Structural Change, Pakistan and its Main Policies

Abstract

This study investigates the impact of structural changes, with a particular focus on regime shifts, on Pakistan's economic growth. The research aims to determine whether these changes contribute positively, negatively, or have no effect on the growth of GDP. Utilizing the Chow test, the study confirms that structural changes significantly influence the GDP growth rate. To explore the empirical relationship between fiscal and monetary policies and GDP growth, the ARDL model is employed, revealing that all selected variables have a significant impact on GDP. Initial diagnostic tests were conducted to eliminate spurious results, followed by the Wald test, which confirmed a long-term relationship between the variables. The findings highlight the significant and enduring influence of structural changes on economic growth, with a particular emphasis on the positive impact of autocratic regimes on Pakistan’s GDP. These results underscore the critical role of governance structures in shaping economic outcomes, providing valuable insights for policymakers aiming to foster sustainable economic growth.