Effects of Terror on Trust Situation of Pakistan

This study investigates the impact of terrorist activities on economy of Pakistan, including lowering trust indirectly. Terrorismreally affected economic growth, FDI, strongly influenced trust and increased military expenditures. For the empirical analysis, data is obtained from 1990 to 2017 from several sources. The study found that the Military expenditures and Human capital are turned to be highly significant and have direct relation with Trust. Based on the results, the study suggest that the government can play a very positive role in allocating the major part of the its budget to military expenditures and human capital. The government must provide the security to its people and their belongings and sketch such policies which paced with rest of the world regarding security.