Federalism, Decentralization and Economic Growth in Pakistan

Ghulam Muhammad Mangnejo
Assistant Professor at Department of Economics, Shikarpur Campus, Shah Abdul Latif University, Khairpur

Dr Muhammad Saleem Rahpoto
Professor at Department of Economics, Shah Abdul Latif University, Khairpur

This research discovers the influence of fiscal decentralization on economic growth in
Pakistan. The secondary data for the period of 33 years from 1980 to 2012 has been
used. Regression has been used with the support of Eviews6.1 software. The chief
variables like Central Transfers to its provinces, literacy and tax to Gross Domestic
Product have significant influence on economic expansion of country. This research
has analyzed the horizontal distribution of resources based on population density. The
horizontal resources distribution mechanism has been extended through including
other elements i.e. inverse population density, poverty, revenue generation, revenue
collection and backwardness. The minor weightage has been given to these factors.
The study recommends that the horizontal resource distribution must be broadened in
real sense by giving appropriate weightage to other factors.

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