Pakistan's informal sector

This study reviews the main features of Pakistan's informal sector. The data on the informal sector, compiled from censuses and sample surveys in one major city (Rawalpindi), suggest that both real wages and employment have grown in the informal sector. The seeming paradox of real wage growth in a labor surplus economy is explained by real wage growth in both agriculture and large‐scale manufacturing, both of which were made possible by Pakistan's growth performance during the 1960s. The differences in wages between the formal and informal sector, after adjusting for age and education, are quite small, a reflection of high labor mobility between the two sectors.     

The terms of trade and real import capacity of the tourism sector in Tanzania

The paper argues that in the nineteen‐seventies, international tourism in underdeveloped countries is liable to have experienced the following: (a) a lower rate of growth of price; (b) a decline in the terms of trade for the sector; (c) a lower rate of growth in the real import capacity of the sector. These hypotheses are demonstrated for an area of holiday tourism, and for tourism in general, in Tanzania up to the end of 1976. Reference is made to the part played by the depreciation of the currency against the separate currencies of the major tourism markets.     

Capital flows and financial stability: the mexican experience

This paper argues that capital inflows that are not well absorbed by the private sector will cause financial instability under a fixed exchange rate regime. Whether capital inflows, particularly portfolio inflows, are good or bad as perceived by the recipient emerging market depends on how they are allocated and used. They can, if absorbed properly, contribute to a reduction in the cost of capital and to domestic capital formation and economic growth. On the other hand, they can also flood the domestic market, build up official reserves, and appreciate the real exchange rate. Moreover, they are very sensitive to political and economic shocks. Empirical analysis of Mexico's recent experience reveals that the capital influx into Mexico in the past decade did not contribute much to capital formation and economic growth. Instead, they were to a large degree absorbed by official reserves and imports for consumption. Capital inflows were a major factor in Mexico's real exchange rate appreciation. Capital flows in Mexico are found to be adversely affected by U.S. interest rates.     

Avoiding crisis contagion: Poland’s case

This paper examines the major reasons for limited crisis contagion to Poland in the period 2007–09. At this time Poland was the only European Union (EU) member that grew in the midst of the Great Recession and financial crisis. The following analysis focuses on domestic polices and economics structure which made this growth possible. Poland’s modest levels of private and public debt, low share of mortgages in bank assets, limited decline in real estate prices, and proactive policies by domestic and foreign banks substantially buffered Poland’s financial sector. At the same time, real economy was aided by a high share of domestic consumption as opposed to exports, a favorable labor market structure, and timely financial assistance from the EU, all that shielded it from major crisis contagion.     

Real and nominal determinants of real exchange rates in Latin America: Short-run dynamics and long-run equilibrium

This article analyses the factors that determine the long-run real exchange rate in Argentina, Colombia and Mexico, distinguishing between real and nominal determinants. Cointegration analysis is utilised to establish that the real exchange rate has an equilibrium relationship with real variables (the terms of trade, capital flows, productivity, and government share of GDP) which excludes nominal variables (nominal exchange rate, money) and central bank intervention. Variance decompositions reveal that among the real variables that determine the real exchange rate, the terms of trade and productivity explain much of the variation in the real exchange rates. When nominal variables are included in the model, the nominal exchange rate accounts for most of the variation in the real exchange rates of all three countries. The impulse response functions are broadly consistent with theoretical predictions and shocks to the nominal variables have only transitory effects on the real exchange rate.     

The role of the sociologist in local planning

The role of the sociologist in development projects can be misunderstood by other members of an interdisciplinary team in ways that may have undesirable consequences for development research and can distort the resultant team recommendations. Technological professionals can define the sociologist's role in such a way that he is expected to produce answers to unreal and unanswerable questions and to refrain from attempting answers to important and answerable ones. These latter tend to be categorized as ‘evaluative’ or ‘political’ and excluded from the scope of the research project, with the result that major policy decisions are smuggled into the conclusions of the study in the guise of purely technical recommendations. The real goals of development can thus be largely ignored in the formulation of the report. Greater attention should be paid to the sociology and organization of development research itself if these dangers are to be avoided.     

OECD imports of leather: Indian performance and real exchange rates of the Indian rupee

This article reports an econometric investigation of shares by source in imports of leather and leather manufactures into OECD markets over the period 1974–87, at four‐digit SITC level. The Indian share at each destination relative to that of other major exporters, taken serially and independently, is tested for sensitivity to relative price fluctuations as measured by the real bilateral exchange rate between the Indian rupee and the currency of the fellow exporter. The pattern of findings by product category and destination provides important guidelines for exchange rate policy and export strategy.     

The Real Exchange Rate,Foreign Aid and Macroeconomic Transmission Mechanisms in Tanzania and Ghana

Abstract

A recent study of 36 sub-Saharan African countries found a positive impact of aid in the majority of these countries. However, for Tanzania and Ghana, two major aid recipients, aid did not seem to have been equally beneficial. This study singles out these two countries for a more detailed empirical investigation. The focus is on the effect of aid when allowing external and nominal factors to play a role in the macroeconomic transmission mechanism. We conclude that when monetary and external factors are properly accounted for, then aid has been pivotal to growth in both real GDP and investment.     

POLICY MAKING AND THE DEMONSTRATION EFFECT: PRIVATIZATION IN A DEPRIVED REGION

The aims of public policies are not always clearly articulated by ministers. Further the aims that are stated may not reflect all – or indeed the most important – aims. In some cases declared policy aims bear little relationship to the real intentions of ministers in undertaking an initiative. In other cases policy decisions are intended as symbolic statements, demonstrating government attitudes on a range of issues beyond the specific matter under consideration. These ideas are explored in the context of the privatizations of Harland and Wolff and Shorts, two major industrial government-owned companies in Northern Ireland. The article concludes that government sought to use the privatizations as a symbolic statement, namely to demonstrate that the heavy dependence on the public sector within Northern Ireland had to be reduced.     

The intensive agricultural districts programme in India: A new evaluation

The Intensive Agriculture Districts Programme (IA DP) was a major component of the Indian Government's desire to launch a ‘new strategy’ for agricultural development in the nineteen‐sixties. Prior evaluations have been incomplete and flawed by an inappropriate interpretation of the evidence. This paper utilizes more recent data and uses the total factor productivity approach to evaluate gains from the programme. A feature of the analysis is the concept of ‘economic slack¹ existing in these districts at the beginning of the programme. It concludes that the programme induced a very significant increase in the use of ‘modem’ inputs and hence of agricultural production but did not result in a major gain in ‘real’ total factor productivity.     

Gender wage inequality and export‐led growth in South Korea

This article investigates the relationship between gender, wage inequality, and export‐led growth in South Korea. The persistent gender wage gap in Korea's manufacturing sector is found to be linked to women's segregation in the country's major export industries where real wage growth has lagged productivity growth, despite favorable market conditions that might drive up women's wages relative to those of men. The interaction of state‐ and firm‐level hiring, training, and promotion practices that structure women's and men's employment opportunities differently appear to have resulted in a relatively weaker fall‐back position for women in labour markets. Econometric results are consistent with the hypothesis that women's weaker fall‐back position limits their ability to bargain for wage increases commensurate with productivity growth. Further, evidence is presented which links gender wage inequality to the growth of Korean exports.     

Private foreign asset accumulation,not just capital flight: Evidence from the Philippines

External debt problems have been accompanied in many developing countries with large private capital outflows. The latter phenomenon is usually identified in the literature as ‘capital flight’. This article argues that private foreign asset accumulation is a more appropriate term and compares a great variety of definitions and measurement methods and applies these to Philippine data for 1971–88. Outcomes show striking differences in assessment of the magnitude of the phenomenon. In the preferred definition of this study applied to the Philippines, unrecorded workers remittances from abroad, a factor omitted in other studies, represent a major source of foreign exchange earnings which indirectly support private foreign asset accumulation. Other definitions appear to severely underestimate private capital outflows. Econometric evidence on the causes of private foreign asset acquisition shows a strong sensitivity to the applied definition. Regression analysis for six alternative definitions shows that the expected real exchange rate depreciation and the real foreign‐domestic interest rate differential are ‐ in line with portfolio theory ‐ important determinants in the case of nearly all alternative measures, except for those that attempt to define a narrow ‘capital flight’ concept. Other determinants found significant are the availability of external finance and the previous year stock of private foreign assets. Debt‐fuelled private capital outflows are associated with the political economy of public external borrowing and the segmented nature of the foreign exchange market in the Philippines. Stock‐adjustment behaviour in the acquisition of private foreign assets in turn is interpreted as being a result of a simultaneous decision‐making process determining consumption demand and portfolio choice of high‐income Philippine households to satisfy demands related to their international lifestyles. These results have important welfare implications and policy consequences.     

PUBLIC EXPENDITURE AND POLICY IMPLEMENTATION: THE CASE OF COMMUNITY CARE

This article explores the contention that the conventions of public expenditure accounting conceal, rather than reveal, the real nature and implications of resource trends. A benchmark — a constant level of service output — is established as a basis for examining the relationship between trends in expenditure inputs and service outputs. Changes in unit costs are identified as the major source of deviation between expenditure and output trends. The impact of resource constraint on policy and policy-implementation is then examined in relation to one, essentially stable, area of policy in the personal social services: community care.
The meaning of the term'policy' is far from straightforward and community care is best understood as the interaction of relatively independent streams of policy, towards service outputs and resource inputs, extant in both central and local government. Mechanisms by which policy streams could be reconciled are of particular interest and an innovative example — joint finance — is examined in some detail.     

U.S. treasury department studies of federal- state-local fiscal relations: the context,the major themes,and the outcome

This article provides an assessment of the condition of the literature on several major issues of Federal-State-local fiscal relations. The assessment is provided in the context of a three-volume report on Federal-State-local fiscal relations recently published by the U.S. Treasury Department. The author was a major participant in the studies who generally views them favorably, but who also raises his real concerns about a number of matters.

This article summarizes and evaluates certain aspects of the economic theory of federalism, the intellectual underpinnings of the report. This article addresses the institutional context in which the report was written, which helped shape its approach, content, and conclusions. The report itself generally lacks detailed recom-mendations.

Three main themes of the report are addressed in detail in this article. These are: (a) issues relevant to programs of general-purpose fiscal assistance, which include the adequacy of any potential improvements that might be made in measures of the fiscal capacity of State and local governments; (b) the role, if any, for tax subsidies to State and local governments through the deductibility of State and local taxes in the computation of individual Federal income taxes, and the exemption from Federal income taxes of interest paid on bonds and notes issued by State and local governments; and (c) the projection of the long-term outlook for the fiscal condition of the State-local sector on a current services basis, compared with projections of the long term outlook for the Federal government.     

The "other diseases" of the Millennium Development Goals: rhetoric and reality of free drug distribution to cure the poor's parasites

The sixth MDG aims 'to combat HIV/AIDS, TB, malaria and other diseases'. The residual category of 'other diseases' has become the focus of intense interest, partly because it has provided an opportunity to increase resources for the control of the mostly parasitic 'neglected tropical diseases' (NTDs). Intense lobbying has secured large amounts of funding from donors, as well as generous donations of medicines from the major drug companies. A massive programme is now underway to treat the parasites of the poor in Africa via integrated vertical interventions of mass drug administration in endemic areas. The approach has been hailed as remarkably effective, with claims that there is now a real prospect of complete control and, for some NTDs, even elimination. However, a closer look at evaluation and research data reveals that much less is known about what is being achieved than is suggested. Competition between implementing organisations is leading to potentially counterproductive exaggerations about treatment coverage. Detailed local-level research in Uganda and Tanzania shows that actual rates of drug take-up among target populations are often lower than is necessary to effectively control the diseases, and that methods of drug distribution may even lead to active resistance to treatment. If current trends are not corrected, declining rates of NTD infection will not be sustained. Much more rigorous and effective monitoring is essential.     

Volatility of Short-term Capital Flows and Private Investment in Emerging Markets

Using micro-level panel data, the paper analyses the impacts of short-term capital flow volatility on new fixed investment spending of publicly traded real sector firms in three major emerging markets – Argentina, Mexico and Turkey. The empirical results, including sensitivity tests, suggest that increasing volatility of capital inflows has an economically and statistically significant negative effect on new investment spending of private firms. Accordingly, a 10 per cent increase in capital flow volatility reduces fixed investment spending in the range of 1–1.7, 2.3–15, and 1 per cent in Argentina, Mexico and Turkey respectively.     

Capital and Labour Mobility and their Impacts on Mexico's Regional Labour Markets

Abstract

This paper studies the effects of capital and labor mobility on real wages across Mexican states for the period 1997–2006. Employing dynamic panel data methods, we find: (1) strong positive effects on real wages from foreign direct investment (FDI) and from migration; (2) domestic and foreign migration provide similar wage effects; and (3) alternative partitions indicate that real wages are more sensitive to FDI-related fluctuations across states with relatively lower wages and migration levels. Overall, these results provide support that real wages respond positively to fluctuations in capital flows and labour movements as predicted from the theory.     

Glasgow: Anatomy of a fiscal crisis

Ostensibly, the reorganisation of Scottish local government in 1996 was intended to create a more local, more efficient and more accountable system of local government. However, simultaneously, through grant abatement, the government intensified its fiscal squeeze on local government, seeking in real terms reductions in local authority expenditure. Contrary to assurances from ministers, both developments occasioned disruption for local authorities, with Glasgow in particular experiencing a severe period of fiscal stress. This paper outlines a research framework for identifying potential causal factors behind the acute nature of Glasgow's fiscal crisis, whilst considering the budgetary constraints within which Scottish (and indeed British) local authorities must operate. Finally, it focuses on the impact and resolution of the crisis and highlights the crucial role that the decisions of central government have played in shaping the response of one major local authority.     

Identity and fear: A survey study of the Arab East

This article explores the concepts of social identity and fear in the Arab East, namely in Lebanon, Syria, Jordan, and among Palestinians living in these countries. Its theoretical framework is composed of two major conceptions: individuals’ perceptions of their social and political identity-affiliation and inter-intra-group relations. It is asserted that the feeling of fear and antipathy in the Arab East creates or supports confessional individual identity and group affiliation. The findings, which are construed through survey analysis, support the arguments that secterian groups are basic actors in the politics of the Arab East and that all political analysis that negates their influence as identity units is superficial. The survey results discredit the argument that the feeling of belonging to confessional groups is anomalous, anachronistic, and evanescent. On the contrary, the minority identity has never been obliterated in the Arab East, and these minorities carry the potential of asserting a real threat to regime stability and to the political order. These threats, though they seem dormant at times, are very much alive and should not be discounted. Michel G. Nehme is an assistant professor at American University of Beirut, Department of Political Studies and Public Administration, PO Box 11-0236, Beirut, Lebanon     

Escaping the ‘Field Trap’: exploitation and the global politics of educational fieldwork in ‘conflict zones’

There is a growing global demand for Northern universities to provide fieldwork opportunities in ‘conflict zones’ to students in applied International Relations (peace and conflict studies, post-conflict studies, human rights, development and related fields). This demand is generated in macro-level or structural dynamics emerging from three sources: the hiring criteria of major international organisations, competition between universities for fee-paying students and the social commodification of ‘authentic’ or ‘real’ life experience. At the micro level these dynamics can manifest themselves in exploitative relations, two of which are explored here. First, substantial inequalities (or a ‘benefit gap’) may arise between student researchers and their research subjects. Second, student researchers may find themselves in extractive relations with their research subjects. These dynamics lead to a situation in which some of the world’s most vulnerable people are objectified as learning resources for students enrolled in (predominantly Northern) universities. The article argues that these dynamics are a problem of global politics, not just research ethics or pedagogy. It concludes with recommendations for reducing the potential for exploitation in educational fieldwork.