Kinnunen, JoukoLofgren, Hans2013-09-272013-09-272013-08https://hdl.handle.net/10986/15916This paper explores the use of fiscal policy to accelerate development in Pakistan during the period 2013-2022, with a focus on the creation of fiscal space for increased investment in infrastructure, as well as on indicators related to macro and sectoral developments, Millennium Development Goals (MDGs), and education. In terms of method, the analysis relies on simulations with a Pakistani version of MAMS (Maquette for MDG Simulations), a Computable General Equilibrium model developed at the World Bank for country strategy analysis. The different policy scenarios point to the importance of selecting infrastructure projects with high productivity effects and the crucial role of financing in determining the net effects of expanded government infrastructure spending. Transfer programs can generate immediate welfare gains but are less effective over time unless they are designed to raise productivity, perhaps via improvements in health, nutrition, and education outcomes. A final high-growth scenario explores requirements and consequences for Pakistan's economy if, during the period 2013-2022, it managed to raise its rate of annual GDP growth from the 4-5 percent range to 7 percent. The results for the final scenario indicate that rapid growth acceleration may be achieved via a combination of strong increases in savings, investment and total factor productivity. By 2022, 10 years of growth at a rate of 7 percent would spread across the macro demand indicators as well as the major production sectors. Its effects would include significant, broader gains in terms of poverty reduction and better outcomes for indicators.en-USCC BY 3.0 IGOACCOUNTINGACCUMULATION OF CAPITALADDITIONAL UNIT OF CAPITALAGRICULTUREANNUAL GROWTHBALANCE OF PAYMENTSBALANCE OF PAYMENTS DEFICITBANK POLICYBENCHMARKBUDGET CONSTRAINTBUDGET CONSTRAINTSCAPITAL ACCOUNTSCAPITAL STOCKCAPITAL STOCKSCOMMODITIESCOMMODITYCOMMODITY MARKETSCONSUMPTION DECISIONSCONSUMPTION GROWTHCONSUMPTION INCREASESCONSUMPTION SMOOTHINGCONSUMPTION SPENDINGCURRENT ACCOUNTCURRENT ACCOUNT BALANCECURRENT ACCOUNT DEFICITCURRENT EXPENDITURESDATA AVAILABILITYDEBTDEBT STOCKDEBT STOCKSDEFICITSDEMAND CURVESDEMAND GROWTHDEMOGRAPHICDEPENDENCY RATIODEPRECIATION RATESDEVELOPING COUNTRIESDEVELOPING COUNTRYDEVELOPMENT ECONOMICSDEVELOPMENT POLICIESDEVELOPMENT POLICYDEVELOPMENT STRATEGYDISTORTIONSDIVIDENDDOMESTIC BORROWINGDOMESTIC CURRENCYDOMESTIC DEBTDOMESTIC DEMANDDOMESTIC MARKETDOMESTIC MARKETSDOMESTIC PRICEDOMESTIC PRICE LEVELSECONOMIC DEVELOPMENTECONOMIC GROWTHECONOMIC PERFORMANCEECONOMIC POLICYECONOMIC STRUCTUREECONOMIC SYSTEMSELASTICITYEXCHANGE RATEEXCHANGE RATE STABILITYEXCHANGE RATESEXISTING GOVERNMENTEXPENDITUREEXPENDITURESEXPORTSFACTOR DEMANDFACTOR MARKETSFACTORS OF PRODUCTIONFERTILITY RATEFINANCING SOURCESFISCAL POLICYFIXED CAPITALFIXED INVESTMENTFORECASTSFOREIGN CURRENCYFOREIGN DEBTFOREIGN DEBTSFOREIGN DIRECT INVESTMENTFOREIGN EXCHANGEFOREIGN GOVERNMENTFOREIGN INTERESTFULL EMPLOYMENTGDPGENERAL EQUILIBRIUMGENERAL EQUILIBRIUM MODELGINI COEFFICIENTGLOBAL ECONOMYGOVERNMENT ACCOUNTSGOVERNMENT BORROWINGGOVERNMENT BUDGETGOVERNMENT BUDGETSGOVERNMENT DEBTGOVERNMENT DEBTSGOVERNMENT EXPENDITUREGOVERNMENT FINANCINGGOVERNMENT INVESTMENTGOVERNMENT INVESTMENTSGOVERNMENT SAVINGSGOVERNMENT SPENDINGGROSS FIXED CAPITAL FORMATIONGROSS NATIONAL SAVINGSGROWTH RATEGROWTH RATESHOUSEHOLD SAVINGSHOUSINGHUMAN CAPITALHUMAN DEVELOPMENTIMPORTIMPORT TARIFFSIMPORTSINCOMEINCOMESINFLATIONINFRASTRUCTURE INVESTMENTINFRASTRUCTURE INVESTMENTSINFRASTRUCTURE PROJECTSINTEREST PAYMENTSINTERNAL RATE OF RETURNINTERNATIONAL BANKINTERNATIONAL PRICESINVESTMENT CLIMATEINVESTMENT FINANCINGINVESTMENT SPENDINGKNOWLEDGE ECONOMYLABOR FORCELABOR MARKETLANDLESS FARMERSLEVEL OF DEBTLIFE EXPECTANCYLOCAL CURRENCYMACROECONOMIC VARIABLESMARGINAL PRODUCTMARKET MECHANISMSMARKET PRICESMARKET TRANSACTIONSMOBILE PHONENEW ENTRANTSNOMINAL DEPRECIATIONNOMINAL EXCHANGE RATEOPPORTUNITY COSTSOPTIMIZATIONOUTPUTOUTPUTSPAYMENT FLOWSPHYSICAL SECURITYPOLICY RESPONSESPOPULATION GROWTHPOSITIVE EFFECTSPOVERTY REDUCTIONPRICE CHANGEPRICE CHANGESPRICE LEVELSPRICE OF EXPORTSPRIVATE CAPITALPRIVATE CONSUMPTIONPRIVATE INVESTMENTPRIVATE SAVINGSPRODUCTIVITYPROFIT MAXIMIZATIONRAPID GROWTHRATE OF GROWTHREAL CONSUMPTIONREAL EFFECTIVE EXCHANGE RATEREAL EXCHANGE RATEREAL GDPREAL SECTORRELATIVE PRICERELATIVE PRICESREMITTANCESREORGANIZATIONRESOURCE ALLOCATIONSAVINGSSAVINGS RATESSLOW GROWTHSMALL COUNTRYSOCIAL DEVELOPMENTSOCIAL DEVELOPMENTSSTANDARD DEVIATIONSTRUCTURAL CHANGESUPPLY CURVESUPPLY CURVESSUPPLY SIDESURPLUSSURPLUSESTAXTAX INCREASETAX INCREASESTAX RATESTAX REVENUESTAXATIONTOTAL DEBTTOTAL FACTOR PRODUCTIVITYTOTAL INVESTMENTTRADE BALANCETRADE DEFICITSTRADE POLICYTRADINGTRADING PARTNERSTRANSACTIONTRANSACTION COSTTRANSACTION COSTSTRANSACTIONS COSTSTRANSFER PAYMENTSTRANSPORTTRUST FUNDUNEMPLOYMENTUNEMPLOYMENT RATEUNEMPLOYMENT RATESVALUE ADDEDWAGESWORLD MARKETSWORLD PRICEWORLD PRICEScomputable general equilibriumMAMSWorld Bank10.1596/1813-9450-6554