Constraints on Pakistan's Industrial Development: A Test of the Infrastructural Bottleneck Hypothesis

Abstract

This paper examines the infrastructural investment bottleneck hypothesis for Pakistan: have shortages in infrastructure investment constrained manufacturing output in Pakistan, as recently suggested by the World Bank? Using Granger causality techniques, we find evidence that the hypothesis does hold true for Pakistan, although the general pattern between public sector investment and manufacturing output is one of little coordination between the two sectors.