Democracy, Inequality and Economic Development: The Case of Pakistan
AbstractIn this paper, we made an attempt to understand the costs and benefits of democracy for economic growth in Pakistan by analyzing the relationship between democracy and its various measures. Using instrumental variables and RALS (rth-order autoregressive least squares) estimation techniques, it is shown that during the period 1972-2005, there is only a tenuous and uncertain relationship between democracy and fiscal policy variables like expenditures, revenues and deficit; whereas democracy has no impact at all on the income inequality. Moreover, we observed that the political rights had a significant negative impact on fiscal expenditures, suggesting that with an increase in political rights, the governing institutes begin to feel themselves more accountable and as such are more circumspect in expenditures.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 26935.
Date of creation: 15 Nov 2008
Date of revision:
Democracy; Political Rights; Fiscal Expenditures; Economic Growth; Income Inequality; Well-Being;
Find related papers by JEL classification:
- H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
- P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism
- P50 - Economic Systems - - Comparative Economic Systems - - - General
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