Are we Failing? Yes. But Why?

pakistan

Are we failing as a state? That’s a definite Yes. Why are we failing? That’s because we have weak economic/technical institutions.

Why are our economic/technical institutions weak? Because dishonest and incapable people are running these institutions. But why are these dishonest and incapable people hired in the very first place? This blog will answer this question.

As Daron Acemoglu and James Robinson analyzed in their book Why Nations Fail, there are two types of political institutions; Absolutist Political Institutions that keep the power centralized (are usually found in dictatorships or in PML-N form of government) and Pluralist Political Institutions which work in broad coalitions (are mostly found in democracies, not in Pakistan).

Absolutist Political Institutions lead to Extractive Economic Institutions which then operate on fundamentals of corruption and work for the special interest groups whereas Pluralist Political Institutions develop Inclusive Economic Institutions which work efficiently to deliver.

How does this nexus of Political and Economic Institutions contribute to the success or failure of the state? Political Institutions are mainly the different ministries with various portfolios; their job is to design policies which will help achieve efficiency (in an ideal world).

Economic/Technical Institutions are the implementing agencies of these political institutions and their job is to implement these policies to bring the policy change for efficiency into practice (again in an ideal world). For instance, Ministry of Petroleum and National Resources will design a policy to provide relief to consumers on Oil and Gas prices (after getting an approval from the cabinet) and Oil and Gas Development Company (OGDCL) and Oil and Gas Regulatory Authority (OGRA) will implement these policy changes.

Now, Absolutist Political Institutions (which we have in Pakistan) will not design policies for the sake of bringing a positive change rather the motive behind these policies will be to cater to the demands of special interest groups or the premier (who interferes in every policy design to make sure his political and self interests are addressed). We can see a glimpse of this theory in the operations of not only Government of Punjab but also the Government of Pakistan where both Sharifs have the final word on any policy stance.

These Absolutist Political Institutions then foolproof their self-interest-coated-plan by making high level political appointments in the Economic/Technical Institutions, so that their self interest is always made the foremost priority. When these economic/technical institutions are run by dishonest and incapable appointees fail to deliver and become safe havens for corruption; they are then called the Extractive Economic Institutions.

These political appointees in both Ministries and Economic/Technical Institutions (OGRA, State Bank of Pakistan, NEPRA et al) who are usually working as Personal Secretaries, Special Assistants and Advisors to the Ministers, Secretaries and Director Generals act as Gatekeepers; keeping the common sense out of the corridors of power. They will not let a talented, ambitious grade 17 Research Officer to present his idea to a Secretary or a Minister simply shrugging it off because the Research Officer should not waste “Honourable” Minister’s or Secretary’s time with his “inexperience”.

Constant meddling of Political Institutions into the recruitment process and operations of Economic/Technical Institutions yells redundancy at the autonomy of the latter and leaves them no room for any efficient delivery.

That’s why it’s left to the dishonest and incapable to run these institutions. That’s why we have weak economic/technical institutions. And that’s why we are failing as a state. Importance of Institutions is foremost for a state to be successful. Addresses, APCs and Task Forces won’t address the security issues, petrol shortage or economic debacle; Institutions will.

Do I have a personal grudge against the PML-N government? (A lot of people ask me this question) Yes. When 141 children are butchered due to negligence of Law Enforcement Institutions, when I have to wait for hours in a queue at a filling station for petrol due to negligence of Oil and Gas Regulatory Institution, when I have to plan my entire day according to the load shedding hours of electricity due to incapacity of Power Regulatory Institution: Yes, then it becomes very personal.


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About the author

Ali Zafar

Ali Zafar is a DAAD Scholar at University of Applied Sciences, Berlin and aspires to be an economist. He blogs at http://azpk90.blogspot.com/

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