Farrukh Iqbal

The determinants of moneylender interest rates: Evidence from rural India

This study examines the determinants of moneylender interest rates in rural India in the context of two major developments of the 1960s: (a) the incidence of agricultural technical change in the process popularly denoted by the term ‘Green Revolution’ and (b) the spread of government‐sponsored subsidised credit through rural banks and co‐operative credit agencies. It finds that farmers residing in areas characterised by the use of Green Revolution technology face lower moneylender interest rates. It also finds evidence of the reduction of moneylender monopoly power as a result of increased competition from formal lending agencies. It concludes that informal rural credit markets are sensitive mechanisms which respond to environmental as well as borrower characteristics.

Economic Growth in Egypt: Constraints and Determinants

Egypt accelerated its ongoing transition from a public sector dominated economy to a private sector led and market oriented economy after the collapse of oil prices in the mid-1980s. Some aspects of the economy, such as trade policy, have been substantially transformed since then whereas other aspects, such as public control of the financial sector, have experienced less change in substance. The authors examine some determinants of growth in Egypt since the mid-1980s using insights from both standard econometric techniques and a diagnostic approach proposed by Hausmann, Rodrik and Velasco (2004). They find that trends in government consumption, credit to the private sector and the average growth rate of OECD countries have been significant determinants of growth in Egypt in the past. They also present evidence that suggests that inefficient financial intermediation is a significant current constraint on growth.

The demands for funds by agricultural households : evidence from rural India

This study presents estimates of borrowing functions based on rural household data for India. It improves upon existing work in three key areas. First, it is shown that existing studies have used an inappropriate definition of the demand for funds, which when rectified produces quite different results. Second, the interaction between agricultural technical change and the rural finance market is examined and it is shown that farmers in a position to benefit from technical change tend both to borrow more and to face lower interest rates. Third, it is shown that farm specific interest rates, when introduced endogenously, are quite sensitive to personal and locational characteristics and are significant determinants of borrowing.

Small Firm Dynamism in East Asia: An Introductory Overview

This Special Issue presents a collection of papers which examine the evolution of small and medium enterprises (hereafter SMEs) in East Asia over the past quarter century or so. East Asia is of interest beca~se this region has experienced, on average, the highest economic growth rates in the world during ~his period. This has been accompanied by dramatic transformations in sectoral output and employment, in demographic patterns and in the flow and composition of domestic and international trade. It is of interest to see to what extent these transformations have affected, or have been influenced by, industrial structure as reflected in the evolution of small firms. At the same time, not all countries in East Asia have grown at similar rat~s. nor has there been uniformity in public polICies across the region. How smaller firms have coped with the different policy environments and patterns of economic transformation that have characterized the region in the recent past could be of potential importance to the formulation of public policy in other developing countries. The papers illustrate selected aspects of the performance of SMEs in East Asia such as their contribution to employment growth, productivity change and resilience in the face of shocks. They also analyze some factors that have been responsible for the observed patterns of SME performance. 1 These factors include aspects of public

Small Firm Dynamism in East Asia

1. Small Firm Dynamism in East Asia: Overview Iqbal, Urata. 2. The Dynamic Role of Small Firms: Evidence from the US Audretsch. 3. Entry of Small and Medium Enterprises and Economic Dynamism in Japan Kawai, Urata. 4. Technological Progress by Small and Medium Firms in Japan Urata, Kawai. 5. Productivity Dynamics of Small and Medium Enterprises in Taiwan Aw. 6. Small and Medium Enterprises in Korea: Achievements, Constraints and Policy Issues Nugent, Yhee. 7. The Evolution and Structure of Industrial Clusters in Japan Yamawaki. 8. Firm and Group Dynamics in the Small and Medium Enterprise Sector in Indonesia Berry, et al. 9.Subcontracting and the Performance of Small and Medium Firms in Japan Kimura. 10. Government-Business Coordination and Small Business Performance in the Machine Tools Sector in Malaysia Rasiah. 11. Market Reforms, Technological Capabilities, and the Performance of Small Enterprises in China Wang, Yao. 12. Small and Medium Enterprises in Thailand: Recent Trends Wiboonchutikula. 13. Small Firm Dynamics: Evidence from Africa and Latin America Liedholm. Index.

The determinants of child mortality reduction in the Middle East and North Africa

Although child mortality rates have declined all across the developing world over the past 40 years, they have fallen the most in the Middle East and North Africa (MENA) region. We investigate the causes of this through an econometric model that differs from previous studies in using the change in child mortality, rather than its level, as the dependent variable. We show that the process of child mortality decline has been characterized by convergence, whereby countries with higher levels of initial child mortality have experienced faster declines than those with lower levels. In addition, we find that public spending on health, growth rates of income and levels of caloric adequacy are robust determinants of the change in child mortality over time. Neither initial mortality status nor caloric adequacy is likely to remain as important for the MENA region in the future as they have been in the past. The region has been benefitting less and less from the convergence momentum conferred by high initial child mortality as its mortality levels have declined over time and this will continue into the future. With regard to caloric adequacy, the region is unlikely to experience significant improvements in the future as it has already achieved a high level of food sufficiency. Accordingly, most countries in the region must look to achieving more rapid income growth and higher rates of appropriately targeted public spending on health in order to achieve further child mortality reductions in the future.

External financing for Korea: The next phase

Abstract This paper suggests that future external finance arrangements for Korea will exhibit increasing reliance on securitized instruments (bonds and equity) in preference to loans. Such a shift in the composition of financing is warranted by the evolution of Koreas needs, constraints and opportunities as reflected in such ongoing or anticipated developments as: the vulnerability to external trade and finance shocks, the gradual disengagement of government from financial, trade and industrial intervention, the substantial improvement in competitiveness arising from the realignment of OECD exchange rates and the associated improvement in Koreas credit- worthiness, and changing lender preferences as expressed in the trend towards securitization in international finance markets.

Why Do Some Oil-Rich Countries Perform Better Than Others?

Progress in child mortality reduction and education attainment varies widely among oil-rich countries. This paper investigates the causes of this variation using an empirical model that departs from the available literature in allowing for explicit measurement of the impact of initial levels of child mortality and education attainment. The results show that the following four variables are statistically significant and robust across various specifications: public spending on health and education, economic growth rates, caloric sufficiency, and initial levels of child mortality and education attainment. Further analysis was conducted to determine the economic significance of these factors by examining the contribution of each to the fitted growth rates (as a deviation from the sample mean) of child mortality and secondary school enrollment for 14 oil-rich developing countries. The analysis reveals some interesting patterns. First, initial conditions dominate the results for education attainment: the initial level of secondary school enrollment in 1980 is the dominant factor in explaining subsequent improvements in 10 of the 14 oil-rich developing countries for which calculations could be performed. Second, policy factors worked in different ways in different countries. A high degree of caloric sufficiency enabled countries in the Middle East and North Africa to reduce child mortality faster, while low levels of caloric sufficiency prevented African oil-rich countries, such as Angola and the Republic of Congo, from making progress. Third, levels of public spending were not economically critical for gains in school enrollment, although they were important in a few country cases for improvements in child mortality rates.

Education attainment in the Middle East and North Africa : success at a cost

This paper reviews the experience of the Middle East and North Africa region in education attainment over the past four decades (1970-2010). It documents the following main findings: (a) all countries in the region experienced significant improvements in educational attainment over this period; (b) most countries in the region did better in this regard than comparators that had roughly the same education stocks in 1970; (c) collectively, the region achieved a greater percentage increase in education than other regions; (d) the regions better performance was in part because of higher rates of public spending on education, better food sufficiency status, and a lower initial stock of education in 1970 in comparison with most other developing country regions; and (e) the region had among the lowest payoffs to public spending in terms of increments in education stock; the impressive advance in education was achieved at high cost.