Role of IFIs in the Economic Development of Pakistan: Case Study of the World Bank

Abstract

This study critically investigates the role of the World Bank in Pakistan’s economic development from 1947 to 2016, with a focus on its financial interventions, policy reforms, and sectoral contributions. Employing a qualitative methodology, it draws upon secondary data, including policy reports, scholarly literature, and institutional documents, to evaluate both the opportunities and limitations of World Bank assistance. The research examines the Bank’s influence on agriculture, industry, infrastructure, and poverty alleviation, while also assessing the challenges of governance inefficiencies, fiscal imbalances, and political instability that hinder sustained outcomes. Findings reveal that the World Bank has been a pivotal actor, providing more than $15 billion in loans and credits to address infrastructure deficits, energy shortages, and social development needs. Its structural adjustment programs, privatization support, and social sector investments contributed to macroeconomic stabilization, but long-term dependence on external aid has undermined Pakistan’s path to self-sufficiency. The 1990s, in particular, highlighted systemic vulnerabilities, as debt burdens rose despite Bank-supported reforms. The study concludes that while World Bank assistance remains vital for short-term relief and sectoral improvements, sustainable development in Pakistan requires institutional reforms, tax mobilization, economic diversification, and effective governance. By situating Pakistan’s experience within development economics and dependency theory, this thesis contributes to broader debates on multilateral aid and offers practical insights for policymakers seeking to balance foreign assistance with endogenous growth strategies.