Pakistan follows a mixed economy model with the co-existence of public and private sectors. It announced its first Five Year Plan in 1956, adopting strategies similar to India, such as creating a large public sector and raising public expenditure on social development.

In the late 1950s and 1960s, Pakistan introduced a regulated policy framework for import substitution-based industrialisation. This policy combined tariff protection for manufacturing consumer goods with direct import controls on competing imports. The introduction of the Green Revolution led to mechanisation and increased public investment in infrastructure in select areas, which significantly raised foodgrain production and changed the agrarian structure.

During the 1970s, nationalisation of capital goods industries took place. Subsequently, in the late 1970s and 1980s, the policy orientation shifted towards denationalisation and the encouragement of the private sector. During this period, Pakistan also received financial support from western nations and remittances from abroad.

Scholars argue that the reform process led to a worsening of economic indicators, with GDP growth rates not improving compared to the 1980s. The economic slowdown is attributed to political instability, over-dependence on remittances and foreign aid, and the volatile performance of the agriculture sector. However, in the last five years, macroeconomic indicators have shown positive growth rates reflecting economic recovery.