Redistributive Effects of Public Expenditures in the Urban and Rural Areas of Pakistan

Abstract

Utilizing HIES (1992-93) data and Economic Survey of Pakistan (various issues), this article focuses on the effects of government expenditures on the distribution of income across various income groups in the urban-rural areas of Pakistan. Net National Product (NNP) is used as the income base. Results show that the lower income groups get the lower absolute public expenditure benefits than higher income groups in both the urban and rural areas of Pakistan. However, public expenditure benefits as a percentage of incomes across various income brackets, show that the lowest income group gets the maximum benefits and the subsequent income groups receive at a decreasing rate. Comparing urban and rural public expenditure benefits results depict that urban households enjoyed more public expenditure benefits than their rural counterparts.