Exploring the Impact of Socio-economic Indicators on Economic Growth of Pakistan

Abstract

Since independence, Pakistan has faced many economic problems. Social and administrative issues have been an obstacle to its economic growth. Economic, social, and administrative problems have amalgamated and engulfed the whole nation like an epidemic. Being the most critical issue, bad governance is destroying the economy in many ways. Poor governance negatively contributes to the empirics of economic growth through increased poverty directly and through increased social evils, such as crimes, indirectly. The present study has used the Three Stages Least Square (3SLS) estimation technique to examine the role of governance in stimulating economic growth by considering important socio-economic variables like poverty and crime. The study results suggest that poor governance is contributing to increasing poverty in Pakistan, which is, in turn, raising crime rates drastically. Since high crime rates slow down the economic pace of the economy, improved governance, increased employment opportunities, mobilization of private investment, and diversion of public investment to rural areas are essential for promoting economic growth.