Infrastructure and Economic Growth in Pakistan: A Panel Data Analysis
This study intends to explore the empirical linkages between infrastructure and economic growth in Pakistan, along with the analysis of regional disparity in infrastructure facilities and per capita GDP across the country. The empirical analysis is based on a panel of 4 provinces of Pakistan over the period of 1994-95 to 2014-15. System Generalized Method of Moment (SYS-GMM) is used for the empirical estimation of the model. In our analysis, we have divided infrastructure into physical infrastructure (transport, electricity and irrigational facilities) and social infrastructure (education and health facilities). The study concludes that both physical and social infrastructure have positive and significant impact on economic growth while two-way causality is also confirmed between infrastructure and economic growth. The regional disparity analysis describes that regional disparity is increasing in Pakistan on the grounds of public infrastructure facilities and per capita income. The analysis also shows that along with the increase in public investment in infrastructure facilities, we need to pay more attention to the quality of infrastructure services, effective policy enforcement mechanism and equity in the distribution of infrastructure facilities across the country. Furthermore under- developed regions must be given priority for the provision of infrastructure facilities to speed up the pace of economic development and social betterment there. Supervisor:- Dr. Wasim Shahid Malik
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