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1. What are public goods? What are the defining characteristics of public goods?2. What is special about managing common resources like Markhors/Ibex (and other rare species)? What is the free rider problem?3. How the incentives-based system works?4. What are the consequences of Community Trophy Hunt Program (CTHP) in Pakistan?

Learning objectives are as follows:1. applying new approaches to manage common resources;2. understanding the various types of goods that society needs for its material progress;3. understanding the challenges associated with the management of common resources because of their particular nature; and4. understanding the need for incentive-based engagement in the management of public policies at the community level.

Management of shared resources is challenging. This case uses the problem of a forest officer who was given the task of managing the animal population of the region. The primary focus of the case is common resources and how it can be managed through incentive-based system. The case demonstrates how individual actions have external effects. These external effects are sometimes good for the community, but sometimes, they are bad. Many desirable outcomes require social cooperation, but they cannot be achieved because individual self-interest dominates collective well-being, the issue called Prisoners' Dilemma. Gulnar (the fictional forest officer) was convinced about the potential of managing common resources by means of a CTHP in the Gilgit–Baltistan region (in Pakistan). The CTHP provided not just environmental benefits but also substantial social and economic benefits to the local community. The financial gains from the initiative can be used in community projects that help locals become less reliant on their natural environment, create more space for wildlife and enhance the quality of life for people.

BS (Hons.) Economics, MS Economics (Public Policy), MBA (Business Economics)

Supplementary materials teaching notes are available for educators only.

CSS 4: Environmental Management

The case has the following learning objectives:

1. understand the various types of comparisons that are possible between groups over time and across space;

2. evaluate a policy intervention using relevant data and different methods; and

3. understand the meaning of the phrase “controlling for other relevant factors” in regression and non-regression contexts.

The difference-in-differences (DID) approach is a useful tool for making meaningful comparisons. This case tries to provide a non-technical introduction to the approach using a basic comparison of crime rates among districts in Punjab (Pakistan's largest province). Being the most populous region of the country, Punjab faces many governance challenges, and street crime is one of them. (Exhibit 5 provides additional information about the geographical and administrative setting used in this case study.) In 2016, Chief Minister Shahbaz Sharif established the Dolphin (police) Force in different locations to improve urban patrolling and reduce street crime. There were debates about the effectiveness of the Dolphin Force (DF).

Those who are skeptical of DF point to various situations that were handled incorrectly by DF personnel, as well as other administrative and operational problems in the initiative. Optimists believe it is beneficial and want it to be expanded to other districts and regions. The threat of street crime claims many lives and, according to optimists, necessitates the formation of a special force. Whether the huge resources invested in the DF worth their lot or not can be known through sound statistical analysis that can identify the difference in the rate of crime because of the DF. In this instance, the case provides information to answer the following question:

Is there a significant difference in crime rates between areas where the DF is operating and districts where it has not yet been installed?

In quantitative/statistical analysis classes, the case can be used to teach the DID technique to MBA/MS Applied Statistics/Applied Data Analysis students. It can also be used in undergraduate Econometrics classes.

Teaching notes are available for educators only.

CSS 7: Management Science.

Purpose of this study is to explore the nature of relationship between internationalization of firms, sustainability of their supply chains, and the extent of their green innovations. Understanding of the relationship between these constructs is important because of the ever increasing sustainability awareness of consumers in the leading economies of the world. This awareness is now compelling importers of goods from cheap-labor countries to ensure that their suppliers comply with sustainability regulations. This compliance becomes very challenging because of the lack of control on second-tier and third-tier suppliers in a supply chain. First-tier suppliers in this case may drive this effort but need to be motivated enough to do so. In case of environmental sustainability, green innovation (GI) may provide a gradual, and thus more affordable and practical, move toward more eco-friendly ways. As far as the motivation to commit to sustainability and GI is concerned, internationalization and export business expansion may act as one of the most effective motivators for these suppliers. However, the nature of relationship between these three constructs, i.e. internationalization of firms, sustainability of their supply chains and the extent of their GI requires a better understanding.

The work uses a novel data set collected from 146 medium and large textile firms operating in Pakistan. The partial least square-structural equation modeling approach is used for data analysis.

All three constructs of internationalization, GI and sustainable supply chain management (SSCM) are significantly associated and thus complement each other.

This work uses a novel agency theory perspective to analyze the relationship between internationalization, GI and SSCM. In that sense, the findings indicate that internationalization could be one of the incentives that can be used by the principals to deal with agents’ goal conflict and information asymmetry.

The use of remotely piloted aerial vehicles (RPVs) as a counterterrorism strategy is intensely debated on grounds of legitimacy, political feasibility and human rights. This study aims to contribute to the understanding of the link between RPVs’ strikes and terrorism through evidence-based analysis.

Using insights from economic analysis of counterterrorism, the study hypothesized possible channels through which RPVs may increase costs for terrorism. A novel data set is gathered to empirically test the theory-consistent prediction of a negative link between RPVs’ strikes and terrorism in a multivariate econometric framework.

Focusing on RPVs’ strikes in Pakistan over 2008 to 2013, the analysis yields important new insights. The principal finding suggests that RPVs reduce overall terrorism, while, without negating the negative spillover effects of RPVs use, there is no evidence of a positive feedback from civilian casualties to terrorism. These findings are not driven by extreme observations and satisfy a number of conventional diagnostic checks.

A well-constructed comparison and empirical evidence in this study implies that RPVs may yield net benefits in terms of greater security at regional and national levels.

Moreover, as a proactive counterterrorism measure, RPVs can be an effective policing tool in crowded urban areas facing the greater threat of terrorism.

The study is the first to systematically analyze the link between RPV strikes and the magnitude of terrorism. The groundbreaking analysis thus extends the scope of economic inquiry to the role of RPVs as a counterterrorism strategy at national, regional and global levels. The findings of the study cast doubt on the validity of many popular notions about RPVs strikes, as they find little support in the empirical analysis.

This study explores the role of firm age as a mediating variable in the link between performance and the risk of terrorism. Theoretically, there can be vulnerabilities, liabilities or learning effects associated with age.

The empirical strategy uses randomness in the occurrence of successful terrorist incidents to estimate the hypothesized link in a sample of 1,600 Pakistani firms.

The results suggest a significant effect of terrorism for organizations lying beyond the 50th percentile of the age distribution. In addition to relevant controls – like size, ownership and location effects – the baseline results withstand alternative empirical specifications and the use of instrumental variables.

The study helps us understand the role of firm age in its performance, taking into account the presence of risks posed by weak law and order.

The health costs associated with obesity are increasing in developed and emerging economies. Particularly important, though remaining underexplored, is the overall impact of health risks associated with being obese and overweight on the productivity of firms in a cross-country setting. The purpose of this paper is to address these issues.

This paper exploits the natural variation in the percentage of obese males in the population as an exogenous health risk randomly distributed across firms in each country.

Investigating this link for a sample of around 80 emerging countries, the evidence suggests a significant negative effect of health risks on productivity.

The identification assumptions are checked using different approaches to establish the robustness of the empirical link.

This study helps us understand the microlevel effects of the rising average obesity rate. This knowledge is rare in emerging economies which are facing the highest risks of obesity and cardiovascular diseases associated with it.