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Household and Macroeconomic Effects of the Ehsaas Emergency Cash Programme in Pakistan

Author

Listed:
  • Hasnain A. Naqvi
  • Chang Yee Kwan

Abstract

This article constructs a computable general equilibrium model calibrated to Pakistan’s social accounting matrix for 2010–2011 to examine the household and macroeconomic effects of an unconditional cash transfer—the Ehsaas Emergency Cash programme—during the COVID-19 pandemic. Simulation results find the programme to be Pareto improving by raising real incomes and consumption for all household types. However, it is also found that the cash transfer served to reallocate resources between sectors, reduce national income and increase the government budget deficit. Thus, despite the welfare gains, the outcomes on Pakistan’s fiscal and macroeconomic indicators suggest that enthusiasm for the programme’s continuation needs to be tempered. Instead, the programme may be better considered for inclusion as an automatic stabilizer in fiscal and social policy planning than as an additional component of social protection in Pakistan. A similar caution extends to other emerging economies facing concerns of rising public debt. JEL Classification: D58, H5, H84, E16

Suggested Citation

  • Hasnain A. Naqvi & Chang Yee Kwan, 2025. "Household and Macroeconomic Effects of the Ehsaas Emergency Cash Programme in Pakistan," South Asian Journal of Macroeconomics and Public Finance, , vol. 14(2), pages 204-221, December.
    • Handle: RePEc:sae:smppub:v:14:y:2025:i:2:p:204-221
    DOI: 10.1177/22779787251370834
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    References listed on IDEAS

    as
    1. Darío Debowicz & Paul Dorosh & Hamza Haider & Sherman Robinson, 2013. "A Disaggregated and Macro-consistent Social Accounting Matrix for Pakistan," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 2(1), pages 1-25, December.
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    4. Tilak Abeysinghe, 2021. "Debt Begets Debt: The Sri Lankan Welfare State and Fiscal Sustainability," Asian Economic Journal, East Asian Economic Association, vol. 35(4), pages 363-389, December.
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    6. Harris, Rebecca Lee & Löfgren, Hans & Robinson, Sherman, 2001. "A standard computable general equilibrium (CGE) model in GAMS," TMD discussion papers 75, International Food Policy Research Institute (IFPRI).
    7. Torben M. Andersen, 2016. "Automatic stabilizers—the intersection of labour market and fiscal policies," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-18, December.
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    Keywords

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    JEL classification:

    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • H84 - Public Economics - - Miscellaneous Issues - - - Disaster Aid
    • E16 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Social Accounting Matrix

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