ABSTRACT
The political convulsions of the late sixties had inevitable adverse consequences for the economy; since 1969, the growth of per capita output had been negative. The PPP had, therefore, not only to revive the economy but also, due to the nature of its evolution, concern itself with distributional issues. Public intervention in the economy was linked to such concerns. However, it is worth noting that Pakistan's economic evolution had reached a stage where policy makers had committed themselves to greater state intervention even prior to the PPP's ascension to power. Until the late sixties, import-substituting industrialisation had led to the growth of consumer goods industries. In the last days of the Ayub Government, however, substantial progress had been made in negotiations with foreign powers regarding collaboration, in setting up large capital goods producing units, such as a steel mill. The intention was to expand the public sector into capital goods production, with the private sector being encouraged to establish downstream industries. When the PPP came to power there was an added dimension to the envisaged expansion of the public sector; existing private sector enterprises were nationalised and brought into the fold of public ownership.
