Development Beyond Seventy: The Way Forward

Abstract

To propose the way forward for Pakistan, it is essential to understand the past historical pattern and outcomes and the factors that contributed to those outcomes. The goal that Pakistan has set itself for the future is to become 20th largest economy in the world by 2025. What are the influences that can facilitate or constrain the achievement of the proposed goal? Pakistan's economic history has gone through the periods of boom and bust. Broadly speaking, the seventy years of Pakistan's economy can be divided into two distinct periods. The first forty years (1950-90) during which Pakistan was one of the top ten economic performers among the developing countries and the next twenty five years (1990-2015) when the country had fallen behind its neighbouring countries with a decline in the average annual growth rate from 6.5 per cent to 4.5 per cent (International Monetary Fund 2016). The reversal of this declining trend and resumption of the past growth trajectory are, therefore, the main challenges that have to be addressed in the next eight years. This paper attempts to examine the several alternative hypotheses that can explain this slowdown, and the reason behind this volatile and inequitable growth of the last twenty five years. Through a process of elimination, it advances theoretical and empirical evidence to show that the most powerful explanatory hypothesis lies in the decay of institutions of governance. The same institutions, on the other hand, were strong and performed quite well during the first four decades despite a myriad of difficulties and external and internal shocks.