Addressing Regional Inequality Issues in Bangladesh Public Expenditure

Traditionally development effort of Bangladesh government have aimed at achieving equitable economic growth. The concept is an overriding factor in formulating national policy strategies of poverty alleviation. In this context, the objectives of poverty alleviation are mostly designed with social development factors, particularly improvements in health and education indicators. One of the most important policy documents Unlocking the potential : National Strategy for Accelerated Poverty Reduction (the PRSP paper which was extended till June 2008), and other government documents embody such with great importance (Medium Term Budget Framework 2007- 2010 documents on website of the Ministry of Finance. Since returning to democracy in 1991, Bangladeshs economy has achieved a steady growth rate with concomitant fall of poverty incidences at an accelerated pace. In fact, the country experienced more than 10 percentage point fall in poverty rate between 2000 and 2005 (Table 1), which is indeed a commendable achievement aligned to other better performances that Bangladesh has been experiencing for the last three decades since independence. One feature of this development is, however, less assuring. Regional analysis of poverty incidences shows that reduction rate is not equal across the country, rather the situation is worsening in some cases. Such picture reflects an unequal progress in overall economic activity throughout the country.Bangladesh, Regional Inequality, public expenditure, Poverty Alleviation

Dynamics of market share in the microfinance industry in Bangladesh

We discuss evidence that the microcredit industry in Bangladesh has seen emergence of large variations in the size of the microfinance institutions operating in the market-- on the one hand, there are large national-level MFIs, while on the other hand, small localized MFIs operating only within the confines of a small area. Data from a recent survey of Pathrail union in Tangail district, a seasoned place for microcredit, reveals that within the local market competition is becoming more and more intense over time between established national-level MFIs and newly emerging local-level MFIs for market shares in terms of loan amount as well as borrowed members. Data reveals that there is market segmentation where some borrowers and MFIs opt for a package of low interest rates tied with low amount of loan disbursed and some other borrowers and MFIs settle for a package of high interest rates tied with high amount of loan disbursed. A Tobit regression estimation of member market shares in village micro credit market shows that size of the MFI, years of operation in the village, average loan size, deposit interest rates, loan amount disbursed for unique loan purposes (i.e., housing loan) are key determinants in determining MFI shares of a village microcredit market.Microcredit; Market Share; Product and Provider Characteristics of Microcredit

Location Decisions of Microfinance Institutions of Bangladesh

The microcredit programs have expanded rapidly in Bangladesh in recent times. A recent phenomenon is that a large number of small and localized micro-finance institutions are operating side by side with established national-level institutions in the local-level microfinance markets. Here we examine the recent data from the Pathrail union of the Tangail district, one of the old places of microcredit, and we find interesting features regarding entry and operations of microcredit activities. One clear finding is that large and small micro-finance institutions tend to choose economically more prospective locations as their choices of destinations and in turn do have a tendency to ignore economically less prospective regions. We specify a panel data probit regression framework and the results derived are consistent with our casual observations of the data

Addressing Regional Inequality Issues in Bangladesh Public Expenditure

The public expenditure allocation in Bangladesh has played a substantial role in improvements of physical infrastructure, health, education, community development, etc. during the recent decades. There have been allegations that inequality in the distribution of political power has often led to some extent to a disproportionate public spending, which in turn may hinder prospects of poverty reduction. The current study aims to examine the research question of whether regional inequality issues are properly addressed within the framework of the public expenditure allocation in Bangladesh during the recent years and if not, whether this has been influenced by some other considerations, which are mainly political by nature. We analyze a panel data set where the dependent variable is the (greater district) per capita ADP allocation within a sector and the independent variables are some explanatory variables, and a variable of interest measuring the proportion of the total number of constituencies within the greater district that belongs to the political party in power. In summary, the study provides evidence of some in-built regional inequality features within the public expenditure allocation in Bangladesh in association with the political favoritism issues involved in a supposedly parliamentary democratic system

Addressing Regional Inequality Issues in Bangladesh Public Expenditure

The public expenditure allocation in Bangladesh has played a substantial role in improvements of physical infrastructure, health, education, community development, etc. during the recent decades. There have been allegations that inequality in the distribution of political power has often led to some extent to a disproportionate public spending, which in turn may hinder prospects of poverty reduction. The current study aims to examine the research question of whether regional inequality issues are properly addressed within the framework of the public expenditure allocation in Bangladesh during the recent years and if not, whether this has been influenced by some other considerations, which are mainly political by nature. We analyze a panel data set where the dependent variable is the (greater district) per capita ADP allocation within a sector and the independent variables are some explanatory variables, and a variable of interest measuring the proportion of the total number of constituencies within the greater district that belongs to the political party in power. In summary, the study provides evidence of some in-built regional inequality features within the public expenditure allocation in Bangladesh in association with the political favoritism issues involved in a supposedly parliamentary democratic system

Addressing Regional Inequality Issues in Bangladesh Public Expenditure

The public expenditure allocation in Bangladesh has played a substantial role in improvements of physical infrastructure, health, education, community development, etc. during the recent decades. There have been allegations that inequality in the distribution of political power has often led to some extent to a disproportionate public spending, which in turn may hinder prospects of poverty reduction. The current study aims to examine the research question of whether regional inequality issues are properly addressed within the framework of the public expenditure allocation in Bangladesh during the recent years and if not, whether this has been influenced by some other considerations, which are mainly political by nature. We analyze a panel data set where the dependent variable is the (greater district) per capita ADP allocation within a sector and the independent variables are some explanatory variables, and a variable of interest measuring the proportion of the total number of constituencies within the greater district that belongs to the political party in power. In summary, the study provides evidence of some in-built regional inequality features within the public expenditure allocation in Bangladesh in association with the political favoritism issues involved in a supposedly parliamentary democratic system

Dynamics of market share in the microfinance industry in Bangladesh

We discuss evidence that the microcredit industry in Bangladesh has seen emergence of large variations in the size of the microfinance institutions operating in the market-- on the one hand, there are large national-level MFIs, while on the other hand, small localized MFIs operating only within the confines of a small area. Data from a recent survey of Pathrail union in Tangail district, a seasoned place for microcredit, reveals that within the local market competition is becoming more and more intense over time between established national-level MFIs and newly emerging local-level MFIs for market shares in terms of loan amount as well as borrowed members. Data reveals that there is market segmentation where some borrowers and MFIs opt for a package of low interest rates tied with low amount of loan disbursed and some other borrowers and MFIs settle for a package of high interest rates tied with high amount of loan disbursed. A Tobit regression estimation of member market shares in village micro credit market shows that size of the MFI, years of operation in the village, average loan size, deposit interest rates, loan amount disbursed for unique loan purposes (i.e., housing loan) are key determinants in determining MFI shares of a village microcredit market

Measuring market power in the United States beef and pork industries

The aim of my dissertation is to investigate the competitiveness of the beef and pork industries in the US. The level of concentration in the US meatpacking industry is considerably high and the increase in concentration in the packing industry since late 1970s has also occurred quite rapidly. The industry has also observed an increase in captive supply and vertical integration in the input market of this industry in the last fifteen years. These changes naturally trigger concern regarding possible assertion of market power at both wholesale meat and live animal levels of the industries by the meatpacking firms. Two separate studies were conducted with the aim to investigate the level of market power in the meat and live animal markets exerted by the meatpackers in the US. Both the studies followed New Empirical Industrial Organization (NEIO) modeling approach. The first study used time series estimation tools and applied a number of cointegration methodologies to estimate measures of market power in the meat and live animal markets. Part of the aim in this study was to avoid more complex structural estimation and instead conduct time series estimation to estimate market power. In the second study, the theoretical model was extended to allow for the estimation of spatially distinct conjectural elasticities in the live animal markets along with national level imperfect conduct in the meat markets. A spatial NEIO model was developed for empirical analysis at the regional level in the U.S. beef and pork industries. The time series estimation results, following Engel-Granger OLS (EGOLS), Fully Modified OLS (FMOLS) and Johansen Maximum Likelihood estimation methods, suggest that market power is exerted in both the output and input market by the meat packing industry. However, output market mark-ups are higher than the input markets. According to the regional study, no evidence of market power was found in any of the regional live animal markets in the US. However, in the wholesale meat market beef packers are estimated to exert about ten percent mark-up pricing; while pork packers assert a much higher level of about 43 percent mark-up pricing in the wholesale pork market

Addressing Regional Inequality Issues in Bangladesh Public Expenditure

The public expenditure allocation in Bangladesh has played a substantial role in improvements of physical infrastructure, health, education, community development, etc. during the recent decades. There have been allegations that inequality in the distribution of political power has often led to some extent to a disproportionate public spending, which in turn may hinder prospects of poverty reduction. The current study aims to examine the research question of whether regional inequality issues are properly addressed within the framework of the public expenditure allocation in Bangladesh during the recent years and if not, whether this has been influenced by some other considerations, which are mainly political by nature. We analyze a panel data set where the dependent variable is the (greater district) per capita ADP allocation within a sector and the independent variables are some explanatory variables, and a variable of interest measuring the proportion of the total number of constituencies within the greater district that belongs to the political party in power. In summary, the study provides evidence of some in-built regional inequality features within the public expenditure allocation in Bangladesh in association with the political favoritism issues involved in a supposedly parliamentary democratic system.Public Expenditure, Regional Inequality, Political Influence in Regional Distribution of Public Expenditure, Panel Data