Template-Type: ReDIF-Paper 1.0
Author-Name: Mohammad Irfan
Author-X-Name-First: Mohammad
Author-X-Name-Last: Irfan
Author-Workplace-Name: International Islamic University, Islamabad
Title: Pakistan’s Wage Structure, during 1990-91–2006-07
Abstract: This paper attempts to document changes in the wage levels of different
categories of workers employed in various segments of the labour market during
the period 1990-91–2006-07, according to the information given in the labour
force surveys. Wage structure can be analysed from different angles. Here we
look at the levels and trends in the broad categories of industry. Further
subdivided along the demarcation of formal/informal, and by worker
characteristics such as age, sex, education, and occupational categories. Largescale
Manufacturing Industries, Banking Sector, and Civil Servants’ salary
structure are subjected to investigation for disuring wage trends in the formal
sector. The impact of unionism and of the labour and wage policies of various
regimes and upon wage outcome is also assessed.
There appears to be a consonance between money wage growth at the
aggregate level of the economy and GDP growth. The former registered a
positive growth, with the exception of the 1999-2002 period, when the latter had
low growth. Time trend of average wage works out to 7.6 percent, which,
adjusted for inflation, yields a 0.7 percent trend growth rate in real wages for the
1990-07 period. Real wage growth rate at the aggregative level is characterised
by substantial diversity. One finds an inverse relationship between the level of
wage rate and real wage growth. Thus workers in the informal sector and
commodity producing sectors like Agriculture and Manufacturing suffered a real
wage decline during the period under study.
That the real wage gains were denied to the majority of the workers (60
percent or so) lying at the lower rung of the wage distribution rendered the wage
structure iniquitous wherein duality further accentuated. The character of the
regime tends to have its mark. During the 1990s, the political leadership
notwithstanding, low GDP growth and Pressler Amendment appeared to have
sympathetic attitude towards labour, which was visible in the virulence of trade
unions as well as announcement of the Minimum Wage Policy during early
1990s. However, in the context of labour supply pressure and subdued economic
performance, stagnation and decline in real wage could not be avoided. In
contrast, there hardly has been any sizeable positive impact on the real wages of
the informal sector workers since the turnaround of the economy in 2003. The
governmental attitude was reflective of the follow-up of the imperatives of
globalisation, weakening of trade unions, and introduction of the changes in the
procedures governing the tripartite mechanism and formulation of labour and
wage policy. The need to have a fresh look at the labour and wage policy to
ensure sustenance and to address inequality issues can hardly be
overemphasised.
Length:  pages
Creation-Date: 2009
File-URL: http://www.pide.org.pk/pdf/Working%20Paper/WorkingPaper-54.pdf
File-Format: Application/pdf
File-Function: First Version, 2009
Number: 2009:54
Classification-JEL: J3
Keywords: Wages; Wage Structure; Pakistan
Handle: RePEc:pid:wpaper:2009:54

Template-Type: ReDIF-Paper 1.0
Author-Name: Nadia Zakir
Author-X-Name-First: Nadia
Author-X-Name-Last: Zakir
Author-Workplace-Name: Pakistan Institute of Development Economics, Islamabad
Author-Name: Muhammad Idrees
Author-X-Name-First: Muhammad
Author-X-Name-Last: Idrees
Author-Workplace-Name: Quaid-i-Azam Univesity, Islamabad
Title: Trends in Inequality, Welfare, and Growth in Pakistan, 1963-64 to 2004-05
Abstract: The present study investigates the trends in inequality, welfare, and
growth based on per capita household income/consumption in Pakistan, both its
rural and urban areas, from 1963-64 to 2004-05. It employs Gini coefficient to
measure inequalities and the Sen welfare index to estimate welfare. Real per
capita mean incomes/consumption are worked out to analyse growth. The study
finds fluctuating trends in inequality, and rising trends in both welfare and
growth. In general, inequality, welfare, and growth remain higher in the urban
areas. The study finds income inequality to be more severe as compared to
consumption inequality.
Length: 17 pages
Creation-Date: 2009
File-URL: http://www.pide.org.pk/pdf/Working%20Paper/WorkingPaper-53.pdf
File-Format: Application/pdf
File-Function: First Version, 2009
Number: 2009:53
Classification-JEL: D31, D63
Keywords: Income Distribution, Welfare, Per Capita Income, Gini Coefficient, Pakistan
Handle: RePEc:pid:wpaper:2009:53

Template-Type: ReDIF-Paper 1.0
Author-Name: Rashida Haq
Author-X-Name-First: Rashida
Author-X-Name-Last: Haq
Author-Workplace-Name: Pakistan Institute of Development Economics, Islamabad
Author-Name: Uzma Zia
Author-X-Name-First: Uzma
Author-X-Name-Last: Zia
Author-Workplace-Name: Pakistan Institute of Development Economics, Islamabad
Title: Does Governance Contribute to Pro-poor Growth? Evidence from Pakistan
Abstract: Economic growth is a driving force in reducing poverty, but experience
has shown that good governance and pro-poor choices are vitally important in
the process of alleviating poverty. This paper explores linkages between
governance and pro-poor growth in Pakistan for the period 1996 to 2005. The
analysis indicates that governance indicators have low scores and rank at the
lowest percentile as compared to other countries. The dimensions of pro-poor
growth, which include poverty, inequality, and growth, demonstrate that the
poor do not benefit proportionately from economic growth. It is found that
poverty and inequality have worsened and the share in income and expenditure
for the bottom 20 percent has also decreased, while inflation for this lowestincome
group is high as compared to the highest-income group. It is also
observed that approximately 25 percent households reported that their economic
status was worse than in the previous year, 2004-05. The results of the study
show that a strong link exists between governance indicators and pro-poor
growth in the country. Econometric analysis shows that there is a strong
relationship between good governance and reduction in poverty and inequality.
It is concluded that greater voice and accountability, political stability,
regulatory quality, and rule of law can control corruption and the pro-poor
policies, which ultimately reduce poverty and inequality in the long run. To face
the challenge of good governance, Pakistan needs to formulate, and implement
effectively, its governance policies to improve the governance dimensions,
taking account of both higher growth and the aim of achieving the Millennium
Development Goals, which require halving poverty by 2015.
Length: 20 pages
Creation-Date: 2009
File-URL: http://www.pide.org.pk/pdf/Working%20Paper/WorkingPaper-52.pdf
File-Format: Application/pdf
File-Function: First Version, 2009
Number: 2009:52
Classification-JEL: I30, I32, O10
Keywords: Governance Indicators, Pro-poor Growth, Poverty, Inequality
Handle: RePEc:pid:wpaper:2009:52

Template-Type: ReDIF-Paper 1.0
Author-Name: Rizwana Siddiqui
Author-X-Name-First: Rizwana
Author-X-Name-Last: Siddiqui
Author-Workplace-Name: Pakistan Institute of Development Economics, Islamabad
Title: Human Capital vs. Physical Capital: A Cross-Country Analysis of Human Development Strategies
Abstract: This study estimates a small simultaneous equation model using panel
data from sixty-four countries for the years 1996 and 2004. The model is
estimated by various techniques—OLS, TSLS, dummy variable approach
introducing variation at the regional level, and fixed and random effect
approaches introducing variation at the individual country level. The objective is
to identify the importance of basic needs in human development strategies in
Asia, Africa, and the rest of the world (ROW). The results show that income per
capita has priority over basic needs expenditure in development strategies of all
regions despite being quantitatively different. However, the importance of basic
needs expenditure cannot be denied in terms of capabilities development
(improvement in health) that ultimately increases productivity.
Length: 28 pages
Creation-Date: 2009
File-URL: http://www.pide.org.pk/pdf/Working%20Paper/WorkingPaper-51.pdf
File-Format: Application/pdf
File-Function: First Version, 2009
Number: 2009:51
Classification-JEL: J24, E22, P24
Keywords: Human Capital, Physical Capital, Income Per Capita, Basic Needs Expenditures, Human Development
Handle: RePEc:pid:wpaper:2009:51

Template-Type: ReDIF-Paper 1.0
Author-Name: M. Idrees Khawaja
Author-X-Name-First: M. Idrees
Author-X-Name-Last: Khawaja
Author-Workplace-Name: Pakistan Institute of Development Economics, Islamabad
Author-Name: Sajawal Khan
Author-X-Name-First: Sajawal
Author-X-Name-Last: Khan
Author-Workplace-Name: State Bank of Pakistan, Karachi
Title: Reforming Institutions: Where to Begin?
Abstract: No society is devoid of institutions but many live with poor institutions.
Institutions promote growth. This is a view now held firmly and widely. The
task then is to ‘engineer’ growth-promoting institutions. Endogeneity
characterises institutions; for example, groups enjoying political power
influence economic institutions, but political power itself is a function of wealth.
Given endogeneity, if the task is to design institutional reforms, the question
then arises, as to what to reform first. We use the theories of institutional
evolution put forth by Douglas North, Darron Acemoglu and Dani Rodrik and
the historical experiences of different countries in the context of development
(or non-development) of institutions, to determine the starting-point of
institutional reforms, if the objective is to design institutional reforms. We argue
that in Pakistan, neither large commercial interest nor fiscal constraints can force
the de jure power to reform institutions. Typically, large commercial interests in
Pakistan have thrived on favours from de jure power, and therefore do not have
teeth. Given strategic interests of foreign powers, foreign aid will alleviate the
fiscal constraint and the ruler-citizens bargain—though reforming institution in
exchange for tax revenue will remain a dream. The country does not seem ready
for a revolution either; the thought process that typically precedes revolutions
seems to have barely begun. The alternative, that remains, then is the gradualist
approach preferred by North, Acemoglu, and Rodrik. Institutional reforms in
Pakistan should begin with reform of the educational system—the introduction
of a common educational system for all and sundry up to a certain level. Two
reasons make us chose the educational system as the candidate to start the
process of institutional reform. First, a common educational system will produce
a shared value system which, in turn, will reduce the heterogeneity in the
society. Lesser heterogeneity in society will then facilitate an agreement over the
minimal set of institutional reforms. Second, politicians being myopic, the de
jure power is more likely to concede to the demand for reform of the educational
system as compared to the demand to, say, put an end to rent-seeking. The
former will affect the de jure power a generation hence, while the latter will
affect them today.
Length: 27 pages
Creation-Date: 2009
File-URL: http://www.pide.org.pk/pdf/Working%20Paper/WorkingPaper-50.pdf
File-Format: Application/pdf
File-Function: First Version, 2009
Number: 2009:50
Classification-JEL: D02, D03, P16
Keywords: Institutional Evolution, Institutional Change, Human Behaviour
Handle: RePEc:pid:wpaper:2009:50