IDEAS home Printed from https://ideas.repec.org/a/zbw/ifweej/20191.html
   My bibliography  Save this article

Political competition and economic policy: Empirical evidence from Pakistan

Author

Listed:
  • Chaudhry, Ahmed
  • Mazhar, Ummad

Abstract

The influence of politics on economic policy is not fully understood. The challenge to ensure political inclusiveness and economic prosperity remains. Perhaps, one way to attain this objective is by increasing political competition. This paper gathers empirical evidence from Pakistan, a country with a checkered political history characterized by episodes of representative, non-representative, and indirectly elected governments. In recent years, the country has witnessed a gradual strengthening of democratic rules with economic progress. Focusing on nine elections held over 1970 to 2015 the authors measure political competition and estimate its impact on economic policy. Contrary to popular conceptions about Pakistan's economy, they find a positive association between lack of political competition and poor economic policy. This finding holds at national as well as subnational levels in Pakistan and withstands a number of robustness tests.

Suggested Citation

  • Chaudhry, Ahmed & Mazhar, Ummad, 2019. "Political competition and economic policy: Empirical evidence from Pakistan," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 13, pages 1-27.
    • Handle: RePEc:zbw:ifweej:20191
    DOI: 10.5018/economics-ejournal.ja.2019-1
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.5018/economics-ejournal.ja.2019-1
    Download Restriction: no
    File URL: https://www.econstor.eu/bitstream/10419/190994/1/1045799416.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.5018/economics-ejournal.ja.2019-1?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Reinhart, Carmen, 2002. "A Modern History of Exchange Rate Arrangements: The Country Histories, 1946-2001," MPRA Paper 13191, University Library of Munich, Germany.
    2. Barro, Robert J, 1996. "Democracy and Growth," Journal of Economic Growth, Springer, vol. 1(1), pages 1-27, March.
    3. Daron Acemoglu & Simon Johnson & James A. Robinson & Pierre Yared, 2008. "Income and Democracy," American Economic Review, American Economic Association, vol. 98(3), pages 808-842, June.
    4. George Stigler, 1972. "Economic competition and political competition," Public Choice, Springer, vol. 13(1), pages 91-106, September.
    5. Ethan Ilzetzki & Carmen M Reinhart & Kenneth S Rogoff, 2019. "Exchange Arrangements Entering the Twenty-First Century: Which Anchor will Hold?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 134(2), pages 599-646.
    6. David Romer, 1993. "Openness and Inflation: Theory and Evidence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 108(4), pages 869-903.
    7. Alessandro Lizzeri & Nicola Persico, 2005. "A Drawback Of Electoral Competition," Journal of the European Economic Association, MIT Press, vol. 3(6), pages 1318-1348, December.
    8. Maria Rosaria Alfano & Anna Laura Baraldi, 2016. "Democracy, Political Competition and Economic Growth," Journal of International Development, John Wiley & Sons, Ltd., vol. 28(8), pages 1199-1219, November.
    9. Madiha Afzal, 2014. "Do barriers to candidacy reduce political competition? Evidence from a bachelor’s degree requirement for legislators in Pakistan," Public Choice, Springer, vol. 161(1), pages 51-72, October.
    10. Fabio Padovano & Roberto Ricciuti, 2009. "Political competition and economic performance: evidence from the Italian regions," Public Choice, Springer, vol. 138(3), pages 263-277, March.
    11. Acemoglu, Daron & Robinson, James A., 2006. "Economic Backwardness in Political Perspective," American Political Science Review, Cambridge University Press, vol. 100(1), pages 115-131, February.
    12. Goel, Rajeev K. & Mazhar, Ummad & Nelson, Michael A. & Ram, Rati, 2017. "Different forms of decentralization and their impact on government performance: Micro-level evidence from 113 countries," Economic Modelling, Elsevier, vol. 62(C), pages 171-183.
    13. Skilling, David & Zeckhauser, Richard J., 2002. "Political competition and debt trajectories in Japan and the OECD," Japan and the World Economy, Elsevier, vol. 14(2), pages 121-135, April.
    14. Nonso Obikili, 2019. "The Impact of Political Competition on Economic Growth: Evidence from Municipalities in South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 87(1), pages 3-21, March.
    15. Richard E. Wagner, 1977. "Economic Manipulation For Political Profit: Macroeconomic Consequences And Constitutional Implications," Kyklos, Wiley Blackwell, vol. 30(3), pages 395-410, August.
    16. William D. Nordhaus, 1975. "The Political Business Cycle," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 42(2), pages 169-190.
    17. Torsten Persson, 2005. "Forms of Democracy, Policy and Economic Development," NBER Working Papers 11171, National Bureau of Economic Research, Inc.
    18. Roberto Rigobon & Dani Rodrik, 2005. "Rule of law, democracy, openness, and income," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 13(3), pages 533-564, July.
    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. Mazhar Ummad & Iftikhar Komal, 2021. "Corruption Accusations and Bureaucratic Performance: Evidence from Pakistan," Economics - The Open-Access, Open-Assessment Journal, De Gruyter, vol. 15(1), pages 60-71, January.

    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. Chaudhry, Ahmed & Mazhar, Ummad, 2018. "Political competition and economic performance: Empirical evidence from Pakistan," Economics Discussion Papers 2018-27, Kiel Institute for the World Economy (IfW Kiel).
    2. Jan Fałkowski & Alessandro Olper, 2014. "Political competition and policy choices: the evidence from agricultural protection," Agricultural Economics, International Association of Agricultural Economists, vol. 45(2), pages 143-158, March.
    3. Alexandru Minea & René Tapsoba & Patrick Villieu, 2021. "Inflation targeting adoption and institutional quality: Evidence from developing countries," The World Economy, Wiley Blackwell, vol. 44(7), pages 2107-2127, July.
    4. Maria Paola & Vincenzo Scoppa, 2011. "Political competition and politician quality: evidence from Italian municipalities," Public Choice, Springer, vol. 148(3), pages 547-559, September.
    5. M. Alfano & A. Baraldi, 2015. "Is there an optimal level of political competition in terms of economic growth? Evidence from Italy," European Journal of Law and Economics, Springer, vol. 39(2), pages 263-285, April.
    6. Torsten Persson & Guido Tabellini, 2009. "Democratic Capital: The Nexus of Political and Economic Change," American Economic Journal: Macroeconomics, American Economic Association, vol. 1(2), pages 88-126, July.
    7. Belke, Ansgar & Potrafke, Niklas, 2012. "Does government ideology matter in monetary policy? A panel data analysis for OECD countries," Journal of International Money and Finance, Elsevier, vol. 31(5), pages 1126-1139.
    8. Shirleen Manzur, 2022. "Are Elections Enough?," Discussion Papers dp22-05, Department of Economics, Simon Fraser University.
    9. Paola Profeta & Simona Scabrosetti, 2010. "The Political Economy of Taxation," Books, Edward Elgar Publishing, number 13258.
    10. Natkhov, T. & Polishchuk, L., 2017. "Political Economy of Institutions and Development: The Importance of Being Inclusive. Reflection on "Why Nations Fail" by D. Acemoglu and J. Robinson. Part I. Institutions and Economic Devel," Journal of the New Economic Association, New Economic Association, vol. 34(2), pages 12-38.
    11. Gavoille, Nicolas & Verschelde, Marijn, 2017. "Electoral competition and political selection: An analysis of the activity of French deputies, 1958–2012," European Economic Review, Elsevier, vol. 92(C), pages 180-195.
    12. Gradstein, Mark, 2005. "Democracy, Property Rights, Redistribution and Economic Growth," CEPR Discussion Papers 5130, C.E.P.R. Discussion Papers.
    13. Rezki, Jahen Fachrul, 2018. "Political Competition and Local Government Performance: Evidence from Indonesia," SocArXiv nekps, Center for Open Science.
    14. Teles, Vladimir K & Pereira, Carlos, 2013. "Are Political Institutions Substitutes for Democracy? A Political Economy Analysis of Economic Growth," Brazilian Review of Econometrics, Sociedade Brasileira de Econometria - SBE, vol. 33(1), September.
    15. Saima SARWAR* & M. Wasif SIDDIQI**, 2018. "AN ATTEMPT TO CRYSTALIZE THE BLACK-BOX MYSTERY: Institutional Quality or Constitutional Rights," Pakistan Journal of Applied Economics, Applied Economics Research Centre, vol. 28(1), pages 103-130.
    16. Madsen, Jakob B. & Raschky, Paul A. & Skali, Ahmed, 2015. "Does democracy drive income in the world, 1500–2000?," European Economic Review, Elsevier, vol. 78(C), pages 175-195.
    17. Duha Altindag & Naci Mocan, 2010. "Joblessness and Perceptions about the Effectiveness of Democracy," Journal of Labor Research, Springer, vol. 31(2), pages 99-123, June.
    18. Marco Frank & David Stadelmann, 2021. "Political competition and legislative shirking in roll-call votes: Evidence from Germany for 1953–2017," Public Choice, Springer, vol. 189(3), pages 555-575, December.
    19. Carl Henrik Knutsen, 2012. "Democracy and economic growth: A survey of arguments and results," International Area Studies Review, Center for International Area Studies, Hankuk University of Foreign Studies, vol. 15(4), pages 393-415, December.
    20. Biswajit Mohanty & N.R. Bhanumurthy, 2014. "Exchange Rate Regimes and Inflation: Evidence from India," International Economic Journal, Taylor & Francis Journals, vol. 28(2), pages 311-332, June.

    More about this item

    Keywords

    political competition; Pakistan; economic policy; economic performance; subnational;
    All these keywords.

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

    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:zbw:ifweej:20191. 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: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/iwkiede.html .

    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.