The writer is Distinguished Professor of Economics at Forman Christian College University and Beaconhouse National University
On the question of deep-rooted change, whereby nations get onto a path of transforming their material conditions of life, the state of science in the New Institutional Economics has established two propositions: 1) the fundamental factor in the prosperity of nations is their ability to change from exclusive to inclusive institutions; 2) the ability to make economic institutions inclusive is derived from a prior change in the realm of politics from exclusive to inclusive political institutions. Exclusive institutions in the political sphere restrict power to a small coalition of the elite, who then establish an institutional structure in the economy, whereby they can generate rents for themselves. This is done by excluding the majority of the people from getting a substantial share in the fruits of economic growth. Daron Acemoglu and James Robinson (2012) in their seminal work have analysed the history of a number of countries to substantiate the earlier insight of Douglass North that exclusive political and economic institutions reinforce each other and create a powerful constraint to achieving a nation’s prosperity. This vicious circle between the political and economic spheres leads to economic policies that generate affluence for the elite at the expense of economic deprivation of the majority of the people. Therefore, it can be argued that breaking this vicious circle involves shifting political, and hence, state power from the elite to broad sections of the population.
The key to understanding transformative change is the concept of a critical juncture in the history of a country, which opens the possibility of transformation in the system of political and economic power. Acemoglu and Robinson show how in the case of the English Civil War and similar conflicts against absolutism in France and Spain during the 17th century, “a confluence of factors disrupts the existing balance of political and economic power in a nation”. These critical junctures are important moments that provide an opportunity to the excluded sections of society to break the hold of the ruling elite.
In the case of Pakistan, it can be shown that a combination of political, economic and social factors has created such a critical juncture. The citizens’ movement helped establish an independent judiciary, while the PPP government, fuelled by the passion of its martyrs, achieved constitutional amendments that aimed to institutionalise a new balance between the parliament, the executive and the president. At the same time, the prospect of a future coup d’état has been considerably reduced, even if indirect military influence in governance may persist. This has set the stage for institutional reform towards a more inclusive polity through the democratic process. However, the current coalition of the power elite, despite these changes, faces critical stresses that threaten its continued existence in its present configuration. This is due to: a) the emergence of armed militant groups as rival powers to that of the state within its territorial domain; b) the abject failure of the power elite to fulfil the fundamental function of establishing order in terms of which the existing configuration of state power is legitimised; c) the acute economic deprivation of the people in contrast to the affluence of the elite and the manifest inability of the government to address the challenges of poverty, provision of basic services and critical shortages of electricity and gas.
As John Dunn has argued, “revolutions are either ventures in creativity … an enhancement of freedom or nothing ... ”. Pakistan, today, faces a revolutionary situation but there is neither a revolutionary party nor a revolutionary culture, which as Antonio Gramsci has argued, is vital for revolutionary change. What we have instead is a constellation of militant extremist groups seeking to mobilise people for political upheaval through coercion, fear and bigotry. At the same time, the depredations that the people are suffering at the hands of an incompetent, corrupt elite coalition, make the democratic structure vulnerable to mass political pressure mounted by a demagogue with the facility of what Boris Pasternak called the “tyranny of the glamorous phrase”. Reform for inclusive political and economic institutions is necessary, otherwise there could be a counter-revolution.
Published in The Express Tribune, January 28th, 2013.
COMMENTS (6)
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@Naeem Ahmad: "...Deprivations of people would still be used to preserve the political elite in some years to come before message of change sinks deeper in the society..." . As pointed out by the author, there is no political group or a political party which can act as a catalyst for a revolutionary change. The future of revolution is bleak in the country. It was perhaps the naivest interpretation of the hooliganism of the so-called Civil Society, as a revolutionary act. . There will be many farcical figures like Bhuttos who will sell the nation down the river, by using the “tyranny of the glamorous phrase” in the shape of revolutionary slogans. . The project started by Ayub came to its fulfillment under the tutelage of ZAB. Turning the tide is near to impossible now. . It may sound pessimistic, but we must accept that Western/imperialist cold war has succeeded in hindering any critical mass to be formed which could be leading the ever increasing deprived millions to obtain a few democratic rights. . Gramsci's observation is still valid.
Dr Akmal has touched central nerve of Pakistan's politico socio enomic culture. People in Pakistan had lived under feudal and dictatorial regimes for too long. Conseqeunlty, the empowerment of people is more a theory in Pakistan than an effective driver of change. Though judiciary and media have created some space for people in the recent past to allow them articulate their aspirations. But the system capacity to translate this space into effective governance is still a far cry. Deprivations of people would still be used to preserve the political elite in some years to come before message of change sinks deeper in the society. Dr. sb keeps on touching the nerves the society; some day Faiz's LAMBI HAI GHU KI SHAM, may give way to a morning of breeze and light. Pakistan's resilience is great.
The writer makes a good point overall, but the 18th amendment is not a good example. Looking at the contents of this amendment, it has nothing that makes the political structures more inclusive. Yes, the new method of appointing judges, the election commission and the care taker set up is better, and in that sense, the amendment is an improvement. but these things can't be termed as inclusive institutions as they do not amount to distributing political power to a larger number of people. On the other hand, a local govt system would have been inclusive, but all the major political parties such as PML-N, PPP and ANP are against it. Not sure why we are so overly impressed with the 18th amendment.
I would say that culture and economics complement each other. You can observe this phenomenon in almost all developing countries, like Turkey, India, China, Brazil etc. Consider India for example, recent demonstrations against Dehli rape-case show a change in cultural attitudes which could be linked with economic growth and social media.
One wonders why the elites of Lahore do not become impatient with the dictators as early as they do with the democrats? The predictions or cries for a counter revolution are certainly out of fear that Punjab would lose its economic dominance, if democracy continues. The fears can be matched only by enhancing economic growth---- and not by distributing laptops and making useless motorways.
Each state during its history goes through exclusive and inclusive political and economic structures. The soviet union and China are two good examples of our modern times.
In my opinion, PAK has always had inclusive economic structures with exclusive political structure and the institutions were developed to cater the exclusive political structure. Even if counter revolution were to take place tomorrow, the institutions are not there to meet the changes needed. It will be the same problem faced in various countries of recent Arab spring which started with desire for inclusiveness but paralyzed due to lack of inclusive institutions.
Who is going to reform the political and economic institutions for inclusiveness : revolutionaries or the present ones and who is in a better position to achieve this?
The status quo will only delay the inevitable revolution but revolutionaries will only create a further chaos until they overcome the status quo powers and establish an inclusive institutions: a long period of turmoil.
If the present powers adapt the transition will be smooth and productive to all. Britain avoided revolution by adapting while the rest of the powers in Europe suffered. Pak is at this juncture and the middle east chaos is a running history.