Indira Gandhi Institute of Development Research

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    308 research outputs found

    Does autonomy matter in state owned enterprises? Evidence from performance contracts in India

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    The empirical effect of enterprise autonomy on the performance of state-owned enterprises is surprisingly scant despite autonomy being a preferred reform instrument in many countries, and often chosen over privatization. Using longitudinal data on performance contracts for state-owned enterprises in India, this paper empirically examines whether granting increased autonomy to state-owned enterprises through such contracts positively impacts enterprise profitability. Further, using the unique reform experience of India as a natural experiment, whereby enterprise autonomy has been simultaneously pursued with partial privatization for a sub-set of enterprises, a unique contribution of the study lies in investigating whether ownership divestiture through partial privatization has any effect once enterprises are imparted managerial autonomy, or whether ownership per se matters. Classifying state owned enterprises into three types, namely those that have been granted autonomy, those with autonomy and partially divested ownership, and those with neither, the study finds robust evidence of a positive impact of managerial autonomy on enterprise profitability. Additionally, once autonomy is controlled for, the study finds at best a weak effect of partial privatization. These results raise doubt on earlier findings of a robust positive effect of partial privatization in India in studies that did not explicitly control for enterprise autonomy thereby raising the possibility that the positive privatization effect that showed up was in actuality, an autonomy effect

    The Imprecision of volatility indexes

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    Concerns about sampling noise arise when a VIX estimator is computed by aggregating several imprecise implied volatility estimates. We propose a bootstrap strategy to measure the imprecision of a model based VIX estimator. We find that the imprecision of VIX is economically significant. We propose a model selection strategy,where alternative statistical estimators of VIX are evaluated based on this imprecision

    The Political economy of MGNREGS spending in Andhra Pradesh

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    Are ostensibly demand-driven public programs less susceptible to political clientelism even when private goods are allocated? We investigate this conjecture using expenditure data at the local level from India's National Rural Employment Guarantee Scheme. By focusing on one state where accountability and transparency mechanisms have been employed and implementation efforts have been applauded, we do not find evidence of blatant vote buying before the 2009 election but do find that patronage played a small part in fund distribution after the 2009 election. Indeed most variation in expenditures is explained by the observed needs of potential beneficiaries, as the scheme intended

    Small farmers in India: Challenges and opportunities

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    This paper examines the roles and challenges of small holding agriculture in India. It covers trends in agricultural growth, cultivation patterns, participation of small holding agriculture, productivity performance of small holders, linking small holders with markets including value chains, role of small holders in enhancing food security and employment generation, differential policies and institutional support for small holders and, challenges and future options for small holding agriculture including information needs. It also provides lessons from the experience of India on small holding agriculture for other countries

    Impediments to contract enforcement in day labour markets: A Perspective from India

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    In developing countries, lack of formal contract enforcement mechanisms is compensated by informal or relational governance enforced through trust, kinship, reputation, etc. This paper focuses on one such setting in India's urban informal economy: the 'day labour' market for casual labour. We survey seven such markets in Navi Mumbai (a city on the outskirts of Mumbai), and find considerable incidence of contract enforcement problems in the form of employers reneging on wage payments to labourers. We find that payments to labourers with access to social networks and a record of work done are less likely to be reneged. Further, consistent with the literature on the limits of relation-based contract enforcement, we find that labourers in large markets, with greater linguistic and caste-based diversity, are more likely to be reneged. We argue that interventions aimed at facilitating access to formal mechanisms might help overcome some of the limitations with relation-based enforcement

    Do futures markets help in price discovery and risk management for commodities in India?

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    In 2003, trading of commodity futures shifted from single commodity, regional exchanges to national exchanges that trade multiple commodities. This paper examines price discovery and hedging effectiveness of commodity futures after this change and concludes that,on average, futures prices do discover information relatively efficiently,but helps to manage risk less efficiently. The paper uses the viewpoint of the hedger to conjecture what factors may improve hedging effectiveness. These include high settlement costs caused by few and widely dispersed delivery centers and an unreliability of warehouse receipts,a mismatch between the grade specified in the futures contract and what is available for delivery in the market, and disruptions caused by various policy interventions in both commodities spot and futures markets

    Spatial convergence and growth in Indian agriculture: 1967-2010

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    Inter-state diversity has been a perennial feature of Indian agriculture. The study probes if per capita income in Indian agriculture has converged across states in the last four and a half decades. It finds strong evidence in favour of beta convergence but not in favour of sigma convergence. Spatial econometric techniques used in the study aid in identifying the impact of spatial neighbours on the growth of a state. Results indicate significant spatial dependence among states. The study also identifies the drivers of growth agriculture in the last four and a half decades and results indicate that infrastructure like roads, irrigation, electricity aid in growth and so do quality of human capital. Hence, investments targeting higher quality of infrastructure, both physical and human and efficient water management will aid in agricultural growth in India

    Inequality, neighbourhoods and variation in prices

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    In this study we examine the link between of income distribution and wholesale price of wheat using panel data. We have weekly time series data on prices for wheat for 3 districts in Uttar-Pradesh in India obtained from the Department of Economics and Statistics of the Ministry of Agriculture, Government of India (DES-MOA, GOI) for the period 2006-2011. Gini coefficient is calculated on the basis of consumption expenditure collected by National Sample Survey Organisation of India. We find that there is inverted-U shape relation between inequality and level of price for wheat: if we compare a cross-section of societies over the period of time, then price of food grain initially increases with increase in inequality but after a point it starts declining

    On the spatial concentration of employment in India

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    This paper seeks to understand what kind of economic activities are concentrated in which regions of India. Spatial concentration of jobs is measured by calculating the location quotient using information on the industry of work of the individuals in a region. The paper uses data from NSSO 2011-12 survey of employment and unemployment

    Student politics: A Game-theoretic exploration

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    Students in institutes of higher education often engage in campus-politics. Typically there are student-parties who electorally compete with each other to gain control of the union which is usually the apex student body dealing directly with the higher authorities on student-related and other academic issues. Often however, campus politics act as fertile breeding grounds for future politicians of the country. As a result there is often direct intervention by larger political parties into student affairs. In fact, the student parties on campus are essentially student wings of larger national parties, which command huge amounts of resources that are used during elections, often instigating conflict and violence on-campus. This paper game-theoretically models the interplay of such `extra-electoral' investments and electoral outcomes in an otherwise standard probabilistic voting model. We find that the political party who is likely to be more popular is also more likely to expend greater resources towards `extra-electoral' elements, in turn spawning greater violence on-campus, even when such investments are disliked by student-voters. We also look at some plausible extensions of the benchmark model where this basic conclusion still holds true. The essential flavor and predictions of the model are borne out by several historical and contemporary instances of student politics in some countries like India, Burma, and Latin America

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