ABSTRACT
This chapter examines the extent to which defense expenditures in the South Asian country have reduced allocations to other budgetary categories, especially physical infrastructure. The middle income countries gave more protection to administration and defense and less to productive and infrastructural sectors. In the aggregate infrastructure appeared to be reduced with increased military expenditures. Longer run budgetary trade-offs may have played a more significant role in reducing the share of resources allocated to the nation's capital stock. The chapter addresses the following question: have increases in defense expenditures in Pakistan come at the expense of both economic and social programs or, instead, have the reductions been confided to one area? The country's constitution specifies areas of exclusive federal responsibility and areas of concurrent federal responsibility with residual powers left to the provinces. On the surface Pakistan does not appear to be following very closely the international budgetary norm for low income countries.
