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The world is adjusting to regain control over direct economic impacts of the COVID-19 pandemic. This adjustment is occurring whilst global collective action is also gearing up to tackle climate change, avert biodiversity collapse and redress unsustainable growth practices that featured in pre-Covid era global economic activity for decades. COVID-19 pandemic experience since December 2019 has been a period of pronounced anxiety and inspiration. Despite the angst of widespread calamity, and the loss of over six million lives, a coordinated global effort helped contain the impacts well short of initial predictions. Progress toward eliminating poverty, the central goal in rural economic transformation, has been set back by decades. The strength in organising — through social and business processes — marked the resilience endured. The recovery is patchy and uneven across individual nations, and the medium-term prospects remain contingent on the efficacy of funding essential human services and clear market bottlenecks. Bridging capacity constraints across the rural–urban continuum also remain a need to ease the regulatory burden as the world tackles widespread externalities of the past to create new growth opportunities. In this special issue, emerging and established academics from the Asian region and beyond, 1 1 These papers were drawn from presentations made at a conference organised by the Asian Development Bank Institute on 'Rural economic transformation: embracing opportunities in better living in Asia' held during 15–17 November 2021. All contributors are from Asian Development Bank member nations. draw insights from research and analysis on the challenges facing policy makers, businesses, and households in raising living standards and inspiring the pursuit of individual and social affluence during these uncertain but opportune times. [ABSTRACT FROM AUTHOR]

Summary This paper elaborates on critical processes of institutional change and the implications for local economic development in fragile settings. Drawing on empirical research in Afghanistan, the discussion looks specifically at how local actors interact to reshape the “rules of the game” in women’s enterprise. The research has highlighted diverse actor negotiation in the transformation of (heterogeneous) purdah norms and development of enterprise institutions. This has crucially influenced the scope of norm development, and women’s engagement in business. The study shows that external actors (such as NGOs) may be able to both initiate and guide institutional change and development. Yet in challenging environments such as Afghanistan, there may be limitations to their endeavors, with strong resistance from local power holders, unpredictable entrepreneurs and disruptive (local) events. The use of liberal cultural/religious narratives has proved fundamental in permitting change processes. Emerging open-minded beliefs have unleashed a more democratic “narrative” on women, particularly if championed by progressive leaders, or credible outsiders in “receptive” local conditions. This has led to the evolution of new attitudes and preferences, with potential effects beyond the market, including increasing girls’ education and women’s property rights. The research has generated a micro-social perspective of institutional change, identifying key actors and conditions that may shape grassroots institutional processes in enterprise development. In emerging outcomes, the paper presents insights into the role of dominant entrepreneurs in driving (nested) institutional pathways. This may promote inclusive opportunities for (new) power and wealth through open institutions, in “productive institutional pathways.” Yet it can equally foster distorted economies if exclusive institutions are allowed to prevail in more “destructive institutional pathways.” To further develop micro-institutional theory, the paper argues for a greater appreciation of culture, religion, and fragility. [ABSTRACT FROM AUTHOR]

Over the last quarter of a century, analyzing the pace of urbanization and urban economic growth in South Asia has become increasingly important. However, a key challenge relates to the absence of spatially disaggregated national accounts data – in particular, the absence of GDP data for sub-national administrative units and individual cities. The absence of such data limits the scope for detailed empirical analysis of spatial patterns of economic growth, particularly across individual urban settlements or cities. This paper aims to test the suitability of DMSP-OLS Nighttime Lights (NTL) data as a proxy for GDP to analyze detailed spatial patterns of urban economic growth across South Asia over the period 1999–2010. It will help to build an understanding of the nature and heterogeneity of spatial patterns of urban economic growth within the region and contribute to the development of a framework for the usage of NTL to investigate such patterns. Geographic Information System (GIS) is employed to identify the cities and urban agglomerations together with their NTL data in South Asia, and spatial statistics are used to analyze the spatial and temporal patterns of NTL growth. This paper adopts descriptive and inferential statistics to determine the quantitative relationship between NTL and population, urban size, and proximity to the coast. This paper reveals that the inter-annually calibrated NTL data is a good proxy for changes in national and sub-national GDP. In South Asia, the urban NTL hot spots are around major cities with populations between 1.3 and 2.6 million in 1999 and 0.5 to 1.3 million in 2010. Cities in the region have also become more clustered and connected forming urban agglomerations. NTL per unit of land in such clusters tends to be higher than in single cities in South Asia. India, Pakistan, and Sri Lanka tend to have higher NTL (economic) growth on average, while Nepal and Bangladesh have lower growth or declining NTL. There exists a very strong positive linear relation between distance to the coast and the total NTL within that distance, which leads to similar NTL growth rates among inland and coastal cities. [ABSTRACT FROM AUTHOR]

‘Resilience’ is the catchword of the moment. For many of the mainstream institutions of international development, building resilience is embedded in a wider commitment to market liberalism. Taking three entry points, the sectoral, spatial and socio-governmental, this paper critically explores the connections, interdependencies and tensions between social resilience and the market imperative. The paper argues that ‘liberal resilience’ plays into a growth-development-resilience ‘trap’ wherein economic growth has become a de facto synonym for development and, often, development a synonym for resilience. Drawing on empirical cases from across rural Asia we highlight the incongruities and inconsistencies in this line of logic. The paper suggests that there is a need to critically judge the market mechanism and the complex and sometimes contradictory ways in which the processes that have been set in train by market integration impinge on resilience. [ABSTRACT FROM AUTHOR]

• Investigating the sustainability of remarkable GDP growth in emerging economies. • Highlighting the roles of energy and environment in economic growth. • STFP is decomposed to identify the drivers of sustainable development. • Regional disparities are compared by incorporating regional heterogeneities. • Providing implications to promote sustainable development by technology spillover. The remarkable GDP growth along with the dramatic increases in energy consumption and pollution emissions in emerging economies raise the concerns for the sustainability of their development pattern. However, the precise role of how energy and environment contribute to economic growth in emerging economies is still unknown. This paper explores the sustainability of remarkable GDP growth in emerging economies by using non-radial directional distance function (NDDF) to identify the sustainable total-factor productivity (STFP) growth in the emerging economies and comparing it with that in developed economies. Our research extends previous literature by highlighting the roles of energy and environment in economic growth. The results raise the concerns on the sustainability of the remarkable GDP growth (especially after 2000) in emerging economies due to their slow STFP growth after excluding the contributions from energy and environment. Furthermore, it is also found that compared with developed economies, the slower STFP growth in emerging economies is mainly caused by their disadvantages in innovation, although they are able to utilize existing technology by catch-up effect. Besides, analysis from the group heterogeneity among Asia, Eastern Europe and Latin America gives a better grasp of implications for stimulating the sustainable growth in emerging economies by promoting technology spillover from developed economies. [ABSTRACT FROM AUTHOR]

Summary Rural financial markets have grown rapidly in Asian emerging market economies, thus contributing to economic development and the reduction of poverty. At the same time, however, the level of indebtedness of rural households has increased, making households more vulnerable to shocks. One of the reasons for rising household debt is the ease of borrowing simultaneously from a growing number of lending institutions. This paper addresses two major questions. First, does borrowing from multiple sources increase rural households’ risk of over-indebtedness? Second, do over-indebted rural households refinance their outstanding loans through multiple borrowing, running the risk of becoming trapped in a debt cycle? Employing a dynamic random effects bivariate probit model for a unique set of longitudinal household panel data from Northeast Thailand, this study examines the bidirectional relationship between over-indebtedness and multiple borrowing to determine to what extent rural households become trapped in debt cycles. On the one hand, the results indicate that households in Northeast Thailand take on multiple loans, which further increases their risk of becoming over-indebted. On the other hand, our model results do not confirm the widespread notion that over-indebted rural households use multiple loans to refinance unpayable debts. [ABSTRACT FROM AUTHOR]

The rising trend in environmental pollution in current years has elevated the demand for clean energy to reduce environmental stress, and the newly developed biomass energy source is contributing well in this regard. This paper quantifies, if biomass energy consumption is performing as the main driver for economic development and clean energy source to decrease the pollution levels. Associations among carbon emission, economic development, and biomass energy have been estimated by using the Common correlated effects mean group, and Panel vector autoregressive techniques for 38 countries of Asia from 1990 to 2017. Granger causality and Impulse-response functions are also measured. A closer look at the results shows that 1% increase in biomass consumption will increase CO 2 emission by 1.698%. The study also found support for the presence of an N-shaped relationship between per capita income and emission and found trade openness and urbanization as the contributors to environmental pollution. Outcomes provide empirical evidence that there is bidirectional causality between real economic growth to inflation and financial development to inflation in the first model. The second model also showed bidirectional causality between real economic growth to financial development and inflation, and inflation to trade openness. The findings show that biomass energy consumption is acting as the key driver for economic development and performing as a non-clean energy source in decreasing pollution. • Study examines association among emission, economic development and biomass energy. • Nations are solicitous for economic development but inattentive toward environment. • Study does not find biomass energy consumption as an environment-friendly indicator. • There is a positive association between renewable energy consumption and emission. • Economic development cannot be a guarantee to achieve a clean environment. [ABSTRACT FROM AUTHOR]

• Convergence in energy efficiency of BRI counties and its factors are studied. • Energy efficiency along BRI experienced an increasing trend except 2009 and 2010. • BRI countries with low TFEE are catching up with countries with high TFEE. • High-income & Eastern Europe and West Asia countries have faster catch-up rate. The Belt and Road Initiative (BRI) has raised concern that it may involve an extensive economic growth pattern at a higher cost of energy and the environment, and China is making a great effort to construct a green BRI, which may improve the general energy efficiency of BRI countries. Therefore, it is important to investigate whether backward countries with low energy efficiency are catching up with frontier countries or falling behind. In response, this paper adopts DEA to calculate the total-factor energy efficiency (TFEE) of the BRI countries, and investigates heterogeneous beta-convergence in energy efficiency of BRI counties and its factors. The results indicate that: (1) except for 2009 and 2010, the TFEE along the BRI experienced an increasing trend due to the global finance crisis; (2) BRI countries with low TFEE are catching up with countries with high TFEE, and more significantly when the TFEE growth rate is greater; (3) the TFEE converges at a faster rate in high-income BRI countries and Eastern Europe and West Asia countries; and (4) inadequate innovation ability and a weak R&D absorption capacity may decelerate the energy efficiency convergence rate of BRI countries, especially those with low-income. [ABSTRACT FROM AUTHOR]