The relationship between foreign direct investment and pro-poor growth policies in Pakistan: The new interface
AbstractThe lack of asset accumulation may be one of the major reasons for poverty; consequently, the poor have not been able to sustain growth. Investment in the assets of the poor will play an essential role for formulating pro-poor growth policies. The aim of this study is to investigate the potential impact of FDI on the poor in Pakistan over the period 1985–2011. The regression model encompassing the impact of FDI on poverty reflects that if there is one percent increase in FDI is likely to reduce poverty by 0.47% at urban, 0.44% at rural and 0.46% at national levels respectively. The result concludes that although, there is a positive impact of FDI on poverty, this positive impact is not sufficient enough to conclude that investment is pro-poor in Pakistan, because, an intensity of income inequality is more than the FDI's poverty reduction at rural, urban and national levels. Pakistan's investment, poverty and inequality statistics were studied for the first time in terms of pro-poor growth scenario. Pro-poor investment index (PPII) and poverty equivalent investment rate (PEIR) reveal that investment is pro-poor in Pakistan from 1985–1986 to 2002–2005, however, the subsequent years from 2005 to 2011 demonstrated pro-rich investment scenario in Pakistan. If the investment still remains anti-poor in the subsequent years as reflected in the years 2005 to 2011, there is a likelihood that investment may not trickle down to the poor but instead to the non-poor in Pakistan. Thus checking vulnerability would offer wide option for the policy makers to settle the issue of the severity of poverty in the future.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Elsevier in its journal Economic Modelling.
Volume (Year): 29 (2012)
Issue (Month): 4 ()
Contact details of provider:
Web page: http://www.elsevier.com/locate/inca/30411
Foreign direct investment; Consumer Price Index; Poverty; Exchange rate; Pro-poor investment index; Pakistan;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Nanak Kakwani & Shahid Khandker & Hyun H. Son, 2004. "Pro-poor growth: concepts and measurement with country case studies," Working Papers 1, International Policy Centre for Inclusive Growth.
- Matsuyama, Kiminori, 1991.
"Increasing Returns, Industrialization, and Indeterminacy of Equilibrium,"
The Quarterly Journal of Economics,
MIT Press, vol. 106(2), pages 617-50, May.
- Kiminori Matsuyama, 1990. "Increasing Returns, Industrialization and Indeterminacy of Equilibrium," Discussion Papers 878, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- James R. Markusen & Anthony J. Venables, 1997.
"Foreign Direct Investment as a Catalyst for Industrial Development,"
NBER Working Papers
6241, National Bureau of Economic Research, Inc.
- Markusen, James R. & Venables, Anthony J., 1999. "Foreign direct investment as a catalyst for industrial development," European Economic Review, Elsevier, vol. 43(2), pages 335-356, February.
- Khan, A.H. & Kim, Y.-H., 1999. "Foreign Direct Investment in Pakistan: Policy Issues and Operational Implications," Papers 66, Asian Development Bank.
- Acosta, Pablo & Calderon, Cesar & Fajnzylber, Pablo & Lopez, Humberto, 2007.
"What is the impact of international remittances on poverty and inequality in Latin America ?,"
Policy Research Working Paper Series
4249, The World Bank.
- Acosta, Pablo & Calderon, Cesar & Fajnzylber, Pablo & Lopez, Humberto, 2008. "What is the Impact of International Remittances on Poverty and Inequality in Latin America?," World Development, Elsevier, vol. 36(1), pages 89-114, January.
- Pasquale Tridico, 2010. "Growth, Inequality and Poverty in Emerging and Transition Economies," Transition Studies Review, Springer, vol. 16(4), pages 979-1001, February.
- Deininger, K & Squire, L, 1996. "Measuring Income Inequality : A New Data-Base," Papers 537, Harvard - Institute for International Development.
- Krugman, Paul, 1991. "History versus Expectations," The Quarterly Journal of Economics, MIT Press, vol. 106(2), pages 651-67, May.
- Barry P. Bosworth & Susan M. Collins, 1999. "Capital Flows to Developing Economies: Implications for Saving and Investment," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 30(1), pages 143-180.
- Anand, Sudhir & Kanbur, S. M. R., 1993. "Inequality and development A critique," Journal of Development Economics, Elsevier, vol. 41(1), pages 19-43, June.
- James E. Foster & Miguel Székely, 2008.
"Is Economic Growth Good For The Poor? Tracking Low Incomes Using General Means,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 49(4), pages 1143-1172, November.
- James E. Foster & Miguel Székely, 2001. "Is Economic Growth Good for the Poor? Tracking Low Incomes Using General Means," Research Department Publications 4269, Inter-American Development Bank, Research Department.
- Hyun H. Son & Nanak Kakwani, 2006. "Measuring the impact of prices on inequality: with applications to Thailand and Korea," Working Papers 11, International Policy Centre for Inclusive Growth.
- Khalid Zaman & Waseem Ikram & Iqtidar Ali Shah, 2010. "Bivariate cointegration between poverty and environment: a case study of Pakistan (1980-2009)," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 53(8), pages 977-989.
- Tsai, Pan-Long & Huang, Chao-Hsi, 2007. "Openness, Growth and Poverty: The Case of Taiwan," World Development, Elsevier, vol. 35(11), pages 1858-1871, November.
- Hyun Son & Nanak Kakwani, 2006. "Measuring the impact of prices on inequality: With applications to Thailand and Korea," Journal of Economic Inequality, Springer, vol. 4(2), pages 181-207, August.
- Dollar, David & Kraay, Aart, 2002.
" Growth Is Good for the Poor,"
Journal of Economic Growth,
Springer, vol. 7(3), pages 195-225, September.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).
If references are entirely missing, you can add them using this form.