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Factors Affecting Economic Growth: A Comparative Analysis of Democratic and Non-Democratic Eras of Pakistan

Author

Listed:
  • Faridoon Khan
  • Amena Urooj

    (Pakistan Institute of Development Economics, Islamabad)

  • Farman Ullah Khan

    (COMSATS Institute of Information Technology, Islamabad)

Abstract

This paper empirically investigated the impact of macroeconomic factors on economic growth during Pakistan's democratic and non-democratic eras. The study employed an ARDL Bounds testing approach along with an error correction model using yearly data spanning from 1971 to 2018. The empirical analysis concluded that export, remittances, and real effective exchange rate are indeed important. Export, remittances inflow, and real effective exchange rate positively influenced economic growth in the long term. Furthermore, imports negatively affect economic growth, but the affect is insignificant. The study reported an insignificant difference in the independent variables that affected the growth process and revealed that non-democratic eras' performance has not remained better than democratic government in Pakistan's case. The study recommends that policymakers pursue appropriate strategies to enhance exports and foreign remittances and appreciate a country's currency to attain long-term economic growth.

Suggested Citation

  • Faridoon Khan & Amena Urooj & Farman Ullah Khan, 2020. "Factors Affecting Economic Growth: A Comparative Analysis of Democratic and Non-Democratic Eras of Pakistan," iRASD Journal of Economics, International Research Alliance for Sustainable Development (iRASD), vol. 2(2), pages 61-71, December.
    • Handle: RePEc:ani:irdjoe:v:2:y:2020:i:2:p:61-71
    DOI: https://doi.org/10.52131/joe.2020.0101.0017
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    More about this item

    Keywords

    Economic growth; ARDL; Imports; Exports; Remittances; Real effective exchange rate;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

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