Throughout Pakistan’s history, policy has sought to promote exports through government support and incentives. The government machinery is geared to export promotion especially through direct and indirect subsidies. Surprisingly, these policies have been continued without serious examination. This paper makes a first attempt to evaluate these policies by estimating the impact of two such schemes—export financing and rebate/refund schemes—on export performance. Our analysis shows that, over the long run, the export financing scheme had a negative effect on exports while the rebate/refund scheme affected exports insignificantly. Subsidy schemes clearly do not seem to work, yet they have been retained for many years.
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Paper provided by Pakistan Institute of Development Economics in its series PIDE-Working Papers with number
2007:26.
Length: 18 pages Date of creation: 2007 Date of revision: Handle: RePEc:pid:wpaper:2007:26
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