Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/305480 
Authors: 
Year of Publication: 
2024
Series/Report no.: 
Working Paper No. 2024-5
Publisher: 
University of Massachusetts, Department of Economics, Amherst, MA
Abstract: 
Pakistan's political economy has been characterized by some interesting and arguably unique features in recent decades. The combination of two stands out, in particular: (1) lifetime uncertainty for elected governments, and (2) a high degree of certainty that, due to reasons that are largely extraneous to popularity and policy performance, the incumbent party will not form the government in the next term. This paper argues, employing modified formal frameworks developed for other con- texts, that these features go a significant way in explaining why the economy has experienced dramatic cyclical fluctuations in internal and external macroeconomic indicators, especially official foreign exchange reserve stocks. In addition, the analysis helps explain the consistent underinvestment in tax revenue-generation capacity. The existing "partisan" and "opportunistic" varieties of political business cycle models do not satisfactorily capture these features. The analysis, thus, extends this literature in new directions.
Subjects: 
Bequest motive
lifetime uncertainty
political business cycles
foreign exchange
current account
country studies
JEL: 
P52
F31
F41
D72
H50
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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