NATIONAL DEFENSE UNIVERSITY

Name: laiba hussain

Roll No: NDU-GPP/BS-S/23-013
Subject: political economy of Pakistan
Semester: GPP-3rd
Submitted to: mam qurat ul ain Abbas
_______________________________.

Analyze the decades from 1947 till 1980 ( political economic

aspect) also analyze the harvard trickle down model in the
AUYUB'S ERA
The period from 1947 to 1980 was marked by significant political and economic
developments. In the political realm, this era saw the aftermath of World War II,
the beginning of the Cold War, decolonization movements, and the rise of
superpowers like the United States and the Soviet Union. Economically, there were
notable shifts in policies and ideologies that influenced global economies.

Political Aspect:
Decolonization and Nation-Building: Many countries gained independence from
colonial powers during this period, leading to the emergence of new nations and
political systems.
Cold War: The world was polarized between the capitalist West, led by the United
States, and the communist East, led by the Soviet Union, resulting in various proxy
conflicts and alliances.
Decolonization Movements: The rise of nationalist movements in Africa, Asia,
and the Middle East challenged colonial rule and led to the dismantling of
European empires.
Civil Rights Movement: In the United States, the Civil Rights Movement fought
against racial segregation and discrimination, leading to legislative changes and
societal shifts.
Globalization of Ideologies: Ideologies such as socialism, capitalism, and
democracy spread globally, influencing political systems and international
relations.

Economic Aspect:
Post-World War II Reconstruction: Many countries, particularly in Europe and
Asia, focused on rebuilding their economies after the devastation of World War II.
Keynesian Economics: Governments embraced Keynesian economic policies,
which advocated for government intervention to manage demand and stabilize
economies.
Bretton Woods System: The establishment of the International Monetary Fund
(IMF) and the World Bank aimed to promote international economic cooperation
and stability.
Golden Age of Capitalism: The period saw rapid economic growth in many
Western countries, characterized by low unemployment, rising wages, and
technological innovation.
Oil Crisis: The oil crises of the 1970s, caused by geopolitical tensions and supply
disruptions, led to economic recessions and increased inflation in many countries.
Analysis of Harvard Trickle-Down Model in Ayub’s Era
The Harvard trickle-down model, as discussed by Philippe Aghion and Patrick
Bolton in their work on "A Theory of Trickle-Down Growth and Development,”
focuses on how economic growth can benefit all levels of society
This model suggests that policies aimed at promoting growth at the top end of the
income distribution can eventually benefit lower-income groups through various
channels.
In Ayub Khan’s era in Pakistan (1958–1969), trickle-down economics was a
prominent feature. Trickle-down economics refers to policies that primarily benefit
the wealthy with the belief that these benefits will eventually “trickle down” to
lower-income groups
This approach often involves tax cuts for high earners and businesses with the
expectation that increased wealth at the top will lead to overall economic growth.
Ayub Khan’s economic policies in Pakistan during this period were influenced by a
desire for rapid industrialization and modernization. While these policies aimed to
stimulate economic growth, there were criticisms regarding their impact on income
inequality and whether the benefits truly reached all segments of society.
Overall, analyzing the Harvard trickle-down model in Ayub’s era involves
assessing how economic policies focused on promoting growth at the top echelons
of society translated into tangible benefits for all income groups in Pakistan during
his tenure as President.
The trickle-down approach faced criticism for exacerbating inequality and failing
to address the needs of marginalized communities, leading to social and political
tensions that eventually contributed to Ayub Khan’s downfall.
Overall, the implementation of the Harvard Trickle-Down Model during Ayub
Khan’s era in Pakistan reflected broader global trends in economic development
strategies, with mixed results and enduring debates about the effectiveness of such
policies in reducing poverty and promoting inclusive growth.