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BDS Volume XXXIX, Sept.-Dec. 2016, Number 3&4

Models of Microcredit Delivery and Social Norm

Author: S. R. Osmani

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Models of microcredit delivery have evolved considerably in Bangladesh since their inception in the mid-1970s. An important feature of this evolution is the gradual dilution of the disciplinary devices as well as incentive mechanisms that the MFIs used to employ in order to ensure regular repayment. An interesting conundrum of the current scenario is that despite the dilution of the erstwhile regime, repayment performance remains as strong as ever. This paper tries to investigate this conundrum, using borrowers’ own perception of the evolving system, solicited through specially designed household surveys. Our findings suggest that the repayment performance has remained high mainly as a result of the emergence of a social norm in which people have come to accept that loans are meant to be repaid. This is a complete reversal of the earlier perception that loans, especially government loans, did not have to be repaid because eventually such loans would be written off. It can be argued, however, that this metamorphosis of social norm is by no means serendipitous; rather it owes itself to the sustained use of the disciplinary as well as incentive devices employed by the MFIs over the years. It is precisely because of the sustained use of these devices over many years that poor people have gradually formed the habit of regular repayment; and once a sufficiently large number of people acquired this habit, the erstwhile social norm of non-repayment was quickly replaced by the norm of repayment. With the emergence of the new norm, many of the devices traditionally employed by the MFIs to ensure regular repayment are becoming increasingly redundant, having served their historical purpose.

Can Cheetah Beat Tiger? A Comparative Analysis of Chinese Industrial Competitiveness with Sub-Saharan African Countries

Author: Ehizuelen Michael Mitchell Omoruyi

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This paper examines Sub-Saharan Africa’s industrial competitiveness with China, by employing a statistical methodology for studying competitiveness based on relative unit labour costs. The patterns of bilateral trade between China and SSA, as well as investment and financial aspects of the relationships are examined. The findings show that SSA’s relative unit cost levels have generally been higher than that of China. However, in the 2000s, the levels dropped as China’s wages increased faster than its productivity, while the reverse is true for SSA countries in the study sample. The study shows that SSA countries are unlikely to be competitive in labour-intensive manufacturing because of high relative unit labour costs and weaknesses in their business climate.

Impacts of the Alternate Wetting and Drying Irrigation System on Modern Varieties of Paddy Production in Bangladesh: A Case Study of Jessore District

Author: Basanta Kumar Barmon

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This paper attempts to estimate the impacts of Alternate Wetting and Drying (AWD) irrigation system on modern varieties (MV) of paddy production in Bangladesh. This study was conducted using primary data. A total of 140 MV boro producers were randomly selected from Manoharpur village of Monirampur Upazila in the district of Jessore, of which 70 farmers used the advanced AWD irrigation technique and the remaining used traditional irrigation techniques in cultivating MV boro paddy. Information on inputs and output of MV boro paddy cultivation was collected through a structured questionnaire. The study findings indicate that AWD farmers used less chemical fertilisers (with the exception of TSP) such as urea, MP, Gypsum and Zinc compared to farmers using traditional irrigation. Moreover, the amount of chemical fertiliser used also varied significantly within the same farming system. The farmers used almost similar proportions of temporary hired and family (male and female) labour for MV boro paddy cultivation under both irrigation systems. However, per hectare yield of MV boro paddy, revenue and profit were significantly higher in farms that used the AWD irrigation technique. In addition, farmers using the AWD irrigation technique used excessive irrigation and urea per hectare compared to their traditional counterparts. AWD results in approximately 10 per cent increase in productivity. Another 4 per cent increase was due to differences in quantities of inputs used in the study area.  

Can Intermediate Water Storage Structures Mitigate Impact of Climate Variability? Some Evidence from Tank Command Areas in Southern India

Author: D. Suresh Kumar & R. Senthil Kumar

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This paper examines whether intermediate water storage structures (farm ponds) would be a better adaptation strategy in the light of climate variability in irrigation tank commands. The study was conducted in two tanks, Pramanur tank and Kovanur tank, in Sivagangai district of Tamil Nadu state, India. To assess the impacts of farm ponds as an adaptation strategy, a sample of 30 farmers in each tank, was selected using a simple random sampling procedure. To make a comparative analysis, an equal number of farmers who do not have access to farm ponds were also studied. Thus, a sample of 120 farmers was studied. It is found that farm ponds play a crucial role in supplementing tank irrigation and help the farmers in achieving better yields. The farm ponds are found to be effective, particularly when farms depend entirely on tank water. The net profit realised from the construction and use of farm ponds is Rs.5383/ha/year. Thus, we can conclude that farm ponds are effective in mitigating climate variability in water-scarce tank command regions. Technical support in water management and cultivation of crops, cropping pattern and crop allocation advice will help farmers better cope with climate variability. 

Relationship between FDI and Environment: Evidence from Emerging Countries

Author: Javed Bin Kamal, Abu N. M. Wahid & Khaled Bin Kamal

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This paper uses generalized method of moments (GMM) panel estimator, proposed by Arellano-Bond and Blundell-Bond, to examine the relationship between FDI and environment for the period of 2000-2010 for a sample of 16 emerging countries. The effect of financial development, institutional quality and macroeconomic policy related variables are controlled for from the macroeconomic literature. The OLS based regression results reveal that environmental quality is not significant in explaining FDI inflows in emerging countries. However, based on dynamic panel data analysis, environmental quality is significant in explaining FDI. Using a number of controls it is found that stock market capitalisation to GDP, gross saving to GDP, gross capital stock to GDP, market size , and economic freedom (institutional quality) exercised by the host countries are important determinants in FDI inflows. However, the influence of such determinants is mixed in direction and magnitude at different significance levels. Thus, climate change and its mitigation strategy and overall environment policy have important implications for attracting FDI in the countries in question. In addition, the results highlight the role of institutional quality and financial development in attracting FDI.
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