Cost-effectiveness of the Family Planning Programme in Pakistan

Family Planning in the context of developing couotries particularly Pakistan can be classified as “public good” or “merit good”. It is because that although family planning services are consumed by private individuals it is accompanied by significant external benefits/costs. This constitutes the reason on efficiency grouod for public provision of family planning services. There are equity grounds as well for public provision of these services. The public provision of family planning services is based on paternalistic argument that individual ought to consume them but are not acting in their own self-interest and are not ready to purchase them without substantial subsidisation. It may be one of the reasons for public provision of family planning, but, on normative grounds it is hard to justify the provision of merit good and still maintain the two basic premises of classical welfare economics: that individuals are rational and that individuals know their own interest best. In the context, of developing countries these arguments however, take a different dimension. First, in the absence of a democratic welfare state with high rate of unemployment, lack of unemployment insurance and social security, lack of old age security and pension a pertinent question to ask is: are individuals particularly from middle and lower income groups acting irrationally by demanding more children if children are perceived as a source of social and economic support in old age as well as being a source of additional family income.