Afghanistan has been the top producer of opium since 1991 and now constitutes over 90% of global production. Afghanistan’s opium fosters many problems including drug use within the country and the deaths of tens of thousands each year.... more
Afghanistan has been the top producer of opium since 1991 and now constitutes over 90% of global production. Afghanistan’s opium fosters many problems including drug use within the country and the deaths of tens of thousands each year. Despite various efforts and about $7.5 billion spent, Afghanistan in 2014 posted a record amount of opium cultivation for a second straight year. Part of the problem is the lack of consensus on the cause with several theories advocated: insufficient security, weak institutions, lack of recognition of wheat as a possible substitute, lack of recognition of cotton as a possible substitute, returning refugees, insufficient eradication of opium crops and poverty. This paper is the first to use cross sectional regressions of provincial data to test all these theories simultaneously. I look at the period of recent increase of 2010 to 2014 and find evidence for the factors of returning refugees and poverty. The findings suggest an alternative economic opportunity can lower opium cultivation.
To test the belief Afghanistan’s lack of development is from conflict and to help find an alternative reason(s), I examine potential determinants of the urbanization rate and urbanization growth over the past few decades. Specifically,... more
To test the belief Afghanistan’s lack of development is from conflict and to help find an alternative reason(s), I examine potential determinants of the urbanization rate and urbanization growth over the past few decades. Specifically, this paper examines new provincial data on urbanization, geography, ethnic diversity, institutions, market access and conflict. I find evidence against the importance of ethnic diversity, institutions or conflict and instead find evidence for geography and market access. The results imply Afghanistan’s urbanization could be improved by increasing its transport infrastructure and thereby improving market access. Theories of the effect of ethnic diversity and conflict on development should be reconsidered for Afghanistan.
Afghanistan’s development problems are often assumed to be predominantly due to its internal warfare that started in 1978. Is this assumption correct? I consider this by comparing Afghanistan from 1961 to 1995 with the Pakistan province... more
Afghanistan’s development problems are often assumed to be predominantly due to its internal warfare that started in 1978. Is this assumption correct? I consider this by comparing Afghanistan from 1961 to 1995 with the Pakistan province of Khyber Pakhtunkwah (KPK) in terms of agricultural land productivity and look at any potential reasons for the trends found. I choose KPK province because of the many similarities with Afghanistan regarding the determinants of agricultural productivity such as similar soil features, absence of colonial investments, land tenure and farm shape and crops grown mostly for subsistence. Instead of divergence in 1978 or after, I find no divergence as Afghanistan and KPK generally have a cointegrated relationship. Nevertheless, closer examination of the trends in land productivity along with cropped land and agricultural output provides evidence conflict is the dominant explanation. This paper is the first to undertake an agricultural output comparison between Afghanistan and the KPK and to incorporate opium data into the agricultural output of Afghanistan from 1986 to 1995.
The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) of 2010 provides for a wide variety of new regulatory and supervisory initiatives with the goal to promote a safer and sounder banking system. Our paper puts... more
The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) of 2010 provides for a wide variety of new regulatory and supervisory initiatives with the goal to promote a safer and sounder banking system. Our paper puts Dodd-Frank into a historical perspective, identifies its key features, discusses the implementation progress, and assesses whether the law will accomplish its objectives. We conclude that the approach in the law to financial regulatory reform is best described as a Band-Aid approach to financial regulation. A better approach in our view is one that strengthens market discipline on bank risk-taking and enhances competition so as to reduce the regulatory burden and enhance the efficiency and stability of the financial system. Dodd-Frank pays lip service to this objective with the creation of an Orderly Liquidation Authority and the Financial Stability Oversight Council, with the effectiveness of both these new bodies being very much in doubt.
This book deals with corporate risk management strategy with regard to macroeconomic factors, like exchange rates, interest rates and inflation rates. The book is explicitly divided into two parts. The first part focuses on the techniques... more
This book deals with corporate risk management strategy with regard to macroeconomic factors, like exchange rates, interest rates and inflation rates. The book is explicitly divided into two parts. The first part focuses on the techniques used to estimate and manage macroeconomic risks, while the remaining chapters mainly relate to the managerial and strategic perspectives. The authors suggest that successfully designing and implementing a Macroeconomic Uncertainty Strategy (MUST) requires a comprehensive understanding of forecasting and hedging techniques.
We extend much research that has been devoted to the effects of the EMU on international trade by introducing monetary regime variables in bilateral export equations with the objective of capturing the effects on trade of changes in... more
We extend much research that has been devoted to the effects of the EMU on international trade by introducing monetary regime variables in bilateral export equations with the objective of capturing the effects on trade of changes in monetary regimes relative the pure EMU effects. In addition, we make a strong attempt to distinguish between EU and EMU effects on trade. To identify these different effects we include three groups of countries in our sample: EMU countries which are also members of the EU, EU countries outside the EMU and non-EU countries. The last control group consists of either non-EU industrial countries or non-EU industrial plus emerging market countries in the empirical analysis.Asian experiences with inflation targeting are discussed and compared to the empirical results we obtain for trade effects of monetary regimes. Even if deeper monetary integration leads to greater trade expansion, it involves political complexity. The choice of an appropriate monetary regim...
On November 20, 2006 the FMG organised a conference on 'Prompt Corrective Action & Cross-Borders Supervisory Issues in Europe'. This conference was the fourth and final in a series of events in the field of Regulation and... more
On November 20, 2006 the FMG organised a conference on 'Prompt Corrective Action & Cross-Borders Supervisory Issues in Europe'. This conference was the fourth and final in a series of events in the field of Regulation and Financial Stability that have been organised with the support of the Economic and Social Research Council. In this volume the FMG/LSE publishes a selection of the papers presented at this conference.
