Economic reforms in Pakistan

1. Gen. In the world Pakistan is a county that is facing one of the most critical conditions of terrorism. Pakistan is on an urge of war against the terrorism since more than 15 years that has been killed thousands of innocent citizens and several hundred of soldiers and law and enforcement agencies' personnel during fighting against terrorism. This irritation has not only affected the peoples of Pakistan, but it has been also very bad effects upon the economy of Pakistan. These things have made the economic situation of the state unsteady and unsecured.

9. Review Klein, Chapters 2 and 3. She explains the influence of US economists, especially Milton Friedman, in designing development strategies, and of the US in installing or supporting governments that would carry them out in several countries that had been pursuing a ‘middle’ development path of ‘regulated’ capitalism in which the state played a large role in supporting social welfare and the development of local businesses. You can expect test questions on this material, including the role of the US in ‘regime change’ in these countries, the role of US-trained economists afterward, and the path that these countries were supposed to pursue.

Rapid changes in governments, people’s non-trust towards the government and number of Martial Laws and declaration of Emergencies in Pakistan has made this country to be a high risk country for foreign investment. Examples of political factors are changes in government, changes in govt. policies, corruption, type of government, regulations, trade restrictions, tax policies, tariffs etc.

William Easterly, The Elusive Quest for Growth: Economists’ Adventures and Misadventures in Tropics, campridge, Mass: MIT Press, 2011

As time passed, conditions in Pakistan worsened. Terrorists bombed mosques and churches, they threatened people to the point where every child was scared to leave his/her house . Robbery, corruption, strikes, revolts, and fights were everywhere.

Sen outlines two different approaches to development policies: the GNP/capital approach, which measures development through GNP and income levels, and the capability approach, which focuses on development through the expansion of freedoms.  Given that his book is titled “Development as Freedom”, he is clear proponent of the latter approach.  He offers a critique of the former, both factually and normatively.

The term “development” has been used by political, economic and international relations scholars to explain the relative economic statutes of various countries around the world. Numerous scholars have concerns about the potentially hegemonic nature of using the term “development”. Rhetorically, their concerns range from potential bias at the expense of indigenous methods to the continuation of western imperialist domination and exploitation of lands yet to be further explored. A few of the main concerns of these scholars is ethnic cleansing, resource extraction and false perceptions of the term.

Acemoglu and Robinson show that it the man created political and economic institutions that underlie economic success or those who lack it. They argue that economies thrive more when the presence of less government is involved. Acemoglu and Robinson don’t just explain in depth the similarities and differences in economic policies between nations. They also give deep

Failure in development is a lack of sustained periods of economic growth and stability, and an increased dependence on foreign aid. For example, forty five per cent of people in Sub-Saharan Africa still continue to live in poverty (About Sub-Saharan Africa). Secondly, the inability to meet eight of the Millennium Development Goals constitutes a failure in promoting development within the last fifteen years (The Millennium Development Goals 2014). Furthermore, World Bank prescriptions have not promoted sustained growth independent of foreign involvement by “[raising] Southern output” (Mosley 1949). The World Bank’s “measured ability to trigger sustained growth in developing countries has been poor […] particularly […] in the poorest countries” (1951). This disparity in flow of investments to developing

There has been a debate over the past century between economists as to what economic policies are able to develop the most prosperity for developing countries. Some economists believe that larger state influence and oversight over the economy are able to yield better results, while other economists contend that free market economies with little government are able to generate results. In the piece, Commanding Heights, Yergin and Stanislaw state that the two sides to the “Battle of Ideas” are the sides of liberalism and conservatism. However, according to Goldstein and Pevehouse, developing countries have in fact employed a myriad of different economic policies to help spur growth such as import substitution, export led growth and foreign investment.

Nevertheless, some political economists have argued that the continents underdevelopment is due to how the states were created with their political and economic link with industrialised nations. This as a result has led to industrialised countries experimenting ill designed development concepts in developing countries. Rodney (2012) argued that every nation has developed, however not on even economic grounds. He further stated that ‘’underdevelopment’’ is used by industrialised countries to exploit other countries.

Economic development involves actions that are sustained and concerted by policy makers and the entire community. These actions lead to improved standards of living as well as the economic health within a specified area either in the local, regional or global environment. Economic development can also be termed as the qualitative and quantitative changes that occur within an economy. For economic development to take place there has to be contributions by various factors. Some these factors can lead to economic development if they are appropriately managed (Mohr, 2012). There is a lot of interest in macroeconomics when it comes to these factors of economic development. Macroeconomics deals with performance, behavior, structure and the entire decision making of an economy in general as opposed to looking at individual markets. This encompasses national, regional as well as the global economies. Through microeconomic there is the aggregation of indicators like GDP, price indexes and the rates of unemployment that enable the understanding of the functioning of the entire economy. This paper will look at various factors of economic development and how they contribute to economic development.

It is widely presumed that modern studies of development economics and development thinking evolved in the aftermath of World War II when the Western world reconstructed Europe and “world poverty” emerged to an opportunistic security issue against the backdrop of the arising Cold war (Knuttson 2009). Within this historical context of the Post World War II environment and the latter historical development, four main strands of thought, commonly known as the Classic Theories of Economic

Countries may pursue distinct development paths. Economies may miss stages, or become locked in one particular stage, or even regress depending on many other complementary factors such as managerial capacities, and the availability of skilled labour for a wide range of development projects (Todaro and Smith, 2009).

Underdeveloped countries display common characteristics: low levels of GNI per capita, large income inequalities and low productivity levels across sectors. Consequently, there is a lack of investors and entrepreneur’s, thus cash flows cannot be directed into various sectors that influenced balanced economic growth. In many developing countries it is therefore common to see a developmental policy to maintain tension, disproportions and disequilibrium in which Hirschman argued the case of a deliberate unbalancing of the economy. These policies dictate the need for more-developed industries to provide undeveloped industries an incentive to grow. Of course, these policies are decided by those with more power, thus typically seen in urban areas of an economy, in which many can argue this leading to urban bias, which I will unfold in this essay.