Political Economy of Elite Capture and Clientelism in Public Resource Distribution: Theory and Evidence from Balochistan, Pakistan

The article critically examines the presence of political and bureaucratic capture in public sector resource allocation in the province of Balochistan, Pakistan. The article applies robust empirical techniques to evaluate how the political and bureaucratic elite indiscriminately and disproportionally allocate public sector funds to meet two overarching ends: (a) to allow maximum misappropriation of public funds for their benefits and (b) to make constituency/district-specific allocations to buy political allegiance and promote pork barrel and patronage politics (political clientelism). For the empirical purpose, the article uses an unbalanced panel technique using data for districts from provincial-level sources. The empirical results show a strong capture and clientelism in the process of budget making and the allocations of resources/projects to districts/constituencies for incumbent politicians and senior career officials who are at the helm of affairs, making disproportionate budgetary allocations of public resources to their home districts or constituencies or the projects with much leverage of extraction (read bribes) in the process of project allocations, bidding and execution. The evidence suggests that districts, which are neither represented by the incumbency of provincial government nor by senior bureaucrats in ministries that make public policy, receive far lesser budgetary allocations than their proportionate share despite the prevailing poor social and economic landscape. Such capture suffices personal interests, supports clientelism in resource sharing and creates an inter-regional and inter-district/constituency disparity in terms of economic and social development within the province.