AN EMPIRICAL ANALYSIS OF FOREIGN AID AND SOCIAL SERVICES IN PAKISTAN

Public service delivery is very important for the well-being of a society and the country's prosperity. To provide these services effectively, the government needs extra funding and investments from domestic and international sources in aid or loan. Foreign aid inflows in the country have grown significantly since the 70s. Many studies have tried to assess the effectiveness of aid at the micro and Macro Levels on a global front. While micro evaluations have found that those at the macro-level are ambiguous in most cases, aid ‘works.' This paper assesses foreign aid's impact on Pakistan's social services for short and long term periods. We use the Auto-Regressive Distributed Lag approach to assess the data set. The time-series data used from 1980 to 2019. The results strongly support the view that foreign aid does have some positive impact on education and health on a short and long-term basis, conditional to a stable macroeconomic policy environment.