Public Policy Fundamentals for Sustainable and Inclusive Growth

Pakistan has seen strong economic growth in recent yearsaccompanied by a reduction in poverty. However, growth has beenconcentrated, which has meant that regional and inter-personal disparitiesare on the rise. In a contestable political environment, this casts a shadowon the sustainability of high growth. The budget, a corrective instrument,has been subject to boom and bust cycles because of rigid claims, poor taxeffort and external shocks, rendering it ineffective in addressing long termpriorities. This paper argues that robust budgets for sustained andinclusive growth require government programs to be credible (monitoringand evaluation and public information) and cost effective (streamlinedbudget cycle, public-private partnerships); this will help increase citizenwillingness to pay for public programs via improved tax compliance.