Browsing by Author "Supervised by Dr. Naeem ur Rehman Khattak"

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    GOOD GOVERNANCE: AN APPROACH TO IMPROVE EXTERNAL DEBT SITUATIONIN PAKISTAN
    (Department of Economics, University of Peshawar. Khyber Pakhtunkhwa, Pakistan, 2015) Asif Farid; Supervised by Dr. Naeem ur Rehman Khattak
    This study investigates the effectiveness of good governance andits impact on external debt in Pakistan during the period from 1973 to 2013 using time series data. The study applies a hybrid model that includes the role of good governance in production function. For analysis, Ordinary Least Square (OLS), Augmented Engel-Granger (AEG) and Granger Causality test is used. Prior the stated approaches have confirmed through Augmented Dickey Fuller (ADF) test that someofthe variables are integrated at level and someat first & second order. The results from AEGtest show that there is co-integration and long run bond between external debt and determinants of poor economic governance that are poverty level and income inequality. The result of the Granger causality test specifies that there exist bidirectional relationship between poverty and external debt services; income inequality and GDP; poverty and GDP; income inequality and budget deficit. There is no causal link between openness and external debt; openness and GDP. The results provide strong evidences that poor economic governance in Pakistan have significantly aggravated economic downturn and augmented povertylevel. It is found that deficit due to governanceissuesleadsto fiscal irresponsibility and deteriorated external debt conditions in Pakistan. Growing external debt services have unfavorable impacts on poverty level and income inequality as less has been left to finance expenditures on social services and poverty reduction. The novelty in the research is that poor governance’s indicators i.e., poverty and income inequality are included as independentvariables in the growth equation and its implications for external debt have been examined. The result is that good governance undertakes sustainable GDP growth and enhances socio-economic development through effective governance andits ultimate effect on external debt. Poverty level and income inequality can be useful indicators of the Highly Indebted Poor Countries (HIPCs) initiatives on debt reduction goals and debt relief