Abstract. The paper undertakes a detailed analysis of economic progress and welfare measures in determining good governance outcomes in Pakistan. There is evidence that inequality stifles the capacity of political, economic and social governance by creating an elite class that protect their economic and political interests and undertake legislation primarily to the benefit of ruling elites. Furthermore our results also suggest that economic development empower the economically and socially excluded groups of the society and give them more voice in favor of policies that are representative of the issues like accountability against corruption or favoritism.Keywords. Governance, Welfare, Economic development.JEL. D60, D61, D63
