IDEAS home Printed from https://ideas.repec.org/a/pid/journl/v48y2009i4p715-738.html
   My bibliography  Save this article

Do Foreign Inflows Benefit Pakistani Poor?

Author

Listed:
  • Muhammad Ali

    (Applied Economics Research Centre, University of Karachi)

  • Muhammad Nishat

    (Institute of Business Administration, Karachi)

Abstract

Foreign Inflow plays an important role in country ’s development. The importance of foreign inflows is not limited to developing countries; developed and emerging economies also attract foreign inflows to supplement their resources to sustain growth. The importance of foreign inflow in Pakistan is very well acknowledged and documented, however the affect of these inflows on poor people of Pakistan remains unanswered. This paper is an attempt to fill this gap by studying the impact of foreign inflows on poverty reduction in Pakistan through the channel of health, education and other indicators related to human development. Our foreign inflow variable consists of Foreign Direct Investment, Remittances and Foreign Assistance. Using ARDL approach to co-integration on time series data for the period 1972 to 2008, we found that foreign inflows as a whole have increased poverty levels in Pakistan. At disaggregated levels, we found that foreign assistance is the major component of inflows which is responsible for the positive relationship between inflows and poverty. We also found positive relationship between poverty and infant mortality and foreign inflows and female enrolment. The relationship suggests that increase in foreign inflows would not only increase poverty but also would increase infant mortality through indirect channel. The impact of inflow on female enrolment was however found to be positive.

Suggested Citation

  • Muhammad Ali & Muhammad Nishat, 2009. "Do Foreign Inflows Benefit Pakistani Poor?," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 48(4), pages 715-738.
    • Handle: RePEc:pid:journl:v:48:y:2009:i:4:p:715-738
    as

    Download full text from publisher

    File URL: http://www.pide.org.pk/pdf/PDR/2009/Volume4/715-738.pdf
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Shastri, Shruti & Giri, A.K. & Mohapatra, Geetilaxmi, 2022. "Foreign capital inflows and poverty linkages in South Asia: Do the forms of capital inflows matter?," Economic Systems, Elsevier, vol. 46(3).
    2. Sodiq Arogundade & Mduduzi Biyase & Santos Bila, 2022. "Be Nice to Thy Neighbors: Spatial Impact of Foreign Direct Investment on Poverty in Africa," Economies, MDPI, vol. 10(6), pages 1-20, June.
    3. Mehmed Ganić, 2019. "Does Foreign Direct Investment (FDI) Contribute to Poverty Reduction? Empirical Evidence from Central European and Western Balkan Countries," Scientific Annals of Economics and Business (continues Analele Stiintifice), Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, vol. 66(1), pages 15-27, March.
    4. Furqan Sikandar & Vasilii Erokhin & Hongshu Wang & Shafiqur Rehman & Anna Ivolga, 2021. "The Impact of Foreign Capital Inflows on Agriculture Development and Poverty Reduction: Panel Data Analysis for Developing Countries," Sustainability, MDPI, vol. 13(6), pages 1-22, March.
    5. Dhrifi, Abdelhafidh & Jaziri, Raouf & Alnahdi, Saleh, 2020. "Does foreign direct investment and environmental degradation matter for poverty? Evidence from developing countries," Structural Change and Economic Dynamics, Elsevier, vol. 52(C), pages 13-21.
    6. Quynh Anh Do & Quoc Hoi Le & Thanh Duong Nguyen & Van Anh Vu & Lan Huong Tran & Cuc Thi Thu Nguyen, 2021. "Spatial Impact of Foreign Direct Investment on Poverty Reduction in Vietnam," JRFM, MDPI, vol. 14(7), pages 1-16, June.
    7. Hummera Saleem & Malik Shahzad Shabbir & Syed Ali Raza Shah & Jalal Shah, 2021. "Nexus between Foreign Direct Investment and Poverty Reduction: A case of Pakistans," iRASD Journal of Economics, International Research Alliance for Sustainable Development (iRASD), vol. 3(3), pages 272-280, December.
    8. Aurora A. C. Teixeira & Ana Sofia Loureiro, 2019. "FDI, income inequality and poverty: a time series analysis of Portugal, 1973–2016," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 18(3), pages 203-249, October.
    9. Taiwo Akinlo & James Temitope Dada, 2021. "The moderating effect of foreign direct investment on environmental degradation-poverty reduction nexus: evidence from sub-Saharan African countries," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(11), pages 15764-15784, November.
    10. S. M. Naseem, 2012. "A Review Of Studies On Poverty In Pakistan: Origin, Evolution, Thematic Content And Future Directions," PIDE Books, Pakistan Institute of Development Economics, number 2012:1 edited by Rashid Amjad, December.
    11. Luqman, Muhammad & Haq, Mairajul & Lal, Irfan, 2013. "Foreign Aid and Macroeconomic Performance in Pakistan: Exploring the Role of Local Financial Sector Development," MPRA Paper 106866, University Library of Munich, Germany.

    More about this item

    Keywords

    Poverty; Economic Growth; Pakistan; Foreign Capital; Foreign Debt; Aid; Remittances; Foreign Direct Investment;
    All these keywords.

    JEL classification:

    • E00 - Macroeconomics and Monetary Economics - - General - - - General
    • F20 - International Economics - - International Factor Movements and International Business - - - General
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • F35 - International Economics - - International Finance - - - Foreign Aid
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pid:journl:v:48:y:2009:i:4:p:715-738. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Khurram Iqbal (email available below). General contact details of provider: https://edirc.repec.org/data/pideipk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.