By Ayesha Mudassar

ISLAMABAD, August 22 (INP-WealthPK): Inclusive institutions have created increasing incentives for entrepreneurs and economic growth in developed countries.

Dr. Mahmood Khalid, research economist at the Pakistan Institute of Development Economic (PIDE), told WealthPK that inclusive institutions have been the basis for broad-scale socioeconomic development. The premise of such institutions is based on universality, equal opportunity, and fair representation.

Ensuring education and fostering investment incentives have improved access to innovation, boosted long-term competitiveness, increased employment, and raised productivity, all of which have supported economic growth in modern countries.

According to economists, education for the people is essential for innovation in an advanced technological world. Education needs to be well-financed and parents must be encouraged to send their kids to school.

The Economic Survey 2021-22 estimates that the federal and provincial spending on education is approximately 1.77% of GDP, not even half of the global average.

Inclusive institutions are characterized by three attributes: 1) protecting property rights; 2) restricting monopolization of the small elite; 3) provision of equal opportunities for employment, social security, and civil rights to all individuals.

In the book, ‘’Why Nations Fail’’, the authors point to the South Korean government’s success of incentivizing public and private sectors to encourage innovation, investment, and exports – the driving forces for its economic boom.

Concerning Pakistan, the inconsistency in policy implementation, lower human capital investment, and disenfranchised people can be directly or indirectly attributed to the weak economic institutions of the country.

 The only obvious solution is to build strong institutions that support widespread public access, strengthen the domestic industry, and provide a favorable, business-friendly environment for foreign investors.

Credit: Independent News Pakistan-WealthPk