Market or government: lessons from a comparative analysis of the experience of Pakistan and India

Abstract

In the 1980s a remarkable consensus developed that all economies, including the less developed countries (LDC), will achieve both more rapid growth and alleviation of poverty with greater reliance on a market oriented strategy and minimal government direct control and ownership in the economy. A powerful tool for analyzing whether greater reliance on markets indeed is successful in raising the rate of growth and reducing the extent of poverty is to compare the experience of similar countries with different strategies in that respect. A comparison of the experience of India with that of Pakistan and Bangladesh during the last 40 yr can be particularly fruitful. The analysis in this paper concentrates on the period 1947-1970, but also includes the 1970s and most of the 80s. It therefore extends to Bangladesh and includes data, where possible, for East Pakistan, the area which became independent Bangladesh in 1971. There are comments by R.E. Baldwin and A.H. Khan. -from Author