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BDS Current Issue Volume XXXVI June 2013 Number 2

Development Without Aid: The Decline of Development Aid and the Rise of the Diaspora

Author: David A. Phillips Mustafa K. Mujeri

Income Terms of Trade and Trade Balance: The Long Run Evidence from Bangladesh


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The paper uses the autoregressive distributed lag approach to cointegration to test the Harberger-Laursen-Metzler (HLM) effect in the context of Bangladesh. The HLM effect predicts that a rise in the terms of trade from an exogenous shock to a small open economy will lead to an improvement in the country’s trade balance. The study findings confirm the existence of a long run relationship in the case of Bangladesh. The Granger test suggests unidirectional causality from income terms of trade to trade balance. The results are found consistent with the theoretical predictions.

Poverty Dynamics: A Perception Study of Tenants and Agricultural Labourers in Bangladesh


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The study analyses poverty dynamics of the poor comprising of the tenants and agricultural labourers in rural Bangladesh. The study uses BIDS survey data of 64 villages in 2005 and estimates self-assessed poverty trend which demonstrates some deterioration of poverty situation over the last ten years. This deterioration has been observed to be more acute for the tenants and agricultural labourers in the rural areas. The paper also indicates some measures for improving the poverty conditions of the poor peasants in Bangladesh.

Do Sharecroppers Undersupply Effort? Evidence from a Farm Level Survey in Assam Plains


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Using farm level data from Assam plains in Northeast India generated through a primary survey, this paper revisits the debate dating back to Alfred Marshall which centers on the question whether the sharecroppers undersupply effort in crop production as reflected in their input intensities. Our investigation, however, did not result in a categorical answer to the research question. It has been found that while the sharecroppers undersupply labour input conforming the Marshallian inefficiency hypothesis, tenancy or any of its forms does not have any significant impact on capital intensity. On the other hand, in the case of fertiliser consumption it has been found that the fixed rent tenants tend to apply chemical fertilisers more intensively than even the owner operators. This was not reported in the existing literature which has an adverse implication for the sustainable use of land. The tendency among the fixed rent tenants to apply more chemical fertilisers is outcomes of certain restrictive provisions in the existing tenancy law in the state. Accordingly, the paper suggests reforms in the existing tenancy law in order to overcome these problems and ensure efficient utilisation of land resources. 

The Pattern and Determinants of Poverty in Rural Bangladesh: 2000-2010

Author: S. R. Osmani& Muhammad Abdul Latif

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Three aspects of rural poverty in Bangladesh have been examined in this paper: (i) trend of poverty over the decade of the 2000s, (ii) evolving pattern of poverty among different population groups over the same decade, and (iii) identification of the major determinants of poverty in rural Bangladesh. For the first two exercises, data from the Household Income and Expenditure Survey (HIES) 2000 of the Bangladesh Bureau of Statistics were compared with data from a large-scale survey of rural poverty carried out in 2010 by the Institute of Microfinance in Dhaka. The third exercise was based solely on the 2010 survey. The major findings of the paper may be summarised as follows. First, rural poverty has declined at an accelerated pace over the decade of the 2000s, which is consistent with the observed rapid growth of the economy as a whole combined with a stable distribution of consumption expenditure. Second, poverty reduction has been a broad-based phenomenon. This is evident partly from the fact that, not just overall poverty, extreme poverty has also declined sharply in this period. Furthermore, when the population is classified according to various characteristics such as land ownership, educational status, occupation, etc., it is found that poverty has declined within each stratum, signifying broad-based poverty reduction. Third, despite the generally broad-based nature of poverty reduction, the rate of decline was not equal for everyone; some groups have fared slightly better than others—for example, the self-employed people as well as non-farm wage labourers have done better than agricultural wage labourers, who have experienced the smallest decline in poverty among all occupational groups and still remains the poorest group of all. Finally, an econometric analysis of the determinants of poverty helped identify a number of factors that can make significant contribution to poverty reduction, namely access to assets (both land and non-land assets), greater availability of working members within the household, education, access to non-farm employment opportunities, access to microcredit and foreign remittance, and greater connectivity, all of which have straightforward policy implications.

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