Measuring the Role of Infrastructure Quality in the Economic Growth of Pakistan

Abstract

The government’s aim to accomplish social and economic development is realized through the optimal use of infrastructure. In this context, an infrastructure index is developed to investigate the role of infrastructure quality in Pakistan's economic growth from 1975 to 2018 particularly. The ARDL bounds testing cointegration with structural breaks confirm the presence of a long-run relationship amid the variables; economic growth, labour force, physical capital, and quality of infrastructure. Long-run findings indicate a positive and significant relationship between infrastructure quality and economic growth in Pakistan. From a policy standpoint, this analysis recommends that improvements in the existing infrastructure stock and utilizing the available resources efficiently would be extremely beneficial for Pakistan’s economy.