Trade Liberalization and Economic Development: Evidence from Pakistan
Zainab Jehan () and
Muhammad Ali Chaudhary ()
Additional contact information
Zainab Jehan: Fatima Jinnah Women University, Rawalpindi, Pakistan.
Muhammad Ali Chaudhary: Fatima Jinnah Women University, Rawalpindi, Pakistan.
Lahore Journal of Economics, 2006, vol. 11, issue 1, pages 19-34
Unrestricted trade stimulates economic growth and bridges socio-economic gaps existing in differentcountries of the world. Pakistan has adopted trade liberalization policies since the late 1980s with the same expectations. This study has empiricallyanalyzed how trade liberalization has affected economic development in the country. Its effects have been examined with respect to four measures of economic development: per capita GDP, income inequality, poverty and employment over the period from 1960-2003. The main analysis is based on a simultaneous equation model. Keeping in view the simultaneity of the chosen development measures, the model is estimated with the 2SLS technique of regression analysis. The analysis shows that, over the study period, trade liberalization has not affected all the chosen indicators of development uniformly. It has affected employment positively but per capita GDP and income distribution negatively. However,it has not affected poverty in any way. The obvious message is that trade liberalization has not affected all the indicators of development favorably in Pakistan. It thus implies the need of a cautious move towards liberalization. The focus of trade liberalization should be to bring about improvement in the performance of mediating factors and to focus exports on labor-intensive products.
Keywords: Trade Liberalization; Economic Development; Poverty (search for similar items in EconPapers)
JEL-codes: F41 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (5) Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: http://EconPapers.repec.org/RePEc:lje:journl:v:11:y:2006:i:1:p:19-34
Access Statistics for this article
Lahore Journal of Economics is currently edited by Jan-Jun
More articles in Lahore Journal of Economics from Department of Economics, The Lahore School of Economics Contact information at EDIRC.
Series data maintained by Shahid Salahuddin ().