Financial Inclusion and Political Instability as Dual Forces Shaping Income Inequality in Pakistan

Abstract

This study examines the role of instability in the political system and financial inclusion in the case of Pakistan. The data sample is from 1998 to 2023. The structural equation model (SEM) is employed to gauge the direct and indirect impacts of financial inclusion and political instability on the unequal distribution of wealth. The findings refer that financial inclusion is the key driver to reduce inequality to give access to financial services. While the political instability leads to an increase the inequality in society. The key findings highlight the importance of financial inclusion in reducing income inequality. This means that political stability is crucial for reducing income inequality. This study provides a comprehensive database and analysis. It offers evidence and insights for policymakers to achieve sustainable development and financial inclusion in Pakistan.