Modelling the Prospects of Economic Growth and Social Development: Results of Circular Flow Planning Models Applied to Pakistan1980-1993

This paper presents for Pakistan an analysis of the country’s recent economic growth and social development, and medium term prospects covering the period of the Seventh Plan. The meaning of economic growth is self-evident. In contrast, by social development we shall mean the pace of progress as regards the distribution of income, the satisfaction of essential needs, balanced development and employment of human resources. The paper has two purposes (i) to provide valuable information for policy making in the area of growth and development, and (ii) to demonstrate the attractiveness and usefulness of working with the models we have developed. We shall rely exclusively on the results obtained from the planning models which were developed in collaboration with the Pakistan Institute of Development Economics, Islamabad and Erasmus University, Rotterdam Netherlands. Most of the past models which were developed for Pakistan served analytical purposes, were demonstrative in nature or were not updated. As a result, they are practically irrelevant for today’s appraisal of future prospects. More recently, since 1980, a few models which have been updated regularly may turn out to have a future. In particular, among the macro models, PIDE’s econometric model is the most widely publicised, cf. Naqvi et aL (1983). In the category of activity models one simple but handy model is available in Cohen, Havinga and Saleem (1985).