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Does Governance Contribute to Pro-poor Growth? Evidence from Pakistan


  • Rashida Haq


  • Uzma Zia


Economic growth is a driving force in reducing poverty, but experience has shown that good governance and pro-poor choices are vitally important in the process of alleviating poverty. This paper explores linkages between governance and pro-poor growth in Pakistan for the period 1996 to 2005. The analysis indicates that governance indicators have low scores and rank at the lowest percentile as compared to other countries. The dimensions of pro-poor growth, which include poverty, inequality, and growth, demonstrate that the poor do not benefit proportionately from economic growth. It is found that poverty and inequality have worsened and the share in income and expenditure for the bottom 20 percent has also decreased, while inflation for this lowestincome group is high as compared to the highest-income group. It is also observed that approximately 25 percent households reported that their economic status was worse than in the previous year, 2004-05. The results of the study show that a strong link exists between governance indicators and pro-poor growth in the country. Econometric analysis shows that there is a strong relationship between good governance and reduction in poverty and inequality. It is concluded that greater voice and accountability, political stability, regulatory quality, and rule of law can control corruption and the pro-poor policies, which ultimately reduce poverty and inequality in the long run. To face the challenge of good governance, Pakistan needs to formulate, and implement effectively, its governance policies to improve the governance dimensions, taking account of both higher growth and the aim of achieving the Millennium Development Goals, which require halving poverty by 2015.

Suggested Citation

  • Rashida Haq & Uzma Zia, 2009. "Does Governance Contribute to Pro-poor Growth? Evidence from Pakistan," Governance Working Papers 22980, East Asian Bureau of Economic Research.
  • Handle: RePEc:eab:govern:22980

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    References listed on IDEAS

    1. Resnick, Danielle & Birner, Regina, 2006. "Does good governance contribute to pro-poor growth?: a review of the evidence from cross-country studies," DSGD discussion papers 30, International Food Policy Research Institute (IFPRI).
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    3. Alberto Chong & Mark Gradstein, 2007. "Inequality and Institutions," The Review of Economics and Statistics, MIT Press, vol. 89(3), pages 454-465, August.
    4. Lopez, J. Humberto, 2004. "Pro-growth, pro-poor : is there a tradeoff?," Policy Research Working Paper Series 3378, The World Bank.
    6. Kraay, Aart, 2004. "When is growth pro-poor? Cross-country evidence," Policy Research Working Paper Series 3225, The World Bank.
    7. Mian Tayyab Hassan, 2002. "Governance and Poverty in Pakistan," MIMAP Technical Paper Series 2002:13, Pakistan Institute of Development Economics.
    8. Son, Hyun Hwa, 2004. "A note on pro-poor growth," Economics Letters, Elsevier, vol. 82(3), pages 307-314, March.
    9. Luc Christiaensen & Lionel Demery & Stefano Paternostro, 2003. "Macro and Micro Perspectives of Growth and Poverty in Africa," World Bank Economic Review, World Bank Group, vol. 17(3), pages 317-347, December.
    10. Ravallion, Martin & Chen, Shaohua, 2003. "Measuring pro-poor growth," Economics Letters, Elsevier, vol. 78(1), pages 93-99, January.
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    Cited by:

    1. Muhammad Khan & Muhammad Khan & Khalid Zaman & Umar Hassan & Sobia Umar, 2014. "Global estimates of growth–inequality–poverty (GIP) triangle: evidence from World Bank’s classification countries," Quality & Quantity: International Journal of Methodology, Springer, vol. 48(5), pages 2631-2646, September.
    2. Shah Shirazi, Nasim & Obaidullah, Mohammed, 2014. "Why Poverty Reduction Programs of Pakistan Did Not Bring Significant Change: An Appraisal," Working Papers 1435-17, The Islamic Research and Teaching Institute (IRTI).
    3. Siddiqui, Danish Ahmed & Ahmed, Qazi Masood, 2009. "The Causal Relationship between Institutions and Economic Growth: An Empirical Investigation for Pakistan Economy," MPRA Paper 19745, University Library of Munich, Germany.
    4. Siddiqui, Danish Ahmed & Ahmed, Qazi Masood, 2009. "Does Institutions effect growth in Pakistan? An Empirical investigation," MPRA Paper 19744, University Library of Munich, Germany.
    5. Mamoon, Dawood, 2017. "Effect of Welfare and Economic Performance on Good Governance Outcomes in Pakistan," MPRA Paper 81878, University Library of Munich, Germany.
    6. Shirazi, Dr. Nasim Shah & Obaidullah, Dr. Mohammed & Haneef, Mohamed Aslam, 2015. "Integration of Waqf and Islamic Microfinance for Poverty Reduction," Working Papers 1436-5, The Islamic Research and Teaching Institute (IRTI).

    More about this item


    Governance Indicators; Pro-poor Growth; poverty; Inequality;

    JEL classification:

    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General


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