EconPapers    
Economics at your fingertips  
 

Indebtedness and Poverty: The Case of Pakistan

Javeria Naeem and Saadia Sherbaz
Additional contact information
Javeria Naeem: Student, Department of Economics, Fatima Jinnah Women University, Rawalpindi
Saadia Sherbaz: Lecturer, Department of Economics, Fatima Jinnah Women University, Rawalpindi

The Pakistan Development Review, 2016, vol. 55, issue 4, 823-835

Abstract: Since the advent of Neolibralism, debt has been construed as means of policy reforms to achieve stability, liberalisation and recovery from shocks. However, the other side of the picture has been either ignored or underappreciated. That is the human cost of indebtedness. Whether internal or external, indebtedness may have significant implications for the living conditions of the masses, as it leads to substantial deviation of resources towards debt management. This paper attempts to assess the impact of indebtedness on poverty for Pakistan. The impact of total, internal and external debt on poverty has been evaluated separately. Using the data from 1973 to 2013, Johansen Co-nintegration test reveals long run relationship between debt and poverty. The results remain consistent when domestic and external debt is taken separately. The long run impact of total, internal and external debt on poverty is positive. Which means that for Pakistan debt leads to increase in poverty. Further, it is evident that domestic debt has more severe poverty implications as compared to external debt. These results have two important policy implications; firstly, the overall levels of debt have to be reduced and secondly, the issue of domestic debt reduction takes priority.

Keywords: External Debt; Domestic Debt; Poverty; Johanson Cointegration (search for similar items in EconPapers)
JEL-codes: I30 I38 F34 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed

Downloads: (external link)
http://www.pide.org.pk/pdf/PDR/2016/Volume4/823-835.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pid:journl:v:55:y:2016:i:4:p:823-835

Access Statistics for this article

More articles in The Pakistan Development Review from Pakistan Institute of Development Economics Contact information at EDIRC.
Series data maintained by Khurram Iqbal ().

 
Page updated 2018-02-24
Handle: RePEc:pid:journl:v:55:y:2016:i:4:p:823-835