Productivity Growth and Efficiency in Indian Banking: A Comparison of Public, Private, and Foreign Banks

India's public sector banks (PSBs) are compared unfavorably with their private sector counterparts, domestic and foreign. This comparison rests, for the most part, on financial measures of performance, and such a comparison provides much of the rationale for privatization of PSBs.In this paper, we attempt a comparison between PSBs and their private sector counterparts based on measures of productivity that use quantities of outputs and inputs. We employ two measures of productivity: Tornqvist and Malmquist total factor productivity growth. We attempt these comparisons over the period 1992-2000, comparing PSBs with both domestic private and foreign banks. Out of a total of four comparisons we have made, there are no differences in three cases, PSBs do better in two, and foreign banks in one. To put it differently, PSBs are seen to be at a disadvantage in only one out of six comparisons. It is difficult, therefore, to sustain the proposition that efficiency and productivity have been lower in public sector banks relative to their peers in the private sector.

The Performance of Domestic and Foreign Banks: The Case of Korea and the Asian Financial Crisis

This paper considers the performance of banks, domestic and foreign, in Korea prior to, during, and immediately after the Asian financial crisis, examining how the profitability of those banks differed and identifying factors that explain why those differences existed. The performance of Korean banks deteriorated dramatically in 1998 with most banks recovering somewhat in 1999. Foreign banks did not experience the same negative effect on their returns on assets and equity as a rule. Several standard findings emerge. For example, equity to assets correlates positively with domestic, but not foreign, bank performance, as measured by the returns on assets and equity, even when the government recapitalized institutions that were performing quite badly. Also, foreign-currency deposits significantly and negatively correlate with domestic Korean bank performance, although only in the post-crisis period for regional banks. In sum, the domestic Korean banks suffered more severely from the Asian financial crisis than foreign banks.

Representing Afghanistan: The United States and Democracy's Imposition

There is an ongoing mission in Afghanistan; a mission driven by external political forces. At its core this mission hopes to establish peace, to protect the populace, and to install democracy. Each of these goals has remained just that, a goal, for the past eight years as the American and international mission in Afghanistan has enjoyed varied levels of commitment. Currently, the stagnant progress in Afghanistan has led the international community to become increasingly concerned about the viability of a future Afghan state. Most of these questions take root in the question over whether or not an Afghan state can function without the auspices of international terrorism. Inevitably, the normative question of what exactly that government should be arises from this base concern. In formulating a response to this question, the consensus of western society has been to install representative democracy. This answer has been a recurring theme in the post Cold War era as states such as Bosnia and Somalia bear witness to the ill effects of external democratic imposition. I hypothesize that the current mold of externally driven state-building is unlikely to result in what western actors seek it to establish: representative democracy. By primarily examining the current situation in Afghanistan, I claim that external installation of representative democracy is modally flawed in that its process mandates choice. Representative democracy by definition constitutes a government reflective of its people, or electorate. Thus, freedom of choice is necessary for a functional representative democracy. From this, one can deduce that because an essential function of democracy is choice, its implementation lies with the presence of choice. State-building is an imposition that eliminates that necessary ingredient. The two stand as polar opposites that cannot effectively collaborate. Security, governing capacity, and development have all been targeted as measurements of success in Afghanistan. The three factors are generally seen as mutually constitutive; so improved security is seen as improving governing capacity. Thus, the recent resurgence of the Taliban in Afghanistan and a deteriorating security environment moving forward has demonstrated the inability of the Afghan government to govern. The primary reason for the Afghan government’s deficiencies is its lack of legitimacy among its constituency. Even the use of the term ‘constituency’ must be qualified because the Afghan government has often oscillated between serving the people within its territorial borders and the international community. The existence of the Afghan state is so dependent on foreign aid and intervention that it has lost policy-making and enforcing power. This is evident by the inability of Afghanistan to engage in basic sovereign state activities as maintaining a national budget, conducting elections, providing for its own national security, and deterring criminality. The Afghan state is nothing more than a shell of a government, and indicative of the failings that external state-building has with establishing democracy.