The first paper of this issue, “Public Investment and Education Inequality”, by Berardino Cesi, is a theoretical study which shows that an increasing public investment in the higher education system may be an effective policy to reduce the education gap between students from high- and low-income households. The author develops a theoretical model in which the educational attainment of the child depends on public investment, pre-university human capital and investment in private education. Their main result is that a higher public investment may unambiguously narrow the education gap under substitutability and weak complementarity between private and public investments.

Sanjay Kumar Lenka and Amaresh Samantaraya, in their paper, “Government-Sponsored Development Programs for Rural India: A Case Study of SGSY in Orissa”, evaluate the impact of the government scheme, Swarnajayanti Gram Swarozgar Yojana (SGSY). The study was conducted based on primary data on various economic indicators of tribal households in Koraput district of Orissa. The study shows that sample beneficiaries have marginally gained in terms of better employment opportunity, while benefits in terms of real income and expenditure were very modest. According to the authors, this underscores the need for redesigning and enlarging the scope of the government-run programs in terms of promoting active involvement of beneficiaries, removing institutional bottlenecks, better information dissemination and provision of basic infrastructure for transportation, storage and marketing of the finished products. They further suggest more autonomy to district-level authorities in the design and implementation of such development programs, keeping in mind that region-specific needs and prospects would be very effective.

Yaron Zelekha, in the paper, “Non-Keynesian Effects of Fiscal Expansions in Israel”, shows the unique characteristics of the fiscal policy in Israel that created one of the largest public sectors assumed many similarities to the characteristics described in the economic literature as related to non-Keynesian effects. The results point to significant asymmetrical negative effect of public consumption on product in Israel that exists even in minor fiscal changes and has long-term effects. Against this background emerges the possibility of considerable unutilized potential growth in Israel, which can be realized by means of drastic contraction of public spending and of tax burden to proportions acceptable in the West.

Mohamad Iruwan bin Ghuslan, Junaina Muhammad and Sazali Zainal Abidin, in the paper, “Factors Affecting Commercial Bank Lending Practices in the Malaysian Farm Sector”, examine lending practices of Malaysian commercial banks to the agricultural sector. The study analyzes the relationship between bank lending practices such as credit analysis, collateral policy and pricing policy in the agriculture sector. This study uses Spearman’s rank order correlation to analyze the relationship between bank lending practices. Respondents from 202 bank branches are randomly selected from peninsular Malaysia. From the non-parametric test, the results show that there is a significant relationship between credit analysis, collateral policy and bank lending practices in the agriculture sector.

B J Queensly Jeyanthi, in the paper, “Weak-Form Market Efficiency in India and Its Emerging Asian Counterparts”, examines the existence of weak-form efficiency of Asian emerging stock markets. The increasing importance of stock markets, especially in emerging markets, is one of the most striking features of international financial development over the past two decades. The understanding of efficiency of the emerging markets is becoming more important as a consequence of integration with more developed markets and free movement of investments across national boundaries. The sample of this study includes the daily price indices of China (SSEC), Indonesia (JKSE), Kuala Lumpur (KLSE), Korea (KS11), Taiwan (TWII) and India (Nifty) for the period

April 1, 1998-March 31, 2009. The hypothesis of the study is whether the emerging Asian stock market is weak-form efficient. The results of Kolmogrov-Smirnov normality test and run test, autocorrelation test and Ljung-Box test provide evidence that the share return series do not follow random walk model and the significant autocorrelation coefficient at different lags reject the null hypothesis of weak-form efficiency. This research enables the security analysts, investors and security exchange regulatory bodies to make policy decisions and to improve the market condition.

-- C S Shylajan
Consulting Editor