Abstract
This paper looks at the impact of structural adjustment on the macroeconomic performance. of Pakistan. After a brief description of the broad characteristics of the various policies im-plemented under Pakistan's 1980s adjustment programme, it provides a methodological review of pre-existing studies of the effects of adjustment on macroeconomic performance in Pakistan. A number of methodological shortcomings of the methods used are identified, including the problem of controlling for non-adjustment factors. An alternative analysis is then proposed, which involves simulating an error correetion model using time series data for inflation and investment. Model simulations based on a number of alternative scenarios suggest that adjustment has had a negligible indirect effect, if any on investment. Inflation would on average have been higher in the absence of adjustment, though this difference has diminished in recent years.
