This paper is motivated by the predicament of capital goods production in Bangladesh which has been penalized during past import policy regimes. Duty concessions applied to capital goods imports combined with high tariffs on imported inputs have contributed to negative effective protection. Current import policy has corrected this by moving towards a more uniform tariff structure which includes rates applied to capital goods. Under the new tariffs, however, the capital goods sector has continued to be depressed and has provided little employment opportunity for the relatively skilled labour used more intensively in this sector. Using the presumption that this sector is also an important source of skills dissemination, this paper examines the optimum tariff structure and its determinants.Because of its relevance for many developing countries, the analysis is kept at a general level. Having made the presumption that there is learning by doing in the capital goods sector, the optimal tariff structure is examined. A two period model with intersectoral linkages demonstrates the dynamics. The optimal tariff rate on capital goods imports is also solved for. While machinery imports can lead to the acquisition of technology, the dissemination of such technology requires domestic capabilities and endowment of skilled labour. Domestic production of capital generates learning by doing and thereby enhances resource productivity in the future by increasing the endowment of skilled labour.The tariff structure is found to depend on the extent of learning and intersectoral linkages. An agreegated numerical model using data from Bangladesh also confirms this result. The conclusion is that encouraging capital goods production will increase the availability of skilled labour as well as the level of welfare.

Lack of funding in health sector renewed the interests of development practitioners and policy makers in community organized, managed and funded health care delivery schemes. To design a community health programme for rural areas, developing countries should evaluate the appropriateness of the Cooperative Medical System (CMS) of China as an alternative model. In this research, successful CMS units of China are examined to identify factors affecting long-term viability of community-based Health insurance plans. These factors can be grouped into a number of programmatic aspects of health system organization: choosing appropriate human resource mix consistent with the economic status of community members, designing a benefit package to encourage participation of both poor and non-poor households, developing administratively simple premium setting and collection mechanism, ensuring inter-CMS collaboration and developing well-functioning referral system. Adjusting for the income difference between Bangladesh and China, Chinese health care costs can be used as a rough guide for estimating the health care resource requirements for implementing a CMS-type programme. Adjusting the Chinese data for Bangladesh income and prices, the premium level becomes Taka 10 to 15 per person per month. this premium will not allow appointment of a fully qualified physician at the village, ward or union levels. In fact, the premium level can pay only about Taka 1,500 to 2,500 per month for a village doctor, keeping aside 55% of total premium collected for drugs, supplies and diagnostic tests. The Chinese experience also implies that a well-functioning health system should allocate about 30 to 35% of total health care costs at the local level, below the upazila level for Bangladesh. This will ensure access to basic health care services for community members and will provide partial financial protection against costs incurred at secondary and tertiary levels of health care delivery infrastructure.

The problem of appropriators to maintain property rights over resource systems is generally considered secondary to the problem of developing institutions that can internalise externalities associated with resource systems. It is assumed that the appropriators maintain property rights over resource systems at zero or negligible costs. In some practical setups this sequence is often reverse – i.e., the appropriators find it increasingly difficult or costly to maintain their rights over resources. We provide such an example from inland fisheries of Bangladesh where the fishers have in general failed to establish property rights over water bodies despite being explicitly sponsored by the state. Property rights over water bodies are transferred to socially powerful agents coming from outside the fishing community. We relate power and enforcement costs to explain this transfer of rights.