Shahrukh Rafi Khan

Decomposing the regional gap in cognitive skills in rural Pakistan

Abstract Schooling, and a major product of schooling—cognitive achievement—varies considerably across regions in rural Pakistan. These regional differences are important because they reflect well-being and earnings differences and because better schooling induces greater geographical mobility. An unique household probability-based data set with cognitive achievement for sample members over nine years old is used to decompose the substantial regional gaps in cognitive achievement. Estimates suggest that regional differentials in school availability and in school quality, in addition to regional differentials in family background, are big factors underlying regional differentials in schooling and in cognitive achievement. The regional gaps in schooling availability and in school quality reflect fairly immediate school supply decisions directly related to policies. Therefore regional gaps in schooling and in cognitive achievement could be reduced substantially in the medium run through policy decisions to equalize school resources across regions, with subsequent gains in equity and mobility across regions. ( JEL 12, 015, R53)

Environmental impacts and mitigation costs associated with cloth and leather exports from Pakistan

We have drawn two propositions, critical from a developing country viewpoint, from the trade and environment literature and assessed them for cloth and leather production in Pakistan. The first is that trade liberalization will result in export by developing countries of their environmental capital. The second is that the costs of mitigating these damaging environmental effects in the South are very high. We find that, given the state of implementation of environmental laws in Pakistan, exports induced by trade liberalization can indeed have major negative environmental impacts. However, we do not find support for the proposition that the costs of mitigation are very high. We also find that the social benefits far exceed the costs of mitigation.

Gender and Structural Adjustment

‘If men and women were to take turns bearing children and if men were to bear the first, no family would have more than two children.’ This is a hard-hitting saying by a down-to-earth woman. One could also say that if men lived the lives of poor rural or urban women for a day, they would quickly endorse a special focus on the condition of women. As things stand, in Pakistan, a special focus on women is often suspected to be driven by a foreign agenda. Even so, one needs to consider the ideological resistance to studying women, and to focus on interventions to improve their social and economic conditions.

Trade Liberalization and the Environment

Trade liberalization is viewed as damaging to the environment for several reasons. Trade is considered to be a magnifier, and if the correct environmental policies are not in place, enhanced production that accompanies enhanced trade could exacerbate the pressure on natural resources and increase industrial pollution.2 In addition, the social costs of liberalization that results in unrestricted import of dirty second-hand manufacturing technologies and hazardous agricultural inputs may outweigh the social benefits.

Cross-sector export 'externalities' in developing countries

Abstract Feders model ( Journal of Development Economics , 1982, 12, 59–73) has been used extensively to measure the externality and productivity enhancing effects of one sector on the whole economy. We argue that the model is misspecified, make three modifications, estimate it for the export vs. non-export sectors, and compare our results with Feders.

Devaluation and the Balance of Trade

Exchange-rate flexibility is generally recommended as part of structural adjustment packages to offset balance of trade deficits.2 However, according to Burton and Gilman (1991, p. 19), the IMF is eclectic. For example, if countries confront a chronic current account deficit and inflation is not a serious problem, a market-determined exchange rate may be endorsed. Alternatively, if coping with inflation is the priority, a pegged exchange rate could be recommended as a nominal anchor. Problems in the real world rarely come singly. Pakistan has struggled with both price stabilization and current account deficits. It adopted a managed float in 1982 and, as part of its structural adjustment reforms, has occasionally made discretionary changes in the exchange rate when confronted with low foreign exchange reserves, or when the value of the dollar has appreciated substantially in relation to other currencies. The obvious question is whether the evidence supports such policy action. The answer is that the evidence is decidedly mixed.

COMPARATIVE PRIVATIZATION EXPERIENCE IN PAKISTAN: EMPLOYEE AND PRIVATE OWNERSHIP

ABSTRACT In this paper, we compare the pre- and post-privatization experience of five firms in three industries in which employee buy-outs and conventional privatization occurred. We do not find evidence to support the hypothesis that labor productivity is higher in employee-owned firms. We find that private sector firms are more successful than employee buy-outs in raising profit rates. In general, private ownership seems to lead to less labor retrenchment, although in one case the complete replacement of the labor force lends credence to employee concerns about privatization and job insecurity.

Structural Adjustment and Food Security

It is difficult to think of a more important issue than ensuring an adequate diet for a population.2 Food security is the subject of this chapter.3 Our focus is on aggregate food security in that we investigate Pakistan’s overall past, present and future capability of feeding its population. We also explore how national food availability translates into food security on an aggregate level and what bearing structural adjustment may have on food security.

Comparative Privatization Experience: Employee and Private Ownership

Does privatization lead to greater economic efficiency? Is privatization inevitably regressive? Do employee-owned firms represent a way of ameliorating the regressive social impact of privatization without compromising economic efficiency? These issues are empirically investigated in this chapter by comparing the performance of employee-owned privatized units with those conventionally transferred to an individual or a corporate group by comparing the before and after privatization performance of both kinds of units.

Structural Adjustment, Industrialisation, and Export Promotion

The main objective of this paper was to explore if trade liberalisation has ushered in the large scale de-industrialisation that is feared by some to follow in its wake and whether it has been successful in enhancing export promotion. We relied on several different kinds of evidence to demonstrate that de-industrialisation has not coincided with the intensive structural adjustment period while export growth has. However, both industrialisation and export promotion in Pakistan have been below potential, below the mean for low income countries and have not even kept pace with progress in this regard in the low income country group. We were not able to establish, possibly due to the paucity of time-series observations, that either industry or exports generated positive externalities for or used resources more productively than the rest of the economy.