Sunday, 19 June 2016

The Urban Sprawl

With Waqas Younas
Cities are often a reflection of their zoning codes. Unfortunately, in Pakistan citizens never have any say in how their cities and towns are designed. The width of our streets, height of our homes, size of building lots, amount of space reserved for pedestrians, even the reason we cannot operate a donut store in our garage are all dictated by zoning regulations.
Bad zoning codes result in sprawl – and sprawl make societies worse off. According to urbanist Charles Montgomery, sprawls result in bad health, little trust and low social capital. Moreover, people living in sprawls are less likely to volunteer, vote and even join political parties. Therefore bad zoning codes result in miserable communities and they are affecting our cities too. But how do our zoning codes and misuse of land result in sprawl?
First of all, our zoning codes discourage mixed-use and high-rise development. There are no apartment buildings with shops and offices near even within such buildings. Most well-designed cities that we appreciate are based on mixed use.
Our zoning codes also mandate that for new housing projects developers buy land in hundreds of acres. This results in sprawl primarily because hundreds of acres are usually not available within a city. It also encourages big investors who can afford that much land, thus reducing competition. An aside, it reduces the availability of fertile agricultural land.
The fact that the government owns large chunks of prime urban land reduces the supply of available land within cities, which in turn also leads to sprawl. There is a huge opportunity cost of the inner city land that government holds to provide its officials with plush housing and unnecessary offices. A Planning Commission study showed that investment could increase by 50 percent of GDP over 10 years – if this land were made available for mixed-use, high-rise development.
Our traffic management focuses on building roads and corridors for cars. The use of cars has been facilitated at the expense of other forms of transport such as bicycles, walking, taxis and even buses. With cars so subsidised, it is not hard to see why the sprawl is spreading.
In most cities, the planning process often has no zoning for the poor. Apartment buildings are seriously discouraged through planning permissions and high fees for commercialization. For some reason our planners think of apartments as commercialisation, and so poor housing is taxed heavily.
Rich housing – single family homes with highways leading to them – are encouraged. Planners even forget to cost the infrastructure required by such housing. Pipes, electricity roads etc – eventually all this expense is borne by the poor of the city.
Excessive focus on form over function has incentivised inefficient use of land to attract customers, and inefficient use of land leads to sprawl. As consumers we have to pay more attention to form than aesthetically appealing architectures because empirical evidence shows that though we place more weight on physical features, eventually we might be less happier in physically appealing buildings. A study at Harvard by Elizabeth Dunn had students select their houses for their subsequent school years; there was a forecast among students that they would be happier in beautiful houses than less appealing ones.
However, after students settled in these houses their happiness was determined more by social features and the quality of relationships they developed in those houses. Students ended up being happier in architecturally miserable houses because they had better social features. Dunn noted: “Participants overestimated how happy they would be in desirable houses and how miserable they would be in undesirable houses. Our results suggest that forecasters may have erred by focusing on physical features such as location while virtually ignoring the quality of social life in the houses.”
We can try to fix our land use and zoning laws to discourage sprawl and thereby construct more equitable, vibrant and productive cities.
We need to tweak our zoning codes so we can build high-rise and mixed-use property to create more spaces for people in a more concentrated area. We need to think more about building vertically rather than horizontally.
Zoning laws should encourage competition and also mandate socially-responsible housing. Large investors who buy the hundreds of kanals mandated are keen to maximise their profits, so their plans price out low-income households. This results in illegal housing and housing schemes deprived of the basic necessities of life. Zoning codes in some developed countries mandate social housing that accommodates people from low-income background. This helps mitigate sprawl and fosters tolerance, trust, equality and care.
Our zoning codes should encourage urban development with high FARs (Floor Area Ratio). According to a study, on urban land and housing markets in Punjab by David Dowall and Peter Ellis, restrictive FARs are constraining urban density in Punjab. The study also notes that low FARs result in high land prices, a reduction in agglomeration benefits, lengthier commutes, limits formal housing (thus pricing out poor), and affects low-income most.
Zoning codes shouldn’t incentivise parking. Currently developers are mandated by law to provide parking spaces – no matter the type of building. Incentivising parking means we are encouraging developers to create commercial and housing projects farther away from urban centres and encouraging people to shop farther away from home.
Both of these lead to sprawl. In addition, according to economist Donald Shoup, “minimum parking requirements subsidize cars, increase traffic congestion and carbon emissions, pollute the air and water, raise housing costs, exclude poor people, degrade urban design, reduce walkability and damage the economy.” More land for parking also means less land for housing, shops, libraries, schools and hospitals.
It is important to understand where we are headed. All major cities like Karachi and Lahore have master plans. Though inhabitants should have the largest say in shaping cities, their input is never incorporated in these master plans. Our zoning codes should address senior citizens, persons with disabilities, as well as matters of public bike sharing, low-income households and the fact that real-estate developers should be mandated to give back to society in the of schools, libraries and hospitals.
Whenever we move into a particular housing society there is only one zoning law available; there have to be alternatives that prevent or repair sprawl. We need to correct our zoning codes by looking at other poorly-designed modern cities are and not repeating their mistakes.

Why does Pakistan economy not grow at a rate required by our demographics?

Pakistan economy grows in spurts. Pakistan has a young population is that needs employment. 
"Given the youth bulge that Paksitan is going through till 2050, the economy needs to at a sustained rate of 8% per annum for the next 30 years" Framework of Economic Growth of the Planning Commission 2011.

Questions discussed are:

What can we learn from the growth experience of the world?
The importance of the software of growth--institutions and what institutions are?
what is the the geography of growth
The preoccupation fo our rulers with "hardware"--projects and aid.

Anjum and Nadeem Discuss many aspects of growth policy and literature while also discussing why Paksitan does not attained the required sustained growth. 

An important subject to which we will return again and again. 

Saturday, 18 June 2016

Why Pakistan economy is not growing at potential

This episode is dedicated to the architects of Planning commission and the early growth model in Paksitan: Zahid Husain and Said Hasan

 We return to the subject of growth with Atif Mian, one of Paksitan's brightest economists. He now holds that Theodore Wells Professorship at Princeton.

Like we argued in our earlier episode (number 4) growth underlies everything and is an important subject that we must understand better. We will keep returning to this subject with Paksitan's key economists to share with you as many informed opinions as we can.

Today it is a pleasure to welcome one of Pakistan's brightest young economists Atif Mian who has achieved a chaired professorship in Princeton and written an excellent book entitled "House of Debt." Everyone must listen to Atif on this important subject. We certainly hope that even policymakers will listen and learn.

Questions addressed are:
How has Paksitan grown in comparison to its peers?
What has kept Pakistan back?
Is the policy of "hardware development" (aid backed megaprojects) going to deliver the required growth acceleration?
How important is the "software" (institutions, rights etc) of growth?

 We hope you will listen and discuss these issues and influence our policymakers with some new thinking from our best young minds

Wednesday, 15 June 2016

Analyzing economic research in Pakistan

Anjum and Nadeem discuss economic research in Paksitan. Questions examined are:
What is driving research? 
How relevant has it been to the larger problems facing Paksitan?
Is research affecting policy?
Where is the demand for research? 
Where is research funding? 
Does the funding drive research issues and agenda?

Should the government define a role for itself in research? 
Should the government fund more research? 

Tuesday, 7 June 2016

What is corruption?

We discuss with Farooq Suleria a Scholar teaching at SOAS his research on corruption. The discussion focusses on how to define and study corruption. 
Should we really be worried about mere bribe-taking or should the use of money to win government favors and shape government policy also be included? 
Is the business of ranking and measuring corruption biased to making poor countries appear more corrupt than they are?
Is it mere lack of institutions and poor governance that is being measured as corruption? 
Legalized corruption si seldom discussed. Is that why the west appears less corrupt since rentsseking has been legislated? 

Various types of corruption are discussed. This is a topic that affects Pakistan deeply. We urge researchers to listen to this discussion and develop further research in this area. 

Saturday, 4 June 2016

Democracy needs checks and balances

Since 1977 the struggle between democracy and martial law has stunted our national political debate to a binary: democracy or martial law. Proponents of democracy talk of not criticizing democracy for fear of another martial law. Those who support military intervention think of the military coming in to clean out the system which, is seen to be taking care of past corruption and then restarting the system with a fresh election to allow the same people in again.

The incumbent government too tames the opposition within the parliament and outside by scaring them with the possibility of return to military rule. Their cry is “leave our misrule alone or the army may take over and return you to dictatorship.”

Proponents further argue that if the system is allowed to run for a long time repeated elections will act as a filter to produce good governance. They have a hard time explaining the 6 election since Zia which have brought back PPP and PMLN despite their many failures. The system seems to be ‘rigged’ to prevent new entrants. Claims of electoral fraud too abound. 

Yet barely a year into an elected government, the executive begins to show a disregard for democracy by shunning parliament, concentrating power in the chief executive and making a mockery of all official process. Poor quality appointments are made questionable policies and projects are hastily initiated without thought or process. Key issues such as power shortages, the losses of the PSEs, the continual decline of the education system, the need for a local government, sensible economic management are barely addressed. Bad management and policymaking seems to become obvious in a very short time and yet 3-4 years to an election remain making all wish this time could be shortened.

Repeated elections seem to empower scions of powerful families and members of their retinue. An office after an election is seen as an opportunity to amass wealth. Those who get elected seldom have work experience or a serious education. Many of them have no resume to show that they ever developed a work habit. Yet they get elected because they have ensured that administration works at their behest and there is no rule of law. People have to turn to them for their rights and ordinary dealings with the state.

So should the army stay out and let this system continue? Will this democratic setup converge to a true democratic solution? Will it give us our rights, good governance, systems of justice, accountability and good policy? I think not. Let me tell u why.

Elections alone are not enough to provide a system of governance for individual freedom and the welfare of the people. Fascism was instituted through elections while the world has seen many episodes of the tyranny of the majority (such as suppression of minorities). Repeated elections were not required in such cases nor allowed. In such cases it was outside intervention, such as international law and charters and sometimes even violence that came to the rescue. 

Our elected leaders will not even allow a redistricting of their constituencies through either a census or some other means for fairer representation. They have resisted any change in electoral laws, the election commission or any other aspect of the system. We continue to have the most outmoded system of “first past the post” election where people get elected on votes of a small segment of the electorate. The winning party often rules with about a third of the voters in a low turnout.

All amendments to the constitution have been self serving. The 14th amendment prohibits voting outside party lines on any major legislation. With parliament thus emasculated, the executive need not worry. They don’t want term limits. They don’t want to debate or legislate. They don’t watch the budget. All they want is a piece of the government pie through development projects or positioning their own people in government for maximizing their power or rent. 

Politicians have also agreed to share the spoils by keeping the broken governance system broken. There is no serious effort at legislation or policy. Instead, they have sold the idea to the people that their job is to do big high visibility projects without worrying about future obligations arising from them.

Is there any hope from this system moving to a better state even if we have many elections? Remember each election is 5 years apart. So how many elections do we need? Ten. So we have 50 years to waste on these politicians’ shenanigans?

Look at it another way. Dynamic systems that are not properly configured may not lead to stable solutions no matter how long they are allowed to run. However, a well designed system (a car, a space shuttle etc.) will remain stable and arrive at a desired destination.

A constitution is the framework that defines the dynamic of democracy. If not properly designed, repeated elections might also not lead to desired democratic governance. This is why most countries have increased their efforts to design better constitutions.

Constitutions define the checks on the elected and the domains in which they operate. Montesquieu taught us the importance of checks and balances. The executive power must be curtailed and the 3 estates of governance--executive, judiciary and legislature—must all be independent of each other. Nowhere do the elected have absolute power as in Pakistan.

The modern state vests a lot of policy and monitoring in independent government agencies, regulatory agencies, universities, think tanks and monitoring agencies that are professionally staffed and beyond the power of the elected or the executive controlled by them. Here not even a university or a hospital is independent of the executive.

Our constitution was made by politicians for themselves without adequate consultation with the people. It has been distorted to further power of the executive. It will never give us a system of governance that is inclusive and works for the people unless we amend it as well as support it by further legislation to introduce checks and balances. Don’t hold your breath for these politicians to do it or elections to yield this.

So should the army step in?

Elections should be a contest for determining the future vision and policy of a society. Here contestability is for rents not policy and people’s welfare. Politicians are now openly colluding against the welfare of the people.

The only form of contestation that these colluding politicians face is the army. So what is wrong if the army knocks them off their perch? This is not to say the army will reform the system (although there are examples of generals who have conducted major reform that have served the country well e.g., Chile and Turkey). Most likely our generals will not. Sadly, we lack enlightenment and generals are no exception.

However, repeated army intervention may push all to learn that the constitution needs amendment for more checks and balances, a better electoral system, shorter tenures, term limits, staggered elections, local government, and independent agencies beyond the pale of the PM and politicians.

A better constitution will give a better democracy which in turn will prevent military takeovers in future.

Let us speed up the process by not continually discussing the binary--army or democracy. Instead develop and discuss reform for dispersal of power and checks and balances. Let the army and the politicians fight for power, while we spell out reform.  

Remember, in the end, ideas win.

Sunday, 15 May 2016

Pakistanis pay taxes; Blame tax policy and administration

Pakistanis are paying a lot of tax contrary to the propaganda of donors. 

The mess that is tax policy has been created by decades of poor policymaking and administration that has been supported by bad technical assistance of donors.

Dr. Ikramul Haq and Huzaima Bukhari leading Tax lawyers and tax policy experts talk to us about how badly this area needs implication and clarity. Rather than follow complications of donor consultants, they put forward home-grown reforms for the simplification fo tax policy and administration. They show hue gains in revenue are possible by following simplification and a clear policy and cleaning out tax administration. This is in sharp contrast to the tax advocacy of donors where the system is further complicated and all Pakistanis are painted as tax cheats. 

it is time we started listening to some good local experts rather than donor consultants who have created this mess. 

Thursday, 12 May 2016

Better cities are required for a growth acceleration

Anjum and Nadeem discuss what cites are and why they are important to growth. Discussion is wide ranging and touches upon many aspects of cities and their contributions to growth, development and civilization. 

They also argue that Pakistan while urbanized does not have any cities that measure up to international standards. This may be an important reason for Paksitan's lagging growth rate. 

What policies are required for better cities? 
Why decentralization is important? 

Tuesday, 10 May 2016

How Universities are managed and what is their quality

Pakistan has been on a university-building binge for the last 15 years. large campuses with beautiful buildings have been made. 

Are universities with big buildings and campuses providing quality education?
Are students learning or merely becoming degree-holders? 
Where are the professors? 
Are universit├ęs well managed? Or is are bureaucracies interfering and overzealous? 

Prof Iqrar Ahmed VC UAF has done a remarkable job in his university. As a leading VC he is the best situated to talk about universities and university management. He talks candidly and very constructively about universities, what their product should be, how they should be managed and how policy need to change from 
a. making more buildings to hiring more professors.
b a focus on degrees to learning
c. teaching to research questioning and pedagogy.   

Friday, 6 May 2016

Role of the Government in an Economy

Anjum and Nadeem discuss the role fo the government in an economy arguing that this subject needs a lot of attention. Most people tend to criticize the market and consider government to have every role that they wish it to have. 

Is there away to think about the role of the government. What can we learn from economics an social science about the role of the government. 

A fascinating discussion venues. 

This important subject is left out of the classroom and training academies leaving many to take polar positions: leave all to market or all to government. The truth is very different and economic thinkers have interesting thoughts on the subject.  

All students and those interested in policy must listen to this episode and debate it. 

Thursday, 5 May 2016

On Health Policy

Political Statements are often made to claim government doing much to provide health and eduction. 
Yet what do our health indicators show? How well are we doing compared to our peers?
How is policy made? is it well thought out? Who thinks about it? where? 
How are health institutions managed? Should that system be changed?
Donors provide a lot of assistance--cash as well as consultants--where does this money go? Do donors do a good job? 
How can the system be improved?

Dr. Samia Altaf, an international public health official evaluates Pakistan's health policy and system providing many international comparisons. 

Reform and management issues are taken up. 

Tuesday, 3 May 2016

How budgets are made and implemented in Pakistan

Economists don't pay attention to process of economic policymaking and implementation. However, policy is only as good as the process that backs it up. 
Budget is in the air and there will be a lot of talk of it. But when you listen to this podcast, you will find out how serious the budget is and how seriously it will be taken by those who make it. 

Commentators will pick the budget to the bone looking for policy. Is there any policy in the budget? Was it prepared with policy mind? 

What is the relationship between the Planning Commission, Department and the ministry of finance?

Is there teamwork in government or is MOF creeped up to be "first among equals"? 

Wajid Rana ex-Finance Secretary MOF talks candidly but very constructively about our budget process. His extensive experience in this area is something we should  all profit by and learn about the budget process. 

Monday, 2 May 2016

Examining Pakistan's trade policy and institutions

Trade policies are made used to made every year with much fanfare. Now they are made every 3 years. One was announced recently.
What are these policies? Are they well researched? What is their objective? 
How open is Pakistan? How open should it be? 
Why are exports as a percentage of GDP no increasing? 
Do we have an import tariff regime that makes sense? 
What do TDAP, MOC Commercial counsellors in embassies do? 

These and many other questions are discussed here with Dr. Manzoor Ahmed who has extensive experiencer of trade Policy of Pakistan and and ha advised many countries o trade issues. He has been with the WTO and with Paksitan civil service. 

If you trade, study trade or are interested in Pakistan Economic policy, this is a must hear.  

Friday, 29 April 2016

How grow agriculture at potential in Pakistan

The system of agriculture is reviewed with Prof. Iqrar Ahmed the Vice Chancellor of Agriculture University of Faisalabad, one of Pakistan's leading economists. 

The discussion is wide ranging. Agriculture must be seen as a system and not a sector. It is a set of markets and business relationships. Policy and reform is required to bring it to potential. 

Perpetual Crisis and Haste--How ECC works?

Listen to Soch Bichar episode 9

Understand how economic decisions are made.
Process based on haste, arbitrary power and no serious thought.
A must learn for everyone.

Saturday, 23 April 2016

Should we think trade corridors or an efficient trade system open to the world?

Should we think trade corridors or an efficient trade system open to the world?: Conversations on issues of development policy in Pakistan and the rest of South Asia. Political economy subjects that are seldom featured in the media will be taken up....

Sunday, 17 April 2016

Why does the myth of rural Pakistan persist?

Why do Pakistani official circles still like to maintain Pakistan is a rural country? Every pronouncement of government, at the cabinet table and even in donor dialog, this myth is maintained. Yet data shows otherwise.

Reza Ali an indigenous urban researcher has been studying this use for some time. For decades he has argued that censuses are underestimating the extent of urbanization. 

His most recent work using satellite imaging that about 70% of Pakistan is non-rural. He hesitated to say that 70% was urban because despite showing concentration of population several areas lacked city functionality.

He found large areas where density was at levels that were by international definitions accepted as urban. Yet he hedged and called them ‘urbanizing’ because he found that despite density they really were satellites of some urban core. 

The new category of “urbanizing’ that Ali used is newly emerging suburbia. As we all know there is a push for housing colonies and strip urbanization along roads because of the repressed demand for housing in cities. And demand for housing and urban space is growing and leading to a rapid development of housing colonies spreading cities far and wide.

Moreover, Ali is right the world has been confused about suburbia for along time. Only recently has it started waking up to how suburbia is a netherworld between rural and city and perhaps neither. The negative consequences of suburban development are now being spelt out.    

But Ali’s research does show that Pakistan is largely an urban country and urbanizing at a rapid rate. Although it is happening badly because of bureaucratic failure. But that is another story.  

Agriculture production as a share of GDP is about 21%. It is often stated that agricultural employment is 40%. Yet various surveys show that half or more could be non-farm employment.  If that is correct than agricultural production employs about 20% of the labor force. What is more important is that agriculture is a declining industry.

Why this pressure in official circles to keep Pakistan an agricultural country. USAID continues to characterize Pakistan as an agricultural country and the economic growth component of its aid is based mainly on agriculture.

When I was in charge of the Planning Commission I told them many times that Pakistan was now largely urban and that we wanted an urban based growth policy. The Pakistan Framework of Economic Growth accepted by the NEC and Cabinet was an urban based growth strategy. The bureaucracy, EAD and USAID however remain rural focused. Perhaps John Perkins (Confessions of an Economic Hitman) is right, USAID does not want Pakistan to develop. Maybe USAID wants to keep us as a farming hinterland!  ;)

We can’t even have a debate on this subject despite Ali’s work which is now about 5 years old and still not recognized by donors.

DFID commissioned a study on urban areas by a young assistant professor at one of our prestigious universities which cited no work of Ali or of any other urban researcher. The researcher told me donors did not know any Pakistan work (such as at PIDE or Planning Commission) on urban areas and more importantly they did not even want to recognize such work.   

Yet DIFD published the report. Why then should the young researcher know more than what the donor contracted. So we have the myth of rural Pakistan. 

I remember at an ECC meeting one minister made this very eloquent speech to counter the pro-market, urban voices by saying in a nice modulated voice “Finance Minister, we can continue our conversation on markets and policy, but one issue is settled we are a rural country and the poor farmers deserve subsidy”

Of course if we are a rural country,
  • ·      Agriculture incomes must not be taxed.
  • ·      Subsidies must be given on inputs such as water, electricity and fertilizer.
  • ·      Farm to market roads (mainly to havelis) of influential must be made.
  • ·      Support prices can be kept well above the market.

I was also surprised at the number of bureaucrats and politicians in meetings who professed to be farmers and speak on behalf of agriculture, of course to increase some form of subsidy to agriculture. Recall the government has on occasion given agricultural land as a gift to senior officials, judges, generals. These people and their children now in official positions maintain the myth of rural Pakistan.

I asked some bureaucrats why so many of them are farmers? The answer was that having a DMG job is considerable advantage to farming. State resources can easily be used to help manage and even increase some productivity. Timely and abundant supplies of water, seed, fertilizer electricity are available to those with political or bureaucratic muscle. 

So our policy continues to remain distorted because of the nexus of landlords and donors. Interestingly local intellectuals like Ali even when they do great work remain invisible.