Economic and social Impact of Privatization in Pakistan

Privatisation has been a part of the structural adjustment policies introduced in developing countries in early 1980s. In Pakistan, privatisation program took pace with the constitution of the Privatisation Commission in 1991. Since its independence, economy was in private hands in Pakistan. However, in 1970s, the size of the public sector expanded by nationalization of almost all the major industries and financial institutions. The share of the state sector in GDP was 11.6 percent in 1985. Privatization in Pakistan is aimed at reducing fiscal deficit, improving efficiency and promoting competitive markets. This work attempts to evaluate the impact of privatization on fiscal deficit, performance of the privatized enterprises, and the social impact in terms of effect on employees and employment, wages and prices. The availability of data has been major constraint on carrying out this work. However, this dissertation concludes with the findings that in Pakistan, it is difficult to differentiate the impact of privatization from the impact of overall stabilization and structural adjustment policies.