A study of government expenditure with special reference to economic development in Pakistan

Huq, Mozammel M (1971) A study of government expenditure with special reference to economic development in Pakistan. MLitt(R) thesis, University of Glasgow.

Abstract

The main object of the present research has been to carry out a study of government expenditure policy in the context of an underdeveloped economy. What has been attempted is not an abstract study of government expenditure nor an exhaustive study of economic development, but a study of government expenditure with special reference to economic development in Pakistan. The main hypothesis of the study is that in a mixed and underdeveloped economy like that of Pakistan, government expenditure policy - if properly formulated and implemented - can help not only to raise the investment-ratio but also to achieve a higher rate of growth, given the investment-fund. The approach of the study may be presented in question-form, as follows: What should be the proper role of government expenditure policy given the development strategy of the economy? In an attempt to answer the question we have first examined the development strategy of Pakistan and the theoretical rationale of investment allocation. Next, we have tried to see the growth of government expenditure. The effectiveness of government expenditure policy is then viewed in relation to other policies such as direct administrative controls and taxation policy. A three-fold classification based on government development expenditure is of use in illustrating the three main facets of government expenditure policy - infrastructural development, direct undertaking and direct assistance. The three functional groups have been dealt with in some detail. The main aim has been to examine conditions and measures which will produce self-sustained growth. In this connection we have examined the role of private investment. The relationships thus found enable an analysis to be made of the role that government expenditure policy can play in achieving the objectives of the economy. A basic assumption of the study is that there exists some form of central authority and planning. Such an assumption will undoubtedly invite criticism, particularly when the "one-country-one-economy" approach has already faced a serious challenge in Pakistan. In the present thesis it is not implied that there is no basis for such a challenge. Instead, the growth process has been examined, taking the central pattern as it has been working since Independence in 1947. It is true that if the "one-country-one-economy" approach is abolished, most of the regional and part of the sectoral aspect of the study will break down. But this does not invalidate the basic criterion of investment allocation - that resources be allocated on the basis of social profitability and not on private profitability. A note on the time period of the study may be added. Although 1949-50 is taken as the start, 1950-51 makes a convenient beginning when talking in terms of the I950's as well as the pre-First Plan period (1950-55). In an attempt to make the study as up-to-date as possible we have tried to extend it, where possible, to 1969-70 which is the last year of the Third Five-Year Plan. This gives us two decades - 1950's and I960's - and four five-year periods - the pre-First Plan (1950-55), the First Plan (1955-60), the Second Plan (1960-65) and the Third Plan (1965-70) - which form the basis of the study. Pakistan being a very poor country, the Government has resorted to economic planning in an attempt to raise the standard of living of the people in the shortest possible time with the minimum possible sacrifice. The present study tries to view the role that government expenditure policy can effectively play in achieving this aim, given the development strategy of the economy.

• Item Type: Thesis (MLitt(R))
• Qualification Level: Masters
• Additional Information: Adviser: J BK Hunter
• Keywords: Economics
• Date of Award: 1971
• Depositing User: Enlighten Team
• Unique ID: glathesis:1971-72889
• Copyright: Copyright of this thesis is held by the author.
• Date Deposited: 11 Jun 2019 11:06
• Last Modified: 11 Jun 2019 11:06
• URI: https://theses.gla.ac.uk/id/eprint/72889