Inclusive Growth & Policies

Abstract

In recent years the concept of inclusive growth has generated considerable interest and debate amongst development practitioners, policy makers and international financial institutions and development banks especially the Asian Development Bank and the World Bank and UN agencies such as the UNDP. These organizations have also devised indicators such as an inclusive growth index for many developing countries to evaluate if their economic growth has translated into improvements in the lives of the ordinary people in a fair and just manner. This paper attempts to develop an inclusive growth index for Pakistan based on 15 indicators to determine which political decade of Pakistan was the most inclusive over the period from 1972- 2014. The inclusive growth index measures we develop concludes that the 1990’s was the most inclusive political decade of Pakistan. It also validates the proposition that high economic growth though a necessary condition is not in itself a sufficient condition for inclusive growth. In addition, our research establishes that periods of democratic governments can be more conducive for inclusive growth as compared to military regimes. The paper identifies the key elements for ensuring an inclusive growth strategy and then examines how the 1990’s was able to achieve those favorable outcomes through devising appropriate and effectively implementing policies and support for key sectors of the economy that ensured more inclusive growth. Lastly, we suggest policy recommendations that would make possible for Pakistan to move towards a more inclusive economy and society.