This article considers the strategic transmission of information, though in a variety of ways, including not only costly signaling through actions to convey information, but also engaging in limited war as a means to learn about the opponent's strength. It provides a useful review of the mechanism design approach to the problem. The article implies that conflict and inefficiencies are to be expected whenever parties have optimistic prospects on the outcome of the all-out conflict. It also examines the recent literature that has challenged this view. These new contributions consider the existence of limited confrontations that allow bargaining to resume. In the presence of private information on the balance of strengths, that means that conflict can convey information and potentially become a bargaining instrument.
Pranab Mukhopadhyay and Priya Shyamsundar
This article looks at issues concerning environmental sustainability and economic growth in India using both micro- and macro-level evidence. The article highlights two environmental challenges of India's rapid growth: urbanization and forest cover change. With respect to urbanization, the article suggests that there is a role for economic instruments in reducing air pollution related to increasing urbanization. With respect to forest cover, it notes that whereas overall forest cover has marginally increased in India, in the bulk of forests, which are moderately dense, there is a decline. The article then asks if it is reasonable to expect forest dependence to decrease as India grows and rural wealth increases. From a broader perspective, it argues that there exist crucial environmental thresholds to India's growth strategy. The article ends with a discussion about governance issues surrounding Indian environment policy to make growth more environmentally sustainable.
Sandeep Baliga and Tomas Sjöström
What prevents the interested parties from revealing the private information they have to avoid suboptimal outcomes? Due to the conflictual relation between the parties, each has an incentive to lie and deceive the other; this incentive, in turn, calls into question the credibility of communication between the two. This article focuses primarily on the strategic transmission of information. It uses a two-by-two game with strategic complementarities to illustrate how the costless, though imprecise, transmission of information can be used to deceive, or possibly enlighten, and induce either peace or conflict.
This article provides an analytical discussion of the sources of the 1991 BOP crisis and the trade and exchange rate reforms that followed thereafter. The BOP crisis offers a natural experiment to study policy complementarities in the Indian context. This article hopes to encourage more formal modern macrowork in this area. The article argues that exchange controls (along with the pegged regime), implemented partly through import quotas, lead to a black market for foreign exchange and encouraged underinvoicing of exports, thereby, aggravating the BOP crisis. It discusses what exchange rate reforms were intended to come out of the crisis, and to what extent these have been effective in lowering the black market premium on foreign exchange and improving India's trade balance.
Despite increased academic and media interest in the continent and the intensity of the sociopolitical and administrative changes that have occurred in the past twenty-five years, analyses published in the press and by scholars are generally incomplete. Beyond the traditional dispute between “universalists” (theorists of a general model of liberal democracy to which all countries are expected to conform) and “relativists” (advocates of the sovereignty of individual cultural identities), the real problem lies in the inability of social scientists to develop a comparative method that is at once valid and acceptable to all. Rejecting the purely normative approach to political ethics that dominates the debate on democracy, this chapter uses an economic approach to advance a comparative theory of the notion of political well-being. It proposes a measurement index whose different components take into account both the viewpoint of universalists on human rights and the perspective of relativists on political utility.
This chapter examines the debates over the measurement of economic progress in African countries in the twentieth century, paying particular attention to national accounting and the measurement of gross domestic product per capita and economic growth. It considers how African economic progress has been measured from colonial times to the pioneering national account initiatives in the 1950s, economic liberalization and the “discovery” of the informal sector in the 1970s, and the adoption of evidence-based policy on social indicators in the twentieth century. It also discusses Africa’s focus on poverty reduction and the millennium development goals that required a change in focus in development and in the data needs for measuring progress.
This chapter examines the structural vulnerability of Africa’s economy and the methodological issues involved in measuring it. It begins by proposing a conceptual framework for measuring economic structural vulnerability that distinguishes it from general vulnerability, from physical vulnerability to climate change, and from state fragility. It then considers the main features and evolution of structural economic vulnerability in Africa using an economic vulnerability index. It suggests that structural economic vulnerability is higher in the continent than in other developing economies, reinforced by physical vulnerability to climate change. In addition, Africa has the highest proportion of fragile states among all continents. Finally, the chapter indicates that structural vulnerability, if adequately measured, may be useful as a criterion for the international allocation of official development assistance and of concessional resources.
This article provides a summary of the state of primary and secondary education in India. It notes the achievements of the sector: increased enrollment, particularly in the primary stage, and a narrowing of many traditional gaps. The supply-side impetus to schooling—which occurred through a host of programs, from independence up the 1990s, and thereafter consolidated through the Sarva Shiksha Abhiyan in 2002—has led to significant increase in access to schools throughout India. Indeed, one finding in the literature is that the probability of a school being located within a given distance of a child's habitation of residence does increase enrollment. However, school location policy also affects other characteristics of schools that are known to have important effects on learning. For instance, small school size, which tends to be the norm in India because of sparsely distributed and low populated habitations, means that the total numbers of teachers per school are small.
This article develops a three-sector general equilibrium model to account for India's unique pattern of structural transformation. Although this article also documents the rise of India's service sector, it constructs a theoretical growth model to understand India's pattern of growth vis-à-vis other Organization for Economic Cooperation and Development (OECD) and emerging economies to highlight what is sui generis about the Indian case. The preeminence of services in recent years meant that there has been a shift from agriculture to services, bypassing industry. Further, changes in GDP structure in India are asymmetrical to the workforce (employment in agriculture continues to persist at 58% of the population). The article's model shows that sector-specific total factor productivity (TFP) growth rates were important drivers of resource reallocation across the three principal sectors of Indian economy from 1970 to 2007.