IMF Programmes and Institutional Quality Determinants: Economic Scenarios in Pakistan

Abstract

Pakistan has been selected in this chapter as a representative example of a frequent user of IMF resources. Here, by applying the Vector Autoregression (VAR) model techniques, various counterfactual scenarios are estimated for a period of 1980–2014, to see impact of a significant institutional determinant (from Chap. 2), KOF index of globalization on macroeconomic instability and real economic growth. Results highlight that through enhanced focus on institutional quality determinants, macroeconomic instability can be reduced, and hence higher growth rate of GDP can be achieved.