Comparative Costs, Factor Proportions and Industrial Efficiency in Pakistan

  • Nurul Islam


This paper contains, in Section I, new and additional evidence on the comparative costs of manufacturing industries in Pakistan. Comparative costs in this context are defined as the ratios of ex-factory prices of specific domestic products to c.i.f. prices of closely competing imports. In Section II, we examine whether tariff rates are an adequate index of comparative cost ratios, i.e., in other words, whether the differences in the tariff rates reflect the differential cost structure of Pakistani industries. We also examine, in Section III, whether the available data provide any evidence on the relationship between the magnitude of cost disabilities of the Pakistani industries and their stage of infancy, i.e. whether and to what extent cost ratios decline with the growing up of infant industries. This paper also analyses in Sections IV and V how far comparative cost ratios can be used as a measure of the relative inefficiency of industries in Pakistan. How far, for example, do the high cost ratios of domesdic industries merely indicate that the Pakistani rupee is overvalued ? How far are the cost ratios affected by or represent high profits of industries? An attempt is made to adjust for both the overvaluation of foreign exchange and the prevalence of abnormally high profits.


Foreign Exchange Factor Proportion Comparative Cost Cost Ratio Tariff Rate 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. [1]
    Soligo, Ronald, and Stern, J. J., ‘Tariff Protection, Import Substitution and Investment Efficiency’, Pakistan Development Review, y 2, summer 1965, pp. 249–270. See also Chapter 4 of this volume.Google Scholar
  2. [2]
    Soligo, Ronald, and Stern, J. J., ‘Some Comments on the Export Bonus, Export Promotion and Investment Criteria’ Pakistan Development Review, vi, 1, spring 1966, pp. 38–56.Google Scholar
  3. [3]
    I.B.R.D., The Industrial Development of Pakistan (Washington: I.B.R.D.,) 1966.Google Scholar
  4. [4]
    Islam, Nurul, Tariff Protection, Comparative Costs and Industrialisation in Pakistan, mimeographed Research Report no. 57 (Karachi: Pakistan Institute of Development Economics, Jan. 1967).Google Scholar
  5. [5]
    Stern, Joseph J., and Tims, Wouter, Inter-Industry Input-Output Tables for Pakistan, 1962–63 unpublished mimeographed report (Karachi: Pakistan Institute of Development Economics).Google Scholar
  6. [6]
    Pal, M. L., ‘Domestic Prices of Imports in Pakistan: Extension of Empirical Findings’, Pakistan Development Review, v, 4, winter 1965.Google Scholar
  7. [7]
    Baqai, Dr M., and K. Haq, ‘A Study of Savings in the Corporate Sector in Pakistan, 1959–63’, paper read at the Pakistan Institute of Development Economics Seminar on ‘Current Economic Problems of Pakistan’ held at Karachi, 28–30 Jan. 1967.Google Scholar
  8. [8]
    Lary, H. B., Exports of Manufactures by the Less Developed Countries (New York: National Bureau of Economic Research Inc., June 1966).Google Scholar
  9. [9]
    Pakistan, Central Statistical Office, Census of Manufacturing Industries 1955 and 1959–60 (Karachi: Central Statistical Office).Google Scholar
  10. [9a]
    Pakistan, Tariff Commission, Reports, various years (Karachi: Manager of Publications).Google Scholar
  11. [10]
    Basevi, G., ‘The U.S. Tariff Structure: Estimates of Effective Rates of the U.S. Industries and Industrial Labour’, Review of Economics and Statistics, May 1966.Google Scholar
  12. [11]
    Krueger, Anne O., ‘Some Economic Costs of Exchange Control: The Turkish Case’, Journal of Political Economy, Oct. 1966, pp. 466–80.Google Scholar

Copyright information

© Pakistan Development Review and Nurul Islam 1972

Authors and Affiliations

  • Nurul Islam

There are no affiliations available

Personalised recommendations