Institutions, Economic Structure and Poverty in Pakistan

This paper argues that the tendencies for slow growth, high budget deficits and growing poverty, which were manifested in the eruption of an economic crisis in Pakistan during the 1990s, are rooted in the structure of Pakistan's economy. The emergence of such a structure is traced through a historical analysis, which examines the relationship between the processes of institutional decay, the policy of successive political regimes, the role of individual leaders and the architecture of the economy The paper shows how various military regimes laid the structural basis for the deterioration in both the polity and economy of Pakistan. It is also shown how the various democratically elected regimes not only sought authoritarian forms of power within formally democratic structures but also accelerated the process of economic decline. Thus, the crisis of growth and poverty is located as much in the deterioration of institutions, as it is in the failure of individual leaders to pursue public interest rather than their own.