Saving in Pakistan, 1950-77 : estimation and analysis
The thesis consists of two parts entitled 'Estimation' and 'Analysis'. The 'Estimation' part is devoted to developing a new set of estimates of saving in Pakistan over the period 1950-77. For this purpose, the economy has been divided into three sectors, namely the private non-corporate sector (including mainly households and unincorporated businesses), the corporate sector and the government sector. Saving in the private noncorporate sector has been estimated from data collected on the sector's acquisition of various types of financial and real assets. Estimates of corporate saving have been built up from corporate profit and loss accounts. Saving in the government sector has been estimated from government budget documents and annual accounts of public sector enterprises. These estimates provide for the first time continuous and consistent information on the sectoral origin and asset-structure of saving in the country. The estimates available thus far were too aggregative in character, having been derived indirectly from the national accounts by subtracting net capital inflow from gross domestic investment. The 'Analysis' part of the thesis is devoted to a detailed analysis of saving behaviour in the country over the period covered by the new set of estimates. Trends in the rates, sectoral composition and asset-structure of saving are studied. Econometric estimation of aggregate and sectoral savings functions with time-series data is the main tool of analysis used in identifying major influences on past saving behaviour. The mechanisms underlying various arguments in the functions are noted and subjected to empirical tests. The regression results are discussed and related to the actual time paths of the relevant variables. Evidence based on crosssection data is examined in the case of some factors which could not be included in the regression analysis either because of lack, of proper data or because of the time-series nature of the exercise. The policy implications of the results of the analysis are studied and, on the basis of the findings, the mix of public financial policies employed in the past is critically assessed.