Pro-business and pro-market reforms in Pakistan: economic growth and stagnation 1950-51 to 2011-12

This paper uses a new method to analyse the causes of growth and stagnation in Pakistan between 1950-51 and 2011-12. It provides support for the argument that pro-business reforms have been an important driver of Pakistan's economic growth. This result holds across two episodes of growth and one episode of stagnation. These findings lead to a clear policy implication: if Pakistan is to return to fast growth, policy needs to move away from pro-market reforms, learn these lessons of history, and promote the profitability of business to incentivise private investment and so boost economic growth.