Trends in Inequality and Welfare in Consumption Expenditure: The Case of Pakistan

Economic growth is important, but at the same time it loses its importance if nothing trickles down to the poor. One of the frequent heard arguments against growth strategies is that it benefits only the comparatively well off segment of the society. This means that the concomitant of economic growth is more skewed income distribution. Growth and equity should be solved subsequently or in some cases simultaneously, otherwise these countries are exposed to disaster [Hirschman (1973)]. The surge for income distribution studies both in developed and developing countries has, however, been caused by different reasons. In a developed nation, a high economic growth, in terms of GNP per capita and the introduction of the concept of a welfare state necessitated a widespread debate on income inequality and relative poverty issues. In the developing countries, failure to achieve sustainable high growth rates and disappointment from the pursuit of growth-led macro-economic policies in the past decade has surfaced a need to conduct income distribution studies and policies. Much of the recent literature on inequality and economic well-being in Pakistan has focused on the apparent increased inequality that occurred during the last two decades.