The economies of the countries have different situation of balancesome are those having low

fertility but great womens literacy rate and greater per capita income on the other hand there are
those economies who have high fertility but less womens literacy rate and less per capita
income. Unfortunately, Pakistan falls in the second type of balance. An alternative model of
gender gap in a political economy of burgignon and verdier 1999 theory can be imagined. The
purpose of this research paper is to investigate a process by which fertility and growth are linked
together. The model comprised on three different elements: firstly, by increasing womens
comparative wages/ salaries lead to decrease in fertility rate as it increases the cost of children
nurturing. Secondly, women comparative wages rises with increase in capital per worker as is it
is more corresponding to womens labor input than mens. this affirmative circle of feedback
produce a change in population like decrease in fertility rate while growth in output. (Galor and
Weil 1996).

The chauvinism of male and their decision to retain women uneducated because they will not
demand more right and equal treatment compared to men. The next political economy tactic
emphasizes the relation between ethnic division and the lack of public service and institutions
outputs. Alesina, Baqir, and Easterly 1999 researched out that more the ethnic divisions in the
cities of united states the low funds will be allocated to education and other public services as
compared to the cities where the population is more similar and regular. Easterly and Levine
1997 researched out that the countries having more dissimilarities in population will spend less
in education and public services. . Goldin and Katz 1999 researched out that the states having
more diversity ethnically or religiously have less public support for higher education. Miguel
1999 conducted research in Kenya and finds out that there is low investment in primary
education in more ethnic heterogeneity districts. Pakistan has the same kind of diversity in its
population and also has the domination of the upper class. Lack of Pakistan social progress is a
result of several decade policies. It has been proved by the different reports, researched
conducted by different economists and scholars. This research paper has traced out in great
length the social and institutional backwardness of Pakistan by analyzing different aspects of
development and reform programs in history of the country. The economic failure of the
government in controlling the fiscal deficit according to the international standard in order to
confirm the better and healthy education and health institutions. The government investment in
the social sectors is also followed by the low level of private investment in this field. The high
level of defence and debt interest payment also hinder the way to invest more in social services.

Literature Review

Organized examination of literature is an important part of research study as it provides the

comprehensive knowledge and better know-how regarding the research topic and makes the
research more fruitful. Development as an opposite concept to economic growth includes the
growth in per capita income with other two highly important factors necessary for human
welfare: literacy rate and life expectance. (for details, see Storey 2003: 32). So we can dedfine
development as a comprehensive process of increasing peoples range of choices so that the
people can live better. educated and healthy life. (Human Development Reports. Glossary of
Terms). ). Robert Putnam (1993) researched out that the solidity and latitude of local community
links is necessary for greater distribution of information in a society which is essential for the
foundation of better governance and development.

Quality of labor plays a crucial role in the economic growth in the shape of human capital,
several researched established that the quality of labor mostly depend on the quality of
education. But this concept completely ignores the contribution of health in human capital
formation and also the basic element of economic growth. The improved and better health
condition of the labor force will lead them to work more efficiently and effectively and
ultimately they will also earn more. The absenteeism of the workers will also be reduced with
better health conditions which in return will not reduce their hourly wages as in developing
countries where more industries are dependent on manual labors. The conventional economists
categorized three main elements modeling economic growth: labor, capital and land. But later on
another major element which is Human Capital added in the list by 1960s neo-classical
economists included T. W. Schultz (1961) and Gary Becker (1962). They established that the
humans education, health and training are the main determinants in order to utilize effectively
other three elements of growth.

FDI

Researcher and economists have different perspective regarding the FDI inflow towards third
world or developing countries. Some scholars are certain that foreign direct investments is
helpful for economic growth for emerging countries so that in this way they can fulfill the need
of long term investments while on the other hand some other scholars have opinion that foreign
direct investment does not bring sustainable economic growth to developing countries. FDI can
simply be defined as the direct investment in a county by the non-resident of the country or by
the citizen of any other country. (Crespo and Fontura, 2007) researched out that the receiver
country gets several economic advantages through foreign direct investment such as the need
foreign exchange, capital, latest technology and the entrance to international markets. All these
outcomes of the foreign direct investment ultimately lead to economic growth in a country.
foreign direct investment on the one hand will improve trade deficit as well as encourage savings
in the country which resultantly also increase domestic investments and employment
opportunities [Khor (2000)]. (Khondoker and Mottaleb, 2007) argued that foreign direct
investment plays crucial role in economic growth and development by balancing the fissure
between local saving and investments and by transporting the up to date technology and
management skills from developed to developing countries.`
 Luara Alfaro and Areendam Chanda,(2003) researched on the data of different developing
countries from 1975-95 and find out that the role play by FDI towards economic growth is
uncertain and vague. Andreas 2006 carried research by collecting data of ninety countries from
the period 1980-2002 and find out that foreign direct investment lead to positive development in
economies of only few developing countries. Ndikumana and Verick (2008) and Lumbila (2005)
carried research and finds out that FDI directly lead to better economic growth in developing
counties. Local industries can get benefit from latest technology and labor brought by FDI from
developed countries. Borensztein, De Gregorio, and Lee (1998) and Carkovic and Levine (2003)
conducted research by using regression analysis and find out that FDP plays little role in
economic growth of developing countries. Naeem, Ijaz, and Azam (2005) carried out research in
Pakistan using time series data from the period 1970-2000 and established that the critical
economic elements in Pakistan are local investment, ease of trade, external debts, inflation and
burden of indirect taxes.