Governance Issues in Pakistan

•Good governance
Is directly related to institutional stability and the breakdown in the institutional development is a major cause behind bad governance

•The issues like institutional development, institutional stability, institutional balance and accommodation have affected Pakistan

•Institutional imbalance
It is the need for all institutions to work within their ambit

Inclusive institutions
These are the ones
1.Where plurality and greater participation of the populace is ensured 2.Economic gains and incentives are broadly shared

Extractive institutions
These are created
1.For the benefit of a tiny elite
2.Are perpetuated for the benefit of that elite

An Influential Book (on the subject = governance/institutions) Why Nations Fail: The Origins of Power, Prosperity and Poverty (by Daron Acemoglu and James Robinson), says: 1.The progress and prosperity of nations is inextricably (inseparably/inescapably) connected to with the way political and economic institutions evolve in their histories a.Those nations progress to prosperity which have inclusive political and economic institutions b.The nations with extractive political and economic institutions end up being poor and fragile 2.This institutional development results from historical evolution of institutions

How institutions structure nations (illustration by example of impact of inclusive Vs extractive institutions on nations) •Contrasting examples of two small towns bearing the same name of Nogales facing each other across US-Mexican border •Explanation for their contrasting fortunes lies in the nature of their current political and economic institutions

1.Mexican Nogales
Is dirt poor, instable with lower health and educational outcomes due to extractive political economic institutions

2.US Nogales
Is rich, stable and demonstrates better health and education outcomes due to inclusive political and economic institutions

Historical Evolution
•Historical evolution is an important factor in development of institutions rather it is an immutable (undeniable) fact •There comes a time in the history of nations — a critical juncture — which, if properly directed, can reverse the fortunes of a nation and set it on the path of inclusive institutional development •Example (Britain in 1348 – the Black Death)

oIn Britain in 1348, the Black Death wiped out a large chunk of farm labour oIt was such a critical juncture
oIt resulted in restructuring of the previously extractive landlord–labour relation oMore equal relations were embodied in legislation
oIt was Britain’s decisive turn from extractive political and economic institutions to inclusive ones

Evolution of Institutions of Pakistan
Effect of Colonialism on Institutions
1.Post-colonial countries are inherited extremely extractive political and economic institutions 2.In most cases post-colonial rulers have not only maintained these coercive and extractive institutions but also augmented the extractive aspects to preserve the hold of a narrow ruling elite nurtured by colonialists

Effect of Colonialism on Institutions of Pakistan
1.Colonialism shaped political and economic institutions in Pakistan 2.This institutional model is responsible for our current backwardness 3.Pakistan inherited highly extractive institutions at birth 4.The new ruling elite maintained and enlarged these arrangements 5.The institutional arrangement in Pakistan has, since independence, been favoring i.The civil-military complex

ii.The corporate sector
iii.The co-opted landed political elites (landed aristocrats)

Impact of such institutions on Pakistan
1.One Unit signified the extreme political and economic extraction from East Pakistan. The result was the break-up of united Pakistan 2.The wealth of the country concentrated in the hands of what came to be called the 22 families

Evolution of Political Institutions of Pakistan
•1968: a popular movement erupted demanding greater say in the running of country •1971 Elections: Highly restricted political system opened up a bit •Since then: Interruptions by periodic military interventions have set back the slow process of inclusive institutional transformation •The political system is becoming a shade more inclusive

Evolution of Economic Institutions of Pakistan
•Economic institutions still remain largely extractive
•Monopolies and cartelisation (example sugar crisis etc)