DEMOCRACY'S ROLE IN SHAPING PAKISTAN'S ECONOMIC GROWTH: AN EMPIRICAL EVIDENCE FROM PAKISTAN

Abstract

This study explores the connection between democracy and economic growth in context of Pakistan. Autoregressive Distributive Lag (ARDL) model is used to scrutinize the annual times series data from 1984 to 2016. The findings indicate that democracy positively contributes to long-term economic growth (0.466) whereas military intervention in politics hampers growth (-0.756). Among the control variables, trade openness (0.399) is positively associated with GDP growth whereas inflation (-0.368) has a significant negative impact. FDI also shows a positive influence (0.652). These insights have profound implications to foster economic growth in economies with nascent legal and political institutions.