Impact of the Belt and Road Initiative: The case of Pakistan

This study investigates the macroeconomic impact of the Belt and Road Initiative (BRI) on Pakistan using the synthetic control method. Based on the panel data of 42 non-BRI countries, we construct a synthetic Pakistan to estimate the economic growth trend of the country without the BRI. By comparing the actual economy with the synthetic case, our results show that the BRI increases the annual per capita GDP growth rate of Pakistan from 3.04% to 4.69% for the period 2013-2018. Pakistan's per capita GDP in 2018 would have been Int$5,022 instead of Int$5,567 if the BRI had not existed. The outcomes of the in-time placebo test, in-place placebo test, and dropping sample test all confirm the robust impact of the BRI on Pakistan.