- Title
- Macroeconomic policy, fiscal decentralisation and spatial inequalities in Pakistan
- Creator
- Ishaq, Tahira
- Relation
- University of Newcastle Research Higher Degree Thesis
- Resource Type
- thesis
- Date
- 2023
- Description
- Research Doctorate - Doctor of Philosophy (pHd)
- Description
- Neoliberalism has failed to resolve rising inequality, poverty, and mass unemployment in both developed and developing countries due to various conditionalities propagated under the neoliberal policy framework. Modern Monetary Theory (MMT) argues that constraints on the conduct of macroeconomic policies, both fiscal and monetary, adopted or imposed under the neoliberal agenda have severely compromised the policy space of countries. Drawing on MMT insights, this thesis argues that such constraints at the national level will echo down to the local level and can critically affect development goals. Fiscal decentralisation is argued to be effective in reducing regional differences. However, limited resources at the local government level and strict austerity measures at the national level can constrain the development expenditures of local governments, resulting in persistent disparities across regions. This thesis investigates the institutional arrangements associated with the monetary and fiscal policy in Pakistan, a developing country with limited currency sovereignty. Pakistan has adopted various neoliberal policies under different political regimes and under the umbrella of international financial institutions in the name of structural adjustment programs. It is argued that various self-imposed constraints critically compromise the policy space to pursue regional development goals under decentralised structure. Additionally, Pakistan’s position in the international financial hierarchy makes it more economically vulnerable and the adoption of a managed floating exchange rate reduces its autonomy to adopt independent monetary policy. Both voluntary and involuntary constraints limit Pakistan’s policy space to pursue development goals across various government levels, national, provincial, and local. The results of a spatial econometric analysis suggest that fiscal decentralisation exacerbates regional inequalities particularly in terms of income per capita, and crime rates for the selected sample. This study argues that finessing some of the adopted constraints on macroeconomic policy could provide more freedom to adopt various development and full employment strategies. Pakistan needs a strong political commitment to implement regionally directed public sector infrastructure and industrial policy that will be conducive to inclusive and sustainable development. An integrated, supportive and well-coordinated macroeconomic policy (fiscal and monetary) framework with policy space will allow Pakistan to benefit from existing investment ventures (CPEC) and also to effectively implement its industrial policy for innovation and development at a decentralised level to mitigate regional disparities.
- Subject
- fiscal decentralisation; macroeconomic policies; spatial disparities; spatial panel model
- Identifier
- http://hdl.handle.net/1959.13/1495879
- Identifier
- uon:54080
- Rights
- Copyright 2023 Tahira Ishaq
- Language
- eng
- Full Text
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| Thumbnail | File | Description | Size | Format | |||
|---|---|---|---|---|---|---|---|
| View Details Download | ATTACHMENT01 | Thesis | 2 MB | Adobe Acrobat PDF | View Details Download | ||
| View Details Download | ATTACHMENT02 | Abstract | 216 KB | Adobe Acrobat PDF | View Details Download |