Introduction

Policy formulation in developing nations is subject to many social, political, and economic influences. Economists have usually treated policy as a freely floating variable, to be manipulated as economic analysis dictates. After 1970, Pakistan experienced two major political transformations. Both led to important changes in economic policies as a result of the realignment of ruling interests. In each instance, changes in economic structure occurred because of the impact of these new policies on economic activities. In Pakistan, distinct configurations of interest groups have formulated distinctly different policies; these policies have yielded different patterns of developmental and export performance. In the 1960s Pakistan’s growth effort was directed at rapid industrialization through import substitution and encouragement of manufactured exports. Policies evolved under the direction of a ruling elite consisting of the army officers’ corps and the civil bureaucracy, supported by landlords and industrialists. The chapter also presents an overview of the key concepts discussed in this book.