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This study analyzes the intent-to-treat effect of prenatal exposure to Ramadan (the Islamic month of fasting) on outcomes including stunting and underweight for children under age 5 years in Pakistan born between 2003 and 2018. The study uses observational data from four rounds of the UN-supported Multiple Indicator Cluster Survey (MICS) data collected on 204,186 children under-5 from Punjab, Pakistan in 2007–2008, 2010–2011, 2013–2014, and 2017–2018. Excluding data on outliers and observations with incomplete data, multivariate logistic regression analysis was conducted on the appended cross-sectional data of 179,943 children under-5 to assess the risk of stunting or underweight according to the month of gestation coinciding with Ramadan. We observe a significant increase in the risk of stunting and underweight associated with exposure to Ramadan following an inverted-U pattern. The peak impact of Ramadan exposure on a child being underweight occurs in the third month of pregnancy, where the probability of being underweight is 20 percent higher as compared to children whose gestation did not coincide with Ramadan. The peak impact of Ramadan exposure on stunting occurs in the fourth month of pregnancy, where the probability of stunting is 22 percent higher as compared to children whose gestation did not coincide with Ramadan. These results vary little by gender. In contrast, exposure to Ramadan in the ninth month of gestation is associated with a reduction in the risk of stunting for boys and underweight for both boys and girls. Our analysis indicates that prenatal exposure to Ramadan during the first two trimesters have negative implications for children’s growth. The study highlights the critical role of maternal habits during early pregnancy, especially nutritional intake, for the long-term physical development of children.

In this article, we append information from four cross‐sectional household surveys (Multiple Indictors Cluster Survey of the United Nations International Children's Emergency Fund) in Punjab, Pakistan, collected between 2007 and 2018 to create a data set of 140,000–150,000 child‐level observations. Using linear regression, we document a strongly negative birth‐order gradient in the nutritional status (measured as height‐for‐age z‐scores) of children below age 5, indicating a pattern of disinvestment in later‐born children that is even greater than that documented for poorer countries in sub‐Saharan Africa in an earlier study. Consistent with other empirical work in developing‐country contexts, girls have on average higher z‐scores than boys, but their advantage is lower in Pakistan than other countries outside of the South Asian region, and worryingly, the negative birth‐order gradient is steeper for girls than boys. Son‐biased fertility stopping rules and close‐birth spacing appear to play key roles in Pakistan; following the birth of daughters, parents reduce contraceptive use and breastfeeding (a natural birth control). Using an IV strategy based on the genders of the previously born children, we find that shortened intervals between births harm children's nutritional status, especially that of boys.

The study planned to determine the roles of birth order and son preference on receiving prenatal, delivery care, and postnatal child health inputs, using cross-sectional data collected by the Multiple Cluster Indicators Study Punjab related to year 2011 from all districts of the Punjab province of Pakistan. Prenatal inputs, safe delivery care, and total child health inputs fall with higher birth order of the child, though these trends are diminished when household socioeconomic controls are added. Prenatal inputs increase with maternal education, household head education, and household wealth. Postnatal inputs have a weaker relationship with both birth order and maternal education. Safe delivery care and total health inputs are higher for families without a prior-born son, demonstrating son-biased fertility stopping behaviours by families.

As Pakistan enters the CPEC era, there is a sense of optimism as well as concern in the country, given the uncertain economic impact of this major collaboration between China and Pakistan. Using firm-level and trade data, we empirically test the impact of the 2006 free trade agreement (FTA) between the two countries on the productivity, size and value added of potentially affected Pakistani firms. These results have important policy implications for CPEC initiatives. We start with a difference-in-difference analysis, comparing trends in those sectors in Pakistan made more vulnerable by tariff reductions on Chinese goods relative to sectors for which the tariff did not change significantly. Next, we examine those sectors in Pakistan that were given greater access to Chinese markets through reductions in the Chinese tariff on Pakistani goods relative to sectors for which market access remained roughly the same. In the sectors made more vulnerable by reductions in Pakistani tariffs on Chinese goods, imports to Pakistan have risen, while productivity, value added and value added per worker have fallen relative to other sectors since the FTA. In the sectors for which Pakistan gained access to Chinese markets, exports and employment have risen, but productivity and value added have fallen relative to other sectors since the FTA.

In this article, we explore whether localization of industries can reduce economic distortions and dispersion in total factor productivity (TFP) among firms in Punjab, Pakistan’s largest province economically. We consider two types of misallocation: (i) dispersion in the distribution of output-based TFP (TFPQ), in particular the survival of low productivity firms in the left tail; and (ii) dispersion in revenue-based TFP (TFPR), indicative of allocative inefficiency. The results are mixed: On the one hand, we find that the distribution of TFPQ is less dispersed in more agglomerated areas, measured by the localization quotient, local productive concentration, and average firm size. At the same time, we find that average TFPQ is also positively related to localization, especially the presence of small firms in the same sector, even though own-firm TFP is lowest for small firms. On the other hand, we do not find evidence that agglomeration improves allocative efficiency measured as deviations in TFPR from the sector average, concluding rather that greater localization of small firms is associated with firms being more output and capital constrained.

1.IntroductionTextiles account for over half of Pakistan's exports, with readymade garments (RMGs) and textile made-ups comprising more than half of textile exports in 2011/12 (Hamid, Nabi & Zafar, 2014).1 Pakistan produces both woven fabrics and knitwear, in about equal amounts. Due to restrictions on the import of synthetic fabrics, Pakistan's garment producers are concentrated in home textiles (towels and bed linen), menswear (socks and polo shirts) and denim. Pakistan's homegrown cotton is well suited to woven denim production, the product category that we focus on in this study.When the European Union granted preferential GSP+ status to Pakistan in December 2013, garment manufacturers were palpably excited about the prospects of increased export opportunities to Europe.2 They also hoped to capitalize on the trend of rising wages in China as international brands sought cheaper sourcing options (Figure 1).To these ends, the current government announced the development of a 1,500-acre industrial estate for garments - the proposed Quaid-e-Azam Apparel Park outside Lahore, near Sheikhupura.3 However, Pakistan faces a number of competitors for the business expected to move out of China, including Bangladesh, Cambodia, India, Indonesia and Vietnam. From Figure 1, we can see that, as of 2011, Pakistan and India's labor costs per hour were comparable, but that of Bangladesh was even lower.As we know, however, it does not make sense to look at wages alone when there are significant differences in labor productivity. The New Delhi-based consulting firm Technopak estimates that, while wages are higher in Bangladesh, workers are less efficient and the level of technology is lower (Table 1). Similarly, our pilot project to benchmark physical output productivity - rather than the standard revenue productivity - using highfrequency worker and line-level data finds a 16 percent productivity advantage when comparing a Pakistani knitwear manufacturer to the most efficient units in a sample of Bangladeshi firms producing very similar products (Chaudhry, Macchiavello, Chaudhry & Woodruff, 2016).In addition, Pakistan has the advantage of homegrown cotton, reducing material costs over competitors such as Bangladesh, Vietnam and Cambodia. On the other hand, its manufacturers tend to face higher energy costs and greater political instability in comparison to the same. When looking at overall costs (labor, materials, overheads, shipping, tariffs, etc.), Nathan Associates (2009) find that Pakistan compares favorably to Bangladesh in the production of t-shirts and chinos.Along with researchers at the University of Warwick, we recently carried out a pilot project to compare the sewing efficiencies of Bangladeshi factories to those in Pakistan (Chaudhry et al., 2016). We intended to make these comparisons using measures of the time allocated to each sewing operation carried out along the line, known in the RMG sector as the standard minute value (SMV) or standard allowed minute (SAM). Although international databases of SMVs exist, many factories develop their own standards, usually based on their time and motion studies. Since similar stitching operations are performed for a variety of garments, we hypothesized that SMV/SAM could be used to compare factories' efficiency levels even though different styles of garments were being manufactured. As long as there is consistency within the factory in how the local SMV is calculated, relative efficiencies between firms can be compared based on the SMVs for identical processes.4It is much easier to match processes across factories to compare SMVs when they produce the same category of apparel, for example, tshirts or trousers. However, the data our co-researchers had collected in Bangladesh was mainly for knitwear (t-shirts), while the data we collected in Pakistan was principally for denim (jeans). This variety in the garments being produced made it difficult to compare SMVs. …

The effects of marriage between biological relatives on the incidence of childhood genetic illness and mortality are of major policy significance, as rates of consanguinity exceed 50% in various countries. Empirical research on this question is complicated by the fact that consanguinity is often correlated with poverty and other unobserved characteristics of households, which may have independent effects on mortality. This study has developed an instrumental variables empirical strategy to re-examine this question, based on the concept that the availability of unmarried cousins of the opposite gender at the time of marriage creates quasi-random variation in the propensity to marry consanguineously. Using primary data collected in Bangladesh in 2006–07 and Pakistan in 2009–10, the study found that previous estimates of the impact of consanguinity on child health were biased and falsely precise. The study also empirically investigated the social and economic causes of consanguinity (including marital quality) and concludes that marrying a cousin can have positive economic effects for one’s natal family, by allowing deferral of dowry payments until after marriage.

1. IntroductionManagement, once primarily the domain of business consulting and business schools, now garners intense interest among academic economists. Recent research has provided concrete and convincing evidence of the profound and positive impact of sound management practices on firm-level productivity (Bloom & Van Reenen, 2007; Bloom et al., 2013).1 In addition, the organization of firms - the delegation of authority and decentralization of decision-making, only possible when trust is high - is also seen to play a role in firm size and performance (Bloom, Sadun, & Van Reenen, 2012). The stakes are high, not just for firm profits but also for national economic performance; Bloom et al. (2014) suggest that a quarter of the variation in total factor productivities can be explained by the quality of private sector management.In Pakistan, firms tend to be family-managed.2 Ilias (2006) demonstrated this reliance on family management in Sialkot's surgical goods sector; firm growth was found to be associated with the size of the founder's family, such that firm founders with more brothers tend to grow into larger firms. The dominance of family management systems may be due to a dearth of professional managers, lack of trust in nonfamily management or systems to control them, or both. This could happen if weak legal systems and poor contract enforcement reduce a firm's ability to sanction nonfamily management in the case of shirking or expropriation of firm resources. Firms may find it easier to monitor family managers (for example, by observing spending habits) or sanction them through informal mechanisms (such as social exclusion).At the same time, research has found that the family management of firms is associated with poorer-quality management, lower productivity, and smaller profits (Bloom & Van Reenen, 2007; Bandiera, Prat, & Sadun, 2013). Family ownership-cum-management structures can also run into succession difficulties: if there are not enough descendants to take over or if they lack competence to run the business, a firm might fail after losing its founder. On the other hand, if there are too many potential managers in the younger generation, the business may be split amongst the inheritors so that economies of scale are lost.In addition to the aforementioned research on management, organization and family firms, a third, related, line of research deals with the design of wage schedules to raise productivity. Given the concerns surrounding the econometric identification of the impact of different wage systems on productivity, newer studies have borrowed techniques from the hard sciences and applied the randomized controlled trial (RCT) approach to economic experiments in the field.3 Researchers randomly assign different wage schedules to control and treatment groups of actual workers to obtain an unbiased estimate of the impact of different incentive schemes. This research finds that, compared to fixed wages, piece rates and performance-based pay have proven effective in increasing worker productivity, both in developed and developing country settings (see Bandiera, Barankay, & Rasul, 2005; Choudhary, Gabriel, & Rickman, 2013; Goto, Aida, Aoyagi, & Sawada, 2013; Kaur, Kremer, & Mullainathan, in press; Shearer, 2004; Shi, 2010). Managers' performance can also be improved through incentives (Bandiera, Barankay, & Rasul, 2007, 2009). Another benefit to firms is that piece rates give them more flexibility to pay for work as needed when faced with lumpy demand, whereas firms that pay fixed wages need a constant flow of orders.The aforementioned experiments have focused principally on low-skill agricultural work or data entry and the desired worker effort - for example, fruit-picking speed - is simple to verify and aligned with firm owners' objectives. Simple systems of performance pay such as piece rates may be less applicable in environments where performance is multifaceted or harder to measure. …

(ProQuest: ... denotes formulae omitted.)1. IntroductionFollowing on the obvious successes of the export-led growth of the 'East Asian tigers' and the perceived failures of the earlier inward-looking import-substitution industrialization policies pursued by most developing countries in the decades following independence, developing countries have sought to promote exports as a growth strategy, as both a source of demand and of coveted foreign exchange.The Washington Consensus, which promoted economic liberalization generally, also recommended freeing trade (through low uniform tariffs and a competitive exchange rate) to improve economic efficiency and eliminate the deadweight losses associated with import restrictions. The argument was that substituting inefficient domestic production with lower-cost supply from abroad and as a source of competition would make surviving domestic producers more efficient. Researchers also documented the experience of East Asia and policymakers sought to emulate their experience. However, these "lessons" can be quite confusing since prominent scholars (for example, Anne Krueger and Dani Rodrik) have disagreed on the extent to which the success of East Asia happened in spite of, or thanks to, government intervention in "picking winners."Proponents of trade liberalization advocate that there is a relationship between the openness of an economy and the productivity of its firms. The suggested mechanisms through which this works is that the introduction of cheaper imports will (i) reduce the mark-up that firms can charge consumers due to greater competition in the final goods market, and (ii) lower the average cost of production in the sector due to the exit of low-productivity firms that were only able to operate in a protected market (Bernard, Jensen, Redding, & Schott, 2011). In addition to intra-industry reallocation of resources, within-firm productivity gains have also been documented (Pavcnik, 2002; Trefler, 2004: cited in Bernard et al., 2011).Productivity is often found to be higher among exporters, which begs the question of the direction of causality. In other words, do firms that are more productive export or does exporting enhance productivity? The bulk of the evidence accumulated over the last 15 years (starting with Roberts & Tybout, 1997) shows that firms that entered export markets were more productive to begin with (also see Bernard & Jensen, 2004). In other words, there are fundamental differences between firms along dimensions that are difficult to measure, such as entrepreneurial ability. Such features differentiate among firms such that the more productive firms export and the less productive firms do not. This explanation for the positive productivity-exporting relationship also coincides with the Melitz (2003) model, which incorporates the fixed costs of exporting.Firms have also been found to experience gains in productivity after they began exporting (see Van Biesebroeck, 2006, on Cote d'Ivoire; Mukim, 2011, on India; Aw, Chung, & Roberts, 2000, on the Republic of Korea; De Loecker, 2007, on Slovenia; Aw, Roberts, & Xu, 2011, on Taiwan). Some of these gains to productivity post-exporting may be due to "learning by exporting." Bernard et al. (2011) note that more recent evidence indicates that exporting activities can raise returns to the kinds of investments that complement exporting, thus raising the productivity of exporters even further (they also cite Bustos, 2011; Lileeva & Trefler, 2010; Aw et al., 2011). For example, Aw et al. (2011) find that, in Taiwan, firms that are more productive initially are both more likely to export and invest in research and development, and that these activities cause further increases in productivity.On the other hand, Gervais (2012) finds that product quality is a better predictor of exporting behavior than firm-level productivity and that idiosyncratic demand also plays a disproportionate role. …

Microinsurance in Pakistan is still in its nascent stages. More than half of the current microinsurance policies in effect in Pakistan are offered through the Benazir Income Support Program (BISP), with the remainder provided in conjunction with microcredit services offered by various microfinance institutions (MFIs), microfinance banks, nongovernment organizations, and rural support programs (RSPs). The policies offered by the microcredit sector are mainly credit-life policies, which cover loan balances in the event of the borrower's death. In addition, some lenders-principally the RSPs-offer small health insurance policies covering the hospitalization of the borrower and (sometimes) their spouse. As catastrophic health expenses and deaths in the family are among the most important economic stressors that households face, it makes sense that microinsurance should first make inroads in these areas.It is difficult to say what impact microinsurance has had in Pakistan, since few rigorous evaluations have been undertaken to date. What we do know is that utilization has been low, explained by providers as limited client awareness of the benefits and coverage. In the short to medium term, microinsurance outreach can be expanded by offering health microinsurance (HMI) coverage to microcredit borrowers' entire households, and by offering HMI to all community members within an RSP, rather than only microloan borrowers and their spouses. Partnering with mobile phone operators for automated, digital payments can also significantly expand potential customer volume while reducing transaction costs. HMIs might also be combined with health savings accounts that households can use to pay for medications and outpatient services not covered by HMI plans. Provinces could also leverage the existing database of poverty scorecards implemented by BISP to channel partially government-subsidized microinsurance policies toward poor households just above the BISP threshold.Keywords: Microinsurance, social insurance, poor, Pakistan.JEL classification: G21.1. Introduction: Defining MicroinsuranceBroadly speaking, microinsurance is insurance for the poor. When it comes to defining the term more specifically or categorizing specific products such as "microinsurance", there is some lack of consensus. According to Churchill and McCord (2012), microinsurance can typically be characterized by: (i) the target group served (the poor, or more generally, those underserved by traditional insurance products); (ii) caps on the amount of coverage and premiums (low compared to traditional insurance products); (iii) the type of provider (such as "self-help groups" and other community-based organizations); and (iv) the distribution channel (including nongovernment organizations [NGOs], microfinance institutions [MFIs], and others). In addition, microinsurance often caters to the specific types of risk faced by the poor. It is often also characterized as being simpler to administer than traditional insurance.2. Trends in Microinsurance CoverageAn estimated 500 million individuals are covered by microinsurance worldwide, 60 percent of who are in India (Churchill & McCord, 2012). In India, a combination of state-sponsored health insurance coverage and government mandates to the insurance sector to expand coverage to underserved segments of the population have been principally responsible for its large and rapidly growing share of the global microinsurance market. Over a period of just five years, India's RSBY program alone has enrolled 110 million individuals (Fan, 2013).The microinsurance market in Pakistan has remained small. We estimate the number of policies in Pakistan to be nearly 7.4 million (see Table 1).1 This is likely an underestimate, since data are unavailable (or not included) on a number of ongoing pilots, small life insurance policies through the Pakistan Post, and some new programs such as life/disability microinsurance and mobile phone microinsurance schemes including Zong and Telenor. …

This article provides empirical evidence of the inefficiency of contracting institutions (measured by high switching costs) among surgical instrument producers in Sialkot, Pakistan, even though it is an industrial cluster where manufacturers have access to a multiplicity of suppliers. Following the methodology of Johnson, McMillan and Woodruff (2002), we found that nearly 50 per cent of firms in the sample would reject an untried supplier offering a lower price. The decision to reject a prospective new supplier offering a 10 per cent discount was positively related to the complexity of the input and measures of relational contracting, and negatively related to a belief in informal contract enforcement mechanisms. Firms were more likely to switch to the prospective discount supplier when they were introduced through a business network. Belief in formal contract enforcement was not significant in any of the regressions.

In this paper, we look at the pace at which firms adjust their employment levels as a measure of “microeconomic flexibility.” Flexibility aids in creative destruction processes, where less efficient establishments recede and dynamic firms can rapidly expand. Following the techniques used by Caballero, Engel, and Micco (2004), we use firm-level data from India and Pakistan to estimate the proportion of the gap closed in a year between desired and actual employment. The results for the proportion of the gap closed for India were 0.46 in 2001 and 0.45 in 2000. For Pakistan, we estimated the proportion of the gap closed as 0.2 in 2001 and 0.53 in 2000. The results for 2001 were much lower than expected (and lower than previous estimates for both countries), possibly due to the events of 9/11. Pakistan compared favorably to India in various key sectors, including chemicals, food processing, and garments. Exporters did not seem to have a quicker speed of adjustment. JEL Classification: E2, J2, J6.

The dramatic increase in international food and fuel prices in recent times is a crucial issue for developing countries and the most vulnerable to these price shocks are the poorest segments of society. In countries like Pakistan, the discussion has focused on the impact of substantially higher food and fuel prices on poverty. This paper used PSLM and MICS household level data to analyze the impact of higher food and energy prices on the poverty head count and the poverty gap ratio in Pakistan. Simulated food and energy price shocks present some important results: First, the impact of food price increases on Pakistani poverty levels is substantially greater than the impact of energy price increases. Second, the impact of food price inflation on Pakistani poverty levels is significantly higher for rural populations as compared to urban populations. Finally, food price inflation can lead to significant increases in Pakistani poverty levels: For Pakistan as a whole, a 20% increase in food prices would lead to an 8% increase in the poverty head count.

Introduction The issue of poverty is both simple and complex: at one level, the implicit or explicit objective of most economic policymakers in developing countries is to reduce the levels of poverty in a country; at another level, the tools that should be used are constantly open to debate. The debate in almost all developing countries concerns the correct policy mix between those that target economic growth, which have the potential to reduce poverty as overall income levels rise, and those policies that target poverty directly, such as social safety nets or income transfers. There is little question that long-term growth reduces poverty, but in a country such as Pakistan, where growth is sporadic at best, the question that arises is what can be done to reduce poverty for those who will not benefit from growth for years or even decades. If we add to this the fact that development has been devolved to the provinces in Pakistan after the 18 th Constitutional Amendment, the future of poverty alleviation initiatives is quite simple: Either we explicitly acknowledge that the state is only concerned with economic growth and wait for growth to reduce poverty—while pursuing intermittent and idiosyncratic poverty interventions that assist the poor but do little to move them out of poverty—or we clearly focus the limited resources of the state on explicitly targeted poverty interventions. The purpose of this chapter is not to evaluate poverty reduction initiatives in Pakistan or to predict what will happen to poverty in the country over the next decade. Rather, we want to see what has been happening to poverty over the last decade by looking at poverty in unique ways: First, we look at what has been happening to poverty if we expand the definition of poverty to include not just income but also other basic necessities such as health and education.

This paper provides a survey of the theoretical and empirical literature relating to industrial clusters. These clusters are groups of firms that are specialized by sector, located in close geographic proximity and consist of mostly small and medium sized enterprises. The benefits to firms from clustering are sometimes referred to as active and passive collective efficiency. Passive collective efficiency refers to benefits accruing to a firm by virtue of being in a cluster, such as access to markets and skilled labor, technological spillovers, flexible specialization, and reduced transaction costs. Active collective efficiency, on the other hand, stems from purposeful cooperation between clustered firms to undertake a large-scale project to upgrade production, such as entering into product marketing.

This paper follows Hsieh and Klenow’s (2009) study in examining the role of misallocation in aggregate productivity for manufacturing plants in Punjab, Pakistan. Using data on manufacturing plants in Punjab from the Census of Manufacturing Industries for 2000/01 and 2005/06, we look at the extent to which marginal products differ across firms within each industry. We then simulate a liberalization setting by allowing the marginal product to equalize across plants in each industry, and find relatively more productivity dispersion in Punjab than Hsieh and Klenow do for India and China. We also find that moving to the US efficiency level boosts manufacturing total factor productivity in Punjab by 23.61 percent and 47.40 percent for 2000/01 and 2005/06, respectively. Finally, the paper explores potential sources of productivity dispersion for manufacturing plants in Punjab.

Given that clustered firms in developing countries generally sell their goods through multinational firms, we seek to determine under what conditions might clustered surgical instrument firms band together and form a cooperative to “break out” of their relationship with multinational buyers to market their own goods. Our results, based on a survey of surgical instrument producers in Sialkot, Pakistan, demonstrate that firms are more likely to be interested in such initiatives once they have already had some direct experience in marketing, such as selling products under their own brand name and having already sold some goods directly to hospitals. Firms that have had relationships of longer duration with customers tend to be less likely to be interested in joint action initiatives. This indicates that a higher opportunity cost of engaging in joint action (as proxied by relationships of longer duration) reduces the likelihood of cooperative marketing initiatives in clusters.