bluuebunny/crossref_metadata_2025 huggingface dataset:
Macroeconomic Management in a Decentralised Set-up (PANEL DISCUSSION-III)
Authors: Ijaz Nabi
Published: September 2018

I am thankful to PIDE for giving me the opportunity to be here and participate in this important discussion. It is always exciting to come back to this audience because this is where I started my career as an economist. We have with us Dr S. M. Naseem and Dr Nawab Haider Naqvi who guided me in my earlier years and I would like to thank them also. I will try to restore some balance after Dr Ashfaque’s alarming comments on the state of the economy, recognising well that we have challenges that need to be addressed. Mr Baldridgde in his discussion has given us fifty questions that capture many of the challenges. But first let me say a few words about whether politics should triumph over economics or the other way around. Lets not forget that we have a democratically elected government that represents a delicate coalition of several political parties and competing political interests. In this setting, it is not at all surprising that technocratic economic solutions are secondary to the political ones, and that “economics does not triumph over politics” as lamented by the previous panelist. In a democratic framework, the economists’ role is to ensure that political objectives are met without inflicting an unsustainable fiscal burden and sacrificing the long term development objectives.
Macroeconomic Management in a Decentralised Set-up (PANEL DISCUSSION-III)
Authors: William Baldridgde
Published: September 2018

The issue of macroeconomic management in a decentralised set-up is a big question. My part of discussion will get more down into the nuts and bolts and as you see I will unfortunately ask a lot more questions. I think that it is very important that all parties have begin to equip themselves with relatively detailed knowledge of what is likely to occur in the shape and structure of government processes as the devolution of authority in 18th amendment begins to take place. It occurs to me the development stakeholders or the government of Pakistan and the provincial ministries of finance, the Planning Commission and the CCI and potentially others even including the international community. I think these bodes need to know how this devolution can actually occur. What are the actions necessary to develop a transparent budget and an auditable budget, procurements in expenditure processes at the provincial level that were administrated by the federal level in order to avoid macroeconomic management to continue to occur in decentralised set-up. The current arrangement provides as far as I know bulk of resources to be collected and controlled with the federal level. Also there is a significant share of responsibility currently with the federal government. These distributional arrangements will necessarily change as the budgetary regulatory framework for the 18th amendment becomes agreed upon. This regulatory framework is not really in place yet. A regulatory framework would need to be enacted and implemented. This means to me at least that an assessment of pre-18th amendment situation is needed to provide a base line to understand how the new structure will have to be reformed. An assessment perhaps should be done with a review of existing policies or to sort out what were the initial conditions going into 18th amendment. I think as federal and provincial governments are moving towards implementation, at both budgetary and operational levels, a few questions may be needed to be asked. One is how will the new responsibilities assigned to the provinces be financed? What will happen to federal government staff currently engaged in doing all the functions will no longer be with the federal government. How will the human and operational capacity at the provincial government level be developed with a particular emphasis on budgeting expertise and expenditure expertise. If there is going to be control and management at macro level, then there is going to be a tremendous amount of capacity required at the budgeting and expenditure level in the provinces. I think an assessment of the provincial capacity is a good idea.
Inaugural Address
Authors: Nadeem Ul Haque Haque
Published: September 2018

My fellow social scientists, economists, scholars, thinkers, observers. Welcome to the 26th Annual General Meeting and Conference of the Pakistan Society of Development Economists—a society that prides itself on being the only “professional association of economists and other social scientists” in the country. This annual event serves many purposes: it is an intellectual exchange allowing a stock taking of research and ideas; it is a showcase of fresh understandings and analyses of the Pakistani economy and society; it is a place to review policy and develop constructive policy debates to improve economic management; and it is also a place to develop economists and prepare them to lead development thinking in the country. I was happy to see that the agenda contains a number of panels with leading Pakistani economists discussing a burning issue of the day—fiscal federalism which we are facing with the 18th amendment and the NFC award. We will all await ideas that are generated from the PSDE.
Revenue Sharing Arrangements: Options and Relative Merits (The Mahbub ul Haq Memorial Lecture)
Authors: Vito Tanzi
Published: September 2018

The decades immediately after World War Two saw: (a) the spreading of ideas, rightly or wrongly attributed to John Maynard Keynes, that called for a larger government role in the economy; (b) the growing popularity of socialism; and (c) the creation of the United Nations, an event that gave a global voice to the citizens of lowincome countries and that provided statistics that, for the first time pointed to the big differences in living standards that existed between the so-called “developed” or “advanced” countries and the “underdeveloped”, or “developing” countries, and between the rich and the poor within specific countries. Those decades witnessed a period of fast growth in the activities of governments and especially in those of the central governments. The central governments of many countries assumed increasingly important and wider roles and functions. See Tanzi (2011) forthcoming, and Tanzi (2008). The governments of many countries tried to raise their tax revenue to be able to increase public investment, to create needed infrastructure and to provide better social services, such as education, health, and social assistance, to their citizens. In those decades the importance and the revenue needs of national or central governments grew and the literature on “taxable capacity” became a popular branch of economics. Especially developing countries needed more government revenues and more taxes to be able to grow.
Reminiscing the PIDE (Honouring Prof. A. R. Khan)
Authors: A. R. Khani
Published: September 2018

I first arrived at the Pakistan Institute of Development Economics, then simply the Institute of Development Economics, at the beginning of October 1960. It was located on the top floor of the Old Sindh Assembly Building on Bunder Road in Karachi. At the time the Joint Director, the resident head of the Institute, was Irving Brecher, a Canadian economist. The Director of the Institute was Emile Despres, the ex-officio head of Ford Foundation’s Pakistan Project administered from Williams College, later from Stanford University, who spent only a few weeks each year at the Institute. The Institute had a number of foreign research advisers funded by the Ford Foundation Project and a handful of Pakistani staff members, very few of them at senior levels. For me the Institute was a refuge. Since my graduation from the Dhaka University at the end of 1959 I had been teaching in the Department of Economics. I had also been selected for graduate studies in England starting the fall of 1960 under an award of the newly-instituted Commonwealth Scholarship programme. In July 1960 I was dismissed from my teaching position at the University due to alleged undesirable political antecedents during my student days. A few weeks later my scholarship for study abroad was also withdrawn by the Government of Pakistan whose approval was a prerequisite for the finalisation of the award. The prospect of alternative employment was bleak with little private sector demand for economics graduates at the time. I had been interviewed by Emile Despres and his colleagues who were on a recruitment mission the previous winter in Dhaka. The teaching appointment at the University, coming on the heels of the interview, had preempted a possible offer from them. A few weeks after I lost my scholarship, I received a telegram from the Institute offering me the position of a Research Officer (later named Staff Economist). This rescued me from what appeared to be virtual banishment from all possibility of a meaningful career. This was the beginning of the series of many kind acts by the Institute and its members which over time made me accustomed to treating it as a home even after my formal employment in it ended.
Shorter Notices
Authors: Amna Rubab  , Sarah Rabbani
Published: September 2018

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The Foreign-Income and Real-Exchange-Rate Elasticities of Bangladesh Exports
Authors: Akhand Akhtar Hossain
Published: September 2018

Bangladesh began implementing trade-reform policies in the mid 1980s, leading to a gradual change in its anti-export-policy. Since then the share of exports in her GDP has been rising steadily with the economy growing at about 5 percent per annum. This growth is associated with structural change in the country’s export composition favouring non-traditional exports, namely garments and frozen foods. This paper specifies and estimates an aggregate export-demand function; deploys Pesaran’s bounds-testing approach to estimate export-elasticities of foreign income and the exchange rate; and tests for the stability of the estimated function. The empirical results, based on annual data for the period 1973-2010, suggest a long-run relationship between real exports and export-weighted foreign real income. Similarly, real exports and the real effective exchange rate of the taka are found to be related. Finally, the results suggest that the dynamic behaviour of exports possesses an error-correction representation. The CUSUM and CUSUMSQ tests suggest no significant instability in the export-demand function. However, the recursive and rolling-regression coefficients indicate that the export-demand function has undergone some structural change since the early 1990s. This is reflected in the decreasing sensitivity of real exports vis á vis the exchange rate. JEL classification: C32, F11 Keywords: Exports’ Elasticities, Pesaran’s Bounds Test, Export-demand Stability, Bangladesh
The Contemporaneous Correlation of Structural Shocks and Inflation-Output Variability in Pakistan
Authors: Muhammad Nasir
Published: September 2018

Monetary policy has changed in a number of ways in the last two decades. Along with other characteristics, modern monetary policy is forward-looking and today central banks, to maintain credibility, respond contemporaneously to structural shocks that might make inflation deviate from the target in future. This study aims at investigating this aspect of monetary policy for Pakistan. Using the modified version of Structural Vector Autoregression (SVAR) developed by Enders and Hurn (2007), the authors have found a weak policy response to supply side shocks as the correlation coefficient between demand and supply shocks is only 0.041. Moreover, the results show that the demand shocks have no significant contribution in output variability. On the other hand, both demand and supply shocks, along with foreign supply shocks, significantly contribute to inflation variability. JEL classification: E31, E42, E52, E58 Keywords: Monetary Policy, Contemporaneous Correlation, Pakistan, Structural Shocks, Vector Autoregression
Kemal Dervis, Masahiro Kawai, and Domenico Lombardi (eds.). Asia and Policymaking for the Global Economy. Asian Development Bank Institute, Tokyo. Washington, D.C.: Brookings Institution Press, 2011. 200 pages, USD 19.95.
Authors: Uzma Zia
Published: September 2018

Asia and Policymaking for the Global Economy is a collection of analysis on global economic cooperation. In particular it highlights Asia’s accomplishments, opportunities, its potential, and the role it can play in the global economy. It is divided into five chapters each constituting a different insightful article. The first chapter gives an introduction and an over view of the topics analysed in this book. It focuses on the structural transformation in Asia and the world economy, and discusses the rise of Asia and implications for economic coordination at international level. The second chapter focuses on growth dynamics in Asia in a global context. It provides an important contribution to the subject issue as it analyses the sources of structural transformation experienced by world economy. It suggests that policy-makers should focus on global savings and investment structures to rebalance world economy. The rebalancing debate is then connected to the debate on the international monetary system and role of reserve currencies in this chapter.
Paul Roberts (ed). The End of Food. New York: Mariner Books Houghton Mifflin Harcourt, Bosten. 2009. xv+330 pages. (Price not given).
Authors: Lubna Naz
Published: September 2018

The modern food economy has evolved over time. The calorie dense food (meat) has taken the place of plants and a technologically driven agriculture system has replaced the traditional food system. Several factors such as industrial revolution, opening of trade, end of communism, female market participation and technological change have contributed in shaping the rules of modern food production system. The endless efforts of the scientists geared towards discoveries has led to a green revolution in the field of agriculture and have done enough to untrue the earlier predictions of mass famine by Thomas Malthus. However, all such man made progress has not done much to resolve challenges of food security, food economy liberalisation and food safety being faced by every country today. This book presents well researched answers to questions raised at every forum on global food security such as; how did the primitive food system evolve into its present shape, what has motivated less spending on food, what has promoted the idea of convenience food in retail business, what has led to technology driven revolution in agriculture output, what radical steps are needed to escape from evils of hunger and malnutrition in the present world, what provokes food producers in developed countries to rule out unfettered functioning of food trade, and finally what turns around the progress that has ever been made in agriculture.
Asset Pricing Behaviour with Dual-Beta in Case of Pakistani Stock Market
Authors: Attiya Y. Javid  , Eatzaz Ahmad
Published: September 2018

This study investigates the dynamics of beta by the asymmetric response of beta to bullish and bearish market environment on 50 stocks traded in Karachi Stock Exchange during 1993-2007. The results show that the betas increase (decrease) when the market is bullish (bearish). The results however suggest that investors receive a positive premium for accepting down-side risk, while a negative premium is associated with up-market beta. The results suggest that the conditional Fama and French three factor model has performed better than the conditional CAPM when news asymmetry was taken into account compared with the unconditional Fama and French three factor model and the unconditional dual-beta CAPM in explaining the relationship in beta and returns in case of Pakistani market. JEL classification: G12, G15 Keywords: Beta Instability, High Market Beta, Low Market Beta, EGARCH Model, News Asymmetry, Fama and French Three Factor Model
The Utilisation of Education and Skills: Incidence and Determinants among Pakistani Graduates
Authors: Shujaat Farooq
Published: September 2018

This study estimates the incidence of job mismatch and its determinants in Pakistan, based on three categories: (i) qualification mismatch, (i) skill mismatch, and (iii) field-of-study mismatch. It uses both primary and secondary datasets that target graduates employed by the formal sector. The study measures the qualification mismatch using three approaches and finds that about one third of the graduates sampled face a qualification mismatch. Similarly, more than one fourth are mismatched in terms of skill, about half are over-skilled, and half are under-skilled. The analysis also shows that 11.3 percent hold jobs that are irrelevant to their discipline and 13.8 percent have jobs that are slightly relevant to their discipline. Women are more likely than men to be over-qualified, and age has a negative association with over-qualification. Graduates who belong to political families have a better qualification match but a lower field-of-study match. While a higher level of schooling prevents graduates from being under-qualified, it also raises the likelihood of being over-qualified and over-skilled. Occupation-specific disciplines offer more protection against the possibility of job mismatch. Both full-time education and semester-system education reduce job mismatch, while distance learning raises job mismatch. The phenomena of being over-qualified and over-skilled is more prevalent in lower occupations, as is field-of-study mismatch. JEL classification: I23, I24, J21, J24 Keywords: Education and Inequality, Higher Education, Human Capital, Labour Market
What Determines Innovation in the Manufacturing Sector? Evidence from Pakistan.
Authors: Hamna Ahmed  , Mahreen Mahmud
Published: September 2018

This study analysed the behaviour of a sample of manufacturing firms in Pakistan in order to understand what determines innovative activity employing a panel data set for the years 2002 and 2006-07. Probit estimation results reveal that size of the firm and human resource quality are important internal factors that increase the likelihood of a firm innovating. Interestingly, whether a firm is exporting or not has no bearing. However, post innovating there is a large increase in number of firms who export. Externally, presence in a geographic cluster is important though further analysis reveals that the impact varies according to firm size. Size per se does not increase likelihood of innovating for medium sized firm who only have an advantage over small sized firms when present in a cluster. Large firms on the other hand continue to have an advantage and the advantage further increases with presence in a cluster. Finally, analysis by product and process innovators reveals that the characteristics of firms undertaking the two types of innovative activity are similar. The only noteworthy difference being that process innovation does not benefit from presence of a firm in a cluster which might be attributable to the more visible nature of product innovation which benefits from technological spillovers that are a characteristic of presence in a cluster. JEL classifications: O14, O31, O33, L6 Keywords: Innovation and Invention: Processes and Incentive, Developing Countries, Industry Study
Factor Utilisation in Manufacturing: Evidence from Pakistan.
Authors: Sahar Amjad Shaikh
Published: September 2018

During the past decade, Pakistan has experienced jobless growth with the employment growth in its manufacturing sector lagging behind the growth in its GDP. This is of concern as Pakistan‘s growing labour force, lacking social safety nets and financial assets, rely on employment as their sole source of income. Thus employment is the main link between economic growth and poverty reduction. This paper aims to investigate the nature of this job-less growth by using the Levinsohn and Petrin (2003) methodology to estimate the production functions for the industries and calculate the rate of factor utilisation in the manufacturing sector. Our hypothesis is that labour under-utilisation may be one of the driving factors behind this jobless growth. Finding lower than optimal employment for production and non-production workers across different industries, it further tries to establish the possible links between factor utilisation, productivity and other institutional characteristics of the firm. Policy recommendations are made on the basis of this analysis. JEL classification: L60, O53, J20, C23, D24 Keywords: Manufacturing, Pakistan, Labour, Panel Data, Production Function
Schooling is Associated not only with Long-run Wages, but also with Wage Risks and Disability Risks: The Pakistani Experience.
Authors: Asma Hyder  , Jere R. Behrman
Published: September 2018

Many studies document significantly positive associations between schooling attainment and wages in developing countries. But when individuals enter occupations subsequent to completing their schooling, they not only face an expected work-life path of wages, but a number of other occupational characteristics, including wage risks and disability risks, for which there may be compensating wage differentials. This study examines the relations between schooling on one hand and mean wages and these two types of risks on the other hand, based on 77,685 individuals in the labour force as recorded in six Labour Force Surveys of Pakistan. The results suggest that schooling is positively associated with mean total wages and wage rates, but has different associations with these two types of risks: Disability risks decline as schooling increases but wage risks, and even more, wage rate risks increase as schooling increases. The schooling-wage risks relation, but not the schooling-disability risks relation, is consistent with there being compensating differentials. JEL classification: J31, J28, O53 Keywords: Wages, Risks, Labour Markets, Job Disabilities, Compensating Differentials, Developing Country, Schooling
The Impact of Trade Liberalisation on Wage Inequality: Case of Pakistan.
Authors: Zara Salman  , Mariam Javed
Published: September 2018

This paper examines whether trade liberalisation played a role in shaping the wage structure of Pakistan in the late 1990s and early 2000. It uses manufacturing workers data from LFS supplemented by external information to analyse the impact of trade liberalisation. In general, the results show that trade liberalisation, measured through import penetration ratio, export penetration ratio and relative prices of each industry, not only impacted wages but also increased wage inequality across skill levels from 1996-97 to 2005-06. The econometrics analysis confirms that increase in import penetration raises skilled premium while simultaneously reducing unskilled premium; a result in contention with the findings of the Stolper-Sameulson Theorem.
Impact of Public Debt on the Economic Growth of Pakistan.
Authors: Naeem Akram
Published: September 2018

Over the years Pakistan has failed to collect enough revenues for financing of its budget. Consequently, the problem of twin deficits emerged and to finance the developmental activities government has to rely on public external and domestic debt. The positive effects of public debt relate to the fact that in resource-starved economies debt financing if done properly leads to higher growth and adds to their capacity to service and repay public debt. The negative effects work through two main channels—i.e., ―Debt Overhang‖ and ―Crowding Out‖ effects. The present study examines the consequences of public debt for economic growth and investment in Pakistan for the period 1972-2009. It develops a hybrid model that explicitly incorporates the role of public debt in growth equations. As the some variables are I (1) and other are I (0) so Autoregressive Distributed Lag(ARDL) technique has been applied to estimate the model. Study finds that public external debt has negative relationship with per capita GDP and investment confirming the existence of ―Debt Overhang effect‖. However, due to insignificant relationships of debt servicing with investment and per capita GDP, the existence of the crowding out hypothesis could not be confirmed. Similarly, domestic debt has a negative relationship with investment and per capita GDP. In other words, it seems to have crowded out private investment. JEL classification: H63, O43, E22, C22 Keywords: Public Debt, Economic Growth, Investment, ARDL
Argentina: Economic Recovery and Tax Improvement after a Decade of Double Crisis.
Authors: Miguel Angel Asensio
Published: September 2018

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Impact of Judicial Efficiency on Debt Maturity Structure: Evidence from Judicial Districts of Pakistan.
Authors: Attaullah Shah
Published: September 2018

The debate over =why capital and bond markets remain under-developed in Pakistan‘ is more than two decades old. Several conceptual papers have highlighted causes responsible for the underdevelopment of these markets; however, not enough empirical evidence exists to support the theoretical claims. This paper tries to fill in this gap. Specifically, this paper draws on the recent developments in the area of law and finance to develop several hypotheses related to maturity of corporate debt and judicial efficiency. These hypotheses are tested using data of 370 firms listed at the Karachi Stock Exchange (KSE) and 27 districts high courts of Pakistan over the period 2000 to 2006. Results indicate that corporate debt-maturity decreases with the inefficiency of judiciary. Furthermore, results show that worsening judicial efficiency has greater negative effect on debt-maturity of small firms than on debt-maturity of large firms. Similarly, worsening judicial efficiency negatively affects debt-maturity ratios of firms with fewer tangible assets than debt-maturity ratio of firms with more tangible assets. JEL classification: G10, G21, G32 Keywords: Judicial Efficiency, Debt-maturity, KSE, Capital Market Development, Law and Finance
A Strategic Framework of Liberalising Trade in Services for Pakistan.
Authors: Ahmed Gulzar
Published: September 2018

For a long time, services were considered non-tradable in the literature of international economics. However, the sector has emerged with profound importance on the basis of strong underpinnings. Technological advancement, financial constraints and limited options, and regulatory changes have greatly expanded the range and scope of trade in services especially in the context of increasing share of knowledge intensive products at the world market. Services now account for a substantial and rising share of output and employment in the economy of Pakistan and its trading partners. However, it is argued that the growing share of services in the economy of Pakistan and its trading partners has not translated into a significant increased share in their over-all trade. Pakistan is heading towards liberalisation of trade in services through unilateral, bilateral, multi-lateral agreements under the broad framework of WTO. Recently, in the wake of trade liberalisation in EBOPS services among Pakistan‘s trading partners; Pakistan has received request lists from its trading partners in the context of national treatment and market access under four modes of cross-border supply of WTO framework. In this regard, the opportunities as well as risks associated with trade liberalisation depend primarily on the relative competitiveness among the trading partners. It is, therefore, essential for the policy makers to design such a trade policy which not only helps in promoting domestic services industries but also open up new opportunities of employment generation and economic growth and development with a guarantee of peace and stability within and across its neighbouring countries. In this connection, this research paper develops a strategic framework of liberalising trade in services in 12 categories of services with 26 partner countries of Pakistan using various economics tools (RCAI, TII, TCI, TBI) and econometric models and techniques (OLS, PLS, 2SLS) by using panel data on annual and quarterly frequencies. JEL classifications: C52, C63, C87, F1, F13, F14, L8, F15, O24 Keywords: Trade in Services, Growth and Development, Trade Potential through Two Stage Least Square with Cross-section Fixed Effect Model by Using Panel Data, Trade Intensity Indices (TII), Trade Complementarity Indices (TCI), Trade Biased Indices (TBI), Revealed Comparative Advantage Indices (RCAI), Determinants of RCAI Using Pooled Least Square Method (PLS), Price and Income Elasticities Using Ordinary Least Square Method (OLS),
Inaugural Address
Authors: Abdul Hafeez Sheikh
Published: September 2018

Dr Rashid Amjad, President Pakistan Society of Development Economists and Vice-Chancellor PIDE, distinguished guests, ladies and gentlemen, it gives me great pleasure to address the 27th Annual General Meeting and Conference of the Pakistan Society of Development Economists (PSDE). I am pleased to note that the Society has been instrumental in promoting scholarly research and debate on critical socio-economic issues facing Pakistan, and that the Pakistan Institute of Development Economics (PIDE) has played a vital role in promoting and nurturing the Society since its inception in 1982. The Society has not only upheld and galvanized the profession of development economics in Pakistan but has also helped inspire new ideas for the greater development and prosperity of Pakistan. Ladies and gentlemen, I am happy to see that when I address you today Pakistan's economy is again showing distinct signs of recovery and we hope to achieve a growth rate of 4 to 5 percent this year which should help lift us to a much higher growth trajectory in the future. Despite the heavy headwinds that we have had to face, our government took important fundamental economic decisions of which we can be justly proud.
Household Balance Sheets, Aggregate Demand and Unemployment (The Quaid-i-Azam Lecture)
Authors: Atif Mian  , Amir Sufi
Published: September 2018

U.S. households accumulated debt at an unprecedented pace between 2001 and 2007. In the aftermath of the housing downturn, deleveraging by highly indebted households is the most important factor responsible for the current economic slump. The deleveraging process has led to sharp drops in both aggregate demand and employment. We argue that meaningful policies aimed at facilitating debt-reduction for under-water homeowners in the short run, and replacing non-contingent debt with contingent-debt in the long run are essential for a robust and sustained recovery.
A Global Green New Deal for Economic Recovery: Addressing the Financial, Climate, Food, Jobs and Development Crises Together? (The Allama Iqbal Lecture)
Authors: Jomo Kwame Sundaram
Published: September 2018

These immortal lines from Allama Iqbal make me very humble standing before you today to deliver the Allama Iqbal lecture. Mr Chairman, Mr President, Excellencies, ladies and gentlemen, friends all,. thank you very much for this honour and opportunity to speak to you on a very difficult subject. I would like to emphasise that, thanks to Professor Naqvi, this is not the first time I am appearing before the Pakistan Society of Development Economists, but it certainly is the first time, thanks to Dr Rashid Amjad, I have been invited to give this very distinguished lecture. Both men are very distinguished in their own right; they are people whom I have greatly respected over the years. Professor Naqvi's contributions, particularly on ethics and economics, and the challenge of rethinking Islam reminds me of Allama Iqbal's Reconstruction of Islamic Thought and the relevance of it for the challenges facing the world today, as highlighted by Professor Saith's lecture yesterday. The lines from Iqbal that I began with are very relevant, of course, to the whole question of inequality. I met Dr Rashid Amjad about three decades ago in the context of his work at the ILO. Over the decades, he provided sterling leadership in very different and changing circumstances. In a sense, it is his absence from the ILO today that is particularly felt because we face a very unique situation in the world today where, unfortunately, various forces seem to have successfully conspired to prevent a strong economic recovery. This is the subject of the lecture I would like to deliver.
Shorter Notices
Authors: Ahmad Waqar Qasim  , Lubna Hasan
Published: September 2018

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Time Poverty, Work Status and Gender: The Case of Pakistan
Authors: Najam-us-saqib  , G.M. Arif
Published: September 2018

The present study measures time poverty and its incidence across gender, occupational groups, industries, regions, and income levels using Time Use Survey (TUS) 2007, the first nationwide time use survey for Pakistan. In the entire TUS sample, the incidence of time poverty is 14 percent. Women are found to be more time poor than men whether employed or not. This is because of certain women-specific activities that they have to perform irrespective of their employment status. Working women are far more time poor than those not working.. Women accepting a job have to make a major trade-off between time poverty and monetary poverty. People working in professions and industries that generally require extended work hours and offer low wage rates are more time poor. This entails a situation of double jeopardy for workers who tend to be money and time poor at the same time. The close association of time poverty with low income found in this study corroborates this conclusion. Government can help reduce time poverty by enforcing minimum wage laws and mandatory ceiling on work hours in industries with high concentration of time poverty. Eradication of monetary poverty can also eliminate the need to work long hours at low wages just to survive. A fair distribution of responsibilities between men and women.is also needed.
Keywords: Time Poverty, Gender Disparities, Time Use, SNA Activities, Time Use Survey, Pakistan
Determinants of Intra-Industry Trade between Pakistan and Selected SAARC Countries
Authors: Adnan Akram  , Zafar Mahmood
Published: September 2018

This paper analyses country-specific and industry-specific determinants of intra-industry trade (IIT) between Pakistan and other SAARC countries using panel data techniques. This paper also disentangles total IIT into horizontal and vertical IIT. The Vertical IIT is further divided into high-quality and low quality IIT. This paper finds that country-specific variables are more important in explaining the IIT relative to industry-specific variables. The decomposition of IIT shows that in the SAARC region Pakistan’s IIT is mostly comprised of the vertical IIT. The share of horizontal IIT is comparatively less. The paper offers specific policy recommendations for the promotion of IIT in the SAARC region. JEL classification: F12, F14, F15
Keywords: IIT, Horizontal IIT, Vertical IIT
Pakistan, Politics and Political Business Cycles
Authors: Gernot Sieg  , Irem Batool
Published: September 2018

This paper studies whether in Pakistan the dynamic behaviour of unemployment, inflation, budget deficit and real GDP growth is systematically affected by the timing of elections. We cover the period from 1973-2009. Our results can be summarised as follows: (1) Unemployment tends to be lower in pre-election periods and tends to increase immediately after elections, perhaps as a result of politically motivated employment schemes. (2) Inflation tends to be lower in pre-election periods, perhaps as a result of pre-electoral price regulation. (3) We find increase in the governmental budget deficit, financed by heavy government borrowings from the central bank and banking sector during election year. (4) Real GDP growth and real governmental investment growth declines during pre and post election terms possibly as a result of inefficient resource allocation. JEL Classification: D72, D78, H50, H61, E51
Keywords: Opportunistic Political Business Cycle, Fiscal Policy, Macroeconomics, Elections, Pakistan
Shorter Notices
Authors: Muhammad Nawaz
Published: September 2018

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The Gender Differences in School Enrolment and Returns to Education in Pakistan
Authors: Madeeha Gohar Qureshi
Published: September 2018

Using estimates of schooling demand function and private rate of return to education by gender derived from Household Integrated Economic Survey 2010-11, this paper attempts to examine if there is any dynamics to define a differential behaviour across gender in enrolment in Pakistan and if there is then what can be the possible cause of such discrepancies and how can they be reduced. The first set of analysis focuses on the estimates of probability of enrolment at primary, secondary and tertiary level of education by gender. Strong evidence for higher likelihood of enrolment emerges only at the secondary level of education when the gender is male. The behaviour of the determinants for these schooling demand functions at different levels of education differs by gender. One such key variable is parental education, which is more pronounced in case of mother’s education towards increasing the likelihood of enrolment of girls at the primary and secondary level and of father’s education for boys at all levels and girls at the tertiary level. Hence investing in female education today will not only empower females today but as a positive externality will also lead to gender equity in educational outcomes in the future. Besides this intergenerational externality of investment in female education, the finding establishes that when conditional cash programmes are targeted at mothers as a policy tool they become an effective measure in increasing current female enrolment. Moreover the case for reducing gender disparities in educational outcomes is further supported when we see how gender imbalance in educational attainment and female labour force participation lead to discrepancies in the private rate of return to education by gender. The varied estimates of private rate of returns to education for males and females show that such deviations arise because the females labour force on average is much less educated than males and hence if the object is to raise the rates of returns, a targeted policy for reducing gender differences in enrolment at all levels of education primary, secondary and tertiary will have to be implemented.
Estimating Standard Error of Inflation Rate in Pakistan: A Stochastic Approach
Authors: Javed Iqbal  , M. Nadim Hanif
Published: September 2018

“The answer to the question what is the mean of a given set of magnitudes cannot in general be found, unless there is given also the object for the sake of which a mean value is required. There are as many kinds of average as many purposes; and we may almost say in the matter of prices as many purposes as many writers.” Edgeworth (1888). We estimate standard errors (S.Es.) of month on month and year on year inflation in Pakistan based on data for the period of July 2001 to June 2010 using the stochastic approach as well as extended stochastic approach to index numbers. We develop a mechanism to estimate S.E. of period average headline inflation (rate) using these approaches. This mechanism is then applied to estimate S.Es. of 12-month average rate of inflation in Pakistan for July 2003 to June 2010. The systematic changes in the relative prices of different groups in the CPI basket for Pakistan are also estimated. The highest (positive) relative price inflation occurred in ‘food, beverages and tobacco’ group and the lowest (negative) for ‘recreation and entertainment’ group, during fiscal years 2001 to 2010. JEL classification: C13, C43, E31
Keywords: Estimation, Index Numbers, Inflation Rate, Standard Error
Firm Performance and the Nature of Agency Problems in Insiders-controlled Firms: Evidence from Pakistan
Authors: Fahad Abdullah  , Attaullah Shah  , Safi Ullah Khan
Published: September 2018

More than two centuries ago, Adam Smith (1776) showed skepticism about the efficiency of joint stock companies because of the separation of management from ownership. He observed that managers of joint stock companies cannot be expected to watch over the business with the same anxious vigilance as owners in a partnership would. Adam Smith’s worry remained buried for a century and a half until Berle and Means (1932) rekindled interest in this area when they hypothesised in their book that dispersed shareholding is an inefficient form of ownership structure. They argued that separation of ownership and management control has changed the role of owner from being active to the passive agent. Dispersed shareholders lack incentives to monitor self-interested managers who possess only a small fraction of the total shareholdings. The propositions by Adam Smith (1776) and Berle and Means (1932) received some support when Jensen and Meckling (1976) tied together the elements of property rights, agency costs, and finance to develop a theory of ownership structure of a firm. Jensen and Meckling asserted that agency costs are real, which the owner can reduce either by increasing ownership stake of the agent in the firm or by incurring monitoring and bonding costs. In early tests, several research studies supported the views of Jensen and Meckling. However, these studies did not account for endogeneity problem.
Agricultural Income Taxation: Estimation of the Revenue Potential in Punjab
Authors: Anjum Nasim
Published: September 2018

In May 2011 a senator of the Muttahida Quami Movement (MQM), moved a private member’s constitutional amendment bill to remove the exemption provided to agricultural incomes from federal income taxation. The proposed amendment mentioned a potential revenue of Rs 200 billion from Agricultural Income Tax (AIT). This figure, however, differs widely from some other reported estimates of potential agricultural income tax.1 The issue of AIT is likely to echo again in the parliament and outside as Pakistan grapples with the issue of its low tax revenues. It is, therefore, important to carefully analyse the potential revenue from AIT to allow more informed discussion and policy decisions on tax options at the federal and provincial levels. The 1973 Constitution of Pakistan gives provincial assemblies the exclusive power to make laws pertaining to taxes on agricultural income.2 Agricultural income could be interpreted narrowly to include crop farming and rental income from land, or more broadly to include income from livestock and animal husbandry. There is no ambiguity that income from the narrower interpretation falls within the domain of provincial taxation though there may be room for debate whether the provincial jurisdiction extends to the broader definition of agricultural income or not [see Nasim (2012)]. Since 1996-97 all four provinces have instituted some form of tax on agriculture land or incomes. In its implementation this tax is largely a land tax (based on acreage) rather than a tax on agricultural income.
The Impact of Exchange Rate on Output Level: Bounds Testing Approach for Pakistan
Authors: Muhammad Nawaz
Published: September 2018

The stabilisation of growth process has been the aspiration of the nations in modern era. Since the industrial revolution in the world, most of the developing nations have been in the paradigm of chronic current account situation, loss in output, high import bill, less integration of their export sector, and less competitiveness in trade with the world. The process to devalue their currency may be evaluated as optimism for the improvement of their national growth that not only overcome the soaring trade deficit but also may be helpful to compete in international market. In theoretical literature, there has been contradiction among the researchers based on its effects in determining the net output of the economy. Since the work of Cooper (1971) and Krugman and Taylor (1978), the ambiguity arises for the effects of currency depreciation on output and their pioneer work explain the demand side as well as supply side channels through which depreciation may appear as loss in net output. The devaluation induces higher prices of tradable products that appear as loss in real balance of the economy and ultimately result in less output and growth. Some studies [Krugman and Taylor (1978); Edwards (1986) and Lizondo and Montiel (1989)] also support to contractionay output hypothesis with the induction of income redistribution channel that just redistribute income from the wage earners towards profit earners having the excess savings. This process ultimately leads to less aggregate demand as well as output via meager consumption. On the supply side, depreciation of currency result in higher input cost and less output level [Krugman and Taylor (1978); Van Wijnbergen (1986)]. In addition, wage indexation mechanism is also important that reduces the net benefits on producer side and escorts to the contraction in output [Agenor and Montiel (1996)].
Consumption Patterns of Male and Female Headed Households in Pakistan: Evidence from PSLM 2007-08
Authors: Ashfaque H. Khan  , Umer Khalid
Published: September 2018

Recent years have witnessed growing interest in analysing the welfare outcomes of female headed households (FHHs) in the developing world. The theoretical argument for examining female headship and family welfare is underpinned by two important considerations. The first concerns households’ access to resources, while the second pertains to control over the allocation of resources within the household [DeGraff and Bilsborrow (1993)]. A priori female headed households are expected to have access to a lower level of resources than the conventional male-headed households for a variety of reasons.1 However, this lower resource envelop experienced by female headed households may be partially offset by the way resources are allocated within such households. Several studies have revealed that resources under the control of women are more likely to be allocated for productive purposes that promote family welfare as compared to resource allocation under the control of men. In the context of Pakistan, the present paper aims to explore how resource allocation within female headed households differs from male headed households by examining the consumption patterns of both female and male headed households in the country.
Precise Estimates of the Unrecorded Economy
Authors: M. Ali Kemal  , Ahmed Waqar Qasim
Published: September 2018

Informal economy in Pakistan is the backbone of the economy. However, the problem is that we do not know how big it is due to non-availability of the precise estimates of unrecorded1 economy. Precise estimates of the unrecorded economy would help policy-makers to make better macroeconomic policies. If unrecorded economy becomes part of the recorded economy government can seek revenues from it and rest of the sectors may have to take lesser burden of taxes. This would be a win-win situation for the government and for those sectors that are part of the documented system. In return, by becoming part of the documented economic system the undocumented sector can enjoy all those benefits and incentives that are available to the formal sector.