Summary of the article “The Political Economy of Growth Without Development: A Case

Study of Pakistan” by William Easterly

Ayesha Khurshid

This paper helps us understand in differentiating between growth and development and why
economic growth is not always reliable to associate with development. William Easterly
verified his hypothesis by observing Pakistan as a case study and compared its socio economic
indicators from 1950 to 1990 with other countries at the same income level and with the
countries with same growth rate regardless of initial income level. He reviewed social economic
indicators of Pakistan under the lens of two hypothesis based on political economy models which
are i) how incentives of elites under high inequality lead to underinvestment in the human capital
at large ii) how ethnic division lead to low public goods provision.

Pakistan has per capita growth of 2.2 percent per year. Billions of dollars of foreign assistance,
loans from International financial institutes, alliance with USA and numerous public
development initiatives. Although, by 1999 its PPP per capita income was higher than a third of
world country but, several social indicators of education and health in the same era were among
the worst in the world. The author has discussed at length indicators such as social, demographic,
water & sanitation, public spending (over spending on defense is approximately equal to
underspending of health) quality of institution, abuse of human rights last but not the least
corruption. The author covered an intriguing statistics that is low Gini coefficient which
contradicts prevalence of income inequality. However, he anecdotally verified the economic
inequality and he considered skewed distribution of income a more important dimension of
inequality.

Easterly, referred Pakistan as an intriguing paradox. He tried to link this paradox with elite
dominance and ethnic division; disguised not only in the form of linguistic, religious, regional
and urban/rural inequalities but also in the form of class and gender gap. He also took into
consideration country’s political instability and military cops during this time period. Easterly
pointed out that reason why Pakistan remained unsuccessful in translation high growth statistics
into socio-economic development is its high level of economic inequality and ethnic
polarization. Although there were some areas which needed more exploration and research, such
as why low social development indicators did not prevent growth, however, the author has
rightly indicated that growth numbers alone do not guarantee development.