IDEAS home Printed from https://ideas.repec.org/a/fej/articl/v4cy2011i4p43-55.html
   My bibliography  Save this article

Impact of poor governance and income inequality of poverty in Pakistan

Author

Listed:
  • Zainab Akram

    (Lecturer, COMSATS Institute of Information Technology, Lahore, Pakistan)

  • Sajida Wajid

    (Lecturer, Minhaj University, Lahore, Pakistan)

  • Tahir Mahmood

    (Assistant Professor, University of Veterinary and Animal Sciences, Lahore, Pakistan)

  • Shoaib Sarwar

    (Research Scholar, University of the Punjab, Lahore, Pakistan)

Abstract

The widespread poverty is due to two main reasons are poor governance and income inequality in Pakistan. Few studies have focused on the theoretical substantiation of impact of bad governance and income inequality on poverty but we do not find any study carrying empirical work on the impact of bad governance on poverty in Pakistan. This study is an empirical research that attempts to find out the long run and short run impact of poor governance and inequality in wealth and income distribution on poverty in Pakistan through time series analysis for the year 1984-2008. Autoregressive Distributive Lag (ARDL) Approach to Co integration is applied in order to find out the short run and long run relationship between the variables. Co integration between poverty, poor governance and income inequality is found in the present study. The results of this study also confirm the positive relationship between poverty and income inequality both in short run and long run. Poor governance is found to positively affect poverty in the long run but in the short run it does not have significant impact on poverty in Pakistan. CUSUM and CUSUMQ stability tests are employed on the model and the results show there is a stable relationship between the variables indicating stability of the estimated model.

Suggested Citation

  • Zainab Akram & Sajida Wajid & Tahir Mahmood & Shoaib Sarwar, 2011. "Impact of poor governance and income inequality of poverty in Pakistan," Far East Journal of Psychology and Business, Far East Research Centre, vol. 4(4), pages 43-55, September.
    • Handle: RePEc:fej:articl:v:4c:y:2011:i:4:p:43-55
    as

    Download full text from publisher

    File URL: http://www.fareastjournals.com/files/FEJPBV4N3P4.pdf
    Download Restriction: no
    File URL: http://www.fareastjournals.com/archive_detail.aspx?jid=18&aid=15
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Peter C. B. Phillips & Bruce E. Hansen, 1990. "Statistical Inference in Instrumental Variables Regression with I(1) Processes," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 57(1), pages 99-125.
    2. Salman Syed Ali & Sayyid Tahir, 1999. "Dynamics of Growth, Poverty, and Inequality in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 38(4), pages 837-858.
    3. Sudarno Sumarto & Asep Suryahadi & Alex Arifianto, "undated". "Governance and Poverty Reduction: Evidence from Newly Decentralized Indonesia," Working Papers 381, Publications Department.
    4. Augustin Kwasi Fosu, 2009. "Inequality and the Impact of Growth on Poverty: Comparative Evidence for Sub-Saharan Africa," Journal of Development Studies, Taylor & Francis Journals, vol. 45(5), pages 726-745.
    5. Engle, Robert & Granger, Clive, 2015. "Co-integration and error correction: Representation, estimation, and testing," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 39(3), pages 106-135.
    6. Johansen, Soren, 1991. "Estimation and Hypothesis Testing of Cointegration Vectors in Gaussian Vector Autoregressive Models," Econometrica, Econometric Society, vol. 59(6), pages 1551-1580, November.
    7. Imran Sharif Chaudhry & Shahnawaz Malik & Asma Imran, 2006. "Urban Poverty and Governance: The Case of Multan City," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 45(4), pages 819-830.
    8. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
    9. Shrestha, Min B. & Chowdhury, Khorshed, 2005. "ARDL Modelling Approach to Testing the Financial Liberalisation Hypothesis," Economics Working Papers wp05-15, School of Economics, University of Wollongong, NSW, Australia.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Younas Khan & Štefan Bojnec & Umar Daraz & Farah Zulpiqar, 2024. "Exploring the nexus between poor governance and household food security," Economic Change and Restructuring, Springer, vol. 57(2), pages 1-17, April.
    2. Malik, Zahra & Zaman, Khalid, 2013. "Macroeconomic consequences of terrorism in Pakistan," Journal of Policy Modeling, Elsevier, vol. 35(6), pages 1103-1123.
    3. Waqas Ahmad, 2022. "The Role of Islamic Microfinance in Poverty Alleviation: Evidence from Pakistan," Journal of Economic Impact, Science Impact Publishers, vol. 4(1), pages 39-49.
    4. Egla Mansi & Eglantina Hysa & Mirela Panait & Marian Catalin Voica, 2020. "Poverty—A Challenge for Economic Development? Evidences from Western Balkan Countries and the European Union," Sustainability, MDPI, vol. 12(18), pages 1-24, September.
    5. Muhammad Shahid Hassan & Samra Bukhari & Noman Arshed, 2020. "Competitiveness, governance and globalization: What matters for poverty alleviation?," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 22(4), pages 3491-3518, April.
    6. Saleemi, Muhammad Waqar & Amir-ud-Din, Rafi, 2019. "How does quality of governance influence occurrence of crime? A longitudinal analysis of Asian countries," MPRA Paper 94142, University Library of Munich, Germany.
    7. Tasos Stylianou & Rakia Nasir & Muhammad Waqas, 2023. "Inclusive Human Development and Governance Nexus: Causality Analysis of Selected Asian Countries," Economies, MDPI, vol. 11(3), pages 1-14, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sulaiman, Saidu & Masih, Mansur, 2017. "Is liberalizing finance the game in town for Nigeria ?," MPRA Paper 95569, University Library of Munich, Germany.
    2. Gulzar Ali & Said Zamin Shah & Ghulam Mustafa, 2019. "Testing the Reliability and Existence of IS-LM Model for Pakistan," Global Economics Review, Humanity Only, vol. 4(2), pages 13-23, June.
    3. Ekaterini Panopoulou, 2005. "A Resolution of the Fisher Effect Puzzle: A Comparison of Estimators," The Institute for International Integration Studies Discussion Paper Series iiisdp067, IIIS.
    4. Eleni Constantinou & Avo Kazandjian & Georgios P. Kouretas & Vera Tahmazian, 2008. "Common Stochastic Trends Among The Cyprus Stock Exchange And The Ase, Lse And Nyse," Bulletin of Economic Research, Wiley Blackwell, vol. 60(4), pages 327-349, October.
    5. Hahn, Jaehoon & Lee, Hangyong, 2006. "Interpreting the predictive power of the consumption-wealth ratio," Journal of Empirical Finance, Elsevier, vol. 13(2), pages 183-202, March.
    6. Norah Al-Ballaa, 2005. "Test for cointegration based on two-stage least squares," Journal of Applied Statistics, Taylor & Francis Journals, vol. 32(7), pages 707-713.
    7. Christou, Christina & Gupta, Rangan & Nyakabawo, Wendy & Wohar, Mark E., 2018. "Do house prices hedge inflation in the US? A quantile cointegration approach," International Review of Economics & Finance, Elsevier, vol. 54(C), pages 15-26.
    8. Chang, Kai & Ge, Fangping & Zhang, Chao & Wang, Weihong, 2018. "The dynamic linkage effect between energy and emissions allowances price for regional emissions trading scheme pilots in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 98(C), pages 415-425.
    9. Luqman, Muhammad & Ahmad, Najid & Bakhsh, Khuda, 2019. "Nuclear energy, renewable energy and economic growth in Pakistan: Evidence from non-linear autoregressive distributed lag model," Renewable Energy, Elsevier, vol. 139(C), pages 1299-1309.
    10. H. Holly Wang & Bingfan Ke, 2005. "Efficiency tests of agricultural commodity futures markets in China," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 49(2), pages 125-141, June.
    11. Myers, Robert J., 1994. "Time Series Econometrics and Commodity Price Analysis: A Review," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 62(02), pages 1-15, August.
    12. Creti, Anna & Jouvet, Pierre-André & Mignon, Valérie, 2012. "Carbon price drivers: Phase I versus Phase II equilibrium?," Energy Economics, Elsevier, vol. 34(1), pages 327-334.
    13. Philip Michael Kargbo, 2012. "Impact of Foreign Aid on Economic Growth in Sierra Leone: Empirical Analysis," WIDER Working Paper Series wp-2012-007, World Institute for Development Economic Research (UNU-WIDER).
    14. Warne, Anders, 2006. "Bayesian inference in cointegrated VAR models: with applications to the demand for euro area M3," Working Paper Series 692, European Central Bank.
    15. Venus Khim-Sen Liew & Ricky Chee-Jiun Chia & Tai-Hu Ling, 2010. "Long-run validity of purchasing power parity and rank tests for cointegration for Central Asian countries," Applied Economics Letters, Taylor & Francis Journals, vol. 17(11), pages 1073-1077.
    16. Bosupeng, Mpho, 2016. "The Effects of Chinese Interest Rates and Inflation: A Decomposition of The Fisher Effect," MPRA Paper 78160, University Library of Munich, Germany, revised 2016.
    17. Kim, In-Moo & Park, Joon Y., 2005. "Iterative Maximum Likelihood Estimation of Cointegrating Vectors," Working Papers 2005-02, Rice University, Department of Economics.
    18. Philip Arestis & Ambika D. Luintel & Kul B. Luintel, 2004. "Does Financial Structure Matter?," Finance 0401006, University Library of Munich, Germany.
    19. Goh, Soo Khoon & McNown, Robert, 2015. "Examining the exchange rate regime–monetary policy autonomy nexus: Evidence from Malaysia," International Review of Economics & Finance, Elsevier, vol. 35(C), pages 292-303.
    20. Mallick, Hrushikesh & Mahalik, Mantu Kumar & Sahoo, Manoranjan, 2018. "Is crude oil price detrimental to domestic private investment for an emerging economy? The role of public sector investment and financial sector development in an era of globalization," Energy Economics, Elsevier, vol. 69(C), pages 307-324.

    More about this item

    Keywords

    Poverty; Poor Governance; Income Inequality; ARDL;
    All these keywords.

    JEL classification:

    • M1 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fej:articl:v:4c:y:2011:i:4:p:43-55. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Jim Chau (email available below). General contact details of provider: http://www.fareastjournals.com/journal_detail.aspx?jid=18 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.