Development 2.0--by Nadeem Ul Haque

To understand why the Pakistan state has failed while fundamentalism has risen, we need to delve deeper into the political economy of Pakistan. My research suggests that dictates of nation-building as well as economic development have led to a strong centralization of government in a large and diverse country. As is well documented this led to state interventions in education that sought to unify the country through religion and language at the cost of productivity enhancing skills. What is often not noticed is that centralization of policy and funding has made capture easier for strong vested interests to capture. These policies have gone unchallenged since policy continues to follow funding. There is little internal capacity –no social science research, no universities, no think tanks--for developing policy; nor are there policy debates in Pakistan. As a result policy retains a short term focus and has no domestic ownership and no constituencies for change develop. Pakistan has a ve...

Missed another opportunity for change and betterment! I hate to say “I told you so!” But I did. This is a practical budget made by practical economists and wannabe “policy wonks”. Off course egghead economists were kept a long distance from it. What did we get? Same old! Same old! Same old! Reviewing the last 3 budget speeches even the construction of the speech, the phraseology is the same. Thanks to Microsoft, the template remains the same! All we require is some editing and some new numbers. What are my criticisms? Let me list a few. 1. There is unanimity that we are in the middle of an existential crisis. We have a failed state that has brought us into a civil war with 2.5 million displaced persons. All the budget talks of is that 50 billion is going to be spent on the displaced people. Governance which has caused our problem is the last item on the agenda and comprises of only some salary increases and contributions to a donor project—“access to justice”. This project rep...

Opinion pages, dinner conversations and official meetings in Pakistan are all full of prescriptions. The claim is that we are in a hurry, “Research and inquiry is not necessary, we know it all. We need to act and not think.” Alternatively, “we know it all! The only problem is that no one will implement what we are suggesting.” The elite including the politicians and bureaucrats would say “No research or thinking is necessary. We know what needs to be done. There is nothing to read or research. In any case, I have no time between my shadi/janaza/meeting/political functions.” They have no time to read or understand and they need to justify it by means of putting down thought and inquiry. In this rush to act, we created the FCD problem, created a half chewed local government scheme, increased electricity with IPPs, protected car monopolies, created hotelling monopolies, built up housing scheme scams and so on and so forth. Yet the advanced countries do not agree that prescriptions are ...

Why did Britain dominate the world for so long? Why does Anglo Saxon culture still dominate the world? These are important questions that have long interested serious scholarship. Many people (eg Landes) point to early development of property rights, rule of law, limitations on sovereign power, development of an individualistic yeoman culture and the early acceptance of learning and innovation as important answers to these questions. But most of these ideas can be traced back to the seeds sown in the legend of King Arthur. Review the legend and you see a king preoccupied with good and efficient government even to the point of developing constraints on himself. He had an advisor in the form of the most learned man of the time. Merlin was not a magician but a wizard who was steeped in knowledge of the times and was known for his wisdom. Thus very early on, England had accepted the role of knowledge, research and wisdom as guides to policy. Indeed policy was subservient to resea...

Egoism has led to a certain form of transparency in government and it is disturbing. Most offices now have nice wooden boards with names of all officials who have warmed that seat in the last few years. But wait a minute, for some reason they hardly get to warm the seat or for even the paint to dry. Let me explain! These wooden boards have the names of officials who served in those offices as well as the dates of their tenure. In recent visits to many of these offices, I did a quick calculation and found that the tenure of officials in a posting has been extremely short. Most officials are lucky if they remain in a position for more than a year. Secretaries are rotated out almost on a yearly basis, customs officials are lucky if they last a few months and the director cooperatives board is moved so rapidly that he probably remains in a daze. Why do we have such quick transfers? The explanation is a combination of the following 4 factors. Each of these offices co...

I took around my friend Miskeen Shah around Lahore and to my surprise he kept saying “what a rich country this is?” Let me remind readers of Miskeen Shah who is not well known in Pakistan at all since he does not belong to the late night crowd that meets every night at shadis, parties etc. However, Miskeen Shah is a well known in economic circles overseas because of his expertise and publication record. Finally I asked Miskeen to explain his remark reminding him that he is in a country that is classified as poor by all international agencies. Here is his explanation. “It is a rich country in the sense that it can support such a large amount of waste. If the waste could be eliminated, all the people would experience a serious increase in the standard of living. Currently the system seems to support the waste of a small elite. Indeed the elite is invisibly subsidized in many ways.” To support his argument, he made three points. First he pointed to how our city centre was or...