Since, the Republicans have completed two terms (8 yrs) in the oval office, I thought to compare their policy impact on Pakistan’s economy and compare it with previous eight years of Democrats Clinton era. In addition, I also compared the South Asian region’s economy to see how it grew under both. Holding everything constant (ceteris paribus), I took Gross Domestic Product (GDP) growth rate as a core economic indicator to describe country’s economical health. There are other macro-economic indicators as well which are equally important in analyzing the economy, but, to avoid complexity, I kept it simple with just one variable. Note that I’m not favoring any political party nor seeking any association. Instead, this analysis is done purely on factual basis. In addition, it’s not necessary to judge the performance of any political party based on its foreign policy or on any other country’s performance. However, it’s one of the several factors which demand careful consideration in describing successes and failures.
Pakistan’s GDP Growth under Democrats era (1993-2000):
Pakistan’s GDP Growth under Democrats era (1993-2000):
Pakistan’s GDP Growth under Republicans era (2001-2008):
South Asian region average growth under Democrats (1993-2000):
South Asian region average growth under Republicans (2001-2008):
The above data is taken from various resources such as World Bank, CIA world fact book, Asian Development Bank, IAEA, State Bank of Pakistan and etc. To make the argument interesting, let’s look at World’s GDP under both; republicans and democrats:
World’s GDP under Democrats (1993-2000):
World’s GDP under Republicans (2001-2008):
I’ll not allow myself to be the advocate of any party rather would welcome others comment to come up with better reasoning in supporting their association. In conclusion, be it Democrats or Republicans, every decision made by America has an impact on other countries. Every political move by these parties changes the economic cycle of other regions. Let’s hope the newly elected President Obama proves good for the developing economies.
2 comments:
I would start out by doing a t-test between the two samples (Clinton and Bush). If the t-stat is significant at the p = 0.05 level, then I would think more about this. Make sure GDP is adjusted for inflation.
A few things are worth noting. First, the president does not define the government. The congress plays a significant role in developing policies. Specifically, Newt Gingrich was very influential during Clinton's administration and Nancy Pelosi has been very influential in the Bush administration. Second, even if there is a significant correlation between Democratic/Republican administrations and world development, it seems difficult or impossible to show causality. Furthermore, the macroeconomics of the developing world are highly complex systems. While American politics, no doubt, affect macroeconomics in the developing world, determining the direction and magnitude of the effects with any level of specification would require a multitude of control variables, many of which are not measured.
Thanks for your feedback. Yes, you're right about correlation between administrations and the world. There are other variables(controlled and un-controlled) involved too, which are significant in knowing the impact of policies. But, I didn't measure any of it as the equation may become more complex. I'll do t-test to check the significance level.
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