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Working Papers | 1997

A Comment on the Diamantaras - Thomson No-Envy concept

Lahiri Somdeb

This paper is really a technical remark on a paper by Diamantaras and Thomas (1990). In that paper, the no-envy concept due to Foley (1967) was refined to accommodate some kind of a radial no-envy comparison, inspired by Chaudhurai (1986). Simply put, each person compares his/her own consumption bundle with all possible radial expansions and contractions of every other person's consumption bundle. A Pareto Optimal allocation which is envy free against such a maximal expansion is the one selected by Diamantaras and Thomson (1990). Our framework differs from the Diamantaras and Thomson (1990) framework in that we consider only the pure exchange situation. Thus, since such technical issues with regard to existence of envy free allocation in the sense of Foley (1967) are somewhat secondary (though present) in our framework, we view this no-envy concept as a new equity criterion. In this framework, we prove the Diamantaras and Thomson (1990) result regarding the existence of an envy free allocation on a somewhat larger domain of preferences. We also feel that our existence proof is much simpler than the one due to the two authors, although it is difficult to say whether our proof would extend to the economies with production as studied by them.

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Working Papers | 1997

Revitalizing the State: 1. Models of the Modern State

Khandwalla P N

In this paper the complexity of the modern state is examined with reference to the pressures under which it operates, and the mechanisms it employs of differentiation and integration. The reasons for the very large increase in the size of the state in this century, both in the developed countries and in the developing countries, are examined, as also some differences in the patterns of growth of the state in these two sets of countries. The major forces shaping the state in the 20th century are briefly discussed, resulting in the evolution of four models of the state. These are: the democratic interventionist-welfare state, commonplace in many Western societies; the developmental state that evolved in the Soviet system, and spread with some modifications to many developing countries; the liberal, market-friendly state espoused by the World Bank which has found a footing in most developing countries that have taken structural adjustment loans from the World Bank and IMF; and the businesslike, managerial state promoted by Margaret Thatcher, Ronald Reagn and others. It is contended that innovations in any kind of state can, with suitable modifications, be adapted in any other kind of state, and that innovations in governance systems and adaptive borrowings are powerful keys to state excellence.

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Working Papers | 1997

Revitalizing the State 4. Reinventing the Democratic State

Khandwalla P N

1407 Although democracy evolved in the West, in this century it has been adopted by scores of developing societies, with several relapses to despotism and recoveries from it. The most common form of democracy is liberal democracy, with several distinguishing characteristics. However, there are several variants of liberal democracy. The more sustainable forms may be those that incorporate elements of associations, deliberative, and direct democracy. In poor countries, democracy may be sustainable if there is also reasonable macro-economic stability, welfare measures for the poor and the insecure, and effective strategy of rapid economic development whose fruits increasingly go to the poor and the under-privileged, and administrative effectiveness. Empirical research suggests that democratization, in conjunction with civil liberties and social empowerment though investment in education, health, etc. of the masses, enhances rather than inhibits economic growth. A number of mechanisms are available to make the democratic state and its organs more innovative and effective. These include innovations for fairer representation of the people in the legislature, for a more stable tenure of elected government, for improving the quality of people's representatives in the legislature, and for improving the competence and quality of political executives. It is argues that democracy has many advantages and some disadvantages also vis-à-vis competing forms of the state, but it can be made sustainable, and the emerging world values are more in consonance with it than with the other forms.

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Working Papers | 1997

Using CEA to Evaluate 29 Canadian Textile Companies-Considering Returns-to-Scale

Pankaj Chandra, Cooper William W, Li Shanling, and Rahman Atiqur

In this paper we analyse the performance of some Canadian textile firms by using Data Envelopment Analysis (DEA). Using DEA we develop efficiency scores, efficiency frontiers and returns-to-scale for three segments of the sector, i.e., spinning, weaving and dyeing. Finally we develop models to solve optimal expansion or vertical integration related problems for firms with increasing and decreasing returns respectively.

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Working Papers | 1997

Globalization Work and Management

Singh J P

Major changes are occurring in the sphere of work and management. While there is emergence of new time based and information based opportunities, some traditional office and business work opportunities are shrinking. Simultaneously, there is recognition of a new type of “Permanently Temporary” Employment that is a pointer to the need for employment laws that take into account new work realities. On a larger plane, changes are also occurring in trade and business world. A few truly global organizations have emerged. However, organizations that operate in 30-40 or 10-20 countries are many, and are beginning to encounter the problem of operating in international environment. Use of values and social concerns have become the new element in protection of markets in addition to the traditional concern for quality and the recent concern for environment. There is a shifting of polluting industries to new environments resulting in environmental hazards where none existed and a major shift in the job market around the globe. National economies are also shifting from industrial to service and information economies. Another major change is linked with the development of distance learning opportunities and a move towards a universal language. This is influencing not only the way education is imparted but also nature and management of educational institutions thus forcing organizations to rethink their human resource development and learning strategies. At the core of all these changes is a major technological breakthrough – in satellite imaging, communication, computing, high speed travel and transport technologies. This explosion of Technology has resulted in new competition giving older organizations very little response time. Emergence of the new slim and trim organizations have forced unions to change focus from wages and benefits to protection of jobs. Since both work and technology are changing at a fast pace, the sphere of management has also been affected. In some ways control and unity of command are under revision and calls for a reassessment of the management theory and practice. The paper concludes with a discussion of the challenges ahead before the business world and developing societies.

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Working Papers | 1997

Initiatives in Rural Credit Policies under New Economic Environment

Desai B M

Initiatives in rural credit policies pertain to two instruments. These are institutional development and interest rates. Some of these initiatives are right for both these instruments, while some others are not. Former for the institutional development includes new equity, prudential norms, reorganization of loss-making branches, MOUs and DAPs, hi-tech branches, enlarged scope of indirect agricultural credit, RRBs becoming full-fledged banks, SHGs, and entry of private local area banks. And the latter includes RBI's discontinued financial support, RIDF, and closing loss-making branches. Right initiative on interest rates is their simplified structure that is linked to amount of loans only though this needs to be more consistent with the rural realities. And wrong initiatives include increases in (minimum) interest rates on loans and a hotchpotch of partially and fully deregulated interest rates. Logic and/or empirical evidence are the basis for identifying initiatives that are wrong.

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Working Papers | 1997

Futures Trading in India - Are We Ready

Gupta Ramesh

The article examines the nature of futures market and its development abroad. It provides a theoretical framework reviewing behaviour of future prices and a need for an effective arbitrage between spot and futures market to ensure competitive and fair pricing for hedge seekers. In the Indian context, it examines the hedging needs of Indian investors and probes the robustness of cash markets. Major deficiencies in out cash markets are absence of facilities for margin trading, short sale, dematerialised settlements and electronic funds transfer among participants. Efficient arbitrage is the key to functioning of the futures market. In India arbitrage can be done only in one direction which is to buy in spot and sell in futures market when basis (that is difference between spot and futures prices) after adjusting for carry cost is at premium. If basis is at discount arbitrage would involve sell in spot and buy in future, but this would not be possible in the absence of short sale. This skewness in arbitrage would delink the two markets and futures market would turn into a casino. The article also critically examines the empirical work of Shah and Thomas and questions the validity of their estimates of 'impact cost' and other 'event studies' in support of futures market. The article ends asking the regulators what is the hurry? Derivative trading requires a critical mass of sophisticated investors, supported by credit and stock analysts, serviced by market-makers prodding a modicum of liquidity and protected by keen regulators. If SEBI is finding it hard to manage system for carry-over business (that is, badla which is akin to a weekly forward market), how is it going to regulate risk in a futures market where transactions would remain outstanding for 6 months and more. Regulators are cautioned to avoid economically unjust demands of a few vested interests and let 'public interest' of several million shareholders take precedence over a few 'interest groups' which are know for peddling hot money.

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Working Papers | 1997

Process of Developing Venture Capital Activity--: A Study of Three Indian VCFs

Pandey I M and Fliegal F C

This study investigates the venture capital activity development process in India. The discussion covers the issues of the initiation of venture capital fund, investment strategy and evaluation criteria and the value addition by venture capital firms (VCFs). The history of modern venture capital in India is not very old, which was formally introduced in 1986-87. In the initial years, VCFs in India encountered a number of problems in developing their business. From in-depth case studies of three VCFs of India, it is found that all of them went through the initial constraints of not knowing the venture capital business well and learnt through trial and error and failures and mistakes. They faced problems in raising funds and evaluating prospective ventures. All of them initially focused their investment on the high technology business. But gradually they shifted their focus towards potentially high-growth, high profitable businesses and not just high-tech businesses. It is also noticed that VCFs maintained a closer link with the assisted firms in order to ensure the success of the venture capital.

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Working Papers | 1997

An Operational Study of CO Patel Vegetable and Fruit Market of Ahmedabad

Girja Sharan and T. Madhavan

We present in this paper, an operational study of CJ Patel Wholesale Fruit and Vegetable Market (CJP Market) of Ahmedabad city. The market is viewed as a dynamic queuing system. A simulation model is constructed. Simulations are used to generate statistics on congestion as the volume of trade is increased form the present level to what would be expected by the year 2010 A.D. This market was built in the year 1996 in order to reduce congestion in another older market. While the buildings are designed to last a long time, simulations show that its handling capacity will get saturated much sooner, most likely by the year 2010 A.D. Based on this work, it is argued that programe to modernize loading, unloading and other handling systems must be initiated now. Further, design procedures for such markets need to recognize these as dynamic queuing systems and not just an assembly of buildings and road.

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Working Papers | 1997

Changing Perspective on Rural Credit between Mid-80s and Mid-90s - Experiences of two West Bengal Villages

Samar K. Datta and Chakraborti Milindo

Credit is a 'pure service' transaction between two points of time rather than a spot market transaction in 'pure goods'. Because of the time gap involved between sanction and realization of credit, the players in the market confront several kinds of risks, many of which are not independent of the socio-economic environment. Against the backdrop of the institutional changes in the form of establishment and strengthening of the Panchayats in rural West Bengal over the last two decades, the present study is an attempt to capture the attendant changes in rural credit market between mid-1980s and mid-1990s from the experiences of two villages in the district of Birbhum. In doing so, it compared the profile and mode of operation of prevailing moneylenders and lending institutions with those documented in an earlier study carried and in the same two villages and made an endeavour to find out as to whether the changes in the functioning of both formal and rural credit have led to greater accessibility to credit of the rural masses, a larger base for agricultural production through productive use of assets and ensuring better prices for farmers. The experiences of several successful multipurpose primary credit societies in India, the Indian Grameen Services, Hyderabad, the Bangladesh Grameen Bank and the Chinese Township and Village Enterprises are cited to provide some future guidance in improving the rural credit scenario in West Bengal.

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