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A Development Model and Foreign Aid Requirements in Pakistan

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  • GHULAM ALI

    (Pakistan Institute of Development Economics.)

Abstract

In the transitional period of development, absorptive capacity is not a binding constraint to development for long. As attempts to increase investment are made in a bid to achieve the desired growth rate, savings fall short of funds required for the purpose. In the initial period of development, the underdeveloped countries like Pakistan generally face the emergence of a gap [6a] between investment and savings which we will refer to as the resources gap. If domestic resources are sufficient to generate required savings, there may be another limit to the investment of these resources due to lack of complementary inputs, in which their own production capacity is limited, and their traditional exports are not, in general, sufficient to finance the imports of capital goods and other complementary inputs in accordance with the needs of the economy. Therefore, there emerges another gap termed as the trade gap.

Suggested Citation

  • Ghulam Ali, 1977. "A Development Model and Foreign Aid Requirements in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 16(3), pages 229-261.
    • Handle: RePEc:pid:journl:v:16:y:1977:i:3:p:229-261
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    File URL: http://www.pide.org.pk/pdf/PDR/1977/Volume3/229-261.pdf
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    Cited by:

    1. Bushra Yasmin, 2005. "Foreign Capital Inflows and Growth in Pakistan," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 6(2), pages 207-219, September.
    2. Zafar Iqbal, 1993. "Institutional Variations in Saving Behaviour in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 32(4), pages 1293-1311.

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