Efficiency of financial markets implies that prices fully reflect all available information rapidly and in an unbiased manner. Thus, market prices should provide an unbiased estimate of fundamental value. Despite strong empirical evidence supporting this theory, there are questions about its validity. In recent years, a significantly large volume of empirical research has been conducted to show predictability of asset returns using publicly available information. This is popularly referred to as the anomalies literature. These studies used different explanatory variables ranging from fundamental to technical factors and showed evidence of market inefficiency. The results indicate that returns exhibit trends of momentum in the short to medium term and reversal in the long term
KEYWORDS: Market efficiency, theoretical framework, economics.

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With only half of Pakistan’s rural population provided water through government sources, many observers may well be led to believe that this is a clear case of government failure. Yet, such conclusions ignore the way development thinking has changed over time. Currently, the new way of providing infrastructure and social services relies increasingly on communities, NGOs and the private sector, with the role of government considerably curtailed. In the Rural Water Supply and Sanitation (RWSS) sector, it is the Uniform Policy which now dominates planning and implementation Unfortunately, succumbing to donor pressure, an illdevised Policy has been approved for the sector which requires prerequisites which are just not available. A socially sensitive engineering department, and organised and active communities, which are the cornerstone of the Uniform Policy, do not exist. Hence the failure of the new thinking in the RWSS sector. While institutional failure and government sclerosis may be amongst the more critical causes of failed service delivery, it may perhaps be more instructive to analyse such institutions in a broader political economy perspective, where reasons for the failure of the state as much as of ‘civil’ society, may provide more useful answers.
KEYWORDS: Rural water supply, institutions, public health, public health engineering, Pakistan.

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To date no study has been made to explore the FDI motives of foreign firms in Pakistan. An attempt has been made to rectify this position through a survey of both wholly- and majority-owned multinational enterprises (MNEs) in the economy. Market size and growth variables appear to be the most cited reasons for FDI by MNEs in the sample. The use of exploratory factor analysis (EFA) also reinforces the significance of market size as the motive for FDI in Pakistan. The other underlying factors produced by the EFA are: expansion of business, low input prices, desire to lower the transaction costs and psychic distance.
KEYWORDS: Foreign Direct Investment, FDI, multinational enterprises, MNEs, Pakistan.

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The genesis of setting International Labour Standards lies in the idea that the issues related to labour and social conditions are not merely matters of state concern. The objective of establishing the International Labour Organisation in 1919 was to undertake joint international action to improve labour conditions world wide along with achieving several inter-related motives. The preamble and the first Article of the ILO’s Constitution gives expression to these ideas by the following statement:
KEYWORDS: Pakistan, labour laws, ILO, labour standards, child labour, minimum wage.

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In a rapidly changing global economy, small enterprises are increasingly a force for national economic growth. Since the 1970s, SEs and the entrepreneurs who drive them have received serious attention by planners, multilateral agencies and governments the world over. Yet there is the need for the management of the environment at the macro level to facilitate the growth of the SE sector. There is a need for setting up and managing institutions and networks which support directly, indirectly, formally, informally, the growth business at the regional and national level. This also calls for the development of entrepreneurs and their team, development of the organisation and the business. The engine of change in all the new economies has been the small and medium enterprises (SMEs) but the growth of the sector was not a response to problems of economic crises of the 1970s and 1980s but it has been observed as a trend that emerged as a wave of change. Hence the chaos and scramble to move according to the trend. The other notable contributing factor for the emergence of Small Enterprises (SEs) is the IT business industry and the worldwide trend towards the service industry sector.
KEYWORDS: Developing countries, SME, support infrastructure, development.

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S. Akbar Zaidi, Issues in Pakistan’s Economy, Oxford University Press, Karachi, 1999. 462 pp. Price: Pak Rs. 450/-. In the last five decades, Pakistan’s economy has, as they say, gone places. Undoubtedly, this economy is much more broad-based, with increases in productivity in all sectors, incomes (even if nobody believes it), trade, infrastructure, social sectors. Living standards and consumption levels and patterns are more diversified than those in the early years, though the benefits are unevenly distributed. Such disparity and imbalances created additional complications because of a rise in expectations, which is invariably faster than production capacity and income increases. Developing countries, soft societies as these are, must face problems emerging from the resulting frustrations and frictions.
KEYWORDS: Pakistan, economy, distribution, economic situation.

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This study contributes to an understanding of locational determinants of FDI in Pakistan. Although there exists a great deal of literature in this area, there is hardly any evidence of such a study in the case of Pakistan. Economy level analyses are carried out to explore the determinants of FDI through multivariate regression analysis. The results of the multivariate regression analyses reveal that market size, relative interest rates and exchange rates are the major determinants of FDI in Pakistan. The variables such as market growth and political instability were consistently insignificant in the analyses. However, mixed findings were revealed by the variables such as consumer goods imports and the political regime in Pakistan.
KEYWORDS: Locational determinants, consumer good imports, market development, transnational corporations, foreign direct investment, FDI, Pakistan.

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Definitions: In this paper it is proposed to use the definition of selfemployed, small scale (2-9 employees), medium scale (10-99 employees) and large scale (100 employees and above) to discuss the issues relating to the Small and Medium Enterprise (SME) sector in Pakistan. The national pension (regulated through the Employees Old Age Benefit Institution Legislation) and health insurance (The Provincial Social Security Institutions Legislation) is applicable to institutions with 10 or more employees and provides a natural cut off point between the small scale and medium and large scale sectors. The cut off between the medium and large scale at 100 workers is also appropriate. Sources: Major sources of data were the: (i) The Census of Establishment 1988; (ii) The Labour Force Survey 91-92; (iii) The Report of the National Manpower Commission 1991; (iv) The Employment and Management Situation in Pakistan (ILO) 1997 and (v) The Economic Survey 1997-98. A large number of other sources were also used as required and these are indicated wherever possible.
KEYWORDS: SME, Pakistan, structure of employment, urban employment, rural employment, employment potential.

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All the provisions of the Uruguay Round Agreements have a bearing upon competition policy, since the international framework governing trade determines the extent of competition in the national markets. Apart from the fundamental provisions of GATT Articles I (MFN treatment), III (National Treatment) and X (Transparency), there are numerous specific WTO provisions which are relevant in varying degrees to competition2 • GATT Article VI and the WTO Agreement on Antidumping which involves concept of injury, treatment of price discrimination, public interest, etc; • GATT Article XVI and the WTO Agreement on Subsidies and Countervailing Measures such as concept of injury; • Agreement on TRIMs; requiring the elimination of deletion programme and local content requirements; • Agreement on TRIPs involving anti-competitive practices in contractual licenses, etc.
KEYWORDS: Uruguay agreement, WTO Agreement on Antidumping, GATT, anti dumping, competition policy.

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One of the most important developments of modern finance is the Capital Asset Pricing Model (CAPM) of Sharpe, Lintner and Mossin. Although the model has been the subject of several academic papers, it is still exposed to theoretical and empirical criticisms. The CAPM is based on Markowitz’s (1959) mean variance analysis. Markowitz demonstrated that rational investors would hold assets, which offer the highest possible return for a given level of risk, or conversely assets with the minimum level of risk for a specific level of return.
KEYWORDS: Capital asset pricing, CAP, equilibrium, single-period maximisers, empirical tests, asset pricing theory.

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An active area of investigation in finance literature is to explore the existence of a pattern in stock returns. A predictable pattern is evidence against market efficiency. Even if the pattern does not seem to affect the stock returns directly, it can provide useful clues to investors concerning their investment decision. One of the significant patterns identified is the day of the week effect which implies that stock returns are not distributed identically across the days. For example, in the U.S. capital market, rates of return on Mondays tend to be negative while those on Fridays tend to be high. Cross (1973), French (1980), Gibbons and Hess (1981), Keim and Stambagh (1984) and others consistently observed lowest returns on Mondays, termed as the ‘Monday effect’.
KEYWORDS: Equity markets, capital markets, stock returns, liberalisation, Pakistan, trading.

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In a world of multiple causes and effects, looking for black and white is turning a blind eye to limitless shades and colours created at diverse intersections. Any particular phenomenon is shaped by historical and cultural specifications interacting in a complex way. Putting these into neat categories across sharp divisions hampers the possibilities of knowledge that can be formulated at limitless points and interstices. Traditional Western philosophical thought was constructed around dualities and dichotomies that imposed “homogeneity and identity upon the heterogeneity of material” (BenHabib: 1992: 208). Post-structural epistemology involves attention to diversity, plurality and relations of power. It offers possibilities by opening spaces for voice/s, and provides a framework to position the ‘subjects’. According to Gaby Weiner, two aims of post-structuralism are:
KEYWORDS: Postmodernism, poststructualism, metanarratives, discourse formations.

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The power aspect in conceptualising importer-exporter interaction is very critical, but few studies are available concerning this issue in the context of export distribution channels. This article explores the power-related dimension of importer-exporter interaction. An effort has been made to discern the pattern of perceptual differences between a number of importer-exporter pairs. It has been found that broadly speaking, the importer exercises higher levels of power over the exporter rather than vice-versa. But the perceptual differences between the importer and exporter do not follow a systematic pattern. Research efforts have significant implications for the exporters’ community, generally in developed and particularly in developing countries such as Pakistan.
KEYWORDS: Power, behavioural concepts, distribution channels, behavioural paradigms, power framework, developing country.

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Traditionally, five year plans suggest an indicative set of policies to achieve medium-term targets. Operarionalisation of these policies, however, takes place through annual plans and budgets, formulation of trade and monetary policies and fiscal measures deemed necessary and announced during the course of a year, the so-called mini-budgets. In recent years, while five year plans have increasingly been seen as analytical frameworks for consistency rather than tight blueprints for disciline, there have been demands, especially from the private sector, that economic policies should be announced for a medium term. Underlying this shift of emphasis are the profound changes that have occurred in economic organisation and management in the country as well as the broad sweep of the forces of rapid globalisation. Of the total fixed investment in Pakistan today, over 60 per cent originates in the private sector. Only a decade ago, the private sector share was well below 50 per cent. Similarly, foreign investment used to be an insignificant component of foreign inflows. It stood at over a billion dollars for three years in a row in the nineties. The degree of openness of the economy has also increased significantly. Exports and imports alone constitute one-third of the GDP. The impact of liberalised financial flows is in addition.
KEYWORDS: Policy continuity, five year plan, Pakistan, investment, governance, institutions.

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This article is an attempt to explain why poverty has persisted to a great extent in Pakistan, despite sustained growth of national income, and to review two publications dealing with poverty and social development, “Social Development in Pakistan: Annual Review 1999, Social Development in Economic Crisis”, published by the Social Policy and Development Centre, (SDP) and “Human Development in South Asia, 1999: The Crisis of Governance”, published by the Mahbub ul Haq Human Development Centre (HD).
KEYWORDS: Pakistan, poverty, policy, neo-classical theory, labour, income distribution.

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S.M. Burke and Salim Al-Din Quraishi, Quaid-i-Azam Mohammad Ali Jinnah, his personality and his politics, Karachi, Oxford University Press pp 412 Rs. 495/-. A convincing vindication of the Quaid’s Conversion from Ambassador of Hindu-Muslim unity to founding father of Pakistan. A book which most Pakistanis have been waiting for for the past five years or so, has at last been published by The Oxford University Press, Karachi (1997) as part of their Jubilee Series. A dispassionate study of the Quaid’s life and his personality illustrates that he was a luminary in three different walks of life. Firstly, as one of undivided India’s renowned legal practitioners; secondly, one of it’s leading legislators and, thirdly, as one of it’s leading politicians. It is universally recognised that the Quaid attained not only world stature, but won a permanent place in world history. Through his dynamic and inspiring leadership, he not only won independence from the then British colonial rule, but had the sole distinction of altering the world map by carving into existence the largest Muslim state of its time in the comity of nations – bigger than the United Kingdom and France put together. It is the role of a leading politician which this latest publication principally deals with.
KEYWORDS: Book Review, Quaid-i-Azam Mohammad Ali Jinnah, Hindu-Muslim.

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Pakistan is enduring a serious economic downturn and facing the probability of the collapse of the banking and financial systems. The growth outlook is meek and risk of default is hanging over the head of the nation as a sword. Banking and financial institutions and economic systems of Pakistan like that of ASEAN and other crises hit countries, suffer from bad loans, political interference, corruption, declining exports, budget and trade deficits, internal and external debts, crashes of stock exchanges, currency mismanagement, and double digit inflation. While 'survival of the fittest’ is ever a self-evident truth, the lessons of the rise and fall of nations are important for survival. In order to meet the challenge of survival, it may be crucial to learn the underlying causes that accounted for and understand the strategies and reforms that attempted to manage the economies of the countries suffering from the crises.
KEYWORDS: Banking crises, economic crises, financial systems, sustainable growth patterns, economic systems, Asia, Europe.

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Educational expenditure as a percentage of GDP has indeed been protected and over the first phase of SAP (1993-1996) has increased by about 0.2 per cent of GDP. However, despite SAP protection, it declined to the preSAP level for 1998-99. While there is evidence that, in some aspects, the gender and regional gaps have closed, the poorest continue to be excluded from schooling, the rural female income gap in schooling has widened and, if the poor do attend, they are the most likely to drop out. Also, net enrollment rates for boys and girls actually declined over the first SAP period.
KEYWORDS: Pakistan, Social Action Plan, SAP, education, poverty strategy, gender, rural enrollments (sic).

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In this age of globalisation, multiple pressures are intensifying for the under developed and developing countries. It is a struggle for economic survival, where the larger fish will eat up any small fish not clever enough to learn the rules of the game. In this market oriented competitive world, management development has increasingly become linked with economic output. Additionally, education is no more just an intellectual exercise. It is compulsively being recognised as a large sector of human and financial resources, requiring strategic management and a purposeful development of the concerned personnel for quality and effectiveness.
KEYWORDS: Management development, organisational theory, education, educational institutions, organisational development.

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This paper is divided into three sections. The first section goes over the major developments in consumer choice theory1 over time and contrasts the approaches of Marshall, Hicks and Samuelson. In the second section is an inquiry into the nature of utility and a hypothesis is developed in the Marshallian tradition. The hypothesis is built on the grounds that utility is not a homegenous concept as is conventionally believed. The last section is concerned with identifying some theoretical and philosophical implications of the hypothesis for economics.
KEYWORDS: Marshall, Hicks, Samuelson, consumer choice theory, revealed preference theory.

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