DO WORLD BANK AND IMF POLICIES WORK?

Transcription

1 DO WORLD BANK AND IMF POLICIES WORK?

2 Also by Shahrukh Rafi Khan HANDING BACK RURAL WATER SUPPLY SCHEMES TO COMMUNITIES: A Case for Collective Action JUST DEVELOPMENT: Beyond Adjustment with a Human Face FIFTY YEARS OF PAKISTAN'S ECONOMY: Traditional Issues and New Concerns

3 Do World Bank and IMF Policies Work? Shahrukh Rafi Khan Executive Director Sustainable Development Policy Institute Islamabad Pakistan

4 First published in Great Britain 1999 by MACMILLAN PRESS LTD Houndmills, Basingstoke, Hampshire RG21 6XS and London Companies and representatives throughout the world A catalogue record for this book is available from the British Library. ISBN DOI / ISBN (ebook) First published in the United States of America 1999 by ST. MARTIN'S PRESS, INC., Scholarly and Reference Division. 175 Fifth Avenue, New York. N.Y Library of Congress Cataloging-in-Publication Data Khan, Shahrukh Rafi. Do World Bank and IMF policies work') I Shahrukh Rafi Khan. p. em. Includes bibliographical references and index. ISBN (cloth) I. World Bank. 2. International Monetary Fund. 3. Banks and banking, International. I. Title. HG W57K '5-dc21 Shahrukh Rafi Khan 1999 Soticover reprint of the hardcover 1st edition CIP All rights reserved. No reproduction, copy or transmission of this publication may he made without written permission. No paragraph of this publication may he reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, 90 Tottenham Court Road. London WIP 9HE. Any person who does any unauthorised act in relation to this publication may he liable to criminal prosecution and civil claims for damages. The author has asserted his right to he identified as the author of this work in accordance with the Copyright. Designs and Patents Act This hook is printed on paper suitable for recycling and made from fully managed and sustained forest sources ISBN I 00 99

5 For Stephanie, Sophia and Lila

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7 Contents List of Tables Vlll Introduction Part I Testing Hypotheses Structural Adjustment, Aid, Debt and Growth 2 Devaluation and the Balance of Trade Financial Sector Reform Comparative Privatization Experience: Employee and Private Ownership Structural Adjustment, Industrialization and Export Promotion Part II Assessing Impact 6 Structural Adjustment, Labour and the Poor 7 Gender and Structural Adjustment 8 Structural Adjustment and Health 9 Trade Liberalization and the Environment 10 Structural Adjustment and Food Security Summary and Conclusion Ill ! Index 195

8 List of Tables l.l Terms of debt Debt ratios and debt indicators Granger causality test results Sensitivity analysis to assess the negative growth-aid association Granger causality between aid and growth Aggregate export and import demand functions Export demand functions using the IV method Estimates of the currency tax Association of the saving rate with the real interest rate Association of financial deepening with real interest rates Association of inverse ICOR with the real interest rate Association of the growth rate with the real interest rate Percentage distribution of bank advances Association of the budget deficit with the yield on government securities Profit-asset ratios of commercial banks Commercial banks' deposit growth rates Loan recovery in major commercial banks Non-performing loans as a proportion of total loans disbursed Performance of Sind Alkalis before and after privatization Comparative performance indicators for the tractor industry Comparative performance indicators for the ghee industry Weighted average mark-ups on imported goods Sources of industrial growth Size and annual average growth rates of industry, manufacturing and export ratios Pakistan's industry, manufacturing and export ratios compared to that of low income countries The extent to which the actual size of industry and export GDP ratios differ from potential Cross-country regression to identify potential size of industry and exports Growth equations: externality and productivity effect of the industry and manufacturing sectors Exports 106

9 List of Tables IX 5.9 Import substitution Domestic demand Changes in household monthly real income I Share of public sector employment cost in public expenditure and GOP Unemployment rates by occupational categories Nominal daily wage of skilled and unskilled workers deflated by the food price index Inequality and absolute poverty Proportion of total government spending on subsidies, social sectors, interest payments and defence Subsidies on wheat, sugar and edible oil as a percentage of current subsidies Expenditure on wheat and fuel as a proportion of total household expenditure Labour force participation rates by age and gender Selected labour force statistics by gender Annual percentage change in the sensitive and general consumer price index Average retail price level of wheat and wheat flour Percentage under 70 per cent of RDA of calories by gender Expenditure on education and health as a percentage of GOP School participation rates by level and gender Childhood mortality rates by gender Time series development and recurring health expenditure Access to health facilities and personnel Child survival and other health indicators Determinants of the infant mortality rate Provincial government receipts from health services Pesticide tariff, import and domestic production Estimated value of major crop saving from pesticide use Import, production and subsidy on fertilizers Benefits of fertilizer use Major food imports as a percentage of total domestic production Percentage daily expenditure, caloric and protein intake from major food items for the lower income group Area under major crop categories as a percentage of total area under cultivation Production under major crop categories 174

10 X List of Tables 10.5 Per capita availability of major foods Inflation rates for food, non-food and wheat Change in land ownership and cultivated area by farm size Cobb-Douglas agricultural production functions Daily per capita caloric intake by income group Daily per capita protein intake by income group 189