Analyzing the Impact of Government Social Spending, Population Growth and Foreign Remittances on Human Development in Pakistan: Implications for Policy

Muhammad Arshad (), Faisal Abbas, Harald Kächele, Yasir Mehmood, Nasir Mahmood and Klaus Mueller
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Muhammad Arshad: National University of Sciences and Technology (NUST)
Harald Kächele: Eberswalde University for Sustainable Development
Yasir Mehmood: National University of Medical Sciences
Nasir Mahmood: PMAS-Arid Agriculture University
Klaus Mueller: Humboldt University of Berlin

The European Journal of Development Research, 2022, vol. 34, issue 3, No 17, 1607-1626

Abstract: Abstract To achieve sustainable future for all, United Nations’ (UNs’) Sustainable Development Goals (SDGs-2030) reinforced the formulation of social, economic and human development policies. Pakistan is a country with high population growth rate, among top ten recipients of foreign remittances but facing an acute problem of stagnant human development outcomes over the years. Of note, Pakistan’s economic growth is considered as growth without human face (see Easterly in The political economy of growth without development: A case study of Pakistan, 2001). It is, therefore, important from public policy point of view to understand the short-and long-run dynamics of the relationships between important social, demographic and economic factors. Accordingly, this paper investigates the short-and long-run relationships between population growth, government social spending, foreign remittances inflow and aggregate level of human development in Pakistan using Autoregressive Distributed Lag (ARDL) bounds testing approach of cointegration and error correction models. The cointegration test results showed that there is cointegration among the variables to proceed with the estimations of long-run relationships. Our empirical results confirm the existence of short-and long-run relationships between population growth, remittances inflow and human development in Pakistan. Population growth inversely while remittances inflow positively influenced Pakistan’s human development status both in the short-and long-run. The empirical findings of our study call for designing and implementing robust development policies—that result in effective and sustainable human development—mainly towards viewing population from a more humanitarian and equitable perspective in Pakistan.

Keywords: Population growth; Government expenditures; Foreign remittances inflow; Human development; Sustainable development policy; SDGs; Pakistan; South Asia (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1057/s41287-021-00435-8

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