alternative view is that Bangladesh's large and growing trade deficits are a recent phenomenon and have nothing to do with India's technological maturity or prowess. As an explanation, such deficits are cnnsidered to be the result both of India's deep devaluation policy and tariff and non-tiff barriers to Bangladesh's exports to its markets. This paper examines the disaggregated structure of trade, as well as the revealed comparative advantage of Bangladesh and India and finds no support for the thesis of Bangladesh's technological imports from India on grounds of their maturity. It then examines the sensitivity of trade flows between the two countries to exchange rates and the possible role of trade liberalisation in generating trade deficits within the framework of intra-industry trade models for differentiated products. The available evidence suggests that through subsidies, interventions and deep devaluation policy, India has artificially created a comparative advantage over Bangladesh in differentiated products. India has also managed to keep its markets closed for Bangladesh's products despite trade negotiations, between the governments. This gives credence to the suggestion that Bangladesh's trade with India is neither fair nor competitive. Finally, the paper considers the political economy of the large and growing trade imbalances between them before drawing policy conclusions. Journal: The Pakistan Development Review Pages: 25-68 Volume: 38 Issue: 1 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume1/25-68.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:1:p:25-68 Template-Type: ReDIF-Article 1.0 Author-Name: Abdul Ghafoor Author-X-Name-First: Abdul Author-X-Name-Last: Ghafoor Author-Workplace-Name: Department of Economics, Faculty of Business and Economics, Eastern Mediterranean University, Turkish Republic of Northern Cyprus Author-Name: Rizwana John Weiss Author-X-Name-First: John Author-X-Name-Last: Weiss Author-Workplace-Name: Development and Project Planning Centre, University of Bradford, Bradford, UK. Title: Privatisation of Electric Power Sector in Pakistan: Some Important Issues Abstract: The electric power sector in Pakistan is growing faster (11 percent) than the average growth rate of other developing countries (10 percent). However, the demand in Pakistan is growing even faster than the supply and therefore power shortage has become a serious problem. The problem is compounded by inefficiency of electric power sector. Moreover there is underpricing, subsidising, overstaffing and inadequate maintenance. Like many other developing countries, Pakistan has also opted for "privatisation" in the form of transfer of ownership as the first best solution. However, a wide range of literature argues that such type of privatisation in the case of electric power may not lead to miracles. The present article attempts to analyse the past inefficiency of the electric power sector in Pakistan and performs a diagnostic analysis to identify sources and causes of inefficiencies. This analysis does not necessarily support a strict privatisation based reform. The article further discusses the salient feature of privatisation of electric power sector in Pakistan and some important issues related to its feasibility. It is noted that the privatisation of electric power sector in Pakistan, as pursued now, may not resolve the problems of this sector. It may ease short-run financial constraints but it may also create a number of long-term problems such as inappropriate planning, greater energy dependence and insecurity. It is also noted that current problems stem primarily from institutional and organisational constraints faced by public sector power enterprises. The key issue may not be a choice between public or private ownership but to determine an appropriate reform package based on either public/private or a mixed ownership structure, that encourages greater private involvement and functions well in the specific environment of Pakistan. Journal: The Pakistan Development Review Pages: 69-84 Volume: 38 Issue: 1 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume1/69-84.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:1:p:69-84 Template-Type: ReDIF-Article 1.0 Author-Name: Jannifer Brennett Author-X-Name-First: Jannifer Author-X-Name-Last: Brennett Author-Workplace-Name: Sustainable Development Policy Institute, Islamabad. Title: Correlates of Child Mortality in Pakistan: A Hazards Model Analysis Abstract: This study investigated factors associated with child mortality in an area in Rawalpindi, one of the large cities of Pakistan. Using both demographic and anthropological methods, the research was conducted to specifically examine the processes and mechanisms whereby a link is established between child mortality and its covariates. Controlling for the socio-economic status as a determinant of child mortality, the study population was limited to a lower income stratum living in a homogeneous environment where all households had equal access to health-related and other facilities. Results of the proportional hazards model analysis on 1301 index children suggest that non-economic factors like maternal health-seeking behaviour were related to high child mortality. The cultural norm of bearing a large number of children was the most significant correlate. In order of significance, this was followed by contraceptive use, current age of the mother, age at marriage and the hygienic conditions of the household. The study provides strong evidence of familial clustering of mortality by order of the household. Journal: The Pakistan Development Review Pages: 85-118 Volume: 38 Issue: 1 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume1/85-118.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:1:p:85-118 Template-Type: ReDIF-Article 1.0 Author-Name: Sabiha Ibrahim Author-X-Name-First: Sabiha Author-X-Name-Last: Ibrahim Author-Workplace-Name: Pakistan Institute of Development Economics, Islamabad. Title: Anthropometric Patterns and Correlates of Growth Attainment in Under-five Pakistani Children Abstract: This study investigates the question whether socio-economic, demographic and environmental variables within a household will affect the growth patterns of under-five Pakistani children. It also examines whether there are differentials in the growth patterns of these children by age and gender. Using the 1990-91 Demographic and Health Survey data, the focus is on children under-five years, the total children identified were 5902 while anthropometric measurement to assess the growth status was available for 4079 children. The results showed that nearly all the socio-demographic, economic and environmental variables were significantly associated with H/A and Wt/A. Children most likely to be stunted and underweight were those whose mothers were aged 40–44 years, mothers with no education, children from rural areas and children with birth interval <24 months. The multivariate analyses for Height/A model showed succeeding birth interval >24 months, mother’s age, her education and having toilet facilities in the house positively associated with growth attainment. For the Weight/A model succeeding birth interval >24 months, mother’s age, her education and having toilet facilities and electricity in the house, and living in Punjab and NWFP province positively associated with growth attainment. This study will be useful for policy-makers to develop programmes and guidelines needed to improve those socio-economic, demographic and environmental factors, responsible for the poor nutritional status of children under-five years of age in Pakistan. Journal: The Pakistan Development Review Pages: 131-152 Volume: 38 Issue: 2 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume2/131-152.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:2:p:131-152 Template-Type: ReDIF-Article 1.0 Author-Name: Hamid Hasan Author-X-Name-First: Hamid Author-X-Name-Last: Hasan Author-Workplace-Name: International Institute of Islamic Economics, International Islamic University, Islamabad. Title: Fisher Effect in Pakistan Abstract: This paper attempts to test the validity of the Fisher Hypothesis (FH) in Pakistan by investigating the long-run relationship between interest rate and inflation rate applying cointegration analysis. The FH has serious implications for debtors and creditors in an inflation prone economy since inflationary expectations influence nominal interest rate. Moreover, the effectiveness of monetary policy and efficiency in banking sector has direct bearing on the long-run relationship between nominal interest rate and expected inflation rate. Inflationary expectation has been modeled using adaptive and rational expectation approaches and sensitivity of the result to expectation formation has been compared. The paper finds the long-run relationship between nominal interest rate and inflation rate and accepts the partial Fisher Hypothesis. This result suggests that interest rate does not fully cover or accurately anticipate inflation, which implies that bank deposits deteriorate over time. The result further implies that monetary policy may not be effective in such a situation and households’ savings rate may suffer a decline. The acceptance of partial Fisher Hypothesis in case of rational expectation suggests that the rate of interest does not reflect all relevant information and real interest rate does not exhibit random walk behaviour, which is indicative of inefficiency in banking sector. The analysis clearly shows the failure of interest rate as a hedge against inflation and as a predictor of inflation. Therefore, the paper recommends innovation and financial engineering for better alternative especially in banking. The paper also recommends the growth and encouragement of equity market vis-à-vis prevalent debt-biased market. Finally, the paper advocates the complete replacement of traditional credit-based banking by more efficient trade-based banking in Pakistan. Journal: The Pakistan Development Review Pages: 153-166 Volume: 38 Issue: 2 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume2/153-166.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:2:p:153-166 Template-Type: ReDIF-Article 1.0 Author-Name: Nausheen H. Anwar Author-X-Name-First: Nausheen Author-X-Name-Last: H. Anwar Author-Workplace-Name: Division of Urban Planning, Columbia University, New York, USA. Title: Inefficiencies in Public Electricity Provision and Impacts on Firms in Karachi’s Manufacturing Sector Abstract: The private costs of electricity supply failures are substantial and inimical to industrial productivity. Using results from a small sample survey of manufacturing firms in Karachi, the study documented the causes, extent and incidence of the failures, identified and classified the firms’ private responses, and estimated the capital share of internally produced power and the associated costs. The results are reported here to engender discussion for developing a policy model of infrastructure provision suited to a developing country like Pakistan. The most encouraging options are those that allow for cooperative provision amongst firms with concurrent reforms in the regulatory and institutional environments. An optimal policy will allow inter-firm trading of electricity making the power market competitive. Those firms that already have extensive private generating capacity due to weak public supply will realise scale economies by selling electric power to lower the costs of private provision. Competition in electricity supply implies that industrial users will find attractive substitutes in the private sector. This will lead to a reduction in the demand on public service, already limited in quantity and quality in key urban-industrial locations like Karachi. Journal: The Pakistan Development Review Pages: 167-185 Volume: 38 Issue: 2 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume2/167-185.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:2:p:167-185 Template-Type: ReDIF-Article 1.0 Author-Name: Jasmin Mirza Author-X-Name-First: Jasmin Author-X-Name-Last: Mirza Author-Workplace-Name: consulting firm based in Lahore. Title: Accommodating Purdah to the Workplace: Gender Relations in the Office Sector in Pakistan Abstract: Based on a qualitative survey of female office workers conducted in Lahore in 1996-97, this article examines the increasing market integration of women, particularly from the lower middle classes, into secretarial and technical occupations in the office sector in urban Pakistan. The study shows that gender images and gender relations inherent in the social order of Pakistani society—particularly the absence of socially sanctioned modes of communication between the sexes, a strong sexualisation of gender relations outside the kinship system, and the incessant harassment of women in the public sphere—surface inside the offices. Female office workers use many strategies, derived from their own life world, to maneuver in the office sector, to appropriate public (male) space, and to accommodate the purdah system to the office environment. By “creating social distance”, “developing socially obligatory relationships”, “integrating male colleagues into a fictive kinship system”, and “creating women’s spaces” they are able to establish themselves in a traditional male field of employment, namely, the office sector. Journal: The Pakistan Development Review Pages: 187-206 Volume: 38 Issue: 2 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume2/187-206.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:2:p:187-206 Template-Type: ReDIF-Article 1.0 Author-Name: Soofia Mumtaz Author-X-Name-First: Soofia Author-X-Name-Last: Mumtaz Author-Workplace-Name: Pakistan Institute of Development Economics, Islamabad. Title: Interpreting Ethnic Movements in Pakistan Abstract: My difficulties with this paper relate primarily to the methodology. Professor Christophe Jaffrelot has chosen to omit the section on Kashmir that figured in the version first presented at the Fourteenth Annual General Meeting, of the Pakistan Society of Development Economists. The omission reinforces the exception I have to the approach. In my comments therefore, I will include some inter-related, and overlapping dimensions of the subject addressed, the exclusion of which, to my mind, hampers an holistic analysis. I will draw attention to the ‘role of Islam’ in Indian Muslim politics before partition, and the question of national identity since the creation of Pakistan. I will also highlight some of the features of the phenomenon of ethnicity itself that help explain the dynamics of the nature, content, and process of identity formation, and hence, an understanding of the mechanics of the identity that became pertinent during the Pakistan Movement. Similarly, I will comment on the ethnic expressions (that have been defined and re-defined) within the national context since the creation of Pakistan. Professor Jaffrelot attributes ethnic tensions in Pakistan to instrumentalist strategies of frustrated élite groups in reaction to over centralisation, and irredentist tendencies. He focuses on the fifty year history of the country, and its situation at the “cross-roads” of Iran, Afghanistan, and India. Since the Baloch, the Pashtuns, and the Kashmiris are spread on both sides of the borders, the foreign policy of Pakistan is discussed as being conditioned by regional geo-politics. I agree with much of Professor Jaffrelot’s assessment. The endeavour to explain ethnic tensions in Pakistan by examining each province without referring to the larger historical background, or selectively inspecting national and cross-border aspects of the dynamic however, suggest the choice of an approach designed to establish an a priori position of the author. Journal: The Pakistan Development Review Pages: 207-217 Volume: 38 Issue: 2 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume2/207-217.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:2:p:207-217 Template-Type: ReDIF-Article 1.0 Author-Name: Eatzaz Ahmad Author-X-Name-First: Eatzaz Author-X-Name-Last: Ahmad Author-Workplace-Name: Department of Economics, Quaid-i-Azam University, Islamabad. Author-Name: Saima Ahmed Ali Author-X-Name-First: Saima Ahmed Author-X-Name-Last: Ali Author-Workplace-Name: Department of Economics, Quaid-i-Azam University, Islamabad. Title: Exchange Rate and Inflation Dynamics Abstract: This paper studies simultaneous determination of nominal exchange rate and domestic price level in Pakistan. The estimated model contains sufficient built-in dynamics to trace the pattern and speed of adjustment in the two variables in response to temporary or permanent shocks. The two domestic shocks considered in the paper are monetary and real shocks, while the three external shocks considered are import price, export price and foreign exchange reserves shocks. The study finds that the impact period effects of temporary shock on price level and exchange rate are divergent, while the long run effects are convergent. This means that, while purchasing power parity does not hold in the short run, there is a tendency in the system to regain relative parity in the long run. Further more continuation of shocks can produce a persistent but non-accelerating divergence between inflation rate and the rate of devaluation. Therefore the parity holds in a weaker sense, that is for the marginal fluctuations in the rates of changes in price level and exchange rate over time. It is also observed that the direction of temporary disparity between the rates of inflation and devaluation depends crucially on the origin of the shock. The shocks with direct effect on price level (exchange rate) have more pronounced effects on the rate of inflation (devaluation). Finally, the relationship between price level and exchange rate is not unidirectional, though the short run effect of devaluation on inflation is smaller than the effect of inflation on devaluation. Since movements in exchange rate are mostly driven by price inflation, the practice of using exchange rate as an independent instrument is not sustainable in the presence of inflation. From policy perspective both the inflation and exchange rate could be considered as interrelated targets while focusing on the instruments that are in effective control of policy-makers, such as money supply. Journal: The Pakistan Development Review Pages: 235-251 Volume: 38 Issue: 3 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume3/235-251.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:3:p:235-251 Template-Type: ReDIF-Article 1.0 Author-Name: Mehmood Ul Hassan Author-X-Name-First: Mehmood Ul Author-X-Name-Last: Hassan Author-Workplace-Name: International Water Management Institute’s (IWMI) Pakistan Programme. Author-Name: Yameen Memon Author-X-Name-First: Yameen Author-X-Name-Last: Memon Author-Workplace-Name: International Water Management Institute’s (IWMI) Pakistan Programme. Author-Name: Abdul Hamid Author-X-Name-First: Abdul Author-X-Name-Last: Hamid Author-Workplace-Name: International Water Management Institute’s (IWMI) Pakistan Programme. Title: Returns to Facilitating Farmers’ Organisations for Distributary Maintenance: Empirical Results from a Pilot Project in Southern Punjab Abstract: Institutional reforms currently underway in Pakistan’s irrigation and drainage sector require that farmers take over the operation and maintenance responsibilities of their secondary canals. However, the farmers need to be organised first, for which investments are a prerequisite. A great deal of skepticism about the farmers’ collective ability and willingness to undertake the needed tasks exists, even now when they are actually organised. This skepticism originates from past experiences when direct subsidies were offered to induce collective action. Theoretically, collective action can be more sustainable if investments are made in capacity building for the tasks that the farmers have to perform to improve the service delivery. Farmers are being organised for distributary operation and maintenance. So far, the delay in formulation of an appropriate legal framework has prevented the irrigation departments from formally transferring the operation and maintenance responsibilities to farmers. Self-help-based maintenance has been the only avenue for farmers to participate in the management of the irrigation system. The paper uses data pertaining to the cost of facilitation and estimates the amount of resources mobilised for two successive years from a pilot project. The analysis shows that investments made for facilitation do pay off. Investment in facilitation returns 69 percent higher than the actual investment per year during the initial years. In the short-run, the returns to facilitation indicate an increasing trend. The paper argues that when compared to previous approaches adopted in Pakistan, investments for facilitation and capacity building have a greater chance of prompting sustainable collective action for irrigation and drainage management. Journal: The Pakistan Development Review Pages: 253-268 Volume: 38 Issue: 3 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume3/253-268.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:3:p:253-268 Template-Type: ReDIF-Article 1.0 Author-Name: Mumtaz Ahmad Author-X-Name-First: Mumtaz Author-X-Name-Last: Ahmad Author-Workplace-Name: Agricultural and Applied Economics, Project Planning, Appraisal, and Management, Saskatoon, Saskatchewan, Canada Author-Name: Joseph G. Nagy Author-X-Name-First: Joseph Author-X-Name-Last: G. Nagy Author-Workplace-Name: Agricultural and Applied Economics, Project Planning, Appraisal, and Management, Saskatoon, Saskatchewan, Canada Title: Private Sector Investment in Agricultural Research in Pakistan Abstract: Private sector investment in agricultural research in Pakistan, although growing in importance, is limited at present and with a few exceptions, has not had a significant impact on agricultural production and productivity. The publicly funded agricultural research system has made the major contribution to increases in production and productivity growth. However the impressive gains of the past cannot be achieved with the current underfunded public research system which makes it all the more important for private sector investment in agricultural research to achieve its full potential in areas of its comparative advantage. This paper identifies the magnitude of private sector agricultural research investment in Pakistan and discusses some of the current policy constraints that hamper its scope. Information was gathered through informal and formal surveys of multinational and national firms conducting agricultural research in Pakistan in the areas of inputs and product processing. Although private sector investment in agricultural research has more than doubled in the past ten years, uncertainty persists surrounding privatisation issues, unresolved intellectual property rights regulation, and the enforcement of seed certification and truth-in-labelling rules and regulations. Journal: The Pakistan Development Review Pages: 269-292 Volume: 38 Issue: 3 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume3/269-292.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:3:p:269-292 Template-Type: ReDIF-Article 1.0 Author-Name: Umar Farooq Author-X-Name-First: Umar Author-X-Name-Last: Farooq Author-Workplace-Name: Agricultural Economics Research Unit (PARC), Ayub Agricultural Research Institute, Faisalabad. Author-Name: Trevor Young Author-X-Name-First: Trevor Author-X-Name-Last: Young Author-Workplace-Name: School of Economic Studies, University of Manchester, Manchester, UK. Author-Name: Muhammad Author-X-Name-First: Muhammad Author-X-Name-Last: Iqbal Author-Workplace-Name: Agricultural Economics Research Unit (PARC), Ayub Agricultural Research Institute, Faisalabad. Title: An Investigation into the Farm Households Consumption Patterns in Punjab, Pakistan Abstract: In the present study, the consumption data of paddy and wheat growing farm households were analysed using the Almost Ideal Demand System (AIDS) model, incorporating the household composition in addition to the usual price/income variables. Although the general restrictions of demand theory were rejected, the overall results were not seriously out of line of a priori expectations. All the own-price elasticities were negative and most of them were significant. Paddy and wheat were found to be gross complements in consumption whereas meat and pulses emerged as gross substitutes. Dairy products and meat were regarded as luxuries by the sample farm households and expenditure on these items was curtailed in response to any addition to household size. Significant quantitative dietary impacts were found associated with change in the age composition of farm households. A more detailed analysis of consumption behaviour of rural families may be merited; this may explore alternative groupings of consumption goods, additional socio-economic factors or use of panel data. Journal: The Pakistan Development Review Pages: 293-305 Volume: 38 Issue: 3 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume3/293-305.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:3:p:293-305 Template-Type: ReDIF-Article 1.0 Author-Name: Sarfraz Khan Qureshi Author-X-Name-First: Sarfraz Khan Author-X-Name-Last: Qureshi Author-Workplace-Name: Mahbub ul Haq Human Development Centre, Islamabad. Title: A Governance Perspective on Development Issues Abstract: Economic growth and poverty reduction are difficult to achieve in the best of times. With decaying institutions and poor governance, these goals become an impossible dream. That is why the theme of this year’s annual meeting is “Governance, Institutional Reform, and Economic Growth”. I hope that the papers being presented and the discussions on or around this theme during these four days will indicate the way forward from the current morass. I shall not bore you with the details of the economy’s deplorable condition—most of you are familiar with them. Its deterioration is best judged by the International Country Risk Guide (ICRG) ratings for Pakistan, which are computed by weighting three elements—corruption, rule of law, and bureaucratic quality. These ratings for Pakistan in 1998 are three times what they were in 1982. This means that on a relative scale, things in Pakistan are three times as bad in 1998 as the 1982 levels. Still, I must dwell on the essential elements of this year’s theme for a way forward. I strongly believe that our salvation now lies in good governance and appropriate institutional reform which is sustained over a suitably long period of time. Journal: The Pakistan Development Review Pages: 327-332 Volume: 38 Issue: 4 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume4/327-332.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:4:p:327-332 Template-Type: ReDIF-Article 1.0 Author-Name: Jock R. Anderson Author-X-Name-First: Jock Author-X-Name-Last: R. Anderson Author-Workplace-Name: Rural Development Department, World Bank, Washington, D. C. Title: Institutional Reforms for Getting an Agricultural Knowledge System to Play Its Role in Economic Growth Abstract: While alarmists shriek the crisis of accelerating soil erosion and declining water quality as the major impediment to the future of global agriculture in supplying the needs of humanity, the argument here is that, although resource degradation is indeed a threat to achievement of satisfactory crop yields over the next several decades, the main threat is not degradation of natural resources. Rather, it is degradation of the capacity of societies, particularly those in the less-developed countries, to develop the knowledge embodied in people, technology and institutions necessary to meet the challenge of higher yields and intensified agricultural production. Dealing with this threat of degradation of knowledge institutions and resources must be an important focus of economic development policy in agrarian societies. In short, the agricultural knowledge and information systems (AKISs) serving the developing world must be put in effective and stable shape to deliver the needful. Journal: The Pakistan Development Review Pages: 333-354 Volume: 38 Issue: 4 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume4/333-354.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:4:p:333-354 Template-Type: ReDIF-Article 1.0 Author-Name: Paul P. Streeten Author-X-Name-First: Paul Author-X-Name-Last: P. Streeten Author-Workplace-Name: Department of Economics, Boston University, USA. Title: Governance Abstract: The paper argues against the currently fashionable case for “state minimalism”. It argues for a strong, activist state, though operating on a different basis and in different areas from the many recently failed interventionist states and many developing countries. The paper seeks to rescue alternative perspectives, such as the importance of the “civil society” that cuts across national boundaries. Global participation is examined. “Market-friendly” interventions are welcomed only if they are “people-friendly”. The role of the civil society, the problems of the post-socialist countries and the role of the fashionable slogans privatisation, liberalisation, deregulation and decentralisation are analysed. These are seen to call for many qualifications. The links between democracy, capitalism and development are reviewed. The social capital of trust and reciprocity that is invested in norms and networks of civic life is seen as a vital factor of effective government and economic progress. Should economic reform precede political reform in the countries in transition? Some lessons can be learned for the developing countries from the countries in transition. An analysis of the politics and the political economy of development aid follow. Buffers between donors and recipients are suggested, such as mutual monitoring of each other’s performance by recipients, a council of wise men and women, or a secretariat with genuinely global loyalties. A quiet style in aid-giving is also an option, when potential improvers are rewarded, without the imposition of conditionality. The paper then goes on to a presentation of various theories of the state. A non-maximising theory is recommended. It ends with a set of policy conclusions for governments and for aid agencies. Journal: The Pakistan Development Review Pages: 355-384 Volume: 38 Issue: 4 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume4/355-384.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:4:p:355-384 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., USA. Title: Governing for Results in a Globalised and Localised World Abstract: This paper addresses three complementary themes in bringing about responsive and accountable public governance in developing countries—namely globalisation, localisation and a results oriented management and evaluation (ROME). The first theme recognises interdependencies in an interconnected world and discusses how these influences would shape partnership within and across nations. The second theme is concerned with public sector realignments within nations to meet the challenges associated with heightened expectations from an informed citizenry. The third theme relates to creating a new culture of public governance that is responsive and accountable to citizens. The paper argues that a road to ROME holds significant promise of overcoming the ills of a dysfunctional, command and control, overbearing and rent seeking public sector in many developing countries. ROME de-emphasises traditional input controls and instead is concerned with creating an authorising environment in which the public officials are given the flexibility to manage for results but are held accountable for delivering public services consistent with citizen preferences. Further under ROME incentive mechanisms induce public and non-public (private and nongovernment) sectors to compete in the delivery of public services and match public services with citizen preferences at lower tax cost to society per unit of output. Journal: The Pakistan Development Review Pages: 385-431 Volume: 38 Issue: 4 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume4/385-431.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:4:p:385-431 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. Title: Pakistan’s Debt Problem: Its Changing Nature and Growing Gravity Abstract: It has been evident for some time that Pakistan’s debt burden is extremely onerous. The danger of external debt default first emerged in 1996 towards the end of the second Benazir government. Following the nuclear explosions by first India and then Pakistan and the subsequent imposition of economic sanctions by the Western countries in mid-1998, Pakistan froze the foreign currency deposits, a major source of balance of payments financing in recent years, and went into a technical default on external debt. Following a fresh agreement with the IMF in January 1999, Paris and London Clubs provided substantial debt relief in the form of rescheduling of debt payments due in 1998-99, 1999-2000 and the first half of 2000-1. Despite debt relief, the burden of external debt remains extremely heavy and the danger of default has not disappeared. In any case, the access to international financial markets has been greatly curtailed, if not eliminated, especially because The Paris Club has applied the ‘comparability of treatment’ to claims of private sector investors. On the domestic side, the heavy burden of servicing public debt has made the much needed fiscal adjustment both difficult and disorderly. The rise in interest payments from 2.2 percent of GDP in 1979-80 to 4.9 percent in 1988-89 and to the peak of 7.3 percent in 1998-99 made reductions in fiscal deficit hard to achieve. As interest payments now account for over 45 percent of government revenues, the fiscal deficit reduction has come mainly at the cost of development spending. Clearly the debt overhang is a major factor in the decline in the investment rate to 15 percent of GDP in 1998-99 and 1999-2000, the lowest level in more than two decades. Unless the debt burden can be brought down to more manageable levels, macro-economic management will remain problematical and growth prospects will remain clouded. Journal: The Pakistan Development Review Pages: 435-470 Volume: 38 Issue: 4 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume4/435-470.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:4:p:435-470 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, Colombo, Sri Lanka. Title: Incentives and Human Resource Management in the Design of Public Sector Reform Abstract: We, in Pakistan, should be very happy that the global development community has finally accepted the centrality of public sector reform (also known as improved governance) in the quest for improved living standards in poor countries. Development economics is a subject that is based on the interpretation and observation of some Western academics and Western donor-based agencies. We should have some sympathy for these leaders of development thought and policy for they have struggled with integrating the prevailing theme (fad) in Western thought and philanthropy with learning about the societies and economies that they were supposed to be prescribing for. Using the principle of “ends justifying the means”, they defend their reliance on the current “fad” as well as on the only clearly visible, organised and powerful actor—the government, no matter how inefficient—they would. The result is that this approach led to a long era of government-led development, which centralised policy- and decision-making, initiated planning, and created a wide range of public-sector institutions. The role of the government was thus extended into areas that were conceptually indefensible. In this manner, the public servant grew into her new much more lustrous and looser robes. A bloated, over-centralised, and a private sector inhibiting government was created to be the observation and implementation outpost of the development word. This was the first step in the transformation of the public sector in the direction of misgovernance. Journal: The Pakistan Development Review Pages: 471-488 Volume: 38 Issue: 4 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume4/471-488.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:4:p:471-488 Template-Type: ReDIF-Article 1.0 Author-Name: Charles H. Kennedy Author-X-Name-First: Charles Author-X-Name-Last: H. Kennedy Author-Workplace-Name: Wake Forest University, Winston-Salem, North Carolina. Title: Reconsidering the Relationship between the State, Donors, and NGOs in Bangladesh Abstract: The growth in size and significance of NGOs and particularly of Grameen Bank and the Bangladesh Rural Advancement Committee (BRAC) in Bangladesh challenges the idealtypical relationship between the state, donors and NGOs. Such an ideal envisions a clear demarcation of roles in which NGOs compete with other NGOs for resources from the state and/or donors and one in which NGO activities and programmes are regulated or held accountable by their respective funding sources. The emergence of large multitasking NGOs in a relatively small and weak state such as Bangladesh belies this ideal. Grameen and BRAC compete with government ministries for donor funding; statal institutions designed to regulate the activities of such NGOs are functionally ineffective; and international donors face insuperable hurdles in assessing accountability. Journal: The Pakistan Development Review Pages: 489-510 Volume: 38 Issue: 4 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume4/489-510.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:4:p:489-510 Template-Type: ReDIF-Article 1.0 Author-Name: Ishrat Husain Author-X-Name-First: Ishrat Author-X-Name-Last: Husain Author-Workplace-Name: World Bank, Washington, D. C. Title: Institutions of Restraint: The Missing Element in Pakistan’s Governance Abstract: Governance and Institutions are not ends in themselves but it is well known by now that good governance and effectively functioning institutions are required, along with sensible policies and well designed public investment, to improve resource allocation and comparative advantage, enhance productivity, facilitate more efficient markets and distribute the benefits of growth more equitably in any economy. How do Governance and Institutions interact? Governance refers to the manner in which power is exercised in the management of a country’s economic and social resources. Good governance requires checks and balances in a country’s institutional infrastructure, such that politicians and bureaucrats have the flexibility to pursue the common good, while restraining arbitrary action and corruption. The state’s monopoly on coercion, coupled with access to information not available to the general public, creates opportunities for public officials to promote their own interests, or those of friends or allies, at the expense of general interest. The probabilities for rent seeking and corruption are considerable. A variety of institutional mechanisms can provide the checks and balances that will lead to good governance and reduced corruption. To be enduring and credible, these mechanisms need to be anchored in core state institutions. Power can be divided horizontally among judiciary, the legislative and the executive, and vertically between central, provincial and local authorities. Beyond the institutions within the state structure, voice and participation from civil society e.g. vigilant NGOs and watchdog bodies, independent but impartial media, user participation surveys, public dissemination of governance benchmarks—can exert external pressures for better government performance and reduced corruption. Journal: The Pakistan Development Review Pages: 511-536 Volume: 38 Issue: 4 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume4/511-536.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:4:p:511-536 Template-Type: ReDIF-Article 1.0 Author-Name: Rashid Faruqee Author-X-Name-First: Rashid Author-X-Name-Last: Faruqee Author-Workplace-Name: World Bank Resident Mission in Bangladesh, Dhaka, Bangladesh. Title: Strategic Reforms for Accelerated Agricultural Growth in Pakistan Abstract: Agricultural growth rates in the 1960s, 1970s, 1980s and 1990s show that strong growth during the 1960s was driven by several factors, including greater certainty in the use of irrigation water (as a result of an agreement with India), the introduction of productivityenhancing fertiliser-seed packages, the introduction of tubewells and the electrification of rural areas, and policy changes that improved the profitability of farming. Growth during the 1970s dropped to 2.3 percent as a result of the uncertainty created by land reforms in 1972 and 1977, severe climatic shocks, a cotton virus that depressed production for most of the decade, and political instability. The recovery in the 1980s and early 1990s can be attributed to the introduction of new cotton varieties and improved management techniques, as well as to a gradual improvement in economic incentives. Closer inspection of the nature and sources of this growth raises concerns about its sustainability and casts doubt on the ability of the sector to grow by more than 3–4 percent a year in the future. Many of the past sources of agricultural growth in Pakistan appear to have been fully exploited. Strategy for the future must effectively address the followings. Allowing the market to Operate, policy reforms that support the ongoing structural adjustment should be given top priority. To address the crisis in irrigation management market-determined incentives must be allowed to determine resource allocation within the irrigation system. Reform in extension should include establishing closer links with research institutions and reducing the number of front-line extension workers and replacing them with fewer, bettertrained workers who are more responsive to the needs of farming systems. Full-fledged land reform is difficult to enact and can be considered only after a comprehensive study of costs and benefits. Some important measures can be implemented immediately, however. Foremost is providing security of tenure to many farmers, especially tenants-at-will, thereby improving responsiveness to incentives and creating better incentives for long-term investments. Journal: The Pakistan Development Review Pages: 537-572 Volume: 38 Issue: 4 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume4/537-572.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:4:p:537-572 Template-Type: ReDIF-Article 1.0 Author-Name: Muhammad Saleem Author-X-Name-First: Muhammad Author-X-Name-Last: Saleem Author-Workplace-Name: Pakistan Telecommunication Authority, Islamabad. Title: Price Regulation in Telecommunications Sector and Its Implications Abstract: Telecommunication facility has been provided in most countries as a user pay public service managed, typically, through the Post, Telegraph and Telephone departments or by some government-owned monopoly. The tradition has been to regard it as a natural monopoly to be supplied by the public sector.1 This perception has changed. Telecommunication is now increasingly recognised as a prime mover of the modern day economy. It is opening to participation by the private sector. The economic benefits of telecommunications are enormous, both as a growth industry in its own right and in terms of its impact on economic development. It has a significant social role in transforming how people communicate, become informed or do business. Additionally, it is also environment-friendly because it disseminates information without shifting goods or people. The practice now in vogue is to establish a regulatory agency with a high degree of independence from both operator and government. The regulator’s task is to implement government policy, ensure performance accountability by the operators and other players in respect of economic and social policy objectives, resolve disputes between competitors, monitor changing industry conditions and advise government on developments bearing on policy. The regulatory agency acts as a buffer between telecom operators and government, helping to ensure the separation of functions. Of late governments have increasingly been pursuing the policy of privatisation, liberalisation and de-regulation of telecommunication services. Pakistan has also made an advance in this direction with the promulgation of the Pakistan Telecommunications (Reorganisation) Act 1996. The main objectives are the promotion of rapid development, modernisation and diversification of telecommunication services and protection of consumer interest. In this paper an attempt has been made to answer the question as to why there is need to regulate telecommunication. Determining reasonable prices for a monopoly public service is an important area in telecom sector. Journal: The Pakistan Development Review Pages: 575-586 Volume: 38 Issue: 4 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume4/575-586.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:4:p:575-586 Template-Type: ReDIF-Article 1.0 Author-Name: Muhammad Abbas Choudhary Author-X-Name-First: Muhammad Author-X-Name-Last: Abbas Choudhary Author-Workplace-Name: Pakistan Telecommunications Authority, Islamabad. Author-Name: Muhammad Saeed Author-X-Name-First: Muhammad Author-X-Name-Last: Saeed Author-Workplace-Name: Pakistan Telecommunications Authority, Islamabad. Title: International Accounting Rate Reform in Telecommunications Abstract: Twenty European countries came together in 1865 to form an organisation, the predecessor to the International Telecommunications Union and to arrive at mechanisms and agree upon a methodology of distributing the revenues from the international telegraph service. The current accounting rate system is a modified version of the then developed methodology for the International telegraph. This international settlement regime based on accounting rates has long been under attack by economists, policy-makers in developed countries and international trade organisations. The ITU, the OECD, the FCC and other regulatory bodies are pursuing various initiatives to reform or replace the existing accounting rate system. These regulatory initiatives are aimed at reducing the current pricing distortions embedded in the accounting rate system. In the wake of the WTO agreement, a system of traffic compensation that is not ‘cost oriented’ is not only unsustainable, it is also in violation of the regulatory principles set out in the WTO reference paper. The FCC has been at the forefront of the move to decrease accounting rates. In August 1997, the FCC adopted “benchmark” accounting rates for different groups of countries, which it considered more closely related to the actual costs of providing international service between those countries and the US. The benchmark rates range from $0.15-$.23 per minute, and are far below those currently in practice, particularly for most of the developing countries which are sometimes in excess of $1.00 per minute. If implemented, these rates would significantly reduce international calling revenues of these countries. While the FCC obviously has no direct regulatory jurisdiction outside of the US, it has threatened to deny access to the US market to PTOs from other countries that do not reduce their accounting rates to the benchmark levels. While the future of the existing accounting rate system is being debated in regulatory circles, an increasing proportion of international traffic is bypassing this traditional system of compensation. Facilitated by the global trend towards the liberalisation of telecommunications markets, new technological means for bypassing the accounting rate system are also developing rapidly. Journal: The Pakistan Development Review Pages: 587-602 Volume: 38 Issue: 4 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume4/587-602.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:4:p:587-602 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: Munir Ahmad Author-X-Name-First: Munir Author-X-Name-Last: Ahmad 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: Growth of Livestock Production in Pakistan: An Analysis Abstract: Agriculture is the backbone and single largest sector of Pakistan’s economy as its contribution to Gross Domestic Product (GDP) exceeded 25.3 percent during 1997-98. Crops, livestock, fishing and forestry sub-sectors being its main components, only crop and livestock sub-sectors are of critical importance. They accounted for 59.6 and 36.2 percent of the sector’s output respectively. Because of the ongoing process of structural transformation, agriculture’s share in the national economy is shrinking. From 39 percent of GDP in 1969-70 it has fallen to its current levels [Pakistan (1999a)]. The livestock sub-sector however has not followed suit. It has risen from 27.3 percent in 1969-70 to 36.2 percent in 1997-98. This trend in fact would be more pronounced if the national accounts did not underestimate the sub-sector’s components such as farm yard manure, dung cakes for household fuels and animal draft power. Apart from its contributions to national income, the livestock sub-sector is an active employer of thousands of landless poor and subsistence and semi-subsistence small farming families. Being a household activity, women are a special beneficiary of employment in the sub-sector. It is a major source of nourishment like milk, butter oil, eggs and meat and adds immensely to the health, nutrition and well being of rural as well as urban people. While animal fat and butter oil supplies are helpful in containing vegetable oil imports, many products of livestock origin such as wool and wool products, leather and leather made-ups and animal casings are exported and contribute significantly to hard earned foreign exchange [Ahmad, Ahmad and Chaudhry (1996)]. It follows from the above that the livestock sub-sector is likely to maintain its position as the dominant sub-sector of Pakistan’s agricultural sector or even that of the national economy for quite sometime in the future. Despite the rising and critical importance of the sub-sector, there, however, is no corresponding emphasis on analysing its achievements, problems and future prospects and likely policies to brighten these up. In view of this limitation, the present paper makes a limited attempt to study the growth process of the livestock sub-sector. Journal: The Pakistan Development Review Pages: 605-614 Volume: 38 Issue: 4 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume4/605-614.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:4:p:605-614 Template-Type: ReDIF-Article 1.0 Author-Name: Muzaffar Iqbal Author-X-Name-First: Muzaffar Author-X-Name-Last: Iqbal Author-Workplace-Name: Animal Sciences Division, Pakistan Agricultural Research Council. Author-Name: Munir Ahmad Author-X-Name-First: Munir Author-X-Name-Last: Ahmad Author-Workplace-Name: Pakistan Institute of Development Economics, Islamabad. Title: An Assessment of Livestock Production Potential in Pakistan: Implications for Livestock Sector Policy Abstract: About two third of the farming community in Pakistan consists of small farmers who are characterised by small land holdings (less than 5 hectares) and by several factors that influence their productive potential and income generating capacity [Pakistan (1998)]. Livestock farming is an integral part of rural smallholders and has a vast untapped potential for productivity increase and income generation. Livestock holdings by the small farmers constitute a significant portion of the farm incomes. Small farmers and landless livestock producers derive around 10–25 percent of their incomes from this sub-sector.1 There have been and, largely, still are two primary purposes of raising livestock: (1) to meet the dietary needs of the rural and urban populace for milk and meat consumption; and (2) to fullfil the work performance requirements of the farm. Large ruminants receive more attention because of their capacity to perform both of the above functions. About 50 percent of the red meat supply in the country comes from large ruminants, yet beef production is not considered a separate specialised production activity. Rather it is treated as a by-product from animals kept for dairying and draught purposes. Most breeds of the large ruminants in Pakistan are famous for either milk production or draught power with hardly any beef breed. Therefore, the entire livestock production system revolves around milk production activity. Livestock raising is closely integrated with crop production system partly because fodder production is a part of the crop rotation cycle and also because crop by-products and wastes are utilised by the livestock sector. In other words, all ruminant production systems depend heavily on crop residues, fodder grown on the farm and/or rangelands, wastelands and fallow lands. Journal: The Pakistan Development Review Pages: 615-628 Volume: 38 Issue: 4 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume4/615-628.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:4:p:615-628 Template-Type: ReDIF-Article 1.0 Author-Name: Waqar A. Jehangir Author-X-Name-First: Waqar Author-X-Name-Last: A. Jehangir Author-Workplace-Name: International Irrigation Management Institute (IIMI), Lahore. Author-Name: M. Mudasser Author-X-Name-First: M. Author-X-Name-Last: Mudasser Author-Workplace-Name: International Irrigation Management Institute (IIMI), Lahore. Author-Name: Zakir Hussain Author-X-Name-First: Zakir Author-X-Name-Last: Hussain Author-Workplace-Name: Ministry of Food, Agriculture and Livestock, Islamabad, Title: Participatory Irrigation Management and its Financial Viability: A Case Study Abstract: Water is a key input of agriculture. In the past, the area under cultivation was small and there was less stress on farmers to grow more and more of each crop. Water was considered a free good. The situation has changed since. The increase in cropping intensity has led to a rise in the demand for irrigation water. Water is not a free good any more. The provision of irrigation water to the farmer’s fields is going to be costlier. The Government of Pakistan is spending heavily on the operation and maintenance of the irrigation system yet shortage of funds is a major reason for deferred maintenance, which threatens the operational integrity of the irrigation system [World Bank (1988) and Haq (1995)]. The shortfall in O&M funding was estimated to be more than 24 percent in 1993 [World Bank (1994)]. As poor O&M has direct effect on the productivity of agriculture, indirectly it affects the whole economy [Carruthers (1981)]. The allocation of funds for the increasing O&M costs is becoming a problem for the Government of Pakistan with every successive year. One logical answer to this problem is to increase abiana1 fees from the users of irrigation water supplies. The revenue collected through abiana may be used for O&M purposes, but it has been reported that the revenue collection is far less than the expenditures incurred. Resultantly the gap has been increasing every year [Chaudhry (1989)]. This situation demands investigation of abiana recovery and increasing O&M costs to know the real situation which in turn will help in deciding whether it is feasible to divert the financing of O&M activities towards farmer organisations (completely or partially). This paper aims at estimating the present level of operation and maintenance expenditures of the H-4-R Distributary and the present situation of the abiana collection and the extent of its leakage through different means. Journal: The Pakistan Development Review Pages: 629-640 Volume: 38 Issue: 4 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume4/629-640.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:4:p:629-640 Template-Type: ReDIF-Article 1.0 Author-Name: Abdul Hakim Author-X-Name-First: Abdul Author-X-Name-Last: Hakim Author-Workplace-Name: National Institute of Population Studies (NIPS), Islamabad. Title: Demographic, Socio-economic, and Regional Fertility Differentials in Pakistan Abstract: Pakistan, with an estimated population of 135.6 million in 1999, is the seventh most populous country in the world. The historical trends indicate a continuous and exponentially increasing growth in population because of sustained high fertility and declining mortality. Currently, the population is growing at around 2.3 percent per annum, one of the highest rates of growth in the world. In Pakistan, the contraceptive prevalence is still low (24 percent) and fertility level (TFR 5.0) is among the highest in the world. There has been only a marginal decline in fertility in Pakistan over the last two and half decades. An average married woman in Pakistan still experiences a total of at least seven children if she survives and completes her reproductive periods. The purpose of this analysis using data from a nationally representative sample survey, Pakistan Fertility and Family Planning Survey 1996-97 [see Hakim et al. (1998) for details] is to determine whether there are any differentials in fertility levels by age at marriage, educational level, occupation, region of residence (province), place of residence (urban or rural) and economic class. Both bivariate and multivariate analyses have been undertaken to examine the effect of the selected demographic and socio-economic variables on the level of fertility. Some variations by use of contraception, exposure to mass media, mother tongue, women’s mobility and decision-making variables were also studied, but subsequently dropped because differentials were either not sustained or captured by other variables. Journal: The Pakistan Development Review Pages: 643-660 Volume: 38 Issue: 4 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume4/643-660.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:4:p:643-660 Template-Type: ReDIF-Article 1.0 Author-Name: Mehtab S. Karim Author-X-Name-First: Mehtab Author-X-Name-Last: S. Karim Author-Workplace-Name: Aga Khan University, Karachi. Author-Name: Shehla Zaidi Author-X-Name-First: Shehla Author-X-Name-Last: Zaidi Author-Workplace-Name: Aga Khan University, Karachi. Title: Poor Performance of Health and Population Welfare Programmes in Sindh: Case Studies in Governance Failure Abstract: Over the past few years, the issue of what is meant by “good governance” has generated increasing attention and debate both at the national and international level [Streeten (1997)]. The role of state and how that role is to be exercised is appearing high on the agenda of politicians, policy-makers and academicians in the developing world. Governance has been defined by the World Bank as “the manner in which power is exercised in the management of the country’s economic and social resources” [World Bank (1994)]. The somewhat narrow scope of this definition has been broadened in recent years to “the sum of the many ways individuals and institutions, public and private, manage their common affairs” [Commission on Global Governance (995)] The Human Development Report [UNDP (1999)] goes beyond these definitions and gives a much more radical notion of good governance, underpinning the importance of peoples’ participation in shaping their own governance and development. This type of governance has been labeled as “humane governance”. A review of existing literature thus shows that governance has been interpreted to have different elements such as management of economic and social resources for development, formulation and implementation of policies, discharging of functions, accommodation of diverse interests towards cooperative action and above all, accountability to people and ownership by the people of the governance process. In view of the above, one may ask what constitutes good governance for the health sector? Management of resources pertains to the concept of efficiency, a term appearing with increasing frequency in global literature on health care reforms; policy formulation and discharging of functions allude to the objective of effectiveness which itself has a wide scope encompassing relevance, quality and availability of health care; while “humane governance” brings in the notion of community participation and accountability with regards to decision-making and delivery of health care. Journal: The Pakistan Development Review Pages: 661-688 Volume: 38 Issue: 4 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume4/661-688.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:4:p:661-688 Template-Type: ReDIF-Article 1.0 Author-Name: Syed Mubashir Ali Author-X-Name-First: Syed Mubashir Author-X-Name-Last: Ali Author-Workplace-Name: Pakistan Institute of Development Economics, and National Institute of Population Studies, Islamabad. Author-Name: Mehboob Sultan Author-X-Name-First: Mehboob Author-X-Name-Last: Sultan Author-Workplace-Name: Pakistan Institute of Development Economics, and National Institute of Population Studies, Islamabad. Title: Socio-cultural Constraints and Women’s Decision-making Power Regarding Reproductive Behaviour Abstract: In a previous study [Ali, Siyal and Sultan (1995)], we observed a big gap between behaviour and desires. Only 35 percent women had the number of children that they had desired. Whereas, a very large number of women had more children than their stated ideal number of children. The same data set also showed that a majority of women (54 percent) either wanted to stop having children or wanted to wait at least two years before having another child [Ali and Rukanuddin (1992)]. In practice, all of these women were not protected; instead only 12 percent were practising contraception [Shah and Ali (1992)]. An argument was put forward that, had these women been empowered to decide about the number of children to be born, the scenario would have been different and small family size norms would have prevailed. However, the finding of that study revealed that generally, the women who were considered to be empowered were actually constrained to exercise fertility control behaviour. It was hypothesised that socio-cultural influences including those of husbands, in-laws and other family members impelled women to become incapacitated. In the present study, an effort has been made to investigate and identify factors that influence women’s decision making about reproductive behaviour. Furthermore, an attempt to measure the extent of these influences has been made. Journal: The Pakistan Development Review Pages: 689-696 Volume: 38 Issue: 4 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume4/689-696.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:4:p:689-696 Template-Type: ReDIF-Article 1.0 Author-Name: Sohail Jehangir Malik Author-X-Name-First: Sohail Author-X-Name-Last: Jehangir Malik Author-Workplace-Name: The World Bank, Washington, D. C. and Pakistan Institute of Development Economics, Islamabad. Author-Name: Hina Nazli Author-X-Name-First: Hina Author-X-Name-Last: Nazli Author-Workplace-Name: The World Bank, Washington, D. C. and Pakistan Institute of Development Economics, Islamabad. Title: Rural Poverty and Credit Use: Evidence from Pakistan Abstract: The 1990s have seen poverty reduction become the overarching objective of all economic development. In countries where poverty is largely a rural phenomenon it is obvious that considerations of poverty focus on improving rural welfare. The welfare impact of credit use in the process of agricultural development is generally not explicitly documented in the literature.1 The emphasis is generally on “the requisites for development of rural financial policies that facilitate rural growth” [Desai and Mellor (1993)]. Welfare gains arise from this growth through net gains in income from the relaxation of the capital constraint leading to higher input use and resultant higher output, in addition to increasing the risk bearing capacity of households thus leading to the adoption of new technology and diversification of crop mix and income sources. Additionally welfare gains can also arise from credit use directly through improved and more efficient consumption smoothing. Pakistan is predominantly rural and poor. Attempts over several decades, by successive governments, at developing the institutional credit market in Pakistan have failed miserably. The rural credit market continues to be fragmented and beset by distortions. Credit policy aimed at improving access of the small landowners and the poor ended up being diverted to the powerful large landowners. This misuse is widely documented in Malik (1989, 1990 and 1999). Badly designed policies coupled with a weak institutional structure and rampant corruption called into question the very basis for using credit markets as a means for poverty alleviation. This paper, therefore, attempts to evaluate the underlying relationship between rural poverty and credit use. Journal: The Pakistan Development Review Pages: 699-716 Volume: 38 Issue: 4 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume4/699-716.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:4:p:699-716 Template-Type: ReDIF-Article 1.0 Author-Name: Zafar H. Ismail Author-X-Name-First: Zafar Author-X-Name-Last: H. Ismail Author-Workplace-Name: Social Policy and Development Centre. Title: Impediments to Social Development in Pakistan Abstract: The development of infrastructure and the provision of basic services in Pakistan lie in the public domain. The quality of the built infrastructure and the service offered reflect successive governments’ capability as a channel for public sector funds, their role in overall financial and macro-economic planning and management, and their administrative efficiency in implementation, operations and management—in essence the extent to which they are able to adhere to the principles of good and humane governance. Good governance is generally conceived of as the judicious exercise of economic, political and administrative authority in the public and private spheres to manage a country’s affairs at all levels to improve the quality of life of the people. It is a continuing process where divergent opinions and desires are satisfied through compromise and tolerance in a spirit of cooperative action for the mutual benefit of the larger whole. It has three dimensions: one, the political regime; two, the systems and procedures for exercising authority; and three, the capacity of governments [World Bank (1994); UNDP (1997); OECD (1995); Commission on Global Governance (1995)]. When Pakistan gained political freedom in August 1947, it inherited an economic and social infrastructure unable to meet the demands of the large influx of refugees from India. Five decades later, policies emphasising public investment, subsidised credit and regulated private sector development have generated strong economic growth, but failed to implement successful social development. Over the last 50 years and more Pakistan’s economy, measured through its GDP, has grown by more than 10 times, an average annual growth rate of 5.1 percent. Rapid population growth, estimated to have averaged just under 3 percent annually, has resulted in real per capita increases of only 2.1 percent per year. Journal: The Pakistan Development Review Pages: 717-738 Volume: 38 Issue: 4 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume4/717-738.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:4:p:717-738 Template-Type: ReDIF-Article 1.0 Author-Name: Aisha Ghaus-Pasha Author-X-Name-First: Aisha Author-X-Name-Last: Ghaus-Pasha Author-Workplace-Name: Social Policy and Development Centre, Karachi. Author-Name: Naeem Ahmed Author-X-Name-First: Naeem Author-X-Name-Last: Ahmed Author-Workplace-Name: Social Policy and Development Centre, Karachi. Title: Pakistan’s Ranking in Social Development: Have We Always Been Backward? Abstract: Consensus is emerging between development thinkers and practitioners that social progress is a necessary pre-condition for sustained economic growth. Social development leads to higher levels of literacy, better health standards and overall improvement in the society’s living conditions. In fact, empirical evidence suggests that there is a two-way relationship between economic growth and social development [Ghaus-Pasha et al. (1998)]. Economic growth leads to higher revenues for government and higher per capita income, encouraging both public and private spendings on human development. Improvements in social indicators feedback as higher economic growth through enhanced productivity for labour and capital. In other words, well-developed human capital makes a significant contribution to economic growth which, in turn, offers improved welfare and better living conditions. However, if there is a breakdown in this chain and economic development is not translated into social development, then the pace of economic development eventually suffers. Pakistan is an example of a country where this chain has broken. Despite moderate economic growth of about 5 percent during the last decade or so, the state of social indicators leaves a lot to be desired. Currently, the female literacy rate is 33 percent, being somewhat higher for males at 56 percent; primary school enrolment for females is 55 percent, for males 78 percent; and infant mortality rate is 105 out of 1000. Today, Pakistan is ranked 138 in the human development index by the UNDP (1999) among 174 countries. The purpose of this paper is to see the state of social development in Pakistan in the international context. Journal: The Pakistan Development Review Pages: 739-754 Volume: 38 Issue: 4 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume4/739-754.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:4:p:739-754 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. Title: The Theory and Practice of Agricultural Income Tax in Pakistan and a Viable Solution Abstract: Pakistan has a history of taxing agriculture through the land revenue system. Being income and price inelastic, the replacement of the system with agricultural income tax is considered inevitable for meeting the financial needs of a growing national economy. In fact, under pressures from World Bank and International Monetary Fund (IMF), Pakistan introduced various variants of agricultural income tax in the past and in full during 1993 and 1996 respectively [World Bank (1999)]. However the introduction of agricultural income tax is a highly controversial issue in Pakistan, in government circles as well as among professional researchers and economists. Out of the nine commissions [Pakistan (1959, 1960, 1963, 1964, 1970, 1975, 1986, 1988, 1989 and 1993a)] that studied agricultural taxation only two recommended it. [Pakistan (1960, 1993a)]. The remaining seven favoured the existing land revenue system. The studies of individual economists are no less controversial in this respect. There seems to be a general consensus among such writers as [Hamid (1970); Yaqub (1971); Chowdhury (1971); Khan (1991) and World Bank (1999)] on the repeal of land revenue system in favour of agricultural income or graduated land tax. Against this an equal number of economists, have shown dissatisfaction with agricultural income tax as an effective tool of taxing agriculture [Ahmad and Stern (1989); Bird (1974); Bird and Oldman (1990); Chaudhry and Maan (1993); Gold and Foster (1972) and Newbery (1987)]. While the merits and demerits of agricultural income tax perceived by various writers in theory and practice are a major source of the controversy, the present paper attempts to provide an assessment of introducing the policy in Pakistan in the light of typical characteristics of a good tax policy if only to recommend viable alternatives. Journal: The Pakistan Development Review Pages: 757-768 Volume: 38 Issue: 4 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume4/757-768.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:4:p:757-768 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. Author-Name: Tariq Mahmood Author-X-Name-First: Tariq Author-X-Name-Last: Mahmood Author-Workplace-Name: Pakistan Institute of Development Economics, Islamabad. Title: Monetary Expansion and Stock Returns in Pakistan Abstract: The effect of changes in money supply on stock returns has been a matter of controversy among economists for many decades. Those in favour of presence of links between money market and stock market argue that any change in money supply creates a wealth effect which disturbs the existing equilibrium in the portfolio of investors. When they re-adjust their asset portfolio, a new equilibrium is established in which the price level of various assets is changed. On the other hand, if the stock market is efficient, it would already have incorporated all the current and anticipated changes in money supply. Consequently, a causal relationship between changes in money supply and stock prices will not be established. Moreover if the change in money supply coincides with a corresponding change in the velocity of money, it will not have any effect on stock prices. The pioneering work in this regard was done by Sprinkel (1964). Using the data from 1918 to 1960, he found a strong relationship between stock prices and money supply in the United States. His conclusions, however, were mostly based upon graphical analysis. Sprinkel’s study brought many conceptual and methodological issues in the forefront. Elaborate statistical techniques were used to explore the relationship between money supply and stock prices. For example, Rozeff (1974) conducted an extensive study and concluded that U.S. stock market is efficient with respect to monetary policy. Similarly Kraft and Kraft (1977) found no causal relationship between money supply and stock returns in the States. Ho (1983) examined the causal relationship between money supply and stock returns for six Asian-Pacific countries.1 Using monthly data and employing minimum Final Prediction Errors, he found a uni-directional causality from money supply to stock prices for Japan and Philippines but bi-directional causality for Singapore. Journal: The Pakistan Development Review Pages: 769-776 Volume: 38 Issue: 4 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume4/769-776.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:4:p:769-776 Template-Type: ReDIF-Article 1.0 Author-Name: Attiya Y. Javed Author-X-Name-First: Attiya Author-X-Name-Last: Y. Javed Author-Workplace-Name: Pakistan Institute of Development Economics, Islamabad. Author-Name: Ayaz Ahmed Author-X-Name-First: Ayaz Author-X-Name-Last: Ahmed Author-Workplace-Name: Pakistan Institute of Development Economics, Islamabad. Title: The Response of Karachi Stock Exchange to Nuclear Detonation Abstract: Stock markets are highly reactive to internal and external developments. News of major events take no time to impact, the Stock Exchange that quite often serves as a barometer of the good and bad for the market. The importance of particular events and their effect on the stock market has been a subject of study in financial literature. Such studies attempt to assess the extent to which stock markets’ performance stray’s from the normal around the time of the occurrence of subject events. The stock market crash in the USA of October 1987 and related crash in the Far East later in January 1998 led to several studies of the event. On October 14, 1987, the US stock market began the steepest decline of its history, culminating in the crash of October 19, when the Dow Jones Industrial Average fell 508 points (22.6 percent). Certain aspects of the event of Black Monday as it is called emphasised the need for research to explore what fundamental economic factors triggered the large decline and the institutional and structural factors that were inherent in the trading strategies of investors. Michell and Netter (1989) have presented evidence that a tax bill containing anti takeover provision proposed by the U.S. House Ways and Means Committee of Oct. 13, 1987 was the economic event that triggered the October 19 crash. Other events and economic conditions during October 14–16 have been cited in the literature including higher than expected trade deficits, rising interest rate and increased worries about the government deficit and fear of inflation by many studies. Certain trading strategies such as index arbitrage and portfolio insurance has been cited by the Report of Presidential Task Force (1988). Roll (1988) has argued the crash did not begin in US since many other world markets experienced a severe decline on October 19 before US markets opened. Journal: The Pakistan Development Review Pages: 777-786 Volume: 38 Issue: 4 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume4/777-786.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:4:p:777-786 Template-Type: ReDIF-Article 1.0 Author-Name: Rehana Siddiqui Author-X-Name-First: Rehana Author-X-Name-Last: Siddiqui Author-Workplace-Name: Pakistan Institute of Development Economics, Islamabad. Author-Name: Rizwana Siddiqui Author-X-Name-First: Rizwana Author-X-Name-Last: Siddiqui Author-Workplace-Name: Pakistan Institute of Development Economics, Islamabad. Author-Name: Zafar Iqbal Author-X-Name-First: Zafar Author-X-Name-Last: Iqbal Author-Workplace-Name: International Monetary Fund, Islamabad. Title: The Impact of Tariff Reforms on Income Distribution in Pakistan: A CGE-based Analysis Abstract: Like most developing countries, Pakistan has undertaken drastic economic policy reforms since the mid-1980s. Under these structural reforms there is a general shift away from quantitative restrictions and price controls towards liberalisation and privatisation. The empirical studies1 analysing the impact of the reforms report mixed results. Economy wide framework like Computable General Equilibrium (CGE), based on the social accounting matrix, is well suited to analysing the effect of these structural reforms. The CGE models are developed to capture the medium to long-run effects through which adjustment programmes affect income distribution. These models are often used to evaluate the effects of trade and tax policies on income distribution in developing countries. There are three interacting channels through which these adjustment policies affect income distribution, viz., the relative price effect, the asset price effect and the shift in portfolio. However, in this study, we are analysing the effect of changes in relative prices only. The first and more easily quantifiable channel is through analysis of the impact of changes in production prices following changes in tariff. For a given shock in the above mentioned policy variables, the medium to long-run distributional impact of the resulting structural adjustment is determined by the extent of relative price rigidities (fixed real wages, or mark up pricing), the extent of factor mobility (supply elasticity’s) and difference in consumption pattern across socio-economic groups. Difference in assumptions and closure rule play a very important role in market adjustment mechanism in developing countries. Simulation exercises show that assumptions about the macro economic closure and behavioural parameters matter a great deal in determining the productive and distributive effects of a shock and a country’s adjustment to the shock. Journal: The Pakistan Development Review Pages: 789-804 Volume: 38 Issue: 4 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume4/789-804.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:4:p:789-804 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: Development Research and Policy Analysis Division, UN-ESCAP, Bangkok. Title: Conceptual Framework for Growth Triangles Abstract: In recent years, while the significance of regional trade and trading blocs within Asia region (AFTA, APEC, ASEAN, SAARC, EAEC, etc.) has gained considerable interest among the policy-makers and researchers alike, tangible accomplishments, in terms of enhanced economic cooperation and trade liberalisation among the trading blocs, are still muted [Thant et al. (1998), p. 23]. Several reasons and problems have been cited for the limited success of these formal trading blocs, particularly in the Asia region, namely: (a) shortage of large volumes of internal and inter-regional trade; (b) absence of complimentary laws and regulations among the trading blocs in managing trade and investment flows; (c) inadequate transport and communication facilities and the lack of geographic proximity among many member countries; (d) presence of income disparities among several member countries may have negative effect on income distribution at the time of adjustments in trade flow; and (e) lack of political commitments and policy coordination among member countries. However, since the late 1980s, a new innovative genre of regional economic cooperation, bridging the differences between regional blocs and international trade, began to surface in the Asia region, which are now commonly known as “growth triangles” or, more appropriately, “growth zones” and they were also considered to be devoid of some of the predicaments noted above for regional trading blocs. Journal: The Pakistan Development Review Pages: 805-822 Volume: 38 Issue: 4 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume4/805-822.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:4:p:805-822 Template-Type: ReDIF-Article 1.0 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: Kalbe Abbas Author-X-Name-First: Kalbe Author-X-Name-Last: Abbas Author-Workplace-Name: Pakistan Institute of Development Economics, Islamabad. Title: The Uruguay Round Agreement: Implications for Pakistan’s Textiles and Clothing Sector Abstract: The Uruguay Round (UR), which marked the conclusion of protracted multilateral trade negotiations, resulted in comprehensive agreements on multilateral trade in goods and services within the framework of the General Agreement on Tariffs and Trade (GATT). The newly created World Trade Organisation (WTO) provides an institutional framework that encompasses all the agreements and legal instruments negotiated in the UR as well as the dispute settlement procedures and provisions for the regular monitoring of policies of the member countries. The UR agreement has been widely perceived as constituting a major advance in the process of multilateral liberalisation of trade in goods and services and, when fully implemented, is expected to improve economic efficiency and welfare from the global, national and sectoral standpoints. An important feature of the UR agreement is the incorporation of new sectors like textiles and clothing within the ambit of the GATT/WTO framework. In view of the fact that the textiles and clothing industry is one of the few sectors in which developing countries enjoy a distinct comparative advantage over industrial countries, the UR agreement holds considerable significance for developing economies like Pakistan. Journal: The Pakistan Development Review Pages: 823-833 Volume: 38 Issue: 4 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume4/823-833.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:4:p:823-833 Template-Type: ReDIF-Article 1.0 Author-Name: Salman Syed Ali Author-X-Name-First: Salman Author-X-Name-Last: Syed Ali Author-Workplace-Name: International Institute of Islamic Economics, International Islamic University, Islamabad. Author-Name: Sayyid Tahir Author-X-Name-First: Sayyid Author-X-Name-Last: Tahir Author-Workplace-Name: International Institute of Islamic Economics, International Islamic University, Islamabad. Title: Dynamics of Growth, Poverty, and Inequality in Pakistan Abstract: The relationship between growth, inequality, and poverty has been a moot point. On the one hand growth is considered central or the best course to reduce poverty (e.g. World Development Report 1990) with the preconditions that access to education, health, and social services are available to all by means of other policies. On the other hand, there is a realisation that growth, inequality, and poverty relations are non-linear, complex, and path dependent in their dynamics. An important point made in this context by Kuznets (1955) was the empirical finding of an inverted U (arch) shape relationship between growth and inequality which suggested that the inequality would increase with growth in the beginning, but will decline at higher levels of growth as the benefits of growth trickle down to lower income strata. This argument has been debated since then in the literature with empirical support gathered for and against this hypothesis. Recent theoretical literature on the issue tries to find the micro-foundations of the dynamical relations between these three variables (see for example, proceedings of the 5th ABCDE Annual (World) Bank Conference on Development Economics). Institutional factors do not change in a few years while they matter in the reduction of poverty as well as in sustaining it at low levels. Hence these relationships are likely to be non-linearity and path dependent, i.e., history matters in the determination of the impact of growth on poverty, of growth on inequality, of inequality on poverty etc. Therefore an understanding of these relationships require knowledge of both the short-run as well as the long-run elasticities of poverty. The method developed by Kakwani (1993) and Kanbur (1987), make use of single survey and provides information on the short-term elasticities but remain silent about longer term relationships between poverty, growth, and inequality. Journal: The Pakistan Development Review Pages: 837-858 Volume: 38 Issue: 4 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume4/837-858.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:4:p:837-858 Template-Type: ReDIF-Article 1.0 Author-Name: Muhammad Ali Bhatti Author-X-Name-First: Muhammad Ali Author-X-Name-Last: Bhatti Author-Workplace-Name: Gordon College, Rawalpindi, Pakistan Institute of Development Economics, Islamabad and Quaid-i-Azam University, Islamabad. Author-Name: Rashida Haq Author-X-Name-First: Rashida Author-X-Name-Last: Haq Author-Workplace-Name: Gordon College, Rawalpindi, Pakistan Institute of Development Economics, Islamabad and Quaid-i-Azam University, Islamabad. Author-Name: Tariq Javed Author-X-Name-First: Tariq Author-X-Name-Last: Javed Author-Workplace-Name: Gordon College, Rawalpindi, Pakistan Institute of Development Economics, Islamabad and Quaid-i-Azam University, Islamabad. Title: A Sectoral Analysis of Poverty in Pakistan Abstract: Since independence, the problem of mass poverty in Pakistan has been substantial. The number of the destitute has continued to soar. The problem of poverty now looks to be beyond control. The vast masses of the people, particularly in rural areas, are indeed, miserably below the poverty line. Moreover, the socioeconomic and demographic indicators are dismal. Official planning and the market economy system have failed to lessen poverty. The policies formulated to eradicate it have failed to achieve their objectives. The issue of poverty in Pakistan has its significance for sustainable development. Long run development is not possible without protecting the rights of the vulnerable groups and the participation of the entire population in the development process. Although Pakistan’s economic growth has been quite respectable for much of the last four decades but it has failed to trickle down to the masses. The country has experienced poverty and stagnation in 1950s, increasing poverty and growth in the 1960s, stagnation of growth but declining poverty in the 1970s, increasing growth and declining poverty in the 1980s and finally, increasing poverty and falling growth in the 1990s [MHCHD/UNDP (1999)]. The mainstream approach to identifying the poor specifies a cut-off point ‘poverty line’, defining the level of income/expenditure below which people are diagnosed as poor. The conventional measure of poverty, head-count index, has been widely used in Pakistan. However, in practice this absolute threshold usually cannot stand the pressures of changing circumstances and is not as absolute as the term would appear to imply [Zaidi and de Vos (1993)]. To show the true face of poverty this study uses Foster, Greer and Thorbecke (1984) class of additively decomposable measure to estimate the variation in the incidence, intensity and severity of poverty across sectors of employment. This study also determines the relative contribution of the various sectors to aggregate poverty. Location index is also used to measure the concentration of poor in each sector. To evaluate the sources of observed changes in sectoral poverty at the micro level ‘HIES’ data sets are used. Journal: The Pakistan Development Review Pages: 859-872 Volume: 38 Issue: 4 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume4/859-872.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:4:p:859-872 Template-Type: ReDIF-Article 1.0 Author-Name: Nabeel A. Goheer Author-X-Name-First: Nabeel Author-X-Name-Last: A. Goheer Author-Workplace-Name: The Planning Commission, Islamabad. Title: Poverty in Pakistan: Increasing Incidence, Chronic Gender Preponderance, and the Plausibility of Grameen-type Intermediation Abstract: Pakistan is a large country with a population estimated at 130.580 million.1 The economy has a low-income of US$ 490 per capita, with an estimated Purchasing Power Parity (PPP) of US$ 2230.2 It has managed to achieve substantial economic growth in the past thirty years until the dawn of 1990s. The growth rate has averaged 6.8 percent, 4.8 percent and 6.5 percent in 1960s, 70s and 80s, respectively.3 Evidence from the National Income Accounts, Household Surveys and time series data on the real wages of unskilled workers shows that economic growth has contributed to reduce consumption poverty4 in Pakistan. The table placed as Appendix A at the end shows that GDP per capita has increased in real terms by about 63 percent between 1972-73 and 1990-91. Private consumption per capita also increased in real terms by about 36 percent. Despite the fact that the population has nearly doubled during the period, there have been gains in income and consumption in per capita terms.5 Further evidence of the decline in consumption poverty comes from various research studies in the past. These studies have generally used Household Integrated Economic Surveys (HIES) and estimated the incidence of poverty by using various definitions. Journal: The Pakistan Development Review Pages: 873-894 Volume: 38 Issue: 4 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume4/873-894.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:4:p:873-894 Template-Type: ReDIF-Article 1.0 Author-Name: Pervez Tahir Author-X-Name-First: Pervez Author-X-Name-Last: Tahir Author-Workplace-Name: The Planning Commission, Government of Pakistan, Islamabad. Title: Multisectoral Initiatives, Sectoral Inertia: A Dilemma of Governance for Development Policy-makers Abstract: The opinion of development professionals at home and abroad has converged on the point that bad governance lies at the root of the loss of the momentum of economic growth, increasing poverty and failed investment in social sectors. Early concern of development economists with market failure brought in the arguments for the role of government. Government failure was the dominant issue of the eighties. The last decade of the twentieth century is witnessing a focus on governance failure, a broader concept in that the government is not viewed as the only governing entity. This paper addresses an issue which has been there during the reigns of all these “failure” paradigms. It arises from the inability of governments, organised traditionally into the vertically operating line departments, to deal effectively with multisectoral or cross-sectoral problems and cross-cutting issues. The paper traces the evolution of multisectoral issues and looks at the standard approach of treating multisectoral initiatives as a horizontally fathomed coordination problem to show that it has been an unmitigated disaster. It argues that the multisectoral issues can be better addressed by internalising the elements of coordination, particularly in social sectors, though there have been situations which raise questions about this approach as well. The large majority of the newly emergent nations of the postwar world adopted a planned course of development, some impressed by the high industrial growth achieved by the Soviet Union and others convinced by the analytical case for overcoming the market imperfections. Journal: The Pakistan Development Review Pages: 897-904 Volume: 38 Issue: 4 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume4/897-904.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:4:p:897-904 Template-Type: ReDIF-Article 1.0 Author-Name: Syed Tahir Hijazi Author-X-Name-First: Syed Tahir Author-X-Name-Last: Hijazi Author-Workplace-Name: Mohammad Ali Jinnah University, Islamabad Campus. Title: Motivational Aspect of Good Governance Abstract: A government job is what most job seekers look for in Pakistan. With a feudal background and job culture inherited from British India, government jobs are believed to provide security, permanency, status and privileged treatment in day to day affairs. But where entering into government jobs is attractive, working in a government atmosphere is often found to be boring, monotonous, and devoid of enthusiasm. Attending office is a matter of killing time. One comes late and leaves early. There is no incentive to work hard, as promotions and benefits depend on seniority not on performance. Coercion seems to be the only management technique, which at times fails or fires back if the manager is not very tactful. Management theories and motivational concepts are foreign names in government departments. Without including the motivational aspects of good governance it would be futile to try to improve performance. Journal: The Pakistan Development Review Pages: 905-912 Volume: 38 Issue: 4 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume4/905-912.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:4:p:905-912 Template-Type: ReDIF-Article 1.0 Author-Name: Seemi Waheed Author-X-Name-First: Seemi Author-X-Name-Last: Waheed Author-Workplace-Name: Pakistan Administrative Staff College, Government of Pakistan, Lahore. Title: Capacity Building in Public Sector Organisations Abstract: During the last two decades the world has experienced a major transformation in thinking on the role of government in provision of services and socio-economic development. This change in thinking has come about as a result of the inability of two major philosophies of production—capitalism and socialism—to redistribute resources for the improvement in the living condition of the masses. Both the philosophies have shortcomings. Capitalism encourages entrepreneurship and growth, but it also creates extreme economic disparities leading to poverty. Socialism in its attempt to create an egalitarian society curbs and stifles entrepreneurship, leading to discontentment and economic inefficiencies. Developing countries have followed, by and large, a mix of these philosophies but the result has not been encouraging in most of the cases. Economic distortions and inefficiencies have been the common outcome. In addition, human development indicators and the quality of life in these countries has fallen far below the minimum acceptable standard. Inequitable distribution of resources is attributed to the absence of a participative and democratic political structure on the one hand, and mismanagement of resources and the absence of a facilitative administrative structure on the other. The latter attribute is now commonly termed as poor ‘governance’ of resources. Journal: The Pakistan Development Review Pages: 913-934 Volume: 38 Issue: 4 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume4/913-934.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:4:p:913-934 Template-Type: ReDIF-Article 1.0 Author-Name: Zafar Mueen Nasir Author-X-Name-First: Zafar Mueen Author-X-Name-Last: Nasir Author-Workplace-Name: Pakistan Institute of Development Economics, Islamabad. Title: Do Private Schools Produce More Productive Workers? Abstract: Education has positive links with economic development as it raises the productivity of the work force. Beside private rates of returns, the social returns of education are also high. Because of the gains to society, education is subsidised in many countries. Pakistan, where only 2.5 percent of the GDP is spent on education, provides subsidised education in the form of a public school system.1 Government pays for the major expenditures such as construction of infrastructure for education and salaries to the teaching and related staff. Household cost is kept low to attract more people to send their children to schools. Therefore only a nominal tuition fee is being charged for attending these schools. From the social point of view these schools are doing a good job in achieving the goal of universal education. But quality of education is a serious problem with this school system. In the majority of the cases, these are crowded with students and most of the time without adequate number of teaching staff.2 The standards set for the employment of teaching staff are not properly observed in the presence of a low literacy in the country. Journal: The Pakistan Development Review Pages: 937-954 Volume: 38 Issue: 4 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume4/937-954.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:4:p:937-954 Template-Type: ReDIF-Article 1.0 Author-Name: Naheed Zia Khan Author-X-Name-First: Naheed Author-X-Name-Last: Zia Khan Author-Workplace-Name: Fatima Jinnah Women’s University, Rawalpindi. Title: State, Education, and the Market Abstract: The tail of the tail-end of the 2nd millennium has taught the humankind two valuable lessons: democracy and the market, although imperfect, have succeeded where other systems have failed. What is clear is that the most successful systems are aligned to humankind’s predispositions rather than being inimical to them. Insofar as it aligns itself with the predisposition to greed, consistently regulated capitalism terms out to be the most efficient economic system hitherto observed in human society. Likewise, democracy works by aligning many people’s desire for power with a governance system which on balance is helpful to the general population, unlike various forms of totalitarianism. But recent movements for both capitalism and democracy in many developing countries largely do not subscribe to humankind’s predispositions, rather they appear to be a part of the headlong global trend towards these paradigms. The reason being that the most important ingredient, common to both recipes, is lacking in many developing countries: that is the popular pressure and mobilisation which is sufficiently informed of its duties and rights. This ingredient is most important as it forces out the authoritarian rule whether, totalitarian or ‘democratic’, and makes democratic governance drive the market to the maximum benefit of society. The central thesis of this work is that this most important ingredient is the result of an effective and efficient system of public institutions for free and compulsory universal primary schooling which, if the resource constraint could be overcome, ought to be supplemented by free and compulsory secondary schooling. The argument is structured in five parts. Journal: The Pakistan Development Review Pages: 955-978 Volume: 38 Issue: 4 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume4/955-978.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:4:p:955-978 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: Najam US Saqib Author-X-Name-First: Najam US Author-X-Name-Last: Saqib Author-Workplace-Name: Pakistan Institute of Development Economics, Islamabad. Author-Name: G. M. Zahid Author-X-Name-First: G. M. Author-X-Name-Last: Zahid Author-Workplace-Name: Pakistan Institute of Development Economics, Islamabad. Title: Poverty, Gender, and Primary School Enrolment in Pakistan Abstract: Primary education is at the base of the pyramid of education, and is regarded as a fundamental human right today. In addition, it has several tangible social and economic effects. As an essential component of human capital, primary education plays an important role in the economic growth and development of a country.1 Its impact on several other socioeconomic variables has also been documented in the literature. To quote a few examples, Butt (1984) has found that five or more years of a farmer’s education lead to increased farm productivity, reduced use of farm labour, and increased use of yield augmenting inputs. Azhar (1988) also reports a significant relationship between the number of years of schooling and increase in farm output due to increased technical efficiency. Studies of the rates of returns to education attribute a positive value to the rate of returns to primary education.2 This means that by acquiring primary education one can increase one’s earnings. Every policy document prepared by the Government of Pakistan aims at attaining universal primary education. However, it is also true that each of these documents has advanced the date for achieving the target specified in the previous one. The net enrolment rates at the primary level show that we are still far from this target. Journal: The Pakistan Development Review Pages: 979-992 Volume: 38 Issue: 4 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume4/979-992.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:4:p:979-992 Template-Type: ReDIF-Article 1.0 Author-Name: Saeed Shafqat Author-X-Name-First: Saeed Author-X-Name-Last: Shafqat Author-Workplace-Name: Civil Services Academy, Walton, Lahore. Title: Pakistani Bureaucracy: Crisis of Governance and Prospects of Reform Abstract: This paper is divided into three parts. The first part provides an overview of literature on how the role and assessment of bureaucracy in the Third World in general and Pakistan in particular has undergone change. The second part examines the changing socioeconomic profile and corresponding attitudinal changes if any, in Pakistan’s bureaucracy. The third part provides guidelines for possible reform in Pakistan’s federal bureaucracy. Journal: The Pakistan Development Review Pages: 995-1017 Volume: 38 Issue: 4 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume4/995-1017.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:4:p:995-1017 Template-Type: ReDIF-Article 1.0 Author-Name: Sohail Jehangir Malik Author-X-Name-First: Sohail Author-X-Name-Last: Jehangir Malik Author-Workplace-Name: The World Bank, Washington, D. C. Author-Name: Hina Nazli Author-X-Name-First: Hina Author-X-Name-Last: Nazli Author-Workplace-Name: Pakistan Institute of Development Economics, Islamabad. Author-Name: Kashif Abrar Author-X-Name-First: Kashif Author-X-Name-Last: Abrar Author-Workplace-Name: FFC- Jordan Fertiliser Company, Rawalpindi. Title: Solving Organisational Problems with Intranet Technology Abstract: Information serves as an essential intermediate input in decision-making for any business process. It is an essential requirement not only for effective and efficient management but also for medium and long term planning. In this era of technological advancement the rapid growth of information flow has contributed significantly in the expansion of business, commercial, industrial, financial, educational and research organisations. Electronic communication provides the ability to overcome many organisational problems. In recent years, an easy and inexpensive access to information through the Internet and e-mail has created an atmosphere of strong competition among organisations. In this competitive environment, the organisations need an efficient, productive and competent internal set-up based on a well-informed workforce. In the absence of effective co-ordination, the expansion of an organisation may result in inter-group conflicts, unhealthy bureaucratic activities, and various complexities in decision-making [Telleen (1996)]. This applies even more to organisations in developing countries such as Pakistan that are in need of efficient ways to improve governance and enhance institutional reforms. Journal: The Pakistan Development Review Pages: 1021-1036 Volume: 38 Issue: 4 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume4/1021-1036.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:4:p:1021-1036 Template-Type: ReDIF-Article 1.0 Author-Name: Nabeela Arshad Author-X-Name-First: Nabeela Author-X-Name-Last: Arshad Author-Workplace-Name: Pakistan Institute of Development Economics, Islamabad. Author-Name: Durr-E-Nayab Author-X-Name-First: Durr-E- Author-X-Name-Last: Nayab Author-Workplace-Name: Pakistan Institute of Development Economics, Islamabad. Author-Name: Arshad J. Minhas Author-X-Name-First: Arshad Author-X-Name-Last: J. Minhas Author-Workplace-Name: The Population Council, Pakistan Office. Title: Y2K Interruption: Can the Doomsday Scenario Be Averted? Abstract: The management philosophy until recent years has been to replace the workers with computers, which are available 24 hours a day, need no benefits, no insurance and never complain. But as the year 2000 approached, along with it came the fear of the millennium bug, generally known as Y2K, and the computers threatened to strike!!!! Y2K, though an abbreviation of year 2000, generally refers to the computer glitches which are associated with the year 2000. Computer companies, in order to save memory and money, adopted a voluntary standard in the beginning of the computer era that all computers automatically convert any year designated by two numbers such as 99 into 1999 by adding the digits 19. This saved enormous amount of memory, and thus money, because large databases containing birth dates or other dates only needed to contain the last two digits such as 65 or 86. But it also created a built in flaw that could make the computers inoperable from January 2000. The problem is that most of these old computers are programmed to convert 00 (for the year 2000) into 1900 and not 2000. The trouble could therefore, arise when the systems had to deal with dates outside the 1900s. In 2000, for example a programme that calculates the age of a person born in 1965 will subtract 65 from 00 and get -65. The problem is most acute in mainframe systems, but that does not mean PCs, UNIX and other computing environments are trouble free. Any computer system that relies on date calculations must be tested because the Y2K or the millennium bug arises because of a potential for “date discontinuity” which occurs when the time expressed by a system, or any of its components, does not move in consonance with real time. Though attention has been focused on the potential problems linked with change from 1999 to 2000, date discontinuity may occur at other times in and around this period. Journal: The Pakistan Development Review Pages: 1037-1056 Volume: 38 Issue: 4 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume4/1037-1056.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:4:p:1037-1056 Template-Type: ReDIF-Article 1.0 Author-Name: Rehana Siddiqui Author-X-Name-First: Rehana Author-X-Name-Last: Siddiqui Author-Workplace-Name: Pakistan Institute of Development Economics, Islamabad. Author-Name: Naeem Akhtar Author-X-Name-First: Naeem Author-X-Name-Last: Akhtar Author-Workplace-Name: Pakistan Institute of Development Economics, Islamabad. Title: The Impact of Changes in Exchange Rate on Prices: A Case Study of Pakistan Abstract: Rapid changes in prices are of concern in almost all countries since the 1970s. However, the issue is of serious concern in developing countries where imported inflation is seen to be driving domestic inflation resulting in limited effectiveness of domestic policies to control inflation. Like most developing countries, in Pakistan also, the domestic price level started rising from the mid-1970s. The exchange rate started depreciating continuously from the early 1980s.1 Continuous devaluation of currency and inflation in the 1980s seems to suggest a correlation between the two variables. The empirical studies, like Rana and Dowling (1983) suggest that foreign inflation was the most significant factor in explaining changes in the domestic price level in nine Asian less developed countries during 1973–79. This suggests that, while, these countries could do little to control inflation, the policies of other countries, particularly their major trading partners, had a significant impact on their domestic prices. A simultaneous relationship between the inflation rate and the exchange rate changes is viewed by certain researchers to exist. [Cooper (1971) and Krugman and Taylor (1978).] In most of the developing countries flexibility of exchange rate is favoured on the ground that it depoliticises the problem of devaluation and creates less disruption in the economy. In the empirical literature, the exchange rate regimes are also linked to domestic prices, trade patterns and current account balance. Journal: The Pakistan Development Review Pages: 1059-1066 Volume: 38 Issue: 4 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume4/1059-1066.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:4:p:1059-1066 Template-Type: ReDIF-Article 1.0 Author-Name: Muhammad Ishfaq Author-X-Name-First: Muhammad Author-X-Name-Last: Ishfaq Author-Workplace-Name: World Bank, Islamabad Office. Author-Name: M. A. Chaudhary Author-X-Name-First: M. A. Author-X-Name-Last: Chaudhary Author-Workplace-Name: Quaid-i-Azam University, Islamabad. Title: Fiscal Deficits and Debt Dimensions of Pakistan Abstract: Pakistan continues to suffer from a syndrome of high fiscal deficits and severe incidence of debt. Its annual fiscal deficit has stayed constantly at over 6 percent of GDP especially since 1990 [Pakistan (1997-98)]. The prevalence of such a high fiscal deficit over the years in a row has propelled increased borrowing from both internal and external sources to cover the resource gap. With inadequate improvement in the repayment capacity of the country debt has continued to accumulate at a massive rate. Serving as the cause and effect of each other, the volumes of both the fiscal deficit and debt have soared continuously. The most devastating consequence of high fiscal deficit and soaring debt has been the continuous accrual of massive debt-servicing. In fact, both the debt and debt-servicing have reached unaffordable limits. How to alleviate this situation has become the foremost issue of the country. While complete elimination of all the debt and thereby debt-servicing may not be easy to accomplish in the short run, efforts are needed to systematically bring the fiscal deficit down to a minimum affordable limit. What may be the minimum financeable level of fiscal deficit and how it may be reduced to that level are the issues addressed in this paper. Journal: The Pakistan Development Review Pages: 1067-1080 Volume: 38 Issue: 4 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume4/1067-1080.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:4:p:1067-1080 Template-Type: ReDIF-Article 1.0 Author-Name: Muhammad Ali Chaudhary Author-X-Name-First: Muhammad Author-X-Name-Last: Ali Chaudhary Author-Workplace-Name: Quaid-i-Azam University, Islamabad. Author-Name: Eatzaz Ahmad Author-X-Name-First: Eatzaz Author-X-Name-Last: Ahmad Author-Workplace-Name: Quaid-i-Azam University, Islamabad. Author-Name: Abid A. Burki Author-X-Name-First: Abid Author-X-Name-Last: A. Burki Author-Workplace-Name: Quaid-i-Azam University, Islamabad. Author-Name: Mushtaq A. Khan Author-X-Name-First: Mushtaq Author-X-Name-Last: A. Khan Author-Workplace-Name: Quaid-i-Azam University, Islamabad. Title: Industrial Sector Input Demand Responsiveness and Policy Interventions Abstract: In Pakistan, government intervention in the input market of the industrial sector is considerable. It regulates prices of virtually all energy and certain other non-labour inputs. To stimulate industrial production and output growth, it also encourages the provision of extended credit facilities to the industrial producers. Further, it has also often announced adjustments/reductions in duties and tariffs on products used in industrial production. Conversely, government also imposes taxes on outputs. It may desire to levy new taxes on the industrial inputs. All interventions have profound implications for producers, consumers and the government alike. Therefore, it is important to know how they may affect the industrial input demand. Further, it is equally important to know how effective they may be for the government in the realisation of its objectives. The most pertinent approach to ascertain the industrial input demand responsiveness to government interventions is to obtain valid estimates of price elasticities. In fact, competent elasticity estimates of the producer input demand derived with a sound methodology can serve as a solid basis to predict producer responsiveness to market changes and thereby the effectiveness and desirability of government interventions. While the price elasticities of products over the years have been estimated for Pakistan, renewed interest on estimating responsiveness of producer input demand with modern estimation procedures has recently surged. Idrees (1997) and Khan (1998) have determined elasticities for the domestic large-scale manufacturing sector from a demand system. Although these research studies make a good addition to the literature, their scope is extremely limited because they have combined industrial inputs into large aggregates. At present, there is no study that has investigated the input demand elasticities of the domestic industrial sector at the dis-aggregated level. Journal: The Pakistan Development Review Pages: 1083-1100 Volume: 38 Issue: 4 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume4/1083-1100.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:4:p:1083-1100 Template-Type: ReDIF-Article 1.0 Author-Name: Eatzaz Ahmad Author-X-Name-First: Eatzaz Author-X-Name-Last: Ahmad Author-Workplace-Name: Department of Economics, Quaid-i-Azam University, Islamabad. Author-Name: Muhammad Idrees Author-X-Name-First: Muhammad Author-X-Name-Last: Idrees Author-Workplace-Name: Department of Economics, Quaid-i-Azam University, Islamabad. Title: The Time Profile of the Cost Structure in Pakistan’s Manufacturing Sector Abstract: The manufacturing sector of Pakistan has at times played the role of the leading sector of the economy. The successful experience of planned growth in the 1960s owes much to the special attention paid to the growth of manufacturing sector. Policies like the export bonus scheme, tax-holidays, subsidised import of capital, easy and subsidised loans and over-valued exchange rate, resulted in a substantial growth in the sector. However, with over-protection of the sector, nationalisation of some of the major industries in the 1970s and, later-on, over-employment in the nationalised industries, the performance of the sector started to deteriorate gradually. It is now widely believed that many of the manufacturing industries in Pakistan have become inefficient because they have not been exposed to competitive environment due to protective and distortionary policies. It is to be expected that distortions like those mentioned would have not only eroded the performance but also affected the behaviour of the manufacturing sector. It is therefore important to determine how productivity growth in the manufacturing sector has been retarded over time and what type of changes in technology have taken place in terms of their effects on factor intensities and on the firms, reaction to such changes in factor prices. An analysis of the changes over time in production technology of the manufacturing sector may provide an answer to these questions. The present study aims at analysing changes in the cost structure of Pakistan’s manufacturing sector over the past two decades in order to study the nature and speed of productivity growth; determine whether there exists any factor bias in the technological changes; and to analyse how technology has adjusted to absorb changes in the relative factor prices. Journal: The Pakistan Development Review Pages: 1101-1116 Volume: 38 Issue: 4 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume4/1101-1116.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:4:p:1101-1116 Template-Type: ReDIF-Article 1.0 Author-Name: Toseef Azid Author-X-Name-First: Toseef Author-X-Name-Last: Azid Author-Workplace-Name: Economics Department, Bahauddin Zakariya University, Multan. Author-Name: Muhammad Akbar Noor Author-X-Name-First: Muhammad Akbar Author-X-Name-Last: Noor Author-Workplace-Name: Government College, Civil Lines, Multan. Title: Investment, Hysteresis, and Layers of Techniques: A Case Study of Agricultural Manufacturing Machinery in Multan Division Abstract: The behaviour of firms is still a little understood matter. Why one firm or industry is investing more than the other or what makes a firm enter or exit from the market, what are the psychological factors that go to make a choice of this kind are questions that have not been answered satisfactorily. Concepts like irreversibility, uncertainty, investment, and the value of waiting are very much there in the literature, e.g., McDonald and Siegel (1985, 1986); Nickell (1974); Schmalensee (1972); Hartman (1972); Henry (1974) and LAM (1989) and others. But the psychology of decision-making on the face of losses has not received much attention in the literature. That the Economic Hysteresis1 and Layers of Techniques2, developed by Professor A. Dixit and Professor P. N. Mathur respectively tackle. Journal: The Pakistan Development Review Pages: 1117-1132 Volume: 38 Issue: 4 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume4/1117-1132.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:4:p:1117-1132 Template-Type: ReDIF-Article 1.0 Author-Name: Munir Ahmad Author-X-Name-First: Munir Author-X-Name-Last: Ahmad Author-Workplace-Name: Pakistan Institute of Development Economics, Islamabad. Author-Name: Sarfraz Khan Qureshi Author-X-Name-First: Sarfraz Khan Author-X-Name-Last: Qureshi Author-Workplace-Name: Pakistan Institute of Development Economics, Islamabad. Title: Recent Evidence on Farm Size and Land Productivity: Implications for Public Policy Abstract: Agricultural productivity is low in most of the developing countries including Pakistan. Moreover, slow and meandering agricultural growth is unable to keep pace with the fast and persistently growing population pressure in these countries. That in turn, has, continued to result in malnutrition and recurrent famines [Cornia (1985)]. Worse than this are the results of an ILO (1977) study, which has shown that food consumption inequalities have actually increased overtime not only in the food deficit countries but also in countries experiencing rapid agricultural growth. This points to the ever-hanging shadows of food deficiency and resulting malnutrition over the countries characterised by slow or negative growth in per capita food production and perverted income distribution [Cornia (1985)]. The only choice with these countries is to enhance food production and provide better access to food consumption for the poor masses. In order to achieve this objective policy-makers consider various options including increased use of modern inputs—mechanical and biological technologies, and removal or reform of the prevalent socio-economic power structure in agriculture that is considered to be an impediment to growth. It may not be desirable to apply these options separately in order to achieve the objective of reducing rural poverty [Cornia (1985)]. Growth in agriculture—that is sustainable and appropriate, is possible when all factors of production are accessible to all strata of the farming community. This is particularly so in the case of access to land. In this regard, land redistribution accompanied by increased input supply is the preferred policy option. Journal: The Pakistan Development Review Pages: 1135-1153 Volume: 38 Issue: 4 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume4/1135-1153.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:4:p:1135-1153 Template-Type: ReDIF-Article 1.0 Author-Name: Khalid Mustafa Author-X-Name-First: Khalid Author-X-Name-Last: Mustafa Author-Workplace-Name: Faculty of Agricultural Economics and Rural Sociology, University of Agriculture, Faisalabad. Author-Name: Zulfiqar Ahmad Gill Author-X-Name-First: Zulfiqar Author-X-Name-Last: Ahmad Gill Author-Workplace-Name: Faculty of Agricultural Economics and Rural Sociology, University of Agriculture, Faisalabad. Author-Name: Rashid Naeem Author-X-Name-First: Rashid Author-X-Name-Last: Naeem Author-Workplace-Name: Allama Iqbal Open University, Islamabad. Title: Rural Institutions and Planned Change in Agriculture: A Comparative Perspective in Two Punjabs Abstract: Agricultural change in the Indian and Pakistan Punjabs has been brought about by their respective governments through formal organisations—cooperatives, credit banks, agriculture departments and/or special interest groups at the local level. The changes produced during 1960s and in subsequent period were dramatic but unsettling. Many have argued that the achievement of agricultural change in the region has depended to an important extent on the effectiveness of rural institutions in executing their role as agents of planned change.1 The present paper seeks to review the debate on the role of rural institutions in producing social and economic changes in the agrarian sectors of the Indian and Pakistan Punjabs and present some of the data which have stimulated this debate. The paper commences with an overview of the agrarian change in the two Punjabs. Then the programmes of planned change in the two regions are described, and the particular institution of change—cooperatives, credit banks, agricultural departments etc. are discussed in detail. At the specific level, the study aims at delineating the role played by rural institutions in initiating, stimulating, sustaining or retarding change in agriculture sectors of the two Punjabs. The role of rural institutions as a policy instrument for the promotion of agricultural expansion is examined. And finally the paper points out the implications of the past experience for the future role of rural institutions in the two Punjabs. Journal: The Pakistan Development Review Pages: 1155-1176 Volume: 38 Issue: 4 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume4/1155-1176.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:4:p:1155-1176 Template-Type: ReDIF-Article 1.0 Author-Name: Zulfiqar Ahmad Gill Author-X-Name-First: Zulfiqar Author-X-Name-Last: Ahmad Gill Author-Workplace-Name: Faculty of Agricultural Economics and Rural Sociology, University of Agriculture, Faisalabad. Author-Name: Khalid Mustafa Author-X-Name-First: Khalid Author-X-Name-Last: Mustafa Author-Workplace-Name: Faculty of Agricultural Economics and Rural Sociology, University of Agriculture, Faisalabad. Author-Name: Waqar Ahmad Jehangir Author-X-Name-First: Waqar Ahmad Author-X-Name-Last: Jehangir Author-Workplace-Name: International Irrigation Management Institute, Lahore. Title: Rural Development in the 21st Century: Some Issues Abstract: Rural development is essentially a part of the process of structural transformation characterised by diversification of the economy away from agriculture. This process is facilitated by rapid agricultural growth, at least initially, but leads ultimately to significant decline in the share of agriculture to total employment and output and in the proportion of the rural population to total population [Johnston (1970)]. Rural development, as such, is not an end in itself but a means to an end and can provide the basis for a sustained and equitable economic growth of all sectors of the economy. The main theme of the paper is to contribute to the perception of rural development in Pakistan by delineating the pros. and cons. of past rural development efforts and the ensuing crisis in agriculture. Possible strategies for sustainable agricultural growth and rural development and the formal approach for their implementation are described in subsequent sections. It is argued that the whole scenario requires courage and political will of politicians to decentralise the development process. Concluding comments and future options for research appear at the end. Journal: The Pakistan Development Review Pages: 1177-1190 Volume: 38 Issue: 4 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume4/1177-1190.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:4:p:1177-1190 Template-Type: ReDIF-Article 1.0 Author-Name: Mohammad A. Qadeer Author-X-Name-First: Mohammad Author-X-Name-Last: A. Qadeer Author-Workplace-Name: Urban and Regional Planning, Queen’s University, Canada. Title: ‘Urbanisation of Everybody’, Institutional Imperatives, and Social Transformation in Pakistan Abstract: Cultural change and social transformation are essential elements of the process of development. They complement and sustain economic growth. Economic historians acknowledge that the rise of the West from poverty to wealth was as much the result of improvements in trade, savings, investment and productivity as of emerging norms of thrift, trust, specialisation, rationality and contractual relations [Rosenberg and Birdzell (1986)]. In fact, it would not be an exaggeration to say that economic development is essentially a phenomenon of cultural change. The recognition of the role of cultural and social factors in economic growth has led to a subtle revision of the terminology from ‘economic development’ to the adjectiveless term ‘development’ or the fully spelled out title of economic and social development. Yet this acknowledgement has remained largely on the conceptual plane. It has not been translated into policies and programmes to deliberately set the direction of cultural change and define the alignment of social organisation. Development strategies have, by and large, treated social and cultural factors as exogenous variables. This is true of development planning in general and in particular of its practice in Pakistan. In fifty years of economic planning in Pakistan, little attention has been paid to the social and cultural aspects of development. This paper argues that the neglect of social and cultural factors has created an institutional lag between spatial, economic and technological sectors on the one hand and the cultural, social and political institutions, on the other. Pakistan is predominantly an urbanised society spatially and demographically, but its social institutions and cultural ethos remain rooted in traditions of rural origins. Journal: The Pakistan Development Review Pages: 1193-1210 Volume: 38 Issue: 4 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume4/1193-1210.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:4:p:1193-1210 Template-Type: ReDIF-Article 1.0 Author-Name: Javed A. Ansari Author-X-Name-First: Javed Author-X-Name-Last: A. Ansari Author-Workplace-Name: College of Business Management, Karachi. Author-Name: Rafique A. Khan Author-X-Name-First: Rafique Author-X-Name-Last: A. Khan Author-Workplace-Name: Institute of Health Management, Baqai Medical University, Karachi. Title: Social Democratic Reform Proposals and the Future of Capitalism Abstract: This paper seeks to present an analysis of some issues raised in the debate on the future of capitalism by influential social democrats in recent years [Agleitta (1999); Habermas (1999); Rorty (1998)]. We begin with a brief description of capitalism's genesis, its characteristics and its need for moral legitimising and proceed to a slightly more extended discussion of capitalist processes at the beginning of the twenty-first century. The paper concludes with an assessment of initiatives proposed by social democratic thinkers such as Agleitta, Habermas and Rorty to strengthen capitalism and realise social democratic objectives—the universalisation of freedom and the promotion of liberal justices in rights centric societies. Journal: The Pakistan Development Review Pages: 1211-1232 Volume: 38 Issue: 4 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume4/1211-1232.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:4:p:1211-1232 Template-Type: ReDIF-Article 1.0 Author-Name: Usman Mustafa Author-X-Name-First: Usman Author-X-Name-Last: Mustafa Author-Workplace-Name: Area Development Programme (ADP)-Extension Services Management Academy (ESMA), United Nations Development Programme (UNDP), Garhi Dopatta, Azad Jammu & Kashmir. Author-Name: M. Afzal Mir Author-X-Name-First: M. Afzal Author-X-Name-Last: Mir Author-Workplace-Name: Area Development Programme (ADP)-Extension Services Management Academy (ESMA), United Nations Development Programme (UNDP), Garhi Dopatta, Azad Jammu & Kashmir. Title: Sustaining Economic Development by Reforming Basic Institutions through Community Participation Abstract: It is universally accepted and advocated that without community involvement and participation, development initiatives either in the economic or social sector, have little chances of success/sustainability, especially at the grassroots level, where the majority of the country’s population lives [AKRSP (1984, 1999); FAO (1989); Khan et al. (1984) and Mustafa (1998)]. In this connection the concept and approaches of community development have been tested in Northern Areas of Pakistan and the principles and experiences have been replicated in some other parts of the country by Non Government Organisations (NGOs), different national and international government projects and programmes [Mustafa and Grunewald (1996); NRMP (1993) and NRSP (1995)]. The need for conceptualising a realistic framework for collaboration between government/other development agencies and community organisations engaged in pursuit of both social and economic goals is imperative for an equitable and sustainable development because when it comes to community involvement, the two sectors cannot be divorced from each other [Khan (1999) and Reid and Khan (1996)]. The objectives of the paper are: to highlight the need and the importance of grassroots non-government institutions based on participatory community development approaches; to analyse the role of community participation models in the country and to recommend strategies for an effective linkage between grassroots non-government organisations and basic-services-driven government institutes for effective and sustainable development; also to review and recommend primitive structural changes in basic institutions as development partners. Journal: The Pakistan Development Review Pages: 1233-1246 Volume: 38 Issue: 4 Year: 1999 File-URL: http://www.pide.org.pk/pdf/PDR/1999/Volume4/1233-1246.pdf File-Format: Application/pdf Handle: RePEc:pid:journl:v:38:y:1999:i:4:p:1233-1246