Pakistan Institute of Development Economics

The intricacies surrounding the measurement and modelling of money laundering (ML), corruption (COR), and black-market prevalence (BMP), as well as their effects on socio-economic development (SD), introduce significant challenges to accurately capturing and understanding these phenomena. There is a plethora of theories on individual measurements of each concept, but regrettably, they are not immune to criticism, and no such explicit approach is available to study the nexus between these complex concepts. The current study employs the multiple indicator approach to measure ML, COR, and SD, and utilizes the PLS-SEM approach to explore the relationships between these complex concepts, with a focus on the mediating role of the BMP. The per capita investment (PCI) expenditures, modelled through the multiple indicator approach, have been used as the control variables. The study has adopted a data-driven approach to conduct pre- and post-estimation analysis for the constructs and validate the results for a cross-section of 198 countries in 2022. The results indicate that the impact of corruption on socio-economic development is negative and statistically significant. The black market has a direct, negative, and significant impact on socio-economic development; similarly, the BMP has a positive and significant effect on ML. In addition to the direct impact on socio-economic development, BMP also indirectly affects SED through the ML. The direct effects of ML on SED are adverse, while it has an indirect positive impact on SED through its significant multiplier effect on per capita investment. These findings have implications for anti-money laundering and anti-corruption policies worldwide.

The purpose of the paper is to examine how board gender diversity can be used to explain financial distress over the span of 9 years, from 2013 to 2021, using a sample of 58 non-financial companies listed publicly on the Pakistani equity market. The study employs the dynamic generalized method of moment estimator, using the Altman Z-score model as a proxy for financial distress, where a higher Z-score indicates lower distress. Findings reveal that gender diversity on boards improves board performance and protects firms from financial instability and bankruptcy. Female directors, both independent and insider, play a crucial role in reducing financial distress, and their effect strengthens with greater board independence. This research is the first study to analyze the association between gender diversity in boards and the probability of facing financial distress from the perspective of the emerging economy (Pakistan).

Abstract This study reviews 150 empirical works on economic and monetary integration in East/Southeast Asia, regions increasingly seen as candidates for deeper cooperation due to strong trade and institutional ties. It addresses two questions: (1) whether shock symmetry and trade integration justify a monetary union despite fiscal asymmetries, and (2) how methodological differences (e.g., business cycle sync vs. cointegration) and temporal shifts (pre/post-crises) explain conflicting findings. China’s rise emerges as a structural break, disrupting earlier assumptions about shock alignment and leadership (e.g., Japan’s role). While labour mobility, tech innovation, and market integration signal progress, divergent policies, fiscal gaps, socio-economic disparities, and geopolitical tensions impede unity. The review stresses the need for stronger regional institutions and inclusive coordination. By synthesising tensions (e.g., China’s Belt and Road Initiative fostering trade amid rivalries), it identifies literature gaps and proposes a research agenda to overcome theoretical and empirical deadlocks.

ABSTRACT The study examines the nonlinear relationships between sustainable and financial development metrics, including eco‐innovation, process eco‐innovation, financial development, financial inclusion, FinTech, economic complexity, and economic growth, across eight developing countries from 2000 to 2023. Empirically, it employs quantile‐on‐quantile regression and wavelet‐quantile analysis to demonstrate that economic complexity enhances economic outcomes at elevated quantiles while diminishing equity at lower levels. While financial development can lead to green investment, it also presents potential environmental hazards if not properly regulated and can impact economic growth. Financial inclusion and FinTech are driven by sustainability but rely on economic conditions and infrastructure. Eco‐innovation and process eco‐innovation are crucial for long‐term economic growth; however, their financing poses a significant challenge. Proposed policy measures highlight the importance of enhancing economic complexity, embedding green finance, scaling FinTech, and strengthening international collaboration.

The levels of neonatal mortality in Pakistan are also among the highest in the world, and the factors that define the practice of newborn care are strong and culturally determined. Objectives: To explain maternal attitude and practice of newborn care in Islamabad, focusing on cultural beliefs and socio-economic factors affecting the health conditions of neonatal care. Methods: Mixed-method design was used, where quantitative data were collected by use of 384 mothers of infants aged 0-6 months on quantitative questionnaires, and qualitative data on 10 in-depth interviews. Data analysis was done through thematic analysis on qualitative results and descriptive and inferential statistics, i.e., ANOVA and chi-square on the quantitative results. Results: Traditional practices, the views of the elders, and old cultures were mostly prevalent in medical advice. The quantitative data showed significant associations between demographic factors, such as maternal age, education, parity, and delivery place, with newborn care practices, i.e., the initiation of breastfeeding, colostrum usage, and skin-to-skin contact. The interviews also revealed that thematic analysis of the interviews pointed to the role of family customs and societal norms in such practices. Conclusions: The evidence taken altogether indicates that there is an immediate necessity to have evidence-based and culturally responsive interventions that are context-specific.

The study empirically explores the impact of political competition and political institutions on inflation rates in emerging economies, taking into account political institutions' moderating role. This study examined data from 57 developing countries spanning 2000 to 2018.The empirical analysis was performed using a two-step System Generalized Method of Moments (system-GMM) estimation technique. The analysis yields two key findings. In a democratic regime, effective competition among politicians lowers inflation. However, the effect of political competition on inflation is conditional on political institutions. Nations with strong institutional structure and balanced competition are associated with better inflation performance.

Health utilization largely depends on both demand and supply-side factors, where affordability is critical, especially for the poor segments. The Sehat Sahulat Program (SSP) is a breakthrough in Pakistan that aims to provide free indoor health services to the population. The present study has analyzed the factors that can adversely impact the utilization of indoor health services, including challenges related to enrolment, communication, awareness, and other supply-side factors. Besides conducting in-depth interviews with supply-side stakeholders, the study also conducts a household survey with the beneficiaries. The analysis reveals that the program still has a catch-up potential where a significant population is not enrolled in the program, and many of them are deprived of treatment. We consider that the program should opt for a co-payment formula to create a health insurance market in the country. To better utilize the program, a comprehensive consultative process among stakeholders is required to address design and operational inefficiencies.

Cross-border energy trading activity via interconnection has received much attention in Southern Asia to help the South Asian Association for Regional Cooperation (SAARC) region’s energy deficit states. This research article proposed a smart metering system to reduce energy losses and increase distribution sector efficiency. The implementation of smart metering systems in utility management plays a pivotal role in advancing several Sustainable Development Goals (SDGs), i.e.; SDG (Affordable and Clean Energy), and SDG Climate Action. By enabling real-time monitoring, accurate measurement, and data-driven management of energy resources, smart meters promote efficient consumption, reduce losses, and encourage sustainable behaviors among consumers. The adoption of a smart metering system along with Strengths, Weaknesses, Opportunities, Threats (SWOT) analysis, socio-economic analysis, current challenges, and future prospects was also investigated. Besides the economics of the electrical distribution system, one feeder with non-technical losses of about 16% was selected, and the cost–benefit analysis and cost–benefit ratio was estimated for the SAARC region. The import/export ratio is disturbing in various SAARC grids, and a solution in terms of community microgrids is presented from Pakistan’s perspective as a case study. The proposed work gives a guidelines for SAARC countries to reduce their losses and improve their system functionality. It gives a composite solution across multi-faceted evaluation for the betterment of a large region.

This study examines the intricate dynamics of Pakistan's fiscal federalism, with particular emphasis on center–province disputes and their effects on regional economic inequality. Despite constitutional pledges to decentralize especially following the 7th National Finance Commission (NFC) Award and the 18th Constitutional Amendment Pakistan continues to exhibit both vertical and horizontal fiscal imbalances. Using a mixed-methods approach, the study analyzes both primary and secondary data from federal and provincial budgets, institutional reports, and economic surveys. Descriptive statistical analysis indicates that the federal government continues to control the majority of revenue collection, while provinces remain heavily dependent on federal transfers. Comparative research reveals notable disparities in per capita development spending, particularly among emerging regions and their federating units, such as Khyber Pakhtunkhwa and Balochistan. The study concludes that Pakistan's fiscal federalism is not merely a financial arrangement but a deeply political process, shaped by power dynamics, institutional frameworks, and historical inequalities.