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8/13/2019 Technical Proposal PUSA 3-13-13
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TECHNICALPROPOSAL
PAKISTAN URBAN SECTOR ASSESSMENT(#1094793)
Section A: Consultants Organization
Section B: Consultants Experience
Section C: Comments/Suggestions on the Terms of Reference
Section D: Description of Approach, Methodology and Work Plan
Annex 1: Team Composition, Task Assignments & Level of Effort (LOE)
Annex 2: CV of Proposed Key Personnel
Annex 3: Work Schedule
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Selection No. 1094793Technical Proposal
Section A
A - Consultants Organization: RAND Corporation and Appli ed Economics
Research Centre
RAND CORPORATION
RAND was established in 1948 as a not-for-profit corporation dedicated to serving the public interest
through research and education. For 60 years, decision-makers in the public and private sectors have
turned to the RAND Corporation for objective analysis and effective solutions that address the
challenges facing the nation and the world. These challenges include critical social and economicissues such as education and training, health care, labor and population, community development,
science and technology, and criminal and civil justice, as well as a range of national security issues.
RAND has about 1,800 employees; about 1,000 are researchers, of whom 87% have advanced
degrees, most commonly a Ph.D.
RAND research and analysis aim to provide practical guidance by making policy choices clear and
addressing barriers to effective policy implementation; develop innovative solutions to complex
problems by bringing together researchers in all relevant academic specialties; achieve complete
objectivity by avoiding partisanship and disregarding vested interests; meet the highest technical
standards by employing advanced empirical methods and rigorous peer review; and serve the public
interest by widely disseminating research findings. RAND staff disciplines include economics,
mathematics and statistics, medicine, law, business, physical sciences, engineering, sociology,
psychology, anthropology and other social sciences, arts and letters, and computer science. RAND's
reach is global, with regional offices in North America, Europe, and the Middle East. RAND has a
broad base of employees, adjunct staff and other consultants, which allows for effective projectstaffing and changes as needed.
We can draw on the expertise of the entire RAND staff, bringing additional capabilities to a research
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Section A
researchers with complementary backgrounds in economics, health policy, education, engineering,
statistics, and other disciplines as required by the design of the specific projects.
RAND is also a leader in population research in developing countries, much of which derives from the
development and analysis by RAND researchers of innovative large-scale surveys, including the
Family Life Surveys (such as the ongoing Indonesian Family Life Survey), the China Health and
Retirement Longitudinal Study, the Korean Longitudinal Survey of Aging and the Longitudinal Aging
Study in India.
To support its portfolio of work in international development, RANDsLabor and Population Unitformed the Center for Research and Policy in International Development (RAPID) in 2009. Peter
Glick, a proposed co-PI on this proposal, is the Director of RAPID.
RAND also carries out innovative work in the areas of land use and urban and transportation
planning. A landmark RAND study considered a broad array of political, economic, social, resource,
and environmental challenges that a new Palestinian state would face, and developed a detailed vision
for a modern, high-speed transportation infrastructure, referred to as the Arc. RAND is currently
preparing a plan for the development of a Knowledge City in the Guangzhou region in southern China
which will foster a regional center of innovation, technological development and commercialization
connected to the global economy. With funding from the Institute for Mobility Research, RAND has
conducted several research projects to examine the different paths of mobility development (e.g., car
ownership and car use) in industrialized and emerging countries. RANDs study for the World Bank
on urban poverty in Indonesia (co-led by Peter Glick) considered access to municipal services,
housing, and infrastructure of low income urban residents; a separate component of that study
evaluated a major community driven development program that focused on local urban infrastructuredevelopment.
APPLIED ECONOMICS RESEARCH CENTRE
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The Centres director is Prof. Dr. Nuzhat Ahmad, Ph.D., a leading economist in the fields of Urban,
Institutional Economics, Poverty, Public Finance, and a co-PI on the current proposal. The Centresresearch work is disseminated to policy makers and interested audience through its publications,
including its Research Report Series, a Discussion Paper Series, and an internationally refereed
bi-annual journal, The Pakistan Journal of Applied Economics.
Research activities at the AERC include contract research for clients and core or staff research; all of
the Centres research is highly policy oriented. Clients for contract research include international
agencies such as the World Bank, the Asian Development Bank, USAID, UN Agencies, DFID,Harvard Institute for International Development, Free University of Amsterdam, and the International
Food Policy Research Institute. The AERC has also undertaken many research assignments for
Pakistan Government agencies and task forces, including the Pakistan Agriculture Research Council,
Planning Commission, National Taxation Reforms Commission, Government of Sindh, Sindh
Regional Plan Organization, Agriculture Development Council, Karachi Metropolitan Corporation,
Karachi Development Authority, City District Government, the Aga Khan University and the Export
Promotion Bureau.
The AERC has extensive research experience in the key topic areas covered under the current
proposal, including urban economics, urban planning, and finance. The staff members on this proposal
have led or participated on a number of assignments in these areas, examples of which are detailed
below in Section B.
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Section B
B - Consultants Experience
RAND CORPORATION:
Assignment name:Indonesia Urban Poverty, Program Review and
PNPM-Urban Process Evaluation
Approx. value of the contract (in current US$):
$450,000
Country: IndonesiaLocation within country:
Duration of assignment (months):12 months
Name of Client:World Bank
Total No. of staff-months of the assignment:11.5 staff months (231 staff days)
Contact Person, Title/Designation, Tel. No./Address:Peter Glick, Senior Economist, RAPID, Director703-413-1100RAND Corporation1200 S Hayes St, Arlington, VA 22202
Start date (month/year): 1/2011Completion date (month/year): 1/2012
No. of professional staff-months provided by yourconsulting firm/organization or your sub consultants:
Name of associated Consultants, if any:
Survey Meter
Name of senior professional staff of your consultingfirm/organization involved and designation and/orfunctions performed (e.g. Project Director/Coordinator,Team Leader):Peter Glick, Principal InvestigatorJoanne Yoong, Principal Investigator
Description of Project:This study had the following main objectives: (a) understanding the characteristics of urban poverty in
Indonesia and any emerging trends through household survey data analysis; (b) reviewing urban povertyprograms and services to assess the extent to which they address the needs of the urban poor, and howeffective they are; (c) carrying out an in-depth process evaluation the PNPM-Urban anti-poverty program,which uses block grants to communities primarily to fund local infrastructure development.
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Section A
Contact Person, Title/Designation, Tel. No./Address:Howard J. Shatz
Senior Economist(703) 413-1100 X 5184RAND Corporation1200 South Hayes St., Arlington, VA 22202
Start date (month/year): 2/2010Completion date (month/year): 3/2011
No. of professional staff-months provided by yourconsulting firm/organization or your sub consultants:19.7 staff months
Name of associated Consultants, if any: Name of senior professional staff of your consultingfirm/organization involved and designation and/or
functions performed (e.g. ProjectDirector/Coordinator, Team Leader):Louay Constant, Principal InvestigatorHoward J. Shatz, Principal InvestigatorPeter Glick, Co-InvestigatorJill Luoto, Co-InvestigatorAlexandria Smith ,Co-Investigator
Description of Project:
The objective of this project was to provide the Kurdistan Regional Government (KRG) with a strategy toreemploy civil service workers in the private sector and increase private sector employment in the KurdistanRegion.
Description of actual services provided by your staff within the assignment:RAND conducted four tasks. Task 1: We assessed the climate for business formation and foreign businessexpansion in the Kurdistan Region by reviewing relevant laws, regulations, and reports, and by interviewinggovernment officials, local business people, and foreign investors. Task 2: We identify and evaluateopportunities for privatization of government functions by reviewing the various roles and functionsperformed by the government and the extent to which those roles could be carried out by the private sector. Aspart of this task, we also reviewed the growth strategies of other countries. Task 3: Using microdata from ahousehold survey conducted by the local and national statistical authorities and a multilateral organization, weanalysed the skills and education of civil service employees and compared them to private sector employees tolearn whether civil servants who were shed from the government had appropriate skills for private-sectorwork. Task 4: We then evaluated the civil service compensation system and personnel policies in comparison
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Section A
Santa Monica, California 90401-3208Tel: (310) 393-0411
x7275
Start date (month/year): 1/2013Completion date (month/year): 5/2013
No. of professional staff-months provided by yourconsulting firm/organization or your sub consultants:4 staff months
Name of associated Consultants, if any: Name of senior professional staff of your consultingfirm/organization involved and designation and/orfunctions performed (e.g. ProjectDirector/Coordinator, Team Leader):
Rafiq Dossani, Principal InvestigatorOlesya Tkacheva, Co-Investigator
Description of Project:Study of the political economy of tariff and nontariff barriers to trade in South Asia in power, telecom,business services, transport, and textiles
The project will identify critical tariff and especially non-tariff factors that have so far impeded regionalintegration and developing policy recommendations on how to promote regional integration in South Asia. It
will do so by studying: The negotiating challenges that arise from differences in economic strength, population size, political
stability, and administrative capacity across nations.
The domestic challenges each country faces arising from internal stakeholders, such as the influenceof organized businesses and labor, provincial governments and bureaucracy.
The non-tariff barriers particularly in procedures and rules for cross-border trade. Approaches to resolve the challenges
Assignment name:Creating a Globally Connected Regional Innovation
System for the Guangzhou Development District
Approx. value of the contract (in current US$):
$606,000
Country: China Duration of assignment (months):
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Development District (GDD) in developing a vision and outlining a strategy for attracting world-class scientific,engineering, and entrepreneurial talent to and fostering high technology companies in Knowledge City so as to
make GDD a leading international center of innovation.Description of actual services provided by your staff within the assignment:RAND provided a detailed assessment of the current business, regulatory, and legal environment for hightechnology star-ups in the Guangzhou Development District. We conducted a survey of 300 high technologystart-ups from a population of over 1,000; interviewed over three dozen entrepreneurs, governmentpolicymakers, and financiers, and provided three case studies of successful high technology clusters: theMaryland biotechnology cluster, the Israeli information technology corridor between Haifa and Tel Aviv, andSilicon Valley. The case studies involved interviews with entrepreneurs, local government officials, includingthose engaged in economic development, and venture capitalists. We also reviewed and drew on the extensiveliterature on innovation and cluster formation. RAND worked closely with the Guangzhou DevelopmentDistrict to provide policy recommendations consistent with national and local regulations and customs and thatcould be implemented by the client. The project produced two published reports in English and Chinese, AnOutline of Strategies for Building an Innovation System for Knowledge City http://www.rand.org/pubs/monographs/MG1240.html and Creating an Innovation System for Knowledge Cityhttp://www.rand.org/pubs/technical_reports/TR1293.html.
Assignment name: Climate Change and Human
Migration in the Middle East and North Africa
Approx. value of the contract (in current US$):$200,000
Country: Middle East and North AfricaLocation within country:
Duration of assignment (months):25 Months
Name of Client:World Bank
Total No. of staff-months of the assignment:1.5 staff months (30 staff days)
Contact Person, Title/Designation, Tel. No./Address:Nicholas Burger, Associate Economist703-413-1100RAND Corporation1200 S Hayes St, Arlington, VA 22202
Start date (month/year): 5/2010Completion date (month/year): 6/2012
No. of professional staff-months provided by yourconsulting firm/organization or your sub consultants:
Name of associated Consultants, if any: Name of senior professional staff of your consulting
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Section A
APPLIED ECONOMICS RESEARCH CENTRE (AERC):
Assignment name:
A Profile of the City of Karachi: Master Plan 2000
Approx. value of the contract (in current US$):1,439,625 (Pakistan Rupees)
Country: PakistanLocation within country: Karachi
Duration of assignment (months):26
Name of Client:World Bank/Karachi Development Authority
Total No. of staff-months of the assignment:18 man-months per person:26 months
Contact Person, Title/Designation, Tel. No./Address:
Start date (month/year): March 1987Completion date (month/year): April 1989
No. of professional staff-months provided by yourconsulting firm/organization or your sub consultants:
Name of associated Consultants, if any: Name of senior professional staff of your consultingfirm/organization involved and designation and/orfunctions performed (e.g. Project Director/Coordinator,Team Leader):
Dr. Nuzhat AhmadDr. Kaisar BengaliMr. Riaz Hussain
Description of Project:
Description of actual services provided by your staff within the assignment:A project provided technical assistance to the Master Plan and Environmental Control Department to prepare
the Master Plan for the Karachi Metropolitan Region for the period 1986 to 2000. A survey of over 7500households was undertaken which was spatially distributed throughout the city of Karachi and included KatchiAbadis. Data was analysed to develop the profile of households, their patterns of demand for services andinfrastructure. Advise was provided to the Karachi Development Authority on various aspects of preparationof the Master Plan 2000
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Mr. M. Sabihuddin Butt
Description of Project:
Description of actual services provided by your staff within the assignment:Preparation of socioeconomic demographic and housing profiles for secondary cities of Sindh (excludingKarachi). Housing profiles were based on key housing characteristics of units and on data based on primarysurvey of households.
Assignment name:
Prospects of Pakistan Urbanization
Approx. value of the contract (in current US$):--
Country: PakistanLocation within country: Duration of assignment (months):6
Name of Client:WWF Adjustment and Environment Project
Total No. of staff-months of the assignment:13 person months
Contact Person, Title/Designation, Tel. No./Address:University of Karachi
Start date (month/year): January, 1994Completion date (month/year): June, 1994
No. of professional staff-months provided by yourconsulting firm/organization or your sub consultants:
Name of associated Consultants, if any: Name of senior professional staff of your consultingfirm/organization involved and designation and/orfunctions performed (e.g. Project Director/Coordinator,Team Leader):Muhammad Sabihuddin Butt
Description of Project:Study describes the situational analysis of urbanization provide in-depth analysis pertaining to the urbandynamics in terms of city characteristics, growth, tempo of urbanization and primate city analysis.
Description of actual services provided by your staff within the assignment: --
Assignment name: Approx value of the contract (in current US$):
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The study, as part of Hyderabad City water plan, estimated population (rural and urban) projection for the nextthree decades at City level, Taluka level and Union Council level through employing cohort component
method. Demand analysis for infrastructure development for the formulation of district level investmentstrategies for the provision of urban services and the affordable level, including land management.
Description of actual services provided by your staff within the assignment: --
Assignment name:Intergovernmental Fiscal Transfers for Equitable
In-Country Growth
Approx. value of the contract (in current US$):1,212,600 Pakistan Rupees
Country: PakistanLocation within country:
Duration of assignment (months):23 months
Name of Client:ADB
Total No. of staff-months of the assignment:33 months per person
Contact Person, Title/Designation, Tel. No./Address:ADB, Manila
Start date (month/year): January, 2001Completion date (month/year): December 2002
No. of professional staff-months provided by yourconsulting firm/organization or your sub consultants:
Name of associated Consultants, if any: Name of senior professional staff of your consultingfirm/organization involved and designation and/orfunctions performed (e.g. Project Director/Coordinator,Team Leader):Prof. Dr. Nuzhat AhmadSyed Ashraf Wasti
Description of Project:Cross country comparative research to assess intergovernmental fiscal transfers
Description of actual services provided by your staff within the assignment:The study examined the rationale problems and issues in fiscal equalization arrangements in Pakistan. Thestudy explored the possibilities of developing an improved formula for transfers from the federal to theprovincial governments and then to the local governments. It looked at the formula in terms of whether thet f h ld b di tl t d f th F d l t th l l t
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Annex 1
CComments and/or Suggestions on the Terms of Reference
[Present and justify here any modifications to the Terms of Reference your consultingfirm/organization would like to propose, if there are any, to perform the assignment betterand more effectively (e.g. deleting some activity that you find unnecessary, adding others or
proposing a different phasing of the activities). Such suggestions should be concise and
incorporated in your Proposal.]
Overall data availability risk:In addition to the specific data limitations noted above, we note the
general issue of data-related risk for this project. Specifically, although the RAND-AERC team has
extensive experience with the relevant data sources and analysis methodologies for this assignment,
we expect that we will encounter data-related limitations associated with data availability or data
quality. These are noted in the description of methodology in Part D. We request the opportunity to
revisit the requirements of the TOR collaboratively with the World Bank team should data limitations
arise that may preclude parts of the proposed analysis. We expect to have clarity on many of the data
issues by the time of the inception report.
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D - Description of Approach, Methodology and Work Plan
a) Technical Approach and MethodologyIn the following we describe, for each of the tasks set out in the TOR, our understanding of the
questions to be addressed, our proposed methodologies for doing so, and data that we expect to use.
We note here, that per our conversation on the revised TOR, Part I on the system of cities will to the
extent possible draw examples from across the urban hierarchy (e.g. large, medium, small cities). Part
II, which has more of a policy focus, will emphasize conditions and policies in large cities, in
particular, Lahore, Islamabad, Hyderabad, Faisalabad, Peshawar, and Karachi. The methodology for
the analysis in Part II will include use of secondary literature and data as well as original data
collection (e.g., interviews, gathering of municipal government data). The precise methodology
applied for each of these cities (in particular, where primary data will be collected) will be spelled out
in the inception report.
PART I. Urbanization characteristics and dynamics
Part I, Task 1: System of Cities
The goal of this task is to describe the current levels and growth rates of urbanization at the national
and provincial levels. In addition, this task involves estimating and describing changes over time in the
population of cities, and undertaking projections that will identify cities which will have populations
of over 1 million by 2030. Additional analysis in this task will focus on the economic role that cities
play in this systemof cities. , including estimating city or metropolitan region economic size and
dominance, and the economic connectivity of cities in the system.
a. With respect to urbanization, we will approach the analysis in several broad steps. First, we will
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Data sets to be utilized for this task include, in addition to the census data, the United Nations World
Urbanization Prospects (2011 Revision) and World Population Prospects (2010 Revision). 1We will
also investigate a range of other sources, including U.S. Census Bureau data (which has estimates tothe tehsilor district subdivision level) and province level statistical publications.
To facilitate city and area specific analyses, we will first identify a class system of cities based on size,
consistent with the approach in other Urbanization Reviews. We will then summarize the total
population and urban population represented by each class nationally using census data. Further, we
will identify changes in classifications by cities over the last two censuses. We will describe the rank-
size distributions of cities nationally and within each province. We will identify average city size in
1998, and the annual growth between 1981 and 1998 by province and by city class. We will also
summarize city population statistics (e.g., population density, annualized growth rates) in 1998 and
changes between 1981 and 1998 by province and by city class.
For the second step in the analysis, we will report estimates of the total population and urban
population currently represented by each class nationally. We will identify changes in classifications
by the ten largest cities from 1998, as well as their current size and growth rates, and attempt this as
well for smaller cities.
For the third step, we will extend existing population projections to 2030 in order to identify cities
with expected populations over one million. These analyses will provide information on which cities
are growing, declining, or remaining stable over time. Insights into reasons for growth or decline of
cities will be provided based on a range of other data, including economic growth and sector-specific
growth in different cities and regions.
b. To address the topics of economic r oles of citi es,we will analyze available data and literature to
determine the relative importance of each city/metropolitan area to the Pakistani economy. The
starting point for this analysis will be an estimate of the size of each urban area in terms of economic
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for growth and attractiveness for investment, we will compare productivity measures with
benchmarks in the South Asia region and elsewhere, available through secondary sources.
To further understand the drivers of differences in economic production and productivity, we will use
the Labor Force Survey data, gross domestic product data and the census of manufacturing industries
to analyze each citys employment structure. This will examine the fractions of total employment in
each city that correspond to each of the major industrial and occupation categories. Differences in
these employment shares will be analyzed by province, size classification, and distance from major
urban centers.
We will also use existing data sources to examine the concentration of Pakistans major industries and
how this has evolved over time. Concentration will be measured using industrial concentration indices
such as the Hirschmann-Herfindahl Index of employment concentration or the Ellison and Glaeser
(1997) concentration index. One source of data we may use for this is plant-level census data with
information on each plants employment sizes and location of operation, obtained from Pakistans
Census of Manufacturing Industries. Alternatively, modified industrial concentration indices can be
constructed using disaggregated data collected for the Labor Force Survey. Using rounds from
different years, indices based on either source can also be used to measure changes in concentrationover time. We will compare our estimates of spatial concentration for specific industries in Pakistan to
those calculated for similar industries in other countries. This will allow us to assess the extent to
which certain industries in Pakistan appear to be under-concentrated, suggesting potential gains
from incentivizing firms to move closer together, given the expected potential agglomeration
externalities discussed under Part I, Task 1. Such an analysis may also indicate where particular
shortfalls in Pakistans provincialand regional business climates lie.
Next the analysis will measure diversity or the mix of industries in cities and how this is changing. A
location quotient approach will be used, measuring by industry each locations share of that industrys
employment relative to its share of national employment A higher location quotient implies relatively
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Force Survey. The LFS contains standard variables that can be used to define whether a job is formal
or informal. If published reports are not adequate, we will explore a direct analysis of the most recent
LFS data to estimate the prevalence of informality in each city-metropolitan area for which the data isrepresentative as well as analyze its prevalence by region and type of city. We will also estimate
correlations between the prevalence of informality in different cities and the industrial composition of
those cities, described in previous paragraphs. We note that the feasibility of direct analysis of the data
will depend on data availability and quality.
The above analysis will allow us to describe primarily cross-sectional variation in the location of
economic activity, where the fastest growing industries are locating, and which types of cities are
attracting different types of businesses. We will complement this cross-sectional analysis with an
analysis of recent trends and changes. This will be done using published figures from the Census of
Manufacturing Industries of 2000-2001 and 2005-2006, looking for changes over time and
determining what types of economic activities have grown and where.
As implied above, an important determinant of economic growth in Pakistans cities both overall and
in specific urban centers is the business climate or incentives for investment. While generallyfavorable relative to regional peers, the investment climate in Pakistan has weakened substantially in
the last decade due to political uncertainty, and has hindered the ability of Pakistan to take advantage
of the Multi Fibre Arrangement to the extent others in the region, notably Bangladesh, have. We will
review available literature and published statistics on investment climate in urban areas and if
available, specific cities. A key source will be theDoing Business in Pakistanreports, in particular the
2010 report as well as theDoing Business in South Asia Report from 2005-7. These particular reports
are valuable for our purpose because they collected information from small and medium sized firms atthe subnational level (6 major cities in the earlier report and additional 7 in the later one, permitting
analysis of changes in the former). For Karachi, more recent information is available in the most
recent (2103) report We will also use the 2007 World Bank Enterprise Survey report which also
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numbers living in poverty are highest, as the two may diverge significantly with implications for
policies to target the urban poor.
c. To analyze connectivity:
Economic connectivity in the system of cities:
Connectivity in this sense relates to spatial allocative efficiency and inter-city economic connectivity
in the system of cities approach. The analysis described above on economic roles and industrial
structure of different cities will be an input into an analysis of specialization and economic
connections among cities within Pakistan. We will draw conclusions from the data analysis as well as
a range of published reports on how specific cities are linked economically (for example, upstream and
downstream industries) and how these roles differ by city, province, and by city class. As is stressed in
the systems of cities literature (e.g. Abdel-Rahman and Anas, 2004), we will discuss how larger cities
in Pakistan, such as Karachi and Lahore, are characterized by a diversity of economic activities, while
smaller cities tend to specialize, and we will examine the extent to which this distribution is optimal.
Policies that could be enacted to encourage a more efficient or growth-enhancing distribution of
industries and economic activities across the city system will be explored.
One factor that could limit city specialization within the system would be transport barriers. High
transport costs betweencities make it difficult for both downstream input producers to reach upstream
firms, and for final goods producers to reach consumers or export markets. For this sub-task, we will
provide an overall assessment of the quality and effectiveness of transport infrastructure and
transportation options, both within and between cities in Pakistan, and identify where key constraintsin connectivity must be addressed to improve access to internal and international markets and
suppliers. In particular, we will consider issues such as whether cities are concentrated along key
national transport corridors; whether there exists connective infrastructure between cities where
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Connectivity within cities: High costs of connectivity withincities increase commuting times, reduce
productivity growth, and limit the ability for firms to take advantage of agglomeration economies.
The costs may be high because of transportation issues, supply-chains reliant on informal firms, a lowlevel of intermediary services, weak land markets, bandwidth shortages, contract enforcement and
other factors. We will focus on Karachi as a crucial case study, but draw on other cities where data are
available. Karachi is selected because it is Pakistans largest city with 21 million people and
contributes over a third of the countrys GDP; it is one of the worlds most populated urban
agglomerations; and it has experienced tremendous growth in recent decades, which has placed great
strain on connectivity. For the transportation sector, we will use JICAs study on Karachis
Transportation Improvement Plan (KTIP). This information should provide an overview of the urban
transportation problems faced by Karachis residents and help us to assess the strengths and
weaknesses of Karachis urban transportation system. We will also synthesize and interpret evidence
from these and other studies for Karachi, including various surveys on doing business in Pakistan, to
understand the full range of connectivity issues. Of particular interest is whether certain income
groups or neighborhoods are priced out of, or are otherwise unable to avail themselves of, the citys
opportunities. This may arise because of the unavailability of specific transport options or simply
because of distance to the city center.
Part I, Task 2: Drivers of Urbanization
The goal of this task is to identify current centers of major net in-migration, and to predict which
urban centers will experience large growth due to migration in the future. Additionally, major trends in
the type of migration occurring (rural to urban, urban to urban) will be identified, along with an
examination of the factors driving migration and urbanization. Finally, to the extent possible given
available data, regional variation in migration, and the links between urbanization and rural/urbanpoverty, will be examined.
We will utilize published analyses of migration and carry out new analysis of existing data sources
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Also with respect to potential drivers, we will examine links between urbanization and rural/urban
poverty, using information on household consumption and poverty for urban and rural areas from twowaves of PSLSM surveys, 2004-5 and 2010-11.3 Appropriate recognition will be given to the
possibility that poverty levels within both rural and urban areas may be caused by migration between
the two as well as being a cause of migration. In conjunction with the analyses of Task 1, we will
investigate the extent to which population is concentrating over time in specific locations. Finally, we
will identify areas of significant future in-migration through extrapolation of trends from the LFS data
over the last ten years. To keep the task manageable given resources, we will compare two surveys to
capture trends, such as 2001-2 and 2010-11.
Our understanding of the various data sources suggests that detailed data on migration will be sparse,
and data availability will dictate the level of precision we can achieve. Migration data from the census
is expected to provide good estimates of the levels and flows of migration in the recent past, but by
itself, it will provide little information on the drivers of migration. Migration data from the LFS will
provide more current and more detailed information about the migration process, but at the expense of
geographic coverage.
Part II, Policies to manage congestion costs, enable growth, and promote livability
Task 1: Municipal governance and service deli very
The goal of this task is to (1) understand the effect of municipal management and governance on
public service delivery, at the country-wide level and for selected provinces and cities and (2) provide
a picture of the state of service delivery in urban areas. As noted earlier, for this and the other tasks inPart II the emphasis will be on, and examples drawn from, Pakistans larger cities. In particular,
RAND and AERC plan to focus on Karachi and two other major centers, to make possible
t t d i t i d ll ti f d t f it t i
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expenditure and provide insights on whether and how metropolitan performance varies across
provinces and cities.
Our examination of urban governance will include a review of the various Ordinances and
Amendments to the Constitution which govern urban management functions and will assess how these
laws may drive future service delivery efficiency. The analysis will consider the implications of Local
Government System of 1979, which gave government control to the provinces but provided no
financial powers to the local governments; the Local Government Ordinance of 2001, which lacked
clarity on fiscal decentralization and administrative devolution; and the 18th Amendment to the
Constitution, passed in 2010, which gave powers to the provinces to devise their own local
government system. We will also review the proposed Local Government of 2013 and its implications
for urban governance. We will assess whether municipal service delivery has improved or suffered due
to these changes.
We will also draw on secondary data and collect limited new data through targeted stakeholder
interviews across at least three of the six major cities as noted above. Data include: Level of
investment in services (national, provincial, and city level) from the Economic Survey of Pakistan
(national level data); the structure and composition of revenue and expenditure (National, Provincialand City level) from federal, provincial and district level budget reports; and per capita expenditure on
services by municipal government using expenditure data from federal, provincial, and district level
budget reports. We will also draw on data from EDO (finance and planning) and the AG Office-
PIFRA (Budget Execution Reports). Finally, because systematic data on financing at the municipal
level is not widely availableand data on governance almost nonexistentwe will conduct semi-
structured interviews with government officials to fill gaps in data on municipal performance where
feasible. The analysis will attempt to ascertain where (in which cities and for which services) gaps inservices are greatest, and where high projected population growth implies the need for higher
investments. If reliable unit cost data are available for specific services, we will attempt to quantify
the resources needed to close current gaps or prepare for future growth
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be based both on reviews of official documents and publications and in depth interviews with public
officials in the cities visited.
Finally, we will conclude this part of the task with recommendations for how Pakistan can address
urban service delivery needs in light of limited government capacity, poor governance, and current
resource constraints. We will draw on quantitative and interview data from Pakistan to inform these
recommendations, which will incorporate good practices from the literature and other countries in the
region.
Part (2) of this task is to characterize the supply, quality, and access of different groups to public
services such as water, sanitation, and sold waste management. In order for cities to function well
economically and provide decent lives for citizens, municipal governments need to provide reliable
access to public services, including water supply, sanitation, electric power, natural gas, and roads and
drains. Public services, particularly water supply and sanitation, can have important public health
consequences, but also have large effects on firm performance, hence economic growth. For example,
in the World Banks 2007 Pakistan Enterprise Survey, nearly 70 percent of firms selected reliable
electricity provision as the most important constraint to their operations. Corruption of public officials,
who are often not properly incentivized to provide services effectively, was the next most commonanswer, identified by over 10 percent of firms as the most important constraint to doing business.
We will first provide a snapshot of access to various public services in urban areas, using household
surveys. The PLSM survey (2010-11) records information on access to electricity and improved water
and sanitation sources, though it does not distinguish what is provided by the public sector and what is
provided privately.4We will present shares of the population in urban areas receiving these benefits
overall and by per capita consumption quantiles.
5
We will supplement the analysis with a review ofresearch that uses city case studies and smaller, more localized surveys with more detailed information
on use of municipal services. Such specialized studies (including for example the JICA study on
Karachis Transportation Improvement Plan mentioned earlier) will be important particularly for
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same cities.6 Viewing this question explicitly from a spatial perspectivethat is, to see how access to
municipal services is related to specific neighborhoods locations or distance to city centersis likely
to be harder. We will rely on existing literature (including for example analyses based on the JICAstudy) and our interviews with various officials to ascertain whether certain locations in urban areas,
or simply, those on the growing outskirts of the city, have significantly poorer access to important
services such as water or electricity.
Part 2, Task 2: Integrated Land and Transport Planning
In order to offer recommendations for integrated land use and transport planning in Pakistans growing
cities, we will begin with a survey of historical patterns in land use and planning in Pakistan and
relevant studies drawn from the region and elsewhere. The latter will focus on the historical
experiences of cities worldwide, examining both how cities have coped with growing populations and
have used the various policy levers at their disposal to provide access to and from city centers, regulate
land use, promote public transport, and generally make cities attractive and productive places to live
and work.
A key focus of this review will be on the implications of the expanding use of private motorized
transport (cars, motorbike, vehicles for hire). We will draw on experiences worldwide to consider how
policies that reduce inter-urban transport costs, such as incentivized car ownership, improvements to
transport infrastructure, or expanded public transport access, affect urban forms. Work in a variety of
settings, for example, has confirmed the theoretical prediction that reductions in transport costs
incentivizes commuters to locate further away from urban centers, expanding the periphery and giving
rise to urban sprawl and lower density (e.g., Baum-Snow 2007). Because transport infrastructure is socrucial for the movement of goods and services between and across cities, some amount of
suburbanization may be unavoidable.
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terms of their ease of use, safety, externalities (greenhouse gas emissions, air quality, noise), and the
extent to which access and pricing of alternate modes is equitably distributed.
Given the constraints and problems we find for Karachi in these data and our examination of policy
alternatives, as well as what is learned from our investigation of the same issues in the other two
selected cities, we will make specific policy recommendations for improvements. These will draw on
the review of successful policies implemented elsewhere. They may involve identifying new policies
that are currently absent from urban planning in Karachi, or recommending small adjustments to
existing policies. A range of possibilities will be proposed, given that perfect implementation may be
difficult to achieve or politically infeasible, and that first-best policies may not be perfectly compatible
with the political economy realities of Pakistan today.
References
Abdel-Rahman, H. M. and A. Anas (2004) Theories of Systems of Cities. In J. V. Henderson and J.
F. Thisse (eds.),Handbook of Regional and Urban Economics, Volume 4:2293-2339.
Ads, A. F. and E. L. Glaeser (1995) Trade and Circuses: Explaining Urban Giants. Quarterly
Journal of Economics110(1): 195-227.
Alonso, W. (1964).Location and Land Use: Toward a General Theory of Land Rent, Cambridge:Harvard University Press.
Au, C. and J.V. Henderson (2006) Are Chinas Cities Too Small?Review of Economic Studies, 73:
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Marshall, A. (1890)Principles of Economics.
Mills, E. (1967): An Aggregative Model of Resource Allocation in a Metropolitan Area, AmericanEconomic Review, 57, 197210.
Muth, R. (1969) Cities and Housing: the Spatial Pattern of Urban Residential Land Use, Chicago:University of Chicago Press.
Rozenfeld, H. D., D. Rybski, X.Gabaix, and H. A. Maske (2011) The Area and Population of Cities:New Insights from a Different Perspective on Cities.American Economic Review 101(5): 2205-2225.
Shapiro, J. M. (2006) Smart Cities: Quality of Life, Productivity, and the Growth Effects of HumanCapital. The Review of Economics and Statistics,88(2): 324-335.
Zuberi, J. (2012) Estimating the Cost of Power Outages for Large Scale Manufacturing Firms.Working Paper.
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b) Work Plan
RAND and AERC have put together an exceptional team that combines each institutions strengths in
urban economics and planning, demography, transportation and other areas. To ensure the successful
and timely completion of the study, we have constructed a carefully considered work plan and project
management strategy. This strategy will allow the combined team to successfully navigate the
ambitious project timeline and deliver to the World Bank a high-quality report that meets the World
Banks needs and is responsive to the TOR. Here we describe the work plan and timeline, along with
the project management strategy.
To achieve the goals laid out in the TOR and described in the previous section, the RAND-AERC
team has identified the set of core activities that must be accomplished to complete the report and has
constructed an ambitious but realistic timeline for completing the project. RAND will lead the report
preparation process and many of the tasks, with AERC leading in-country information gathering and a
subset of the tasks where AERC staff have particular expertise. Both teams of researchers will
participate in the overall design, strategy, and analysis in a fully collaborative fashion.
The deliverables schedule will follow the TOR, reflecting the modified project end date of sevenmonths following the contract inception (September 30 th, assuming the contract is signed by mid-
March 2013). Table 1 shows deliverable schedule for deadlines indicated in TOR.
Activity/Deliverable Date based on March
15th
inception
Virtual project launch meeting March 18, 2013
Inception report April 7, 2013
Preliminary draft report June 30, 2013
Final draft report August 30, 2013
Finalized deliverables September 30, 2103
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immediately, although tasks that depend more on results from the stakeholder interviews (e.g.,
municipal governance) will commence somewhat later. Some parts of the analysis may also depend
on secondary data gathered from local government agencies by AERC staff during their visits to thedifferent cities.
RAND will contribute the team leads for each of the parts, but for the individual tasks there will
generally be both RAND and AERC co-leads, depending on particular expertise needed for that task.
Dr. Dossani, with support from Dr. Glick, will manage the report writing, review, and revision process
in close coordination with Dr. Ahmad of AERC, as well as with frequent contact with the World Bank
task leader and team.
Figure 1 - Workplan
1 2 3 4 5 6 7 Research lead/team
Project inception meeting
RAND/AERC
Data accessing, compilation, and review RAND/AERC
Stakeholder interviews AERC
1. Urbanization characteristics and dynamics Section Lead: Pollard
1.1 - System of cities Pollard/Butt
1.2 - Drivers of urbanization Pollard/Fatima
2. Policies to manage congestion costs, enablegrowth, and promote livability Section Lead: Rothenberg
2.1 - Municipal governance and service deliveryDossani/Ahmed/Glick/Butt
Month ( indicates deliverable)
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1. Focus group discussion (FGD) with firm managers in the three selected urban areas (2 percity)
2. In-depth interviews with a range of regional and municipal government stakeholders, as wellas community leaders and residents and individuals involved in transport and planning.(quantity of each to be determined in the inception phase)
The activity will take place in at least three of the six leading cities in Pakistan identified above. In the
cities where we do not collect these data we will analyze the secondary literatures on these issues.
Overall therefore we will capture information across Pakistans major urban areas.
Reporting and communication with the World Bank
To ensure that the RAND-AERC team is responsive to the World Bank and is able to adhere to the
project timeline, close and frequent contact with the World Bank project team will be imperative. Dr.
Glick, who is located in RANDs Arlington, Virginia office, will serve as the primary liaison with the
World Bank (working closely with Drs. Dossani and Ahmad) to ensure streamlined communication
channels and responsiveness. Specifically, we propose bi-weekly phone calls with the World Bank
team lead during months 1, 2, 6, and 7, with monthly phone calls during months 3-5. Because Dr.Glick and several other members of the RAND team are located near Washington, DC, we welcome
in-person interaction with Bank staff, as well.
In addition, non-public data provided by (or access facilitated by) the World Bank will be critical to
completing the project analysis on time.
The RAND-AERC team will provide a preliminary draft report to the World Bank in week 14 of the
project (June 30 assuming a March 15 start date). A final draft report will be delivered in week 22 of
the project (currently scheduled as August 30). After receiving comments from the World Bank team
and internally from RAND reviewers we will revise and submit the final report and all other materials
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c) Organization and Staffing
This projects success will depend critically on efficient and effective project management. To ensure
high quality and timely outputs we have constructed teams from each partner organization in a way
that draws maximally on RAND-AERC expertise and organizes subteams for different tasks that will
work simultaneously on different components of the study.
RAND, as the lead organization, will have overall responsibility for project management and will be
the primary point of contact for the World Bank. Within the RAND team, Dr. Dossani will be the
project lead (principal investigator, PI), given his wealth of experience conducting economic analysis
and regional expertise (including a recently awarded World Bank project to study trade barriers forkey industries in the South Asia region). Dr. Peter Glick will serve as co-PI, drawing on his broad
international development experienceand in particular his work as co-PI for the World Bank-
supported study of urban poverty and evaluation of the PNPM-Urban program in Indonesia in 2011-
2012to provide senior guidance and project oversight. Given the importance of close coordination
between the RAND-AERC team and the World Bank team, Dr. Glick will also serve as the primary
liaison with the World Bank, coordinating communication and providing updates. Dr. Dossani will
also attend all key meetings with the World Bank and will be available as needed for consultation.
Dr. Nuzhat Ahmad will lead the AERC teamand serve as co-PI to Dr. Dossani. AERCs team will
consist of core research staff (Drs. Norman, Butt, and Fatima) and research support staff (Ph.D.
candidates) with experience in data analysis and urban research. Dr. Ahmad will be the primary point
of contact for RAND and will coordinate closely with Drs. Dossani and Glick through regular email
contact and bi-weekly phone calls.
Each project Part (1-2) will be led by a member of the RAND team, with RAND and AERC
researchers serving as co-leads for individual tasks. Dr. Pollard will manage Part 1 and Dr.
Rothenberg will manage Part 2. The lead for each project part will provide weekly progress updates to
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Figure 2: RAND-AERC Management Structure
Peter GlickCo-PI
Primary WB Liaison
Noman Ahmed
Urban Design/Urban
Muhammad Sabihuddin
ButtUrban Development/
Municipal finance
Michael PollardDemography
Part 1 Lead
Alex RothenbergUrban/Transport Economics
Part 2 Lead
RANDAERC
Rafiq Dossani
Team Lead (PI)
Nuzhat Ahmad
Co-PI
AERC lead
Bi-weekly
phone calls
Weekly teammeetings
Weekly team
meetings
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Brief descriptions of each team members background and qualifications follow.
RAND:
Rafiq Dossani, Ph.D (Project lead). A Senior Economist at RAND, Dr. Dossanis research interests
focus on business services policy including technology, higher education, private equity and venture
capital policy, corporate governance, globalization and innovation in business services. Previously,
Dossani was a senior research scholar at Stanford University's Shorenstein Asia-Pacific Research
Center and director of the Stanford Center for South Asia. In 1999, as a member of an Indiangovernment commission to develop rules for accessing venture capital in India, he designed rules for
opening access to global institutional investors and rules for improving the governance of venture
capitalists portfolio companies. In 2000, he evaluated the Bangalore operations of the Software
Technology Parks of India (STPI-B) for the Indian government. In 2000, he jointly led an Indian
Department of Telecommunications exercise to review the rules for telecom licensing in India, in
order to improve carriers commitment to investing in telecom rollout. In 2002, he evaluated the
telecom sector in Pakistan for the Pakistani government to improve foreign investment, while
achieving high rollout rates. In 2002, he evaluated the venture capital sector in Pakistan for the
Pakistani government to improve foreign investment inflow, while improving the supply of innovative
startups. In 2012, he advised the Indian Planning Commission on the design of its five year plan on
higher education, to improve quality, while maintaining a high rate of capacity expansion and
equitable access. These projects required expertise in market analysis, an understanding of business
services, analysis of investment climate and growth potential, evolution of supply-chains in urban
clusters, policy and regulatory design, antitrust economic analysis, competition advocacy, national
innovation system design, and competitive neutrality. Dossani has worked for the Robert FlemingInvestment Banking group, as CEO of India operations and as head of San Francisco operations. He
has authored/edited books including, Higher Education: Triumph of the BRICs? (2013), Knowledge
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of education and training on earnings, the determinants of private and public sector employment,
patterns in womens labor force participation, and youths entry into the labor market.His education
research has used survey and test score data to analyze such topics as school progression, skillsacquisition, private-public school choice, the effects of school and teacher quality on education
outcomes, and gender differences in schooling and skills. In the area of poverty and access to
services, Dr. Glick has conducted numerous studies on the benefit incidence of health and education
service and infrastructure provision. Dr. Glick has consulted for governments and many international
organizations, including the World Bank, Millennium Challenge Corporation, UNDP, USAID, and the
African Development Bank. With Dr. Dossani, Dr. Glick will lead the project, and will oversee the
quantitative analysis and act as primarily liaison (in Washington) with the World Bank. Dr. Glick will
co-lead the RAND team and serve as the primary communication liaison between RAND-AERC and
the World Bank.
Alexander D. Rothenberg (Ph.D., Economics, University of California, Berkeley) is an associate
economist at RAND specializing in research on transportation and urbanization in developing
countries. He is an applied micro-economist with a strong background in econometrics, program
evaluation, development, international trade, and urban economics. Alex has extensive experience
with structural econometric modeling and has ongoing research on a variety of projects, including anevaluation of the effects of improvements to transport infrastructure on firm location choice in
Indonesia and an estimation of willingness to pay for access to transport infrastructure in Honduras.
Dr. Rothenberg will lead Part 2 of the analysis and contribute to multiple tasks on Part 1.
Michael S. Pollard, Ph.D. (Sociology, Duke University), is a full behavioral/social science researcher
at RAND. Dr. Pollard has extensive research experience utilizing demographic methods including
population projection, fertility, and mortality. Dr. Pollards previous population projection work
includes analysis of Kurdistan and New Orleans post Hurricane Katrina both settings with sparse
data. Dr. Pollards ongoing work includes an examination of the role of migration on health. Dr.
Pollard will lead analyses and contribute to the writing relevant to Part 1 with a focus on migration
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forums. Dr Ahmad is a Director on the Board of the Pakistan Poverty Alleviation Fund. She has been
a member of various advisory bodies constituted by the Government of Pakistan, for policy
formulation including Prime Ministers Task Force on Poverty Alleviation, Task Force on UrbanDevelopment, Provision of Services and Poverty Alleviation, Resource Mobilization and Public
Expenditure Management. Dr. Ahmad was also the Editor of the Pakistan Journal of Applied
Economics, an internationally refereed journal in applied economics, from 1996 to 2005. She has
acted as editor for papers by Urban Studies, a leading journal published in the U.K. Dr Ahmad will
act as co-PI on the project and oversee all activities of the AERC team as well as participate in
analysis on several of the project tasks.
Mr. Sabihuddin Buttis currently a Senior Research Economist/ Associate Professor at the Applied
Economics Research Centre, University of Karachi. He has over 30 years of research experience e of
working on urban development, housing, public finance, trade and service delivery for international
organizations like the World Bank, Asian Development Bank, UN Agencies and national provincial
and local government. He has published extensively in peer reviewed journals in areas of urbanization
and population growth, housing, local government administration and finance, institutional
development and health. His work has involved sophisticated modeling and econometric techniques. A
good part of his research has been based on large primary data sets. He has advised government andmunicipal development authorities and participated in World Bank missions on a number of occasions.
He teaches Monetary Economics, Project Evaluation and Macroeconomics at the post graduate level.
He is currently the editor of the Pakistan Journal of Applied Economics an internationally refereed
journal published by the Applied Economics Research Centre. Dr. Butt will serve as the AERC lead
on multiple tasks in both parts of the project.
Professor Dr Noman Ahmedis currently the chairperson of Architecture and Planning Department at
the NED University, Karachi. He has undertaken many assignments related to urban and regional
planning in Pakistan and abroad. Some recent mentions include Team Leader of Sustainable
Urbanization Programme that comprised documentation analysis and proposal development
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aspects of project affected persons. A census was conducted for the entire housing units affected by
the project. Dr. Ambreen was part of the team that conducted the socio economic analysis. The study
was done for the Environmental Management Consultant and the project was funded by JICA.
She also worked on a project assessing the housing finance situation in large cities of Pakistan. The
project focused on the urban housing issues related to large cities like Karachi, Lahore and Islamabad/
Rawalpindi. The project highlighted the weaker portion or missing links in the current framework for
housing in Pakistan and tends to make recommendations that are likely to make the framework more
functional and conducive to the issues in obtaining situation. The study used a combination of
information generated through detailed discussions with different stakeholders e.g. bankers,
developers, government officials, housing consumers through household surveys in Karachi, Lahoreand Islamabad/Rawalpindi. Her role in the project was not only to conduct the discussions/survey but
also to conduct all the analysis based on which a comprehensive report was prepared. The project was
funded by Muslim Commercial Bank of Pakistan. In addition to these studies, part of her Ph.D
dissertation assessed the effect of labour market conditions (from 1990-91 to 2007-08) on child labour
incidence. Finally, she has also worked on Pakistan Standard of Living Measurement Survey and
Household Integrated Economic Survey. Dr. Fatima will support multiple tasks on this project and be
AERC co-lead on drivers of urbanization (Part 1, Task 2).
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-34-