This is an analytical paper in which we have analysed the public expenditure of Pakistan through regression. We have used time series data for the period 1960 to 1980. The level of income (GNP), defence expenditure of India, lagged public expenditure and foreign aid are important determinants to total Public expenditures of Pakistan. Disaregation to total public expenditure into development, non-development, defence and non-defence expenditure shows that the level of Income and total public expenditure have positive influence on them, while foreign aid has positive influence on development and non-defence expenditure and negative one on non-development and defence expenditure. It is the development expenditures which have been reduced to finance defence expenditure. The validity of Wagner's Law (The elasticity of public expenditure with respect to Income (GNP) 11111SI be greater than Unity AE AGNP GNPIE > I has been checked and confirmed that the Wagner's Law for total public expenditure has been generally valid. The study has also thrown some light on the fact that Pakistan has followed the Islamic strategy in making budgetary allocation throughout the establishment of Zakat and Ushr Institutions.
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