Below is given the Table of Contents of the
Issues listed above:
Volume 56 Number 1 April-June, 2008
ARTICLES
/ 1
Education, Skill Formation and
India's Economic Development B.B. Bhattacharya
In the recent years there is a
significant acceleration in economic
growth rate in India. The
acceleration is sharper in services
than in manufacturing. A dis-aggregated
analysis suggests that higher
education in general and skill
formation in particular has given
India a competitive edge in
services. Unfortunately, however,
investment in higher education has
slackened over the last couple of
decades. With growing demand for
highly skilled work force in both
India and abroad the supply of
highly skilled work force in India
is now failing to keep pace with
demand. As a result there is a
danger of India losing its
international competitiveness in
skill induced economic growth. The
only way to prevent the law of
diminishing marginal return is to
drastically augment investment in
higher education.
B.B. Bhattacharya, Vice-Chancellor,
Jawaharlal Nehru University, New
Delhi. Email:
bbb@mail.jnu.ac.in
ARTICLES
/ 2
Visible Hand: Public Policy and
Economic
Growth in the Nehru Era Pulapre Balakrishnan
Conventional wisdom today reportedly
views the policies of early
independent India as having been
"disastrous" for its economy. To
address the belief, this article
investigates the relationship
between economic policy and growth
in India during 1950-1964, termed
here "the Nehru era". While there
exist valuable early appraisals,
access to new data and accrual of
fresh information allow for a longer
and comparative view of India's
growth performance then. We find
overwhelming evidence not only of a
resurgent growth but also of the
lasting transformation of a stagnant
colonial enclave into an economy
with firmer foundations capable of
sustained growth. The record of this
growth, its nature and significance,
and the factors that governed it
form the contents of this paper.
Every individual is " led by an
invisible hand to promote an end
which was no part of his intention.
By pursuing his own interest he
frequently promotes that of the
society more effectually than when
he really intends to promote it."
Adam Smith: An Inquiry into the
Wealth of Nations, 1776.
Pulapre Balakrishnan, Senior Fellow,
Nehru Memorial Museum and Library
and Honorary Visiting Professor,
Centre for Development Studies,
Thiruvananthapuram. Email:
pbkrishnan@yahoo.com
ARTICLES / 3
Economics of Arms Reduction and
Peace Dividend
A Survey K. Krishnamurty and Samik Shome
Arms reduction or disarmament
fosters a peaceful environment. This
may be regarded as a peace dividend,
a public good contributing to
quality of life. However, from an
economist's point of view, the peace
dividend is the additional output of
civilian goods and services
generated by reallocation of
resources from military to civilian
uses consequent to disarmament. This
opens up opportunities to strengthen
human capital, enhance physical
infrastructure, promote civilian
research and development, and extend
help to needy nations. The
availability of resources released
by arms reduction is constrained,
redeployment is neither costless nor
frictionless and benefits are
realised after some passage of time.
Therefore, disarmament can be viewed
as an investment process. The net
gain to the economy can be
considered as social rate of return.
The
role of public policy is to help to
maximise this rate of return. This
essay attempts to present an
overview of the analytical and
empirical literature on economics of
peace dividend which is fast
growing, wide and complex.
K. Krishnamurty, Honorary Professor,
Administrative Staff College of
India, Hyderabad. Email:
kk@asci.org.in
Samik Shome, Senior Research Fellow,
Administrative Staff College of
India, Hyderabad. Email:
sameek_ind@yahoo.com
ARTICLES
/ 4
Sraffa's Critique of Marshall and
the
Monopolistic Competition Revolution
Lefteris Tsoulfidis
Sraffa's (1925, 1926 and 1930)
critique of Marshall focused on the
foundations of the
neoclassical theory of value and
revealed the inconsistencies of the
Marshallian theory of the firm. The
revolution of monopolistic
competition that followed had as an
unintentional effect-the emergence
of the theory of industrial
organisation, as a new area of
economic research of market forms.
This in combination with the
antimonopoly sentiments in the
decade of 1930s and the search for
the theoretical justification for
government intervention in the
markets led to the return of the
notion of perfect competition and
the suppression of the theory of
monopolistic competition for many
decades.
Lefteris Tsoulfidis, Associate
Professor, Department of Economics,
University of Macedonia, Greece.
E-mail:
lnt@uom.gr
ARTICLES
/ 6
Disappointment as an
Evolutionary Force Tassos Patokos
An alternative, less abstract
approach to standard evolutionary
game theory is proposed; it is
assumed that evolutionary forces do
not necessarily favour expected
utility maximising strategies per
se, but instead, that agents choose
their strategies so as to eschew
disappointment they possibly
experienced in past rounds. The
equivalence of these two postulates
is contingent on the behavioral
assumptions one makes on the
individuals of the population under
study. It is shown that the
disappointment dynamics may be
implemented with a multitude of
ways, which, generally, do not
generate convergent results. This
fact suggests that populations may
be regarded as heterogeneous with
regards to how individuals react to
disappointing outcomes.
Tassos Patokos (DPhil), UADPhilEcon,
University of Athens, Athens,
Greece. Email:
apatokos@econ.uoa.gr
COMMUNICATION
FOR DEBATE & RESEARCH / 1
Fund Size and its Impact on Fund
Returns
An Empirical Study of Indian Mutual
Funds* T.S. Somashekar
The Impact of growing fund size on
the performance of actively managed
funds is sought to be studied
choosing a sample of diversified
equity funds and controlling for
various fund characteristics. It is
found that the beta adjusted fund
performance actually improves with
size. But on further decomposition
of fund performance into bear and
bull phases, it is found that both
beta and market adjusted returns are
negatively correlated with fund size
in bear phases showing that larger
funds find it more difficult to be
nimble footed in falling markets.
Their better performance in bullish
markets help them to show overall
better results with increase in
size.
T.S. Somashekar, Assistant
professor, National Law School of
India University, Nagarbhavi.
Bangalore: 560 072, Karnataka,
India. E-mail:
somashekhar@nls.ac.in
COMMUNICATION FOR DEBATE AND
RESEARCH / 2
Social Security Reform Imperatives
in Developing Asia Mukul G. Asher
The main objective of this paper is
to discuss broad imperatives for
effective social security reform in
developing Asia. The current
demographic trends strongly suggest
that Asia will become old before it
becomes rich. It is Asia's response
to managing rapid ageing of its
population that will determine how
the world copes with this challenge.
This paper argues that the objective
function of social security for the
individual and for the country is
multi- dimensional and complex,
involving difficult technical and
political trade-offs.
In addition, issues involved in
transitioning from the current to
the reformed system are also
politically difficult. Nevertheless,
constructing and sustaining adequate
social security and social safety
net systems are essential for
managing the challenges of the 21st
century. In the social security
reform literature, no single model
or framework has emerged.
Nevertheless, the World Bank's five-
tier framework may be useful for
thinking about social security
reform in developing Asia.
This paper suggests that for
effective social security reforms in
Asia, greater attention should be
paid to professionalism, a systemic
perspective, transition issues,
financial education, pension
regulation, and indigenous research
capability. Each country however
must develop its own strategy for
reform which takes into account
initial conditions, economic,
financial, and fiscal capacities,
and political economy. Finally, this
paper suggests establishing an Asian
forum for dialogue on social
security issues and experiences.
Mukul G. Asher, Professor of Public
Policy, National University of
Singapore, E-mail:
sppasher@nus.edu.sg
COMMUNICATION FOR DEBATE AND
RESEARCH / 3
An Assessment of the Productivity
Behaviour
during the Pre- and Post-liberalisation
Era
A Case of Indian Fertiliser Industry Seema Sharma and V. Upadhyay
This paper seeks to analyse the
productivity performance of the
Indian fertiliser industry during
the pre-liberalisation (1973-1991)
and post-liberalisation period
(1992-2005). Using the growth
accounting approach, Divisia
Tornquist approximation has been
used to derive the total factor
productivity growth estimates for
the period 1973-74 to 2004-05.
Results show that during both the
sub-periods, the industry has
experienced positive productivity
growth. Further analysis reveals
that in the pre-liberalisation
period, partial productivities of
labour, capital, material and energy
have shown a rising trend. For the
post-liberalisation period, results
indicate that partial productivities
of labour and capital have shown an
increasing trend whereas those of
material and energy have exhibited a
declining trend. Our results on
total factor productivity for the
second sub-period seem to be
dominated by capital and labour
productivity growth.
Seema Sharma, Assistant Professor,
Department of Management Studies,
Indian Institute of Technology, New
Delhi-110 016, India. email: seemash@dms.iitd.ac.in
V. Upadhyay, Professor, Department
of Humanities and Social Sciences,
Indian Institute of Technology, New
Delhi-110 016, India. email:
upadhyay@hss.iitd.ac.in
REVIEW
ARTICLE / 1
Indian Agriculture since
Independence
(G.S. Bhalla. 2007. Rs. 350.
New Delhi: National Book Trust
India)
Reviewed
by R.S. Deshpande,
Professor
Institute for Social and Economic
Change, Bangalore.
REVIEW
ARTICLE / 2
Growth, Poverty and Equity
(Ruddar Dutt. 2008. Rs. 980.
New Delhi: Deep & Deep Publications
Pvt. Ltd.)
Reviewed
by G.S. Bhalla
Professor Emeritus,
Centre for the Study of Regional
Development, School of Social
Sciences,
Jawaharlal Nehru University. New
Delhi.
