The objective of this research is to investigate the relationship between institutions and economic growth in case of South Asia and Pakistan. For this purpose, this research uses economic growth as dependent variable and government stability as a proxy for institutions. Similarly, domestic investment, human capital, infrastructure, inflation and financial development are used as control variables. Using the time span of 1990-2014, this research resorts to Driscoll-Kraay standard errors approach for panel data analysis. The results reveal that government stability has an insignificant impact on the economic growth due to inconsistent policies of South Asia. Similarly, using ADF test for checking order of integration, two variables government stability and inflation came integrated of order zero or level stationary. Therefore, using ARDL, the results show that government stability has a +ve and significant impact on the economic growth of Pakistan. Moreover, ECT (-1) term is -0.97 and significant which indicates that there exists a long run relationship between the variables. Further, the estimates are normal having no problems of heteroscedasticity and autocorrelation. Supervisor:-Prof. Dr. Usman Mustafa