Implications of Structural Adjustment Programs (SAPs) on the Economy of Pakistan

Authors

  • Hasnain A. Naqvi Department of Economics, University of Hafr Al-Batin, Saudi Arabi
  • Muhammad Azhar khan Department of Economics, University of Hafr Al-Batin, Saudi Arabia
  • Ghulam Moeen ud Din Department of Economics, Punjab College of Commerce, Islamabad, Pakistan

Keywords:

Structural adjustment program, welfare, inequality, computable general equilibrium, trade liberalization, trade deficit, tariff, income tax, sales tax, expenditure of governmen

Abstract

This paper discusses the implication of the Structural Adjustment Programs (SAPs) on the
welfare of the Household and Inequality in Pakistan. To examine the policies below mentioned plans
for the economy of Pakistan, Computable General Equilibrium Model is employed. Fiscal strictness
and trade liberalization policy is selected from the structural adjustment programs to be analysed for
their implication based on CGEM. The analysis considers a combination of these two elements. This
paper aims to analyse the impacts of the removal of tariffs on the country’s trade deficit and its revenue loss. It considers various factors such as the increase in income tax, the reduction in government
spending, and the rise in sales tax. The results revealed that a reduction in the expenditure of government can surpass erstwhile fiscal perspectives regarding the emblems of the welfare of household’s
welfare as well as economy-wide. The results were quite encouraging in terms of avoiding budget
deficits and covering losses resulting from the abolition of tariffs.

Published

2022-06-30 — Updated on 2022-07-01

Versions

How to Cite

A. Naqvi, H., Azhar khan, M., & Ghulam Moeen ud Din, G. M. ud D. (2022). Implications of Structural Adjustment Programs (SAPs) on the Economy of Pakistan. Journal of Business & Economics | ISSN (print): 2075-6909 | ISSN (online): 2708-1923, 14(1), 01-16. Retrieved from https://journals.au.edu.pk/ojs/index.php/jbe/article/view/540 (Original work published June 30, 2022)