Institutional Quality, Gender Equality, Digital Financial Inclusion, and Women Empowerment in Pakistan: Evidence from Provincial Data

Abstract

Women empowerment is a key driver of inclusive and sustainable development, particularly in developing economies such as Pakistan, where persistent gender inequality, weak institutional structures, and limited financial access constrain female economic participation. This study examines the relationship between institutional quality, gender equality, digital financial inclusion, and women empowerment using provincial-level data from Pakistan over the period 2010–2025. The analysis incorporates data from Punjab, Sindh, Khyber Pakhtunkhwa, Balochistan, and Islamabad Capital Territory to capture regional heterogeneity.The study employs panel econometric techniques including Fixed Effects, Random Effects, and Panel ARDL models to estimate both short-run and long-run dynamics. The findings suggest that institutional quality and digital financial inclusion significantly enhance women empowerment, while gender inequality acts as a structural barrier that weakens the effectiveness of financial inclusion policies. Moreover, institutional quality plays a moderating role by strengthening the impact of digital financial inclusion on women empowerment. The study highlights significant provincial disparities, with Punjab and Islamabad performing better than Balochistan and rural Sindh.The results provide strong policy implications for improving governance quality, expanding digital financial infrastructure, and reducing gender inequality to achieve inclusive growth in Pakistan.

Keywords: Institutional Quality, Gender Equality, Digital Financial Inclusion, Women Empowerment, Pakistan, Provincial Data