Dan Biller

Greening Growth in Pakistan through Transport Sector Reforms : Strategic Environmental, Poverty, and Social Assessment

The Government of Pakistans (GoPs) 2011 Framework for Economic Growth seeks to place Pakistan on a sustained high economic growth path of 7 percent per year through measures to reduce the cost of doing business, improve the investment climate, and strengthen institutions. Trade and transport reforms are central to achieve the Frameworks goals. The transport sector constitutes 10 percent of Pakistans Gross Domestic Product (GDP) and provides 6 percent of the employment in the country. The sector plays an important role in linking other sectors in the economy, contributes to both domestic and international trade, and helps facilitate the spatial transformation occurring in Pakistan. The present patterns in transport and trade logistics generate inefficiencies that are costing Pakistans economy roughly 4-6 percent of GDP per year, which is a major constraint on the aspirations set out in the Framework. This report examines the poverty, social, and environmental aspects associated with trade and transport sector reforms aimed at increasing the freight transport sectors productivity to meet the Frameworks goals. This report is organized as follows. Chapter 1 provides the objectives and methodology of this work. Chapter 2 discusses the sector status and the trade and transport policy reforms. Chapter 3 establishes the priority issues associated with freight transport reform. Chapters 4 and 5 focused on the social and environmental aspects of the reform, respectively. And chapters 6 and 7 conclude the report by discussing policy options to promote environmentally and socially sustainable trade and transport and an agenda to advance environmentally and socially sustainable trade and transport reforms in Pakistan.

Infrastructure Gap in South Asia: Inequality of Access to Infrastructure Services

The South Asia region is home to the largest pool of individuals living under the poverty line, coupled with a fast-growing population. The importance of access to basic infrastructure services on welfare and the quality of life is clear. Yet the South Asia regions rates of access to infrastructure (sanitation, electricity, telecom, and transport) are closer to those of Sub-Saharan Africa, the one exception being water, where the South Asia region is comparable to East Asia and the pacific and Latin America and the Caribbean. The challenge of increasing access to these services across the South Asia region is compounded by the unequal distribution of existing access for households. This study improves understanding of this inequality by evaluating access across the regions physical (location), poverty, and income considerations. The paper also analyzes inequality of access across time, that is, across generations. It finds that while the regressivity of infrastructure services is clearly present in South Asia, the story that emerges is heterogeneous and complex. There is no simple explanation for these inequalities, although certainly geography matters, some household characteristics matter (like living in a rural area with a head of household who lacks education), and policy intent matters. If a poorer country or a poorer state can have better access to a given infrastructure service than in a richer country or a richer state, then there is hope that policy makers can adopt measures that will improve access in a manner in which prosperity is more widely shared.

A Dynamic Spatial Model of Rural-Urban Transformation with Public Goods

This paper develops a dynamic model that explains the pattern of population and production allocation in an economy with an urban location and a rural one. Agglomeration economies make urban dwellers benefit from a larger population living in the city and urban firms become more productive when they operate in locations with a larger labor force. However, congestion costs associated with a too large population size limit the process of urban-rural transformation. Firms in the urban location also benefit from a public good that enhances their productivity. The model predicts that in the competitive equilibrium the urban location is inefficiently small because households fail to internalize the agglomeration economies and the positive effect of public goods in urban production.

A Methodological Framework for Prioritising Infrastructure Investment

Policy makers are often confronted with a myriad of factors in the investment decision-making process. This issue is particularly acute in infrastructure decisions since these often involve large sums and lock-in technologies. In regions and countries where the infrastructure access gap is large and public budgets severely constrained, the importance of considering the different facets of the decision-making process becomes even more relevant. This is the case for South Asia. This article presents the infrastructure access gap in South Asia and discusses the impacts that this gap has in South Asian economies. It examines the links between the infrastructure and economic growth and infrastructure and welfare/poverty. The article reviews different methodologies to measure these impacts and hence serve as mechanisms to establish priorities. Finally, the article presents a methodology to holistically equate trade-offs among different policy objectives per key infrastructure sectors.

A methodological framework for prioritizing infrastructure investment

Policy makers are often confronted with a myriad of factors in the investment decision-making process. This issue is particularly acute in infrastructure investment decisions, as these often involve significant financial resources and lock-in technologies. In regions and countries where the infrastructure access gap is large and pubic budgets severely constrained, the importance of considering the different facets of the decision-making process becomes even more relevant. This paper discusses the trade-offs policy makers confront when attempting to prioritize infrastructure investments, in particular with regard to economic growth and welfare, and proposes a methodological framework for prioritizing infrastructure projects and portfolios that holistically equates such trade-offs, among others. The analysis suggests that it is not desirable to have a single methodology, providing a single ranking of infrastructure investments, because of the complexities of infrastructure investments. Rather, a multidisciplinary approach should be taken. Decision makers will also need to account for factors that are often not easily measured. While having techniques that enable logical frameworks in the decision-making process of establishing priorities is highly desirable, they are no substitute for consensus building and political negotiations.