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Entrepreneurship in Pakistan


  • Nadeem Ul Haque

    (Formerly Vice-Chancellor Pakistan Institute of Development Economics, Islamabad.)


Entrepreneurship is viewed by economists to be a combination of innovation and risk taking. When such activity thrives, high growth rates are achieved as well as opportunities offered to all segments of society, including the poor. The latter benefit form growth and employment as well as through opportunities for entrepreneurship. In Pakistan innovation and risk taking is severely inhibited by the intrusive role of government in the marketplace. From the early days of planning when protection and subsidy polic ies determined winners in the market place, entrepreneurship has been diverted to seeking government favours. Government economic policy also seeks to promote growth through a basically ‘mercantilist’ approach where domestic commerce through seriously neglect is heavily regulated. This sector either employs most of the poor or offers them entrepreneurial opportunities. Hence deregulating this sector could be a priority in and anti-poor strategy. The paper also argues that land distribution and city zoning and management have also evolved to further reinforce the prevalent rent seeking path to success. The result is that cities are by design not allowed to become clusters of commerce that will be entrepreneur friendly. These clusters of dense urban commerce are magnets of employment and opportunity for the poor. To develop an entrepreneurship culture in the country, the system of incentives (laws and policies) that promote rent seeking will have to be dismantled. This paper presents an analysis of the state of entrepreneurship/rent seeking prevailing in Pakistan. This analysis allows us to obtain and understanding of the kinds of reforms (including legislative changes) that are required to develop entrepreneurship.

Suggested Citation

  • Nadeem Ul Haque, 2007. "Entrepreneurship in Pakistan," PIDE-Working Papers 2007:29, Pakistan Institute of Development Economics.
  • Handle: RePEc:pid:wpaper:2007:29

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    References listed on IDEAS

    1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-1037, October.
    2. Gene M. Grossman & Elhanan Helpman, 1994. "Endogenous Innovation in the Theory of Growth," Journal of Economic Perspectives, American Economic Association, vol. 8(1), pages 23-44, Winter.
    3. Nadeem Ul Haque, 2006. "Awake the Sleeper Within: Releasing the Energy of Stifled Domestic Commerce!," PIDE-Working Papers 2006:11, Pakistan Institute of Development Economics.
    4. Adam B. Jaffe & Manuel Trajtenberg & Rebecca Henderson, 1993. "Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations," The Quarterly Journal of Economics, Oxford University Press, vol. 108(3), pages 577-598.
    5. Musleh-Ud Din & Kalbe Abbas, 2000. "The Uruguay Round Agreement and Pakistan's Trade in Textiles and Clothing," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 1(1), pages 101-115, March.
    6. Kevin M. Murphy & Andrei Shleifer & Robert W. Vishny, 1991. "The Allocation of Talent: Implications for Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 106(2), pages 503-530.
    7. Nadeem Ul Haque, 2006. "Awake the Sleeper Within : Releasing the Energy of Stifled Domestic Commerce!," Trade Working Papers 22189, East Asian Bureau of Economic Research.
    8. David B. Audretsch & Roy Thurik, 2001. "Linking Entrepreneurship to Growth," OECD Science, Technology and Industry Working Papers 2001/2, OECD Publishing.
    9. Din, Musleh-ud & Abbas, Kalbe, 2000. "Uruguay Round Agreement and Pakistan's Trade in Textiles and Clothing," MPRA Paper 4903, University Library of Munich, Germany, revised Mar 2000.
    10. Krueger, Anne O, 1974. "The Political Economy of the Rent-Seeking Society," American Economic Review, American Economic Association, vol. 64(3), pages 291-303, June.
    11. Paul M. Romer, 1994. "The Origins of Endogenous Growth," Journal of Economic Perspectives, American Economic Association, vol. 8(1), pages 3-22, Winter.
    12. Daron Acemoglu, 1996. "A Microfoundation for Social Increasing Returns in Human Capital Accumulation," The Quarterly Journal of Economics, Oxford University Press, vol. 111(3), pages 779-804.
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    Blog mentions

    As found by, the blog aggregator for Economics research:
    1. Can Entrepreneurship Save Pakistan?
      by Dane Stangler in Growthology on 2011-01-13 23:37:08


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    Cited by:

    1. Irfan ul Haque, 2016. "The Productivity Growth–Technology–Entrepreneurship Nexus: Implications for Pakistan," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 21(Special E), pages 15-31, September.
    2. Mohammad Salman Shabbir & Mohd Noor Mohd Shariff & Arfan Shahzad, 2016. "Determinants of Entrepreneurial Skills set in Pakistan: A Pilot Study," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 6(2), pages 76-86, April.

    More about this item


    Entrepreneurship; New Firm; Startups;

    JEL classification:

    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

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