South Asian Economic Development:
The Way Forward
An International Conference from the Perspective of
Young Researchers
In honour of the Late Professor G.K. Chadha
(Founding President, South Asian University)
April 9-10, 2015
South Asia is well known as the region that has consistently grown at impressive rates over the last decade and a half, while being home to the largest concentration of the world’s poor. Interrogating the extent of and reasons for endemic poverty coexisting with sustained economic growth is the basic raison d'être for the proposed conference to be held during April 9-10, 2015 in the SAU campus in New Delhi. Evaluating ‘what has worked’, ‘what has not’ and, therefore, ‘how precisely do we go forward’ will form the core scientific content of the conference.
Being part of a unique university with a mandate of inculcating regional consciousness among the citizens of South Asia, the Faculty of Economics considers it an obligation to contribute to the understanding of the challenges and opportunities for inclusive development in the region, especially in its economic dimension. Through this conference, we hope to provide a platform for sharing both broad visions of the region’s collective future, as well as results of detailed research focusing on specific themes relevant for the region.
24 research papers selected from more than 350 papers submitted will be presented in the conference by young scholars from Afghanistan, Bangladesh, India, Nepal, Pakistan and Sri Lanka. Apart from the technical sessions, there will be two keynote lectures by Professor Jean Dreze and Professor Arvind Panagariya and panel discussion on the Quest for Inclusive Growth in South Asia with distinguished panellists from across the region. Former Prime Minister of India, Dr. Manmohan Singh, who was instrumental in setting up SAU, will inaugurate the conference.
This event will be dedicated to the memory of Professor G. K. Chadha, Founding President of South Asian University, who passed away in March 2014. A renowned economist and administrator, Professor Chadha spent the last years of his life building the South Asian University from scratch. His vision of South Asia as a strong regional entity and South Asian University as a vibrant intellectual space to support this goal will be the guiding force behind this conference.
Patron: Dr. Kavita A. Sharma President, SAU
Conference Chair: Santosh C. Panda Dean, Faculty of Economics, SAU
Organizing Secretary: Anirban Dasgupta
Program Committee: Snehashish Bhattacharya, Anirban Dasgupta, Namrata Gulati
Organizing Committee:
Anoma Abhayaratne
Syed Ahsan
Rohin Anhal
Soumya Datta
Binoy Goswami
Sunil Kumar
Debdatta Saha
Thursday, April 9
8:30 – 9:30 am: Registration
9:30 – 10:45 am: Inaugural session
Chair Kavita A. Sharma President, South Asian University, New Delhi
Welcome Address Santosh C. Panda Dean and Professor, Faculty of Economics, South Asian University, New Delh
Inaugural Address Dr. Manmohan Singh Member of Parliament and Former Prime Minister, India
Keynote Address
Title South Asia and the Indian Enigma
Speaker Jean Drèze Visiting Professor, University of Ranchi, and Honorary Professor, Delhi School of Economics
10:45 – 11:00 am: Tea / Coffee
11:00 am – 1:00 pm: Session I
Poverty
Chair: Manoj Panda (Director, Institute of Economic Growth, New Delhi)
Andaleeb Rahman (Indian Institute for Human Settlements, Bangalore)
Universal Food Security Program and Nutritional Intake: Evidence from the Hunger prone KBK Districts in Odisha
Tariq Masood (University of Kashmir, Srinagar)
Are Microfinance Institutions Drifting Away from Original Mission? Empirical Evidences from South Asia
Krishna Ram (Jawaharlal Nehru University, New Delhi and Shivaji College, University of Delhi)
Explaining Calorie Consumption Puzzle in India: An Empirical Study Based on National and International Data Sets Since 1990s
Damayanthi B.W.R. (University of Sri Jayewardenepura, Sri Lanka)
Multilevel Analysis of Urban Poverty: Evidence from Sri Lanka
Discussants: Arindam Banerjee (Ambedkar University, New Delhi)
Himanshu (Jawaharlal Nehru University, New Delhi)
1:00 – 1:45 pm: Lunch
1:45 – 3:45 pm: Session II
Rural and Agricultural Development
Chair: Sanjay Kaul (Managing Director and Chief Executive Officer, National Collateral Management Services Limited, Mumbai)
Debayan Pakrashi (Indian Institute of Technology, Kanpur)
Microcredit Program Participation and Household Food Security in Rural Bangladesh
Thiagu Ranganathan (Institute of Economic Growth, New Delhi)
Non Farm Sector and Income Inequality in Rural India
Kanika Mahajan (Indian Statistical Institute, New Delhi)
Rainfall Shocks and Gender Wage Gap: Evidence from Indian Agriculture
Hadia Majid (Lahore University of Management Sciences, Lahore)
Drought and Farmer Productivity: The Role of Linguistic Fractionalization in Rural Pakistan
Discussants: Rohit (Jawaharlal Nehru University, New Delhi)
Ram Singh (Delhi School of Economics, New Delhi)
3:45 – 4:00 pm: Tea / Coffee
4:00 – 6:00 pm: Session III
Labor Market Dynamics
Chair: Ravi Srivastava (Professor, Centre for the Study of Regional Development, Jawaharlal Nehru University, New Delhi)
Antara Dhar (University of Calcutta, Kolkata)
Are Aged a Burden or an Asset? Assessing Contribution of Elderly Workers to Household Economic Status in India
Ganga Tilakaratna (Institute of Policy Studies, Colombo)
Social Protection and Labour Market Outcomes in Sri Lanka: An Empirical Analysis
Yasir Khan (International Growth Centre – Pakistan, Lahore)
The Political Economy of Public Sector Absence: Experimental Evidence from Pakistan
Bilesha Weeraratne (Institute of Policy Studies, Colombo)
Female Domestic Workers in the Middle East: Does Recruitment Through an Agent Minimize Vulnerability?
Discussants: Jayan Thomas (Indian Institute of Technology, New Delhi)
Deepti Goel (Delhi School of Economics, New Delhi)
6:00 – 6:30 pm: Tea / Coffee
6:30 – 7:30 pm
Distinguished Lecture
Title Indian Economy: Retrospect and Prospect
Chair Santosh C. Panda Dean and Professor, Faculty of Economics, South Asian University, New Delhi
Speaker Arvind Panagariya Vice Chairman, NITI Aayog, New Delhi, and Jagdish N. Bhagwati Professor of Indian Political Economy,
Columbia University, New York
Friday, April 10
9:00 – 11:00 am: Session IV
Trade and Macro Dynamics
Chair: Nagesh Kumar (Head, South and South-West Asia Office, United Nations Economic and Social Commission for Asia and the Pacific, New Delhi)
Ganesh Manjhi (Jawaharlal Nehru University, New Delhi)
Dynamics of Mundell’s Trilemma in India
Naveen Thomas (Delhi School of Economics, New Delhi)
The Role of Small and Medium Enterprises in Structural Transformation and Economic Development
A. Lakshmi (Indira Gandhi Institute of Development Research, Mumbai)
Extensive and Intensive Margins of India’s Manufactured Exports: Comparison with China
Ahmad Shah Mobariz (Ibn-e-Sina University, Kabul)
Trade Complementarity in South Asia: Lessons for SAARC and SAFTA
Discussants: Jyotirmoy Bhattacharya (Ambedkar University, New Delhi)
Prabir De (Research and Information System for Developing Countries, New Delhi)
11:00 – 11:15 am: Tea / Coffee
11:15 am – 1:15 pm: Session V
Education, Infrastructure and Inequality
Chair: Pulin B. Nayak (Former Professor of Economics, Delhi School of Economics, New Delhi)
Soham Sahoo (Indian Statistical Institute, New Delhi)
Intra-Household Gender Disparity in School Choice: Evidence from Private Schooling in India
Vachaspati Shukla (Centre for Development Studies, Thiruvananthapuram)
The Role of Education in Shaping Income Inequality in India
Sumedha Bajar (Institute for Social and Economic Change, Bengaluru)
The Impact of Infrastructure Provisioning on Inequality in Indian States: Does Level of Development Matter?
Ismail Hossain (Directorate of Primary Education, Dhaka)
Efficiency of Primary Education: A Role of Infrastructure Facilities Development
Discussants: Mausumi Das (Delhi School of Economics, New Delhi)
Ananya Ghosh Dastidar (Delhi University South Campus, New Delhi)
1:15 – 2:00 pm: Lunch
2:00 – 4:00 pm: Session VI
Institutions, Conflict and Climate Change Vulnerability
Chair: Ramesh Chand (Director, National Centre for Agricultural Economics and Policy Research, New Delhi)
Souvik Dutta (Indian Institute of Management, Bangalore)
Ethnic Conflict and Civic Engagement
Hari Prasad Sharma (National College, Kathmandu)
A Ricardian Analysis of the Climate Variability on the Vulnerable Population of Nepal: A Study of Cross-Sectional Household Data
Kirtti Ranjan Paltasingh (University of Hyderabad, Hyderabad)
Climatic Risks and Household Vulnerability Assessment: A Case of Rice Growers in Odisha, Eastern India
Tapas Kumar Sarangi (National Institute of Labour Economics Research and Development, New Delhi)
Working of Forest Rights Act 2006 and Its Implication for Livelihoods: A Comparative Study of Two Indian States
Discussants: Indrani Roy Chowdhury (Jamia Millia Islamia University, New Delhi)
Surajit Das (Jawaharlal Nehru University, New Delhi)
4:00 – 4:30 pm: Tea/Coffee
4:30 – 6:30 pm
Panel Discussion
Title Quest for Inclusive Growth in South Asia
Chair Abhijit Sen Professor of Economics, Jawaharlal Nehru University, and Member,
14th Finance Commission, India
Speakers Rashid Amjad Professor of Economics and Director, Graduate Institute of Development
Studies, Lahore School of Economics, Pakistan
Danny Atapattu Senior Professor of Economics, University of Ruhuna, Sri Lanka
Debapriya Bhattacharya Distinguished Fellow, Centre for Policy Dialogue, Dhaka, Bangladesh
Ashwani Saith Emeritus Professor, International Institute of Social Studies, Erasmus
University Rotterdam, Netherlands
6:30 – 6:45 pm
Vote of Thanks Anirban Dasgupta Associate Professor, Faculty of Economics, South Asian University, New Delhi
6:45 – 7:30: High Tea
Universal Food Security Program and Nutritional Intake: Evidence from the Hunger Prone KBK Districts in Odisha
Andaleeb Rahman (Indian Institute for Human Settlements, Bangalore)
This article provides evidence on the role of consumer food subsidies in improving nutritional intake and diet quality by evaluating the expansion of the government food assistance program coverage in the hunger prone state of Odisha in India. In 8 districts of Odisha, popularly known as the Kalahandi-Balangir-Koraput (KBK) region which is notable for extreme poverty and starvation deaths, the government did away with the targeted food assistance program in 2008 and made the scheme universal. Using a Difference-in-Difference methodology over two repeated cross sectional household surveys, this article finds that the shift from targeted to a universal food security program in the KBK region of Odisha has led to an improvement in the household nutritional intake and diet quality. Further examination suggests that proportion of households consuming below the recommended dietary allowance of calorie, fats and protein has declined significantly in this region post the intervention.
Are Microfinance Institutions Drifting Away from Original Mission? Empirical Evidences from South Asia
Tariq Masood (University of Kashmir, Srinagar)
The present study tries to empirically ascertain the relationship between financial orientation of microfinance institutions and their poverty outreach in the South Asian context. A balanced panel of 69 microfinance institutions covering the period 2005-2012 is taken. We relied mainly on the Hausman and Taylor panel data model due to the inclusion of time invariant regressors which make fixed effect model inapplicable and assumptions underlying random effect model are not fulfilled. Commercial oriented, profit oriented and regulated institutions are diverting away from their original mission of serving poorest of poor clients. Further, it is found that commercialization is helping these institutions in serving more female clients.
Explaining calorie consumption puzzle in India: An empirical study based on National and International data sets since 1990s
Krishna Ram (Jawaharlal Nehru University, New Delhi and Shivaji College, University of Delhi)
India has witnessed of declining in average per capita calorie consumption despite the rise in per capita real income during 1990-2009. However, in year 2011-12 survey there is an evidence of a substantial rise in calorie consumption particularly in the lower segment of the population both in rural and urban areas. In the context, this paper re-examines the relationship between cereal consumption and income using wider data sets of 128 countries over the period 1990-2011 and shows that cereal consumption has a very strong association with the real income and given the strong associationship, the argument of taking cereal consumption as a proxy for real income become stronger. Besides, this paper examined the pattern and trend of per capita calorie and protein intake at the household level across various income groups across cross section and over the time period 1993-94 and 2011-12 and investigates the cause of the recent rise in consumption of per capita calorie and protein intake. The paper mark that decline in calorie consumption during particular period is obviously not because of voluntary reduction of calorie demand but it is because of impoverishment of large section of the population which was not captured through the conventional measure of real Income. The recent rise in calorie consumption is probalably because of people are working more to fulfill their basic needs.
Multilevel Analysis of Urban Poverty: Evidence from Sri Lanka
B.W.R. Damayanthi (University of Sri Jayewardenepura, Sri Lanka)**, HJH Norulazioah PG HJ Omar Ali, Gamini Premarathna
Urban poverty in Sri Lanka has long been neglected and given less priority in policy interventions and academic contributions following favorable nominal poverty statistics which underscore the need for urgent attention in matters pertaining to urban livelihood. The negligence of the urban sector and the urban poor for many decades has created a severe dearth of academic contributions. Thus the main objective of this paper is to void some of these knowledge gaps which are vital to be addressed at the current development phase in the country. This study utilizes multilevel models to analyze poverty variations in the urban sector taking both individual and contextual levels simultaneously. It was found that about 11 per cent of total error variance of poverty was attributed to the contextual level. While age, gender, family size, education level and employment status significantly contributed at the individual level; female labor force participation, magnitudes of main employment sectors: agriculture, service and industry were significant at the contextual level. Allowing the risk of poverty to be varied across districts, a considerable variance was found to be evident though there was no evidence of significant variations in the patterns of covariates. Hence this study suggests that poverty alleviation policies should focus on multilateral way.
Session II: Rural and Agricultural Development
Microcredit Program Participation and Household Food Security in Rural Bangladesh
Asadul Islam, Chandana Maitra, Debayan Pakrashi (Indian Institute of Technology, Kanpur)**, Russell Smyth
We use a large household level panel dataset collected from rural households in Bangladesh to examine the effects of microcredit program participation on household food security. This is the first study examining how microcredit affects different measures of food security; namely, household calorie consumption, dietary diversity indicators and anthropometric status of women of reproductive age (15-49 years) and children under the age of five. We find that microcredit program participation increases calorie consumption both at the intensive and extensive margins, but does not improve dietary diversity and only has mixed effects on the anthropometric measures. We also find that the effect of participation on food security may be non-linear in which participation initially has either no effect on food security or may actually worsen it, before improving in the long run.
Non Farm Sector and Income Inequality in Rural India
Thiagu Ranganathan (Institute of Economic Growth, New Delhi)**, Amarnath Tripathi, Bisla Rajoriya
Rural households earn their incomes from various sources including cultivation, livestock, agricultural wage labour and nonfarm occupations. Participation of households in nonfarm sector and the share of non-farm income in the total income of rural households have been on the rise over the past two decades or so in the Indian context. This paper analyses the share of different income sources in total income of rural households defined by characteristics such as caste, education, land holding and access to irrigation. This paper then estimates the impact of rural non-farm sector on income inequality using techniques of inequality decomposition by factor components. We also analyse the impact of different components of nonfarm sector – nonfarm casual labour, employment with regular salary/wages, migration and self-employment on income inequality. We use the data from Indian Human Development Survey (IHDS) for our analysis. Results indicate that nonfarm sector as a whole has been inequality increasing. If we look at the individual components, remittances do not have much of an impact on inequality owing to low share in total household income. Regular employment and self-employment have been inequality increasing while nonfarm labour employment has been inequality decreasing. Important policy implications follow from our findings.
Rainfall shocks and Gender Wage gap: Evidence from Indian Agriculture
Kanika Mahajan (Indian Statistical Institute, New Delhi)
Previous studies have shown that productivity shocks in agriculture like rainfall variability affect wages adversely. None of the studies however consider the heterogeneity in the impact of these shocks on agricultural wages by gender, a feature which has been studied for demand shocks in the urban labor markets for developed countries. Using National Sample survey data for India from 1993 to 2007, I create a district level panel dataset to examine how rainfall shocks, which affect demand for labor in Indian agriculture, affect gender wage gap in agriculture. Overall, we find that such shocks do not affect the wage gap significantly, but low rainfall years affect the wage gap adversely in the rain-fed rice growing regions of India. This finding is consistent with greater value of female labor in rice cultivation which is also a crop highly sensitive to rainfall variability under rain-fed conditions. The paper concludes that the effect of rainfall shocks on gender wage gap in agriculture depends upon the gender roles underlying the technology of production which varies across cropping systems.
Drought and Farmer Productivity: The role of Linguistic Fractionalisation in Rural Pakistan
Hadia Majid (Lahore University of Management Sciences, Lahore)** and Hana Zahir
This paper posits that a household’s ability to cope with an adverse shock will be affected by the level of linguistic fractionalization of the community that the household resides in. Using an indicator variable to categorize villages where only one language is spoken as homogeneous, we do an OLS analysis. Our results show that when hit with drought, households that reside in homogeneous communities tend to see significantly lower variation in their crop yield, and that the effect of linguistic fractionalization is operating through increased disputes over water particularly when it is scarce. Our results then are consistent with the literature and suggest that households in homogeneous communities see lower levels of conflict over a shared resource even when their residents have been hit with a shock that makes the resource scarce, and so are not as adversely affected as households in heterogeneous communities.
Session III: Labor Market Dynamics
Are Aged a Burden or an Asset? Assessing Contrubution of Elderly Workers to Household Economic Status in India
Antara Dhar (University of Calcutta, Kolkata)
With prolonging of life cycles, due to improvements in health care facilities, accompanied by reductions in fertility levels, the developing countries are experiencing an inversion of age pyramids. This new stage in demographic transition—characterised by an increase in the share of elderly population (aged sixty years or more)—poses challenges to society and policy makers. With the erosion of traditional family structures and values and the failure of the state to compensate for such social changes, an increasing proportion of the aged is remaining in the labour market even after "retirement age". This implies that the aged need not necessarily be a burden on their families, but can contribute financially to their households. Estimating the magnitude of the resource flow from the aged to their families comprises an emerging area of research.
Using all-India data from the "Employment and Unemployment" survey conducted by National Sample Survey Office (NSSO) in 2011-12, we estimate the financial contribution of elderly workers as (Earnings of elderly workers / Monthly household expenditure). Statistical tests are used to determine whether such contributions are significant. This is followed by a re-estimation of Planning Commission poverty estimates based on Monthly household expenditure less monthly earnings of aged workers. It is found that poverty levels and intensity (measured by the Head Count Ratio and Foster-Greer-Thorbecke indices) would have risen significantly in most states without the contribution of aged workers.
Social Protection and Labour Market Outcomes in Sri Lanka: An Empirical Analysis
Ganga Tilakratna (Institute of Policy Studies, Colombo)**, Shan Jayawerdana
Sri Lanka has a large number of social protection programs targeting vulnerable groups such as the poor, elderly, disabled, children and women. These programs vary from cash and in-kind transfers to pensions, insurance and livelihood development programs. Despite the large array of programs, no empirical analysis to-date has explored the relationship between social protection and labour market outcomes in Sri Lanka. Thus, this study attempts to fill this gap by analysing the relationship between social protection and labour market outcomes, in particular looking at the effect on the labour force participation and employment status. It further analyses this relationship for different gender and age groups. The paper carried out an econometric analysis using the Household Income and Expenditure Survey (HIES) data for 2009/10. The findings reveal that social protection income as a share of household expenditure has a (very)small negative effect on the probability of an individual’s labour force participation. This relationship holds for the prime age and elderly categories of both genders while there was no significant effect on the youth. The findings indicate the need for improvement of the current social protection system of Sri Lanka, in particular, to focus more on social protection programs that would help addressing lowfemale labour force participationespecially among females, high youth unemployment and large informal sector employment.
The Political Economy of Public Sector Absence: Experimental Evidence from Pakistan
Michael Callen, Saad Gulzar, Ali Hasanain,Yasir Khan (International Growth Centre – Pakistan, Lahore)**
In many developing countries, public sector absence is both common and resistant to reform. One explanation is that politicians preferentially provide public jobs with limited work requirements as patronage. We test this patronage hypothesis in Pakistan using: (i) a randomized evaluation of a novel smart phone absence monitoring technology; (ii) data on election outcomes in the 240 constituencies where the experiment took place; (iii) attendance recorded during unannounced visits; (iv) surveys of connections between politicians and health staff; and (v) a survey of the universe of health supervisors. Four sets of results are consistent with this view. First, 36 percent of health officers report interference by a politician in the previous year when sanctioning an employee and report this twice as often in uncompetitive constituencies. Second, doctors are 21 percentage points less likely to be present if they know their politician, 32 percentage points less likely to be present if they work in an uncompetitive constituency, and are only at work during 10 percent of normal reporting hours if both conditions are true. Third, the effect of the smart phone monitoring technology, which almost doubled inspection rates, is highly localized to competitive constituencies and to monitored employees who do not know their politician. Last, we find evidence that program impact is in part due to the transmission of information to senior officers.
We test this by manipulating the salience of staff absence in data presented to senior officials using an online dashboard. Highlighting absence leads to larger subsequent improvements in attendance for facilities located in competitive constituencies.
Female Domestic Workers in the Middle East: Does Recruitment Through an Agent Minimize Vulnerability?
Bilesha Weeraratne (Institute of Policy Studies, Colombo)
Females heading to the Middle East as domestic workers are an important component of labour migrants from Sri Lanka. Female domestic workers are highly vulnerable to adverse working or living conditions in destination countries. As such, the vulnerability of female domestic workers at destination is an important concern of Sri Lanka. This study attempts to discern if there is a nexus between vulnerability of female domestic workers at destination and the recruitment channel. The analysis uses secondary data and adopts discrete choice methodology, with a qualitative component to validate findings. This paper makes an important contribution to the literature on vulnerability of female domestic workers by performing an empirical analysis to test the correlation between female domestic workers’ vulnerability at destination and the recruitment channel. The study finds inconclusive evidence on the effect of recruitment channel on the vulnerability of female domestic workers at destination, with specific effects based on the definition of vulnerability adopted. The findings may be sensitive to the limitations of the underlying dataset.
Session IV: Trade and Macro Dynamics
Dynamics of Mundell’s Trilemma in India
Ganesh Manjhi (Jawaharlal Nehru University, New Delhi)
Using quarterly data 1996q2-2013q2, state that; on average over the entire period, policymakers give the largest relative weight to monetary independence followed by exchange rate stability and then to the capital account openness. If India could not do better than medium range of exchange rate stability and capital account openness and higher monetary autonomy irrespective of change in macroeconomic variables, it’s always better to maintain the status quo. The cointegrating equation for exchange rate stability, monetary policy autonomy and capital account openness are stable and state that respective 12 per cent, 41 per cent and 48 per cent of the deviation from equilibrium will come back as a stable equilibrium within a quarter; though might be at different level. Since 2007 several domestic and external events like overheating of the economy, commodity price shocks and the global financial crisis have resulted in the RBI asserting greater monetary independence, while at the same time allowing greater exchange rate flexibility and gradual open capital account. Among the trilemma components, monetary independence is significantly affecting the output gap, whereas financial crisis does not really affects the output gap.
The Role of Small and Medium Enterprises in Structural Transformation and Economic Development
Naveen J. Thomas (Delhi School of Economics, New Delhi)** and Mausumi Das
Developing countries are often faced with the difficult task of balancing rapid economic growth with equitable growth. The inequalities are a cause of serious concern as they are not temporary but are structural in nature. In these conditions a myopic view on economic growth will only lead to a widening of inequalities in the economy. This study directs attention to the role of Small and Medium Enterprises (SMEs) in overcoming these structural rigidities. The model described in the study shows that even though SMEs have the potential for being a bridge for economies facing structural poverty and inequalities, it may not always be effective in bringing about structural transformation. It is shown that a country’s history plays an important role in determining the effectiveness of this sector and under certain condition can render promoting SMEs as a completely ineffective policy prescription. The study also discusses the role of SMEs in influencing a change in perceptions of the workers about the importance of educating their children and how this can have very interesting implication for the effectiveness of these enterprises in structural transformation and economic development.
Extensive and Intensive Margins of India’s Manufactured Exports: Comparison with China
C. Veeramani, Lakshmi. A (Indira Gandhi Institute of Development Research, Mumbai)** and Prachi Gupta
Should India’s export promotion policies be targeted at accelerating export growth along the extensive margin (new trading relationships) or along the intensive margin (increase in trade of existing relationships)? To help answer this question, we undertake a comparative study of manufactured exports from India and China by analysing the role of extensive and intensive margins in export market penetration of both countries during 2000-2012. We find that along the extensive margin, the gap between the two countries is getting narrower, as India is clearly catching up with China. However, along the intensive margin, China surpasses India significantly. Further, we analyse the factors responsible for the differential export performance between India and China, particularly, the role of exchange rate and development status of partner countries, using a gravity model of trade. Our regression results show that China’s export growth along the intensive margin is mainly on account of markets in developed countries. We also find that the impact of exchange rate is higher on China’s exports as compared to that of India. Also, for both countries, exchange rate generates more response at the intensive margin, than at the extensive margin. In sum, the differential performance between India and China, predominantly along the intensive margin is due to exchange rate effects and China’s export-orientation in rich countries. Our analysis suggests that India can reap rich dividends by adopting policies aimed at accelerating export growth along its intensive margin. Also, there exists great potential for India to expand and intensify its export relationships with traditional developed countries by focusing on labour intensive products.
Trade Complementarity in South Asia: Lessons from SAARC and SAFTA
Ahmad Shah Mobariz (Ibn-e-Sina University, Kabul)
This paper studies the trade complementarily among South Asian countries. It is argued that in South Asia despite significant regional agreements on trade, like SAFTA and separate agreements between SAARC members, yet the progress in intra-regional trade is minimal. The paper tries to provide un understanding of how much exports and imports among South Asia Countries can complement each other and to do so a quantitative examination of South Asia’s economic integration potential is undertaken by applying the trade complementarily index technique. The trade complementarily index is an empirical technique that can be used to assess the extent to which the export specialization and the import specialization of trade partners complement each other in relation to world trade. It is found that on average the TCI among South Asian countries is 50% which is relatively a high index; and it can be pushed up by further comparative and competitive studies to identify which commodities could more suitable for exchange.
Session V: Education, Infrastructure and Inequality
Intra-Household Gender Disparity in School Choice: Evidence from Private Schooling in India
Soham Sahoo (Indian Statistical Institute, New Delhi)
This paper explores the gender inequality within households in the decision of private versus government school choice in India. Using a three-period longitudinal data on rural households from Uttar Pradesh, a northern state of India, this paper estimates a household fixed effects model that also takes into account non-random enrollment decision. The results show that there is an intra-household gender gap of 5.4 percentage points in private school enrollment among the children aged 6 to 19 years. The female disadvantage in private school choice is significant among both younger and older children, and is rising over time. Moreover, a larger cost-difference between private and government schools is associated with a significantly higher gender gap. The village-specific difference in direct cost, particularly school fees, is the most prominent factor in explaining the gender gap. Robustness analysis considering the potential endogeniety of the cost variables indicates that the coefficients are unlikely to be driven by omitted variables.
The Role of Education in Shaping Income Inequality in India
Vachaspati Shukla (Centre for Development Studies, Thiruvananthapuram)
The purpose of this paper is to examine the contribution of education in the household income inequality across Indian states. The study asks how has the contribution of educational differences in explaining the household’s income inequality changed during the period 1993-94 – 2009-10, using Theil decomposition method. It is observed that education of the household’s head played a vital and determining role in explaining the differences in household’s income inequality in India. The state-wise analysis depicts interesting variation as regard the role of education in shaping inequality. Such variations are largely owing to the differential levels of development and structure of the local economy. It also remains sensitive to the differential levels of educational attainment of the workforce. Further, it remains restricted to urban space rather than being responsive in rural areas. In fact, the pattern of educational response to inequality in the rural scene offers a mixed response across states conditioned by the workforce structure in rural areas. The temporal comparison of these results too does not offer anything systematic across states raising the concern regarding the varying education-employment nexus across states.
The Impact of Infrastructure Provisioning on Inequality: Evidence from India
Sumedha Bajar (Institute for Social and Economic Change, Bengaluru)
India witnessed high levels of growth in the last decade butnational levels of poverty and inequality remain high. Infrastructure provision is seen as a particularly important instrument for helping in regional development where government can play a significant role due to the public goods nature of infrastructure facilities. Literature confirms the positive association between infrastructure and growth. However, it is not necessary that economic growth attributable to infrastructure development will consequently lead to a reduction in inequality.This paper analyses the links between physical infrastructure and inequality and determines the nature of this relation and focuses on 17 major Indian states.Gini coefficient (for rural and urban sectors combined) was used as the dependent variable and it was computed data on Monthly Per Capita Consumption Expenditure (MPCE), which was estimated from Unit level records of the periodical Household Consumer Expenditure surveys of National Sample Survey Organisation for the years 1983, 1987-88, 1993-94, 2004-05, and 2009-10 (Rounds 38th, 43rd, 50th, 61st and 66th round respectively).By evaluating Indian states with different levels of development (measured in terms of per capita net state domestic product (NSDP)) the paper shows that the impact of infrastructure on consumption inequality across states differs not just for the type of infrastructure under consideration but also for the income category the state belongs to.The results have shown that some components of infrastructure, mainly power and roads, tend to increase interpersonal inequality at the regional level and the paper provides some explanations for this result.The initially rich states were also the ones with a better endowment for infrastructure facilities andthese states continued to remain in the rich income category with an average PCNSDP much above India’s, and they managed to grow in terms of their infrastructure endowments. They, however, also showed higher levels of inequality. The results of this study do not prescribe abandoning transportation projects or infrastructure development but instead recommend that the government should emphasize also on investments in complementary policies. Infrastructure can help open up opportunities but it should not be that these benefits are reaped by those who are in a position to be able to take advantage of these.
Efficiency of Primary Education: A Role of Infrastructure facilities Development
Ismail Hossain(Directorate of Primary Education, Dhaka)** and Kashfi Rayan
This study assesses the efficiency of Primary education in Bangladesh using stochastic frontier model that estimates an educational production function and an inefficiency effects function without Infrastructure and with Infrastructure factors simultaneously. The model developed by Battese and Coelli (1992 and 1995) is used in this study and applied to a panel dataset. The study finds that although the mean efficiency scores with Infrastructure obtained from the model are higher than the efficiency scores without Infrastructure, the estimates are steady and consistent. The empirical application uses Annual Primary school Census (2013 and 2014) data in Bangladesh .From the results we observed that the mean technical efficiency scores for Stochastic Frontier Model with infrastructure attained 88% and 86% for Inefficiency effect Model. Several infrastructure facilities development estimates under inefficiency effects model are significant on Graduate in primary education however estimates of conventional stochastic frontier with infrastructure have influence on Primary education with decreasing level of inefficiency but not statistically significant. Formal primary school (90%) and Madrasha (90%) attained higher efficiency scores for Infrastructure development than non formal school (85%).
Session VI: Institutions, Conflict and Climate Change Vulnerability
Ethnic Conflict and Civic Engagement
Souvik Dutta (Indian Institute of Management, Bangalore)
Despite similar levels of ethnic diversity, some places manage to remain peaceful while others experience ethnic conflict. Using a game theoretic framework, I argue that this variation is related to the structure of ethnic engagement in the society. Ethnic engagement refers to a business relationship between two individuals which can be inter (with an individual of opposite ethnicity) or intra (with an individual of same ethnicity). I show, the more segregated an economy is i.e., the higher is the degree of intra-relative to inter-ethnic engagements, the more conflict prone the economy is. The chances of conflict are lowered if there are “inter” ethnic ties in form of social engagement, i.e. if individuals derive utility from social interactions. Absolute poverty can also play a role in precipitating conflict. I also provide an empirical analysis in the context of Hindu-Muslim violence in India. The analysis shows that higher is the inbreeding homophily at a place the greater is the probability of occurrence of a conflict there, which validates the main result of the paper.
A Ricardian Analysis of the Climate Variability on the vulnerable Population of Nepal: A Study of Cross-Sectional Household Data
Hari Prasad Sharma (National College, Kathmandu)
Many studies have shown the effects of climate variability on certain geographical areas and populations. Considering that majority of the population in developing countries is agriculturally dependent, an assessment of the effects of climate change on these is critical for the formulation of sound public policies. This paper applied the Ricardian Method to examine the net effect of climate variability on per capita consumption in Nepal, which is also expected to capture its indirect effects. To examine the net impact on the country and on the Tarai and hilly belt, the per capita consumption is regressed on climate and socioeconomic variables using a sample of 1,552 households.
Except for winter temperature climate variability does not have significant effect on per capita consumption in Nepal. In the hills, the variability in precipitation is more significant than temperature; a marginal increase in winter and fall precipitation positively affects the per capita consumption, while an increase in spring precipitation has negative effects. The Terai remained unaffected by climate variability. Most socioeconomic variables, like quantity of land, caste, remittance, irrigation, rent-in land, and household size, are significant for entire country. Policymakers should also be able to consider non-climatic factors in formulating poverty-related policies.
Climatic Risks and Household Vulnerability Assessment: A Case of Rice Growers in Odisha, Eastern India
Kritti Ranjan Paltasingh (University of Hyderabad, Hyderabad)**, Phanindra Goyari
Odisha is one of the most calamity prone states in India. Agriculture is backward and subsistence in nature, characterised by low productivity and high instability in output. The geographical location of the state makes it quite vulnerable to climatic extremes. The abiotic stresses like submergence, floods, droughts at various stages of crop growth, cyclones have become the annual affair in the state causing a huge agricultural production loss and livestock mortality and also loss properties. In this paper we analyse the degree of vulnerability of farming households to those climatic extremes in both irrigated as well as rainfed ecosystems of Odisha. The expected poverty approach is used to assess the degree of vulnerability of farming households. The study found that the degree of vulnerability is rising following a shift in minimum threshold level of income in both ecosystems. Again, the marginal farmers in both ecosystems are highly vulnerable, followed by small farmers. The medium farmers are the least vulnerable. The study comes out with the policy implications that livelihood system of farmers needs to be diversified and their coping mechanisms should be strengthened various govt. policies.
Working of Forest Rights Act 2006 and Its Implication for Livelihoods: A Comparative Study of Two Indian States
Tapas Kumar Sarangi (National Institute of Labour Economics Research and Development, New Delhi)
Historically forest dwelling populations in India especially the tribals have been subjected to a range of forest rights deprivations that have affected their livelihood adversely. Due to continuous and concerted efforts by the civil society organisations, legal activists and intellectuals the historic Forest Rights Act (FRA) was passed in India in 2006.The Act was further amended in 2012 to provide more scope to the people to have greater control over forest resources. The broad objective of the study was twofold: the first objective was to analyse the actual process of implementation at different institutional levels and the factors that constrain its proper implementation. The second objective was to understand the livelihood impact of FRA on the beneficiaries. Odisha and Jharkhand were selected for the study because of the high concentration of Scheduled Tribe population and high dependence on forest resources for their livelihoods. Primary data was collected through intensive field survey and group meetings with households having forest land under possession and those households who received title under FRA 2006. If implemented properly in both the states will thus not only provide stable property rights on forest land but also enforce the entitlement of forest dwellers on Minor Forest Produce.
Sponsors
Key Speakers
Inaugural Address
Dr. Manmohan Singh
Member of Parliament and Former Prime Minister, India
Key Proponent of South Asian University
Eminent Speakers
 Arvind Panagariya Vice Chairman, NITI Aayog, New Delhi, and Jagdish N. Bhagwati Professor of Indian Political Economy, Columbia University, New York |
 Jean Drèze Visiting Professor, University of Ranchi, and Honorary Professor, Delhi School of Economics |