Pakistani defense expenditures and the macroeconomy

In summing up, the fiscal pattern that developed in Pakistan during the 1980s and extending to the 1990s is not sustainable. Over‐expansion in expenditures, both for defense and non‐defense purposes, together with sluggish revenues and excessive foreign borrowing have created a situation in which further growth will be increasingly constrained by debt servicing, inflation, and shortages of domestic savings for private investors. However, given the complex nature of defense expenditures in both stimulating and suppressing growth, budgetary reductions in this area in, and of themselves, are unlikely to improve the country's economic performance. In fact, rapid reductions in defense are likely to impair the situation even further. On the other hand, modest efforts in tax reform are by far the most effective means of restoring fiscal stability.28 The optimal policy mix is one of tax reform together with defense expenditure expansion constrained in the 2.5% range. Unforeseen events aside, this package would enable the country to meet the goals established by itself and its major creditors in restoring a rapid, self‐sustaining growth in an environment characterized by a declining defense burden

Balanced budget · Creditor · Debt · Economic policy · Economic shortage · Economics · Government (linguistics · Inflation (cosmology · Macroeconomics · Monetary economics · Public economics · Revenue · Tax revenue · Defense, Military, and Policy Studies · Military and Defense Studies · Politics and Conflicts in Afghanistan, Pakistan, and Middle East · Finance

• Economia internazionale

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• State, military and modernity

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• Defense Expenditures and Economic Performance in South Asia

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• Economic Aspects of Military Expenditure in Developing Countries

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• Budgetary Dilemmas in Pakistan

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• Budgetary Consequences of Defense Expenditures in Pakistan

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