Empirical Analysis of Poverty Reduction and Governance in Pakistan: A Qualitative Comparison with Sub-Continent

Abstract

Government stability, law, and order, internalconflict, government effectiveness, regulatoryquality, quality of bureaucracy, corruption, external conflict,investment profile, military in politics, religious tensions, andethnic are the key policy variables that are directly and stronglycorrelated with all strategies and measures to reduce poverty. Andthese are summarised in one terminology, i.e., 'Governance’. So,quality of governance is crucial to lessen hunger. However, thisidea is not empirically tested, especially in the case of the sub-continent. First of all, this paper presents a statistical analysis ofthis phenomenon in the case of the sub-continent and then offersto make an econometric analysis of the link between politicalgovernance and strategies of poverty reduction in the case ofPakistan. Time series data from the year 1984 to 2015 is used foreconometric analysis. After checking stationary of variables, co-integration among variables, stabilities of an econometric model,ARDL technique is used for estimation. What follows is theconclusion that that governance is directly affecting the schemesto reduce poverty. Moreover, the pragmatic recommendations forreduction in poverty are given in this paper.