Economic Growth and Protection of Life, Property and Contracts by Dr. Shabib Haider Syed, Forman Christian College (A Chartered University), Lahore
Economic Growth and Protection ofLife, Property and Contract.Shabib Haider SyedZahid IqbalLuqman SaeedRabia Saeed
Problem StatementPakistan faces two major challenges, how to establish and sustain democracy and how to stimulate and sustained growth? These two issues can be bridged through the quality of its institutions. The quality of institutions not only ensures the sustainability of democracy but also determines its long run economic growth. The adverse institutional structure hinders sustained growth.
ObjectivesCompilation, construction and analysis of time series data on terrorism, crime and suicide.To estimate the impact of terrorism, crime and suicide on economic performance.
Objectives AchievedLiterature Review Institutions, Terrorism, Crime and Suicide.Data
Literature ReviewStudy Objectives Data Main findingsDe Long and Schleifer Impact on Institutions on City expansion 1050-1800 Positive Impact of Non Absolutist governments(1993) Medieval EuropeKnack and Keefer Institutions 1974-89, 97 countries, Positive Impact of Institutions(1995) ICRG, BERI, GastilAlesina et al (1996) Political Instability 113, 1950-82 Negative impact of government collapse on Propensity of Government collapse DevelopmentKnack and Keefer Institutions, ICRG, BERI Positive Impact(1998) ConvergenceAcemoglu and Relative importance of Country risk services, Polity IV Property rights have stronger impact.Ronbinson (2003) property and contarct rightsGerring et al (2005) Impact of democracy on Polity 2, Polity IV Positive impact of democracy on development development
Literature ReivewEnders and Sandler (1996) Impact of terrorism on FDII, 13.5, 11.9 percent decrease Spain and Greece in Spain and GreeceAbadie & Gardaezabal(2003) Economic impact of terrorism on 1968-2000 -10 % PCI, Basque regionBloomberg, Hess & Orphanides Macro-economic consequences of Panel data T –PCI(2004) terrorism 177 countries G crowds in, I crowds out. 1968-2000Barth et al (2006) Impact of terrorism on growth and T – growth and capital capital formationCrain and Crain (2006) Economic impact of terrorism Panel data Unanticipated level of incidents 147 countries most significant. 1968-2002Abadie and Gardeazabal (2007) Terrorism Impact on FDI - Impact on FDIGaibulleov and Sandler (2006) Economic Impact of terrorism in Panel Data -Growth. South Asia. 42 Countries 1970-2004 GTD significant predictor of investment.Gaibulleov(2010) Economic impact of terrorism 1970-2007 No significant relationTayab et al (2011) Impact of terrorism on financial Time Series- Primary data KSE index affected significantly markets of Pakistan for terrorism. 2006-08
Literature ReviewLondono and Guerrero (2000) Direct cost of violence 7 percent of GDP in VenezuelaBuvinic and Morrison (2000) Cost of Violence in Latin Health, 0.3 to 5 percent of GDP, America Policing, 2 to 9 % of GDPAnderson (2009) Cost of crime in US Per capita crime burden US $ 4118.42Loureiro and Delfino Silve (2010) Cost of Violence - Investment and growthRincke (2010) 5 incidents per 1000 pop, 0.5 percent reduction In earnings.Detotto and Otranto (2010) Impact of crime on Reduces growth by 0.0004 growth percent
DataTerrorism (GTD and SATP)Crime (Major categories)Suicide (Punjab and Sindh completed. Baluchistan and Khybar Pakhunkhwa completed since 2000)
Methodology α α1 α2 α3 α4 α5 Yt =At(K ,L ,Tar ,Sui ,Cri ,CIM ) t t t t t tLogYt =LogAt+α LogK t +α 1LogL t +α 2 LogTart +α 3LogSui t +α 4LogCri t +α 5 LogCIM t + µ t
Preliminary ResultsVariables CoefficientsC 1.196Log of Capital 0.224***Log of Labor 0.201*Log of Openness 0.056Log of Secondary School Enrollment 0.111**Log of Incidents -0.015***Log of Lagged Per capita income 0.390******, ** and * shows significance level of one, five and ten percent respectively.
ChallengesDue to unavailability of data prior to 2000, time series data of suicide is being constructed through newspapers. This is the first comprehensive data on suicide in Pakistan since 1980. Data cleaning and validation is taking time.
Way forwardData on Suicide (KPK and Baluchistan prior 2000)Estimation and Analysis