Unrestricted trade stimulates economic growth and bridges socio-economic gaps existing in different countries of the world. Pakistan has adopted trade liberalization policies since the late 1980s with the same expectations. This study has empirically analyzed how trade liberalization has affected economic development in the country. Its effects have been examined with respect to four measures of economic development: per capita GDP, income inequality, poverty and employment over the period from 1960-2003. The main analysis is based on a simultaneous equation model. Keeping in view the simultaneity of the chosen development measures, the model is estimated with the 2SLS technique of regression analysis. The analysis shows that, over the study period, trade liberalization has not affected all the chosen indicators of development uniformly. It has affected employment positively but per capita GDP and income distribution negatively. However, it has not affected poverty in any way. The obvious message is that trade liberalization has not affected all the indicators of development favorably in Pakistan. It thus implies the need of a cautious move towards liberalization. The focus of trade liberalization should be to bring about improvement in the performance of mediating factors and to focus exports on labor-intensive products.
KEYWORDS: Trade Liberalization, Economic Development, Poverty.
JEL: F41.

This study is designed to assess the macroeconomic performance of fund-supported programs, and the sequencing and ordering of macroeconomic policies in the context of the Pakistan economy. The generalized evaluation estimator technique has been used to assess the macroeconomic impacts of the IMF supported programs. GDP growth, inflation rate, current account balance, fiscal balance and unemployment are used as the target variables in order to gauge economic performance during the program years. The vector of policy variables (that might have been adopted in the absence of programs) and the vector of foreign exogenous variables are also taken as explanatory variables in the model, so that the individual effect of the IMF supported programs could be assessed. The result suggests that as the IMF prescriptions were applied, the current account balance has worsened, the unemployment rate has significantly increased, and the inflation rate has increased during the years of fund-supported programs. Only the budget balance has shown signs of improvement. Furthermore an inadequate sequencing of reforms has contributed to the further worsening of the economic scenario during the program period.
KEYWORDS: Pakistan, IMF, macroeconomic, policy conduct, policy variables, unemployment rate.
JEL: N/A.

This paper attempts to determine the capital structure of listed firms in the cement industry of Pakistan. The study finds that a specific industry’s capital structure exhibits unique attributes which are usually not apparent in the combined analysis of many sectors as done by Shah & Hijazi (2005). The study took 16 of 22 firms in the cement sector, listed at the Karachi Stock Exchange for the period 1997-2001 and analyzed the data by using pooled regression in a panel data analysis. Following the model developed by Rajan & Zingle (1995) it has chosen four independent variables i.e. firm size (measured by natural log of sales), tangibility of assets, profitability and growth and further analyzed the effects on leverage. The results, except for firm size, were found to be highly significant.
KEYWORDS: Capital structure, Pakistan, cement industry, tangibility of assets, leverage.
JEL: N/A.

The empowerment of women and improvement of their socio-economic status are essential ingredients of economic, political and social development. To achieve these objectives, the Government and NGOs have launched a number of programs in various parts of the country. The Aga Khan Rural Support Program (AKRSP) is working on the same agenda in Northern districts of North West Frontier Province (NWFP). The aim of the present research was to study the gender related interventions introduced by the AKRSP in District Chitral. The study findings show that the gender related interventions introduced by AKRSP have played a key role in the development of rural women in the area under reference. In addition to the provision of water supply schemes, health and credit facilities, training has also been imparted to the local women in different sectors of the rural economy including: agriculture, livestock management, vocational and enterprise development. This training has had a positive effect on economic activities performed by rural women and has enhanced the income of the respondents from various economic activities in their respective fields in the research area. Another major effect of the AKRSP interventions was the saving of time of rural women that had been spent on fetching water before these interventions. Though these interventions have improved the socio-economic conditions of women to a greater extent in the area, their sustainability requires regular monitoring and follow-up of training.
KEYWORDS: AKRSP, NGO, Gender, Pakistan, NWFP.
JEL: N/A.

Bonded labor is a dominant feature of the brick kiln industry of the country. Apparently an outcome of poverty, it is closely linked to the socio--cultural fabric of society. The vicious cycle of bondage subjugates the families physically and economically so that they are unable to break out of the trap despite putting in hard labor. The issue has a number of socioeconomic implications and its solution lies in a multi pronged strategy; economic uplift, social involvement and educational breakthrough of the bonded families. The paper explores the nature and extent of bonded labor in the brick kiln sector and analyzes its repercussions on children and women of the bonded families. It also examines the available legal infrastructure tackling bonded labor. Finally the paper proposes a comprehensive scheme to ameliorate the concerns of bonded families and ways to eradicate the menace from the industry.
KEYWORDS: Pakistan, bonded labor, brick kiln, economic uplift, poverty.
JEL: N/A.

This paper analyzes the impact of exchange market forces on Pak-Rupee/US dollar exchange rates during the 1965-1971 globalization period. The main findings are that a) the behavior of Pakistan’s fundamentals relative to those of the USA help to explain exchange market forces against the Pak-Rupee; b) during the run up to devaluation in the globalization period the monetary authorities in Pakistan were acting to reduce domestic credit; but that c) additional pressure was brought against the Pak-Rupee from speculative sources. These findings relate to current thinking on the choice of the exchange rate regime as even well behaved fundamentals may not be sufficient to sustain a currency on its peg.
KEYWORDS: Exchange market forces, pegged exchange rates, realignment expectations.
JEL: C53.

Bhagwati, Jagdish, In Defense of Globalization, Oxford University Press, New York, 2005, pp 308, Price US $ 15.95. The style is lucid in this provocative book and the author captures the reader’s attention throughout. Yet anyone anywhere including Jagdish Bhagwati who claims that extreme inequality is benign and good for the poor simply cannot by any means be taken too seriously, ‘evidence’ and analysis notwithstanding. Bhagwati, a Columbia University economics professor and author of many books on trade, has a brilliant intellect no doubt, but his thinking and ideas to my mind seem somewhat misdirected.
KEYWORDS: Globalization, book review, Bhagwati.
JEL: N/A.

The study argues for land reform in Pakistan by demonstrating an inverse relationship between students’ enrollment and land concentration and landlessness for 50 districts of the Punjab and Sindh provinces. With the help of enrollment data from the Population Census, a composite measure is constructed and linked with the inequality in ownership of land and landlessness. While the effect of the development level of districts on schooling is as expected positive and substantial, both the Gini coefficient for land ownership and coefficient of landlessness are negative and statistically significant.
KEYWORDS: Pakistan, schooling, land reform, Gini Coefficient.
JEL: N/A.

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.
KEYWORDS: Industrial clusters, SMEs, transaction costs, passive, active, collective efficiency.
JEL: N/A.

Most behavioral sciences based on rationality have simplistic assumptions; and the same is true about consumption or investment decisions. The aim of such studies is to maximize either utility or wealth. The entire ‘financial economics’ theory revolves around an investor who wants to maximize his return at some given level of risk. To determine the optimal return at a given level of risk or an optimal risk for a given level of return has been widely discussed in the financial literature consequently raising the issue of asset pricing in financial markets.
KEYWORDS: Asset pricing, CAPM, financial literature, review.
JEL: N/A.