In Search of Pakistan’s Inclusive Growth: Evidence from Income and Non-Income Dimensions

Abstract

Inclusive growth (INCL_GRTH) is a process through which economic opportunities are available for all segments of society without any discrimination of rich and poor. The aim of this study is to find how socio-economic factors affect poverty and how we may achieve INCL_GRTH and reduce poverty in a country like Pakistan. The study has used a poverty headcount ratio as a proxy for INCL_GRTH while the number of income and non-income poverty factors, including, per capita GDP, FDI inflows, agriculture value added, health expenditures, income inequality and education expenditures are highlighted as explanatory factors. The results show that poverty is substantially reduced by increasing education expenditures and FDI inflows, while per capita income, health expenditures and agriculture value added increases poverty in a country. The pro-poor growth estimates have confirmed that except agriculture value added, the remaining factors show anti-poor growth in a country, while agriculture value added gives marginal benefits to the poor as compared to the non-poor between the two time periods studied, that is 1980 and 2016.

Is Economic Growth Inclusive in Punjab, Pakistan? A District Level Assessment Using the Composite Index

“…In addition to this, other studies also focused on measuring inclusive growth at the country level. Mushtaq and Zaman (2021) used the single indicator approach to measure the inclusive growth of Pakistan, where the poverty headcount ratio was used as a proxy and per capita Gross Domestic Product (GDP), Foreign Direct Investment (FDI) inflows, agriculture value added, health expenditures, income inequality, and education expenditures were used as explanatory variables which have an impact on inclusive growth. On the other hand, Kiani, et al (2015) used a composite index approach to measure Pakistan's inclusive growth for a period of five years from 2008 to 2012.…”

“…the proportion of employed women who are registered under Punjab Employees Social Security Institution (PESSI) for social security benefits. Moreover, health and education expenditures have a positive impact on inclusive growth (Mushtaq & Zaman, 2021). Thus, literacy rate, immunisation rate, and household satisfaction level with healthcare facilities (BHUs) are positively associated with inclusive growth, while the infant mortality rate indicator has a negative hypnotised relationship with inclusive growth.…”