Relationship between Economic Freedom and Pro-poor Growth: Evidence from Pakistan (1995-2010)

Relationship between Economic Freedom and Pro-poor Growth: Evidence from Pakistan (1995-2010)

ZAMAN, Khalid;KHAN, Muhammad Mushtaq;AHMAD, Mehboob;
romanian journal of fiscal policy 2011 Vol. 2 pp. 24-35
153
zaman2011relationshipromanian

Abstract

The relationship between economic freedom and pro-poor growth is examined in Pakistan from 1995-2010. The concept of pro-poor growth is derived from the literature of Kakwani and Pernia (2000) and Kakwani and Son (2003). The domino effect shows that there is a strong link between economic freedom indicators and pro-poor growth. Econometric analysis proves a strong relationship between economic freedom, poverty reduction and income inequality. Results reveal that larger the business freedom and / or trade freedom, greater the economic growth. This will ultimately reduce poverty in the country.

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