Perverse consequences of well-intentioned regulation: Evidence from India’s child-labour ban
Prashant Bharadwaj, Leah Lakdawala, Nicholas Li, 5 December 2013
The most popular regulation against child labour is a ban against it. This column presents evidence from such a ban in India. Not only did the ban not reduce child labour, but it even increased it. The effects are concentrated among the poorest families. Therefore, policy reforms other than bans could be more effective in reducing child labour, and in improving the lives of children.
Despite decades of near universal opposition to it, child labour is endemic. According to a recent report by the International Labour Organization, there are nearly 168 million child labourers, of whom 85 million work under hazardous conditions (ILO 2013).
There are many policy options to readdress this. Bans and regulations against child labour are among the most popular worldwide.
Tags: child labour, India
The BRICs party is over
Anders Åslund, 4 September 2013
Emerging markets are under pressure. This column argues that this is not a mere headwind but that the BRICs’ party is over. Their ability to get going again rests on their ability to carry through reforms in grim times for which they lacked the courage in a boom.
After a decade of infatuation, investors have suddenly turned their backs on emerging markets. In the BRIC countries – Brazil, Russia, India and China – growth rates have quickly fallen and current-account balances have deteriorated.1 The surprise is not that the romance is over but that it could have lasted for so long.
Topics: Development, International trade
Tags: Brazil, BRIC, BRICs, China, commodities, India, protectionism, Russia
India and the Emerging Market crisis
Marco Annunziata, 1 September 2013
India, like other emerging markets, is having a tough summer. This column argues that India needs to step up reforms and critical infrastructure investment to reboot growth. Its economic health – and that of other emerging markets – is not as dire as headlines suggest. The alarm and pessimism surrounding emerging markets appears to have run well ahead of any deterioration in fundamentals.
India has come under siege this summer. The rupee has depreciated sharply since late July, and foreign exchange reserves dropped significantly. The pressure has been triggered by market concerns on the Fed’s intention to ‘taper’ its quantitative easing, against the background of a growth slowdown in China.
Topics: Development, International finance
Finance and Poverty: Evidence from India
Meghana Ayyagari, Thorsten Beck, Mohammad Hoseini, 2 June 2013
Using state-level data from India over the period 1983 to 2005, this paper gauges the effect of financial deepening and outreach on rural poverty. Its findings suggest that financial deepening contributed to poverty alleviation in rural areas by fostering entrepreneurship and inducing geographic-sectoral migration.
Vox readers can download CEPR Discussion Paper 9124 for free here.
Journalists are entitled to free DP downloads on request; please contact firstname.lastname@example.org. To learn more about subscribing to CEPR's Discussion Paper Series, please visit the CEPR website.
Topics: Development, Financial markets, Migration, Poverty and income inequality
Tags: entrepreneurship, India, poverty alleviation
Migrating out of poverty: The role of finance
Meghana Ayyagari, Thorsten Beck, Mohammad Hoseini, 23 June 2013
Financial liberalisation has been controversial among academics and policymakers as it is not clear whom the benefits of expanded credit allocation accrue to. Using time and state-level variation across Indian states, this column finds strong evidence that financial deepening reduces rural poverty, especially among the self-employed. Financial deepening is also found to be associated with an inter-state migration trend from rural areas into the tertiary sector in urban areas.
For better or worse, the 2008 financial crisis has put the financial sector again at the centre of public debate. Several commentators have suggested that financial liberalisation contributed both to the financial crisis and to growing income inequality (e.g.
Topics: International finance
Tags: financial development, India
Finance and growth in China and India: Have firms benefited from the capital-market expansion?
Tatiana Didier, Sergio Schmukler, 6 May 2013
The growth of China and India’s financial sectors is hard to ignore. This column presents a new dataset on domestic and international capital raising activity and performance of the publicly listed firms in China and India. The data suggest that expanding capital markets might tend to directly benefit the largest firms – those able to reach some minimum threshold size for issuance. More widespread direct and indirect effects are more difficult to elucidate.
China and India are hard to ignore. Over the past 20 years they have risen as global economic powers, at a very fast pace. By 2012, China has become the second-largest world economy (based on nominal GDP) and India the tenth. Together, they account for about 36% of world population.
Topics: International finance
Tags: China, India
The need for a second round of ‘look east’ policies in south Asia
Pradumna B. Rana, Chia Wai Mun, 1 April 2013
The global economy was once dominated by north-north relations, with some limited concern for north-south relations. This column argues that south-south economic relations now matter and explains what new ‘look east’ policies that are being implemented in south Asia mean for the global south and the global economy.
The global economy was traditionally dominated by north-north relations with some concern for north-south relations. South-south economic relations were, until recently, of minor import.
Topics: Development, Global economy
Tags: East Asia, India, look east
What explains gender differences in India? What can be done to promote shared prosperity?
Ejaz Ghani, William Kerr, Stephen D O'Connell, 22 February 2013
Although its economic development has been impressive, recent events have sparked debate about India’s gender inequality. This column argues that Indian women’s levels of entrepreneurship and participation in the labour force are some of the lowest in the world. India’s economic growth and shared prosperity depends upon successfully utilising both its male and female workforce, and improving this balance is an important step towards sharing the benefits of India’s growth. Economically and socially, gender equality should be a no-brainer for policymakers.
Despite rapid economic growth during the last two decades, gender disparities remain deep and persistent in India (e.g. Duflo 2012, World Bank 2012). The UN Gender Inequality Index ranks India below several sub-Saharan African countries, and the World Economic Forum ranks India 113 out of 135 countries in its Global Gender Gap Report (Hausmann, Tyson and Zahidi 2011).
Topics: Development, Gender
Tags: Business, entrepreneurship, gender, India
Highway to success in India
Ejaz Ghani, Arti Grover Goswami, William Kerr, 5 February 2013
Investment in transport plays an important role in a country’s economic development. This column assesses Indian industries that are moving out of the congested big cities in search of cheaper land and buildings, facilitated by major highways. The Golden Quadrilateral highway project -- a huge, country-wide highway building project connecting four major Indian cities -- significantly influences the success of industries’ exodus from the big cities. It is clear that although highway investments are expensive, the costs of not investing may be too high.
Transport investments within cities and across cities are essential for economic growth, job creation, and poverty reduction. Beyond simply facilitating cheaper and more efficient movements of goods, people, and ideas within cities, transport affects the distribution of economic activity across cities.
Tags: Golden Quadrilateral, highways, India, infrastructure, roads
Did the Indian capital controls work as a tool of macroeconomic policy?
Ila Patnaik, Ajay Shah, 20 November 2012
Can we agree that capital controls are an effective tool for macroeconomic policy? If so, should they be permanent or temporary? This column argues that under a permanent system of capital controls, a country will always bear costs whether there is a surge or capital flight or not. Looking at the Indian experience, it’s clear that capital controls do not necessarily help a government meet its macroeconomic goals in times of need.
The empirical literature on the effectiveness of capital controls for macroeconomic management has generally found that transitory capital controls have a relatively limited impact on the magnitude of flows (Magud et. al. 2011). Controls appear to influence the composition of capital flows, but they seem to do so only for a short time.
Topics: Macroeconomic policy
Tags: capital controls, capital flows, India, macroeconomic policy