Siddhartha Mitra

Special Economic Zones in India: White Elephants or Race Horses

On the basis of economic theory and history we can conclude that absorption of agricultural labour is necessary for sustained economic development of a developing country. Special Economic Zones (SEZs) constitute a medium for such sustenance. However, the SEZ policy in India has suffered from permission being granted for far too many sub-optimally sized SEZs or for others serving as appendages to mega cities and therefore inheriting all the diseconomies associated with the large size of the latter.

Implications of Nash Bargaining for Horizontal Industry Integration

This article shows how horizontal industry integration can arise from transferable asymmetry of technologies and endowments. The Nash bargaining solution suggests that greater technological diversity among coordinating parties yields greater gains from horizontal integration. The framework fits the case where a firm with a superior technology franchises the technology by horizontal integration. The results appear to fit hog production where integration has been primarily horizontal and, in part, broiler production where integration has been both vertical and horizontal. Specifically, technology has been shared through uniform genetic traits, fine-tuned feed rations, and veterinary services specified in grower contracts.

Corruption, Pricing of Public Services and Entrepreneurship in Economies with Leakage

The paper presents a theoretical model with bureaucratic corruption where bribe income can leak out of an economy. In such an economy given its perception about the extent of leakage the government sets the price of public services required for entrepreneurship by maximizing the welfare of the economy. We show that the corruption persists at the equilibrium. The government prices its services at a level higher than their unit cost of provision in high leakage economies. However, the price falls to unit cost level in more prosperous economies. We also find that the number of entrepreneurs starting business and the total income received as bribe are non-increasing functions of the prosperity level and the extent of leakage from the economy. The predictions of the model generate interesting policy implications: for example it clearly shows that in low prosperity economies the control of leakage may induce higher level of corruption, while the opposite is true in the high prosperity economies.We consider the case of entry into a business based on complementary licenses, the supply of which is controlled by monopolist bureaucrats who therefore face identical demands. We consider the impact of liberalisation on welfare and corruption when such bureaucrats engage in Nash or sequential interaction in the price space. We also examine how a government with awareness of the results of these interactions in regard to corruption, government revenue and welfare can affect these by choosing official prices of licenses. In the process of our examination we experiment with different objective functions of the government.

Determinants of Suicide Rates in Developing Countries - an Econometric Investigation of the Indian Case

In this paper we look at the determinants of suicide rates in developing countries by looking at the incidence of suicides in the various states of the Indian union. A thorough analysis of socio-economic factors affecting suicide rates in developed countries was conducted by Emile Durkheim towards the end of the nineteenth century and recently by Helliwell among others. However, no comparable work has been done in the case of developing countries. A big difference between our Indian study and the studies on developed countries is that neither literacy, nor the level of urbanization nor unemployment rates turn out to be significant determinants of suicide rates in our analysis. However, per capita income is a significant and positive determinant of suicide rates in both sets of studies.

A Framework for Analytical Treatment of Terrorist Problems

This paper classifies the various causes of terrorism into necessary, precipitating, facilitating and perpetuating factors. The presence of a leader is a necessary factor without which terrorism cannot be generated. Poverty and unemployment, however, might only be one out of many facilitating factors which might be rendered redundant without the necessary factor or precipitating factors. This explains the lack of significance of poverty as a cause of terrorism in some recent econometric studies.

Sustaining Subernarekha river basin

Subernarekha is an interstate river passing through the Indian states of Jharkhand, Orissa and West Bengal. The Subernarekha River basin is marked by conflicts among the alternative uses of water because of the inadequacy of the total water supply. An increase in water supply and improvement in water quality is felt to be necessary given the water scarcity in this region and because of widespread and extreme poverty. This was the precise objective of the multipurpose project started in the river basin in 1982–83. However, an attempt at simultaneous implementation of all project components has greatly reduced the benefits of the project. The project has also had some adverse consequences for the coastal environment and the quality of water. A careful study of the project and the institutions and policy relating to water lead to some suggestions. First, there is a need to check the over consumption of water through cost‐related pricing and greater efficiency in the collection of water charges. Second, the adoption of a project‐based engineering approach should be replaced by a comprehensive integrated management approach. Third, more hydromorphological information has to be generated and fed into the planning process. Fourth, good planning requires the inputs of diverse stakeholders.

A Note on Measuring Inclusive Growth and the Inclusiveness of Growth

This article makes three basic contributions: (a) review an already existing measure of ‘inclusive growth’ derived from a measure of inclusiveness (an increase which is assumed to be associated with inclusive growth) and show that this is one among a class of an infinite number of possible measures; (b) identify two drawbacks associated with the class of measures of ‘inclusive growth’ mentioned in (a) and come up with a measure of inclusive growth which is not associated with one of these drawbacks and (c) propound a measure of inclusiveness of growth which allows the researcher the room to partition an income-ordered population into blocks so that he/she can concentrate on inter-block inequality in growth rates of per capita income and neglect intra-block inequality (note that the formulation of this measure allows the researcher to partition the population into blocks in any way which he/she wants to) in growth rates of individual incomes. JEL Classification: D30, D31

Poverty in West Bengal: A Review of Recent Performance and Programmes

The position of West Bengal in terms of incidence of poverty has improved relative to other states since the 1970s. It also exhibits very little urban bias in regard to incidence of poverty as the gap between urban and rural poverty is low compared to many other states. A worrying fact, however, is that the pace of poverty alleviation in the post-liberalisation period has slackened compared to that in the pre-liberalization period. If we look at the incidence of poverty across districts of West Bengal, we see that these exhibit varying poverty incidence: The districts in the southeastern zone exhibit low to moderate rural as well as urban poverty; those in the southwestern zone exhibit moderate to high poverty, while the poverty in the northern districts shows large variations from low to moderate to high. In regard to performance of poverty alleviation programmes, we focus on the Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA)—West Bengal does very well in terms of percentage of rural households provided employment and ranks among the top 5–7 major states in this regard. However, the relative performance of districts leaves a lot to be desired: It is observed that the high-poverty districts often exhibit lower impact of the programme (in terms of percentage of rural population registered and works completed per 1000 persons), when these districts should exhibit higher impact.

Dynamics of Foodgrain Deficiency in India

Food security is a basic requirement of livelihood. A major source of calories is carbohydrates which are mainly derived from foodgrains. This article addresses the foodgrain deficiency in India, across its states, regions and at the household level. The study further analyses the causal effect of subsidies from India’s public distribution system, the share of home-produced foodgrain in total consumption of foodgrains, food diversification, monthly per capita consumption expenditure and socio-religious factors on foodgrain deficiency. The analysis is based on the National Sample Survey’s unit-level data at three points of time: 1999–2000, 2004–05 and 2009–10. Foodgrain deficiency has been captured at the national level and across states by suitably adapting Foster, Greer and Thorbecke’s (1984) measure of poverty. Panel regression has been done at the state-region level to analyse the impact of the above-mentioned determinants on foodgrain deficiency. For the household-level regression, the dependent variable is deviation from the desired norm of 8.6 kg of foodgrain per consumer unit per month. Quantile regression analysis is done at the household level to capture the impact of the determinants at different segments of foodgrain deviations. We find that foodgrain deficiency levels have increased for ‘all-classes’ and the ‘below-poverty-level class’ but the deficiency levels are not very high and can be managed with suitable measures. It is further found that the determinants have a significant influence on foodgrain deficiency and foodgrain deviation at the state-region and household levels, respectively. Suitable policy measures have also been identified. JEL Classification: I31, I32, C21, C23, O10, Q18

Utility Maximisation as a Pathway for Maximisation of Happiness

It is hypothesized that pursuit of human happiness is carried out through adaptive change in utility functions by drawing lessons from, in an ex-post manner, the effect of short run utility maximizing choices on utility possibilities. A reference frame for future research is designed to check the truth of this hypothesis which would draw on the methodology already in use for conducting happiness surveys.