Home / Economy / Policy power plays | By Dr Niaz Murtaza
Policy power plays

Policy power plays | By Dr Niaz Murtaza

STATE policies are supposedly formulated by government institutions to serve people, especially those most vulnerable. In reality, policies serve powerful groups who, given their vast private powers, disproportionately determine which individuals capture state power. In power, these individuals largely formulate policies which benefit this ‘selectorate’ rather than the electorate.

In developed countries, the ‘selectorate’ mainly includes organised representatives of classes — mainly capitalists and middle-class professionals and secondarily labour. In developing countries, powerful state institutions, ethnic groups, foreign states and multilateral institutions also partake in crowning rulers and controlling state policies. A review of Pakistani policies in different domains, ie, foreign, security, economic, social and political, helps in understanding who controls and benefits from them.

The easiest to analyse are foreign and security policies since one institution — the army — has monopolised them since 1977. The army focuses on competing with India over Kashmir and keeping Afghanistan subservient. Decades of such policies have brought no benefits to vulnerable Pakistanis, but only international isolation, mass civilian casualties and economic stagnation.

The establishment’s security pre-eminence also affects the economic domain indirectly in anti-poor ways, by producing insecurity-induced economic stagnation, hobbling private players through proliferation of military enterprises and tying-up large resources for defence expenditures.

The three most critical policy domains are anti-poor.

However, unlike the military’s monopoly in foreign/security domains, Pakistani economic policies reflect the influence of several powerful entities, making economic policies incoherent. Tax efforts under fiscal policies, especially during IMF programmes, prioritise indirect taxation, which generally hurt the poor more, but de-prioritise taxing commercial and landed elites equitably.

Fiscal expenditures beyond defence, debt repayment and administration focus on untargeted subsidies disproportionately benefiting upper and middle classes. Monetary policies remain subservient to pro-rich fiscal policies.

Interest rates generally remain high under IMF advice to control inflation, negatively affecting employment growth. Exchange rates have generally remained overvalued benefiting groups which prefer cheaper imports such as retailers, the military and consumption-focused middle classes.

Under political and social policies, one sees more focus on vulnerable groups, especially under elected regimes, and greater influence of civil society. Devolution represents the most important recent political policy which theoretically benefits weaker ethnicities, while undermining centralisation-oriented groups. However, poor implementation has pre-empted both outcomes. Pro-vulnerable measures, like judicial, bureaucratic and police reforms, largely remain untouched since they undermine upper class and security interests.

Within social policies, state anti-poverty programmes like BISP, and higher primary education expenditures expand under elected regimes, but still fail to benefit the poor significantly. Several policies to provide protection to vulnerable groups like women, children and minorities have also been adopted recently but practically provide little protection. Still, their adoption reflects the victory of progressive groups.

Overall, the three most critical policy domains (foreign, security and economic) are largely anti-poor. One sees some legislative attention to the interests of vulnerable groups in political and social policies, but poor implementation undermines the legislative accomplishments. Thus, overall state policies largely benefit different elite groups.

Class-wise, industrialists have re­placed landlords as the most powerful group while low-income sub-classes like workers and farmers have little voice. The middle class, which generally benefits more from and hence supports unelected regimes, is finding increasing success electorally under the more middle class-controlled PTI and MQM.

Institutionally, the security establishment still reigns supreme with the judiciary replacing the bureaucracy as the second significant institution. Elite Punjabis remain most powerful but the Pakhtun and possibly Sindhi elite have overtaken the Mohajir elite in the pecking order politically though not economically. Externally, US influence is giving way to Saudi and Chinese influence, ie Pakistan is jumping from the frying pan into the fire.

Countries prosper where state policies in different domains cohere together. In Pakistan, at least half a dozen powerful external and internal entities control different policy domains, resulting in mutually conflicting policies. Thus, Pakistan is experiencing class-based, ethnic, institutional and related ideological conflicts. Until a set of cooperating and pro-poor groups attain control over different policy domains, chances of immediate development remain bleak.

Published in Dawn March 24th , 2015

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