The central focus of the study is to find out the determinants of public spending and social welfare spending of SAARC countries. Political, economic and socio-demographic factors collectively determine the direction of the policies of government. These variables are polity, federal structure for legislative strength, election year, total tax revenue, total debt, economic shocks, population ages from 15 to 64, population above 65 years, and income inequality. Panel data is used for estimation. Durbin-WU-Hausman test has preferred random effect test over fixed effect test for the study. The results postulate that, public spending and social welfare spending is mostly determined by political factors rather economic and demographic factors. Legislative strength and polity is more effective than population, revenues and economic shocks. Supervisor:- Muhammad Jehangir Khan