Impact at the ‘Bottom of the Pyramid’: The Role of Social Capital in Capability Development and Community Empowerment

Rooted in the notion of inclusive capitalism, the Bottom‐of‐the‐Pyramid (BoP) approach argues for the simultaneous pursuit of profit and social welfare by creating markets for the poor. This idea has been both celebrated and criticized in the literature. We do neither in this paper. Instead, by leveraging insights from Amartya Sen's work on capability development and the literature on social capital, we offer a more socially embedded and community‐centric BoP approach. By redefining poverty not just as a lack of income, but also as a lack of ‘capabilities’ in Sen's sense that can be developed through leveraging social capital, we offer a systemic framework for understanding the societal impact of business‐driven ventures in the BoP and empowering BoP communities through these ventures. Specifically, we argue that any business initiative in the BoP ought to be evaluated on the basis of whether it advances capability transfer and retention by (a) enhancing the social capital between a particular community and other more resource rich networks, and (b) preserving the existing social capital in the community.     

The Worldwide Movement in Private Universities: Revolutionary Growth in Post-Secondary Higher Education

The end of the Cold War, which resulted from the collapse of communism and the spread of free market ideas in the former Soviet Union, China, and nations in Eastern Europe, has brought about many dramatic and momentous changes on the world scene. One remarkable development not widely recognized outside specialized academic circles is the emergence of new institutions of higher learning in the private sector of previously command economies and also in many developing countries that had been wedded to a culture of socialism for decades. The “privatization” of higher education is by all accounts a global phenomenon. Very few systematic studies of these new trends in private post‐secondary education exist to date, although the impact of this development could be far‐reaching not only for higher education but also for the social and economic development of many societies in the world. In this paper we attempt to analyze the phenomenon of new private universities in non‐Western nations, focusing on the developing world in general, and Asia in particular. What missions have these institutions chosen? Which models are these institutions following? What challenges do they face? How are they coping with their relationship to existing public universities? How are they dealing with tuition and budgetary issues? What sources of funding are they tapping into? How are they dealing with issues of equity, excellence, and access? In the composition of their faculty, student body, and curriculum, are these institutions sufficiently international? How are the funding institutions and universities in the West helping these fledgling universities? Are these trends expected to accelerate in the future? We attempt to answer these questions within the context of a few case studies that reflect the breadth and diversity of this revolutionary growth in post‐secondary higher education.     

A theory of risk, smuggling and welfare

This paper argues that the existing models of smuggling do not provide a proper treatment of risk. The paper develops a smuggling model which is an application of James Tobin's celebrated risk analysis to the smuggling situation. The paper shows that a large number of existing key smuggling-related results are fundamentally modified. The paper then develops special cases using this properly specified risk model. These special cases help identify the assumptions one needs to obtain results in the existing smuggling literature. It is shown that the required assumptions for these results to hold are generally quite unrealistic.     

Purchasing power parity in ASEAN-5 countries: revisit with cross-sectional dependence and structural breaks

This paper re-examines the purchasing power parity (PPP) hypothesis for a panel of ASEAN-5 countries. The panel unit root and cointegration tests, which incorporate cross-sectional dependence and multiple structural breaks, are innovatively used for testing the PPP hypothesis. We could not find evidence that supports the existence of a long-run equilibrium between the relative price ratio and the nominal exchange rate for the whole period. Nevertheless, there is evidence of a cointegrating relationship for the post-crisis period. Our finding implies that a flexible exchange rate regime is suitable for the individual ASEAN countries.     

The relevance of personal characteristics in health care rationing: what the Australian public thinks and why

This article examines the preferences of the general public in Australia regarding health care resource allocation. While previous studies have revealed that the public is willing to give priority to particular groups of patients based on their personal characteristics, the present article goes beyond previous efforts in attempting to explain these results. In the present study, there was strong support among respondents for giving “equal priority” to people regardless of their personal characteristics. However, respondents did reveal a preference for married patients over single, for children over adults, for carers of children and the elderly, sole breadwinners, and good community contributors. Further, they would give a lower priority to those perceived as “self-harmers”—smokers, individuals with unhealthy diets, and those who rarely exercise. Variation in the answers according to broad economic and social beliefs across seven different categories (“factors”) influenced the pattern of the public's attitudes towards rationing. The Principal Components Analysis (PCA) indicated that most of the items in our survey are associated with seven factors that explain or capture much of the variation. These relate to a patient's avoidance of self-harm behaviors (Safe Living), their Life Style (diet, exercise, etc.), their contribution to the community through caring for others (Caring), their talents (Gifted), their sexual behavior (Sexuality), their age and marital status (Family), and whether they are an Australian citizen or employed (Citizen). The strength of social preferences—e.g., how strongly respondents would “discriminate” against a recreational drug user or preference a person with a healthy diet—is related to the particular class of preferences.     

On solving bias‐corrected non‐linear estimation equations with an application to the dynamic linear model

In a seminal paper, Mak, Journal of the Royal Statistical Society B, 55, 1993, 945, derived an efficient algorithm for solving non‐linear unbiased estimation equations. In this paper, we show that when Mak's algorithm is applied to biased estimation equations, it results in the estimates that would come from solving a bias‐corrected estimation equation, making it a consistent estimator if regularity conditions hold. In addition, the properties that Mak established for his algorithm also apply in the case of biased estimation equations but for estimates from the bias‐corrected equations. The marginal likelihood estimator is obtained when the approach is applied to both maximum likelihood and least squares estimation of the covariance matrix parameters in the general linear regression model. The new approach results in two new estimators when applied to the profile and marginal likelihood functions for estimating the lagged dependent variable coefficient in the dynamic linear regression model. Monte Carlo simulation results show the new approach leads to a better estimator when applied to the standard profile likelihood. It is therefore recommended for situations in which standard estimators are known to be biased.     

Global water crisis and future food security in an era of climate change

Food policy should serve humanity by advancing the humane goals of eradicating extreme poverty and hunger. However, these goals have recently been challenged by emerging forces including climate change, water scarcity, the energy crisis as well as the credit crisis. This paper analyses the overall role of these forces and population growth in redefining global food security. Specifically, global water supply and demand as well as the linkages between water supply and food security are examined. The analysis reveals that the water for food security situation is intricate and might get daunting if no action is taken. Investments are needed today for enhancing future food security; this requires action on several fronts, including tackling climate change, preserving land and conserving water, reducing the energy footprint in food systems, developing and adopting climate resilient varieties, modernising irrigation infrastructure, shoring up domestic food supplies, reforming international food trade, and responding to other global challenges.     

Black market for foreign exchange,capital flows and smuggling

The paper develops a geometrical model of the working of a black market for foreign exchange and considers such questions as: Can the black market exchange rate be a guiding instrument to exchange control authorities considering a change in the exchange rate? How does exchange control affect the current and capital account use of foreign exchange in the presence of a foreign exchange black market? What are the implications of changes in trade restrictions (such as import tariffs) for the black market exchange rate, supplies of foreign exchange to exchange control authorities, and current and capital account use of foreign exchange?     

A partial equilibrium model of smuggling

Zusammenfassung Ein partielles Gleichgewichtsmodell des Schmuggels. — Es gibt viele Faktoren, die zu einem Markt für Schmuggelwaren führen k?nnen, z.B. Importz?lle und -quoten, Devisenkontrollen und indirekte Steuern. Am Beispiel eines Einfuhrzolls als Mittel der Handelsbeschr?nkung wird in diesem Aufsatz ein partielles Gleichgewichtsmodell des Schmuggels entwickelt. Dieses Modell erm?glicht es, die verschiedenen Eigenschaften des Schmuggel-Gleichgewichts zu demonstrieren. Die Hauptthesen des Aufsatzes sind, da Schmuggeln (a) den Punkt senkt, an welchem ein Zoll überflüssig wird und die heimischen Produzenten nicht mehr schützt, (b) die Gesamt-Importnachfrage bei gegebenem Zollsatz erh?ht, (c) einen gespaltenen Preis für das geschmuggelte Gut auf dem heimischen Markt herbeiführt, (d) den Protektionsgrad für die heimischen Industrien nicht beeinflussen kann, solange es legale Importe gibt, und (e) Einkommen der Regierung zugunsten von Konsumenten und Schmugglern umverteilt. Es ist ungewiβ, ob Schmuggel die Verluste, die mit der Einführung eines Zolls verbunden sind, vergr?\ern oder verringern würde.

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Resumen Un modelo de equilibrio parcial para el contrabando. — Existen muchos factures que pueden establecer un mercado para productos contrabandeados, tales como las tarifas de importatión y las cuotas, controles cambiarios e impuestos indirectes. Usando una tarifa de importatión como medio para restringir el comercio, el presente artículo desarrolla un modelo de equilibrio parcial para el contrabando. Este modelo ayuda a dar información sobre varias propiedades de un equilibrio de contrabando. Los principales argumentos del artículo son, que el contrabando (a) hace bajar el punto en el cual una tarifa se torna superflua y cesa de proteger a los oferentes domésticos, (b) aumenta la demanda total por importatión para una tasa tarifaria dada, (c) establece un sistema de precios paralelo para un mismo producto en el mercado domestico, (d) no puede afectar el grado de protectión otorgado a las industrias domésticas mientras existan importaciones legales y (e) redistribuye el ingreso del gobierno hacia los consumidores y contrabandistas. No es claro si el contrabando haría aumentar o disminuir el lastre de la pérdida asociada con la impositión de una tarifa.

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Résumé Un modèle d’équilibre partiel de fraude. — Il y a beaucoup de facteurs établissant un marché des biens introduits en fraude, comme des tarifs imposés sur les importations et des quotas, les contr?les de change et les taxes indirectes. En utilisant un tarif imposé sur les importations comme moyen des restrictions de commerce extérieur, cet article développe un modèle d’équilibre partiel de fraude. Ce modèle assiste à donner des informations sur les propriétés différentes d'équilibre de fraude. Les arguments principaux du papier sont que la fraude (a) réduit le point auquel un tarif devient redondant et cesse de protéger les offrants locaux, (b) augmente la demande d’importation totale au taux de tarif donné, (c) établit un deuxrang système de prix pour le même produit dans le marché local, (d) ne peut affectuer un dégré de protection pour les industries locales tant que les importations légales existent, et (e) rédistribue le revenu du gouvernement vers les consommateurs et les contrebandiers. Il n’est pas s?r si la fraude augmenterait ou diminuerait la propre perte associée avec l’imposition d’un tarif.

     

Overflow effect of credit rating announcements on stock exchange based on event study

This study is aimed to identify the impact of credit rating announcements on the stock returns in stock markets and for this purpose, four different sectors of Pakistan stock exchange were selected and from each of these four sectors, different business organizations were selected, i.e. total 32 business organizations were selected. The credit rating announcement data were collected for these 32 business organizations belonging to four different sectors. Totally 101 credit rating announcements were selected and the time period for which the credit rating warnings were selected include last three years period, i.e. from 2014 to 2016. The collected data were analysed by calculating abnormal returns for each of the selected security and average abnormal returns, and cumulative average abnormal returns were calculated for four different sectors. Event study methodology was applied, and t-test and t-stats value were calculated and results were analysed on the basis of t-statistics. The results of analysis identified that credit rating announcements have a significant impact on stock prices and investors and other market participants are earning abnormal returns during two-day period after the announcements are made. In addition, these abnormal returns were either negative or positive, depending upon the nature of credit ratings announced. If the credit rating announced was upgraded, investors enjoyed positive abnormal returns while in case when credit rating announcements were downgraded, then investors bear negative abnormal returns. Finally, the findings of the study identified the applicability of random walk hypothesis on the Pakistan Stock Exchange and Pakistan Stock Exchange confirms the efficient market hypothesis with its semi-strong form of efficiency.