Shikha Jha

• Ph.D.
• Principal Economist (former) at Asian Development Bank retired

The primary aim of the paper is to place current methodological discussions in macroeconometric modeling contrasting the ‘theory first’ versus the ‘data first’ perspectives in the context of a broader methodological framework with a view to constructively appraise them. In particular, the paper focuses on Colander’s argument in his paper “Economist...

This paper models fiscal effects of foreign aid in a federal system of governance. Our main innovation is to incorporate the inter-governmental fiscal link in examining economic fungibility of foreign aid. The model is applied to the expenditure decisions of the central government of India. The two main findings are: (i) Foreign aid merely substitu...

This paper analyzes the effects of liberalizing foodgrain trade on domestic price stability using a multi-market equilibrium model in which the direction of trade is determined endogenously and world prices are sensitive to the amount traded by India. Simulation results demonstrate that contrary to popular belief, freeing of trade by India leads to...

Stabilization of prices is an important element of food policy in India as in most other countries — both developing and developed. However, since the magnitude of grain stocks held for this purpose as well as the costs of physical storage have become prohibitively high, there is now a need for finding cost-effective alternatives including non-inte...

This publication assesses India’s fiscal federalism framework and recommends improvements based on learnings from the experiences of Australia, Indonesia, Japan, the People’s Republic of China, and the Republic of Korea.

ADB South Asia Working Paper Series This paper explains the importance of urban clusters and the potential of planned cluster development to drive economic growth in South Asia It examines the concept of urban clusters and explores its application in South Asia. Drawing lessons from international case studies, the paper highlights the advantages...

The Sustainable Development Goals (SDGs) and the Paris Agreement on climate change shifted development priorities from a higher rate or quantity to quality of economic growth that is inclusive and green. This note presents a new measure of the quality of growth through the Inclusive Green Growth Index (IGGI), which has three pillars: economic growt...

This publication launches the Inclusive Green Growth Index, a new comprehensive metric that captures the key dimensions of economic growth, social equity, and environmental sustainability. The index’s 28 performance indicators cover various aspects of growth and policy outcomes in areas where higher investment will advance better quality of growth...

We investigate the economic response of rural households to natural disasters in Pakistan. In particular, we explore to what extent households adjust their savings, and income strategies in response to floods. Using a detailed panel data set that was assembled concurrently with two major flood events, we find evidence of an economic response, altho...

Typhoons, floods, and other weather-related shocks can inflict suffering on local populations and create life-threatening conditions for the poor. Yet, natural disasters also present a development opportunity to upgrade capital stock, adopt new technologies, enhance the risk-resiliency of existing systems, and raise standards of living. This is aki...

In recent years, rising food prices have returned as a concern for policy makers, especially in developing economies. This paper examines how supply shocks, both domestic and foreign, have impacted imports and consumption in the world rice market between 1960 and 2010. Such an investigation is important in assessing the role of trade in compensatin...

Slight gains in oil and gas production in 1234 slowed the pace of GDP contraction and, if maintained, are expected to restore GDP growth this year. Consumer prices, after easing in 123> and 1234, are forecast to edge up. Lower oil and gas prices will likely push the current account into deficit in 123A. They also provide an opportunity to rein in e...

Public expenditure on fossil fuel subsidies exceeds education, health or infrastructure spending in some Asian economies. Our estimates exceed official subsidy estimates, which may not capture “hidden” costs of low-priced public services, tax rebates, and cheap loans. Unsustainable budgetary cost of selling oil, gas, and coal at low prices has prop...

Heavily dependent on imported energy sources, significant subsidies on fossil fuels present a heavy burden on public finances in Thailand. This study measures the size of fossil fuel subsidies such as tax breaks for diesel and natural gas, market price support for natural gas for vehicles, and free electricity for low-income consumers as well as th...

Subsidized energy is provided to all Indonesian citizens as a public service obligation. This study measures the size of fossil fuel subsidies such as underpricing of petroleum products and electricity, tax exemptions, and subsidized credit; examines the potential economic, energy, and environmental impacts of reducing them; and discusses options f...

Despite periods of crisis, developing Asia’s real GDP per capita averaged 5.6% annual growth from 1990 to 2014. It helped lift nearly 1 billion people out of extreme poverty from 1990 to 2011. The region is becoming more urban as labor gravitates to higher wage opportunities in cities, and more globalized as its shares of world output and exports e...

Developing Asia has made considerable progress in closing gender gaps in health and education over the past several decades. Today, narrowing gender gaps in the labor market is a good way to give the region a considerable growth boost—and, at the same time, do the right thing for women as individuals.

Can discretionary fiscal policy effectively stimulate output? This paper examines this question in the context of developing Asia, where many countries implemented fiscal stimulus measures to support domestic demand during the global crisis. Economic conditions normalized after the crisis but growth in Asia has slowed down since. We examine histori...

Despite a large food grain procurement apparatus and one of the largest food subsidy programs in the world, food insecurity has been high in India. This paper reviews the trends in food grain production and consumption and discusses the issues concerning an effective policy design for ensuring food security in the country. It argues for a holistic...

This chapter explores the implications of high and volatile global food prices for economic growth and poverty and discusses policy choices available to developing countries in Asia in dealing with uncertain supplies and rising and fluctuating food prices. As the poor cope with rising prices by depleting assets and switching to less nutritious fo...

Theft rates from subsidized food programs vary greatly and strongly influence program efficiency. Unfortunately, the determinants of these variations remain understudied because the agencies that run these programs seldom publicize the allocations of subsidized food to local markets. We develop a theoretical model of pilferage which predicts that:...

This study investigates how domestic and foreign supply shocks in the international rice market impact trade and consumption at the country level. More importantly, we examine how domestic and foreign government policies affect the way exogenous shocks translate into changes in trade and consumption. Utilizing data from the United States Department...

Many countries adopted safety net programs to deal with the food crisis of 2008. However, such programs are often beset with targeting errors, inefficiencies, and fraud. Despite this, there is no systematic comparative analysis of safety nets. The objective of this paper is to identify generic issues germane to safety net design and their role in d...

This paper studies the targeting outcomes of a self-targeted rice subsidy program in the Philippines. We find modest within-community targeting outcomes, but weak between-community targeting. This appears to be because, controlling for the direct influence of household characteristics, participation was lower in poorer communities. These inter-comm...

Developing Asia is bouncing back from the slowdown of the previous year. Robust domestic demand and greater reliance on regional trade will accelerate growth from 6.1% in 2012 to 6.6% in 2013 and 6.7% in 2014. Though still relatively stable, inflation is forecast to pick up as regional economies return to their production potential in the midst of...

We argue that subsidized food distribution systems that fail to publicize how much food has been allocated to each local market will experience high rates of theft on the margin as they are expanded. We provide the first comparable cross-section of estimates of subsidized food theft. As predicted, in regions of the Philippines that were allocated m...

This study examines the pilferage of subsidized food and the effects of institutional opacity and voice on consumers’ ability to prevent it. Our case study is the subsidized rice distribution program run by the Philippines’ National Food Authority in 2006. We estimate that around 48% of subsidized rice did not reach consumers at subsidized prices,...

This paper considers quality control in a program that distributes subsidized food. The standard theory of price controls and participatory approaches to food security both suggest that the quality of subsidized food and distribution services may be lower in vulnerable communities. We examine this suggestion in the context of a self-targeted rice s...

Food price trends over the last few years are contradicting decades of improved global food security and are especially threatening to the world’s poor. In the Greater Mekong Subregion (GMS), extensive rural poverty persists, making a dual contribution to food insecurity. Because the poor spend the majority of their income and effort on subsistence...

Food price trends over the last few years are contradicting decades of improved global food security and are especially threatening to the world’s poor. In the Greater Mekong Subregion (GMS), extensive rural poverty persists, making a dual contribution to food insecurity. Because the poor spend the majority of their income and effort on subsistence...

In the wake of recent food price spikes, plus growing demands for food in emerging Asia and for biofuels in Europe and the United States, governments are reexamining their strategies for dealing with both short-term and long-term food security concerns. This paper argues that long-run trends in real agricultural prices have policy implications for...

Rapidly rising food prices are not just a macroeconomic problem. By directly influencing poverty levels, they create a political challenge for developing countries. As the poor spend large fractions of their income on food, recent surges in food prices have pushed more people into poverty. According to the Asian Development Bank (ADB) estimates bas...

The main objective of this paper is to identify possible generic issues with in-kind transfer programs by estimating the extent to which the expenditures permeate down to poor populations. The paper measures the percolation of food subsidy expenditures to the poor by defining a metric that takes into account the depth and width of income transfer....

The nature of South-South international economic relations has changed significantly in recent decades, especially since the early 1990s. In areas such as trade, investment, labor markets, technology, and policy coordination, regional cooperation between countries of the South and pro-market policies have supported a rapid growth in South-South lin...

Global food prices registered a new high in February 2011, rising by more than 30% year-on-year, underpinned by large increases in the prices of cereals, edible oils, and meat. While the recent price increases were triggered largely by production shortfalls due to bad weather, structural and cyclical factors that were at play during the 2007–2008 f...

Developing Asia must explore and then foster new sources of growth. The strengthening of ties with developing countries, both in the region and beyond, has much potential, but so far these links have been mainly used for final goods exports to major industrial countries. To fully tap the potential of these developing-country markets as new sources...

Trade in food and other agricultural products is increasingly important across East and Southeast Asia, where high income Asian economies have driven significant agricultural expansion, and the People’s Republic of China’s (PRC) momentous growth promises more stimulus to agro-food activity in the region. The PRC is expected to become a net importer...

This study explores the outcomes of food subsidies to the poor in the case of India and the Philippines. Both countries operate in-kind food subsidy programs with similar mandates, commonalities in functioning, and substantial budgetary outlays. The goal of the study is to quantify the gains to the poor from an additional unit of public spending on...

Developing Asia has weathered the global economic crisis well and is experiencing a rapid, robust V-shaped recovery. According to conventional wisdom, the fiscal stimulus packages put in place by the region’s governments played a key role in the region’s superior postcrisis performance. The central objective of this paper is to empirically test thi...

As the global crisis hit developing Asia, several countries instituted fiscal stimulus measures to create domestic demand. With the region returning to normal times, in this paper we draw lessons using historical data from 10 developing Asian countries to examine if countercyclical fiscal policy can still be used to stimulate growth. To do so, we u...

Hunger has risen in the Philippines during the last 5 years of stable economic growth. The Social Weather Stations’ (SWS) hunger index clearly indicates sharply deteriorating food security beginning in 2003 (Figure 14.1). This has occurred despite the country's longest spell of uninterrupted growth in per capita real gross domestic product (GDP) si...

Remittances to Asia plunged during the 1997 Asian financial crisis, but the drop was temporary as the flows were increasing once again after just one year. The current crisis, however, is fundamentally different in that even the main remittance-sending countries have been adversely affected. The global nature of this crisis raises several questions...

Governments across developing Asia quickly rolled out large fiscal and monetary stimulus packages to fight the sharp slowdown of economic activity stemming from the global financial crisis. The crisis highlights the potential usefulness of countercyclical fiscal and monetary policies for coping with the impact of large shocks. This positive experie...

Developing Asia can look ahead to a robust recovery in the next 2 years. Growth is forecast to rise to 7.5% in 2010 and moderate to 7.3% in 2011, marking a healthy rebound from the 2009 slowdown. Shifting the drivers of growth from the support of monetary and fiscal expansion to robust private sources is now the key challenge for sustaining the rec...

Governments across developing Asia quickly rolled out large fiscal and monetary stimulus packages to fight the sharp slowdown of economic activity stemming from the global financial crisis. The crisis highlights the potential usefulness of countercyclical fiscal and monetary policies for coping with the impact of large shocks. This positive experie...

This paper examines the impact of remittances on economy and household welfare in Pakistan by using a general equilibrium framework and microeconometric analysis. The frst approach is to highlight the macroeconomic and sectoral effects of a reduction in remittances, while the second is to show how remittances decrease the probability of being poor...

Trade in food and other agricultural products is increasingly important across East and Southeast Asia, where high-income Asian economies have driven significant agricultural expansion, and the momentous growth of the People’s Republic of China (PRC) promises more stimulus to agrofood activity in the region. The PRC is expected to become a net impo...

This paper examines the impacts of international remittances on household consumption expenditure and poverty in Bangladesh using computable general equilibrium modeling of the Bangladesh economy and microeconometric analysis at the household level. The former assesses the economic effects and distributional implications of remittances at the macro...

Remittances to Asia plunged during the 1997 Asian financial crisis, but the drop was temporary as the flows were increasing once again after just 1 year. The current crisis, however, is fundamentally different in that even the countries that send remittances have been adversely affected. The global nature of this crisis raises several questions suc...

As one of the world’s largest recipients of remittances, the Philippines received remittances roughly 12% of its gross domestic product in 2008. Remittances have become the single most important source of foreign exchange to the economy and a significant source of income for recipient families. Using the instrument variable estimation technique, th...

This study examines the potential of remittances for promoting economic growth and reducing poverty in Asian countries using data for more than 20 countries in the region for 1988–2007. The results indicate that remittances positively affect home country real gross domestic product (GDP) per capita growth. A 10% increase in remittances as a share o...

This paper assesses the role of consumption and saving in Asia’s growth. It examines the composition of national saving, analyzes what forces drive saving rates, and draws policy conclusions from the analysis that are relevant for the economies in the region and which might play an important part in rebalancing global growth. The paper identifies a...

Developing Asia’s economic growth in 2009 will slow to its most sluggish pace since the 1997–98 Asian financial crisis. The global downturn is having a pronounced impact on the region’s exports, and subdued domestic demand will further crimp growth. Inflation pressures will abate on the back of slower economic expansion and falling commodity prices...

The region’s large and persistent current account surpluses are an integral part of the global imbalances underlying the current global financial crisis. Well before the outbreak of the current financial crisis, the region may have been paying a heavy price for its output–expenditure imbalance. This price includes not only welfare costs associated...

In response to the spike in rice prices in 2008, the rice subsidy program budget for the Philippines's National Food Authority (NFA) was expanded five-fold to 2.5% of gross domestic product. The NFA is the largest recipient of government subsidy, but also the largest loss-making government corporation. The latest household expenditure data show tha...

Developing Asia is facing its most challenging year since the 1997–1998 financial crisis. The collapse of world trade brought about by the global economic crisis is having a profound effect on manufacturing in the region. The slowdown is creating challenges for rural households as non-agricultural employment disappears. Quick responses from the reg...

The global economy is threatened with a deep and prolonged recession as a consequence of the financial meltdown that began with the housing price crisis in the United States. The financial implications of the global macroeconomic imbalances that have persisted and enabled the housing bubble to develop with the spread of toxic mortgage-backed securi...

The recent spike in global food prices and the short-sighted policy responses that accentuate volatility in prices threaten to push large numbers of people back below the poverty line—including many millions in developing Asia. Structural forces augmented by adverse cyclical events have put food prices on an upward trajectory that will not end soon...

Governments in developing countries often actively participate in storage and trading activities to allay fears of future scarcity and to control ‘collusive practices’ and ‘speculative activities’ of private operators. Imposition of domestic trade restrictions is one such ubiquitous phenomenon. In this paper, we analyze the impacts of relaxation of...

During 1998-2002, India experienced record public surpluses of wheat and rice, sharply higher government grain subsidy outlays, and declining per capita consumption of wheat and rice. By 2006, despite continued high subsidies and sluggish domestic consumption, India developed a large wheat deficit because of reduced price incentives, weak yield gro...

Also available at:http://www.igidr.ac.in/pdf/publication/PP-052.pdf The objective of this study is to analyze some of the recent reforms proposed in the operation of government buffer stocks and provision of price support to wheat and rice farmers in India. Based on the Indian grain market scenario and the recent policy initiatives this study esti...

"This study evaluates the domestic and international trade and marketing policies in India and analyzes the effects of deregulating domestic markets and liberalizing external trade on the food grain sector. Historically, India's food policy has involved heavy government intervention in all aspects of the food grain market pricing, procurement, stoc...

This book reviews the impact of globalization by examining, for example, how changes in global trading rules and regulations, the removal of trade barriers, and the elimination of many country-specific and commodity-specific agreements affect the economies of developing countries. In particular, it studies the effect of these factors on the agricul...

This paper evaluates the fiscal success of recent efforts towards reforming and strengthening rural governments in India through the process of rural decentralisation initiated with the 73rd Constitutional Amendment Act in 1992. It measures the extent of fiscal decentralization that has taken place in order to evaluate how far the rural governments...

This paper examines the costs and benefits associated with the operation of the Public Distribution System (PDS) for foodgrains in India. It illustrates through counterfactual simulations how the benefit-cost ratio for the PDS increases when subsidies are targeted at the poor and indirect benefits are accounted for, even in a scenario where PDS gra...

This paper evaluates the role of food inventories or buffer stocks in stabilizing prices of foodgrains in India when private external trade in grain is liberalized. The model adopts a multi-market equilibrium framework with the direction of trade determined endogenously. World prices are assumed to be sensitive to the amount traded by India (the ‘l...

The process of rural decentralization in India was given a boost in 1992 with the 73rd Constitutional Amendment Act. However, important matters such as implementation, service delivery and transfer of responsibilities and powers to rural local bodies were left to the discretion of the state legislatures. This has raised concerns as to the quality o...

The Indian government has traditionally maintained buffer stocks as a means to stabilise domestic foodgrain prices. In the scenario of liberalised external trade in foodgrains, we examine the cost effectiveness of variable levies on trade as an alternative option to stabilise domestic prices. We find that the use of variable levies is much more eff...

Stabilization of prices is an important element of food policy in India as in most other countries — both developing and eveloped. However, since the magnitude of grain stocks held for this purpose as well as the costs of physical storage have become prohibitively high, there is now a need for finding cost‐effective alternatives including non inter...

Through simulation exercises, this paper explores the implications of private storage and subsidized distribution of foodgrain for price stabilization policies in India. A multimarket equilibrium approach is used to incorporate the simultaneity in the determination of supply and demand for the three major cereals, namely, rice, wheat, and coarse ce...

This paper explores through counterfactual simulations the effects of deregulating and liberalizing the foodgrain sector on the costs of price stabilization, production incentives and consumption levels. The outcomes under free trade with trade taxes are compared with those of a regime in which trade is canalized. Equilibrium output, stocks and pri...

In a paper published in this journal, Deepak Ahluwalia recognizes the need for safety nets to protect the poor from adverse impacts of the reform process in India and examines the performance of one such safety net already in existence, the public distribution system (PDS). Although the paper contains several interesting ideas, not all of its claim...

This paper addresses the question of how pricing policies can improve the utilization of existing production capacities. An optimizing input-output model for the Indian economy is developed for this purpose where the government's objective is to maximize growth subject to capacity constraints. It is found that the optimal prices are related to the...

This article analyses the effectiveness of self-targeting in the Indian public distribution system and shows that implicit targeting leaves considerable scope for improvement. There is a wastage of the associated consumer subsidy in the sense that a substantial amount goes to the non-targeted population while a part of the deserving population is l...