Impact of Infrastructure on Economic Growth in Pakistan: Moderating Role of Governance

Abstract

In this study, the moderating effect of governance is examined in relation to the effect of infrastructure on economic growth in Pakistan. Governance quality, which includes factors like political stability, government effectiveness, the rule of law, and corruption control, can have an impact on how well infrastructure works to support economic growth. The study uses panel data from several dependable sources covering the years 1992-2018 and adopts a quantitative research methodology. Autoregressive Distributed Lags (ARDL) are used in the study to evaluate the association between infrastructure development, economic growth, and governance indicators. The infrastructure–led development theory is used as the theoretical foundation. The study's conclusions show a strong and positive correlation between infrastructure spending and Pakistan's economic expansion. The study also reveals that the association between infrastructure investment and economic growth is moderated by governance quality. For Pakistan's government and officials, these findings have significant policy consequences. The research concludes that it is essential to address governance concerns and enhance the entire standard of governance to maximize the advantages of infrastructure investment and support sustained economic growth.