The recently released World Banks policy research report on the politics of development cites some interesting studies done at the intersection of politics and economics in Pakistan. Three of those interesting takeaways from the report, titled Harnessing Transparency and Citizen Engagement, are worth highlighting.
One of those studies was conducted by Atif Mian et al in 2005. The study looked at firms borrowing from banks between 1996 and 2002, and found that politically connected firms, defined as those having a politician on the firms board, borrow 45 percent more and have a 50 percent higher default rate. The effects are greater depending on whether the political party to which the firm is connected is in power.
Another study by Micheal Callen et al. in 2014 provides systematic evidence that politically connected doctors in Pakistan are more likely to be absent from public health clinics. They also find that about 40 percent of inspectors and health administrators report political interference when they try to sanction errant doctors.
However, quite intuitively the study also found that doctors in Pakistan are present at 42 percent of clinics in political constituencies that are competitive, as opposed to only 13 percent of clinics in uncompetitive constituencies. Similarly, the effect of smartphone-monitoring technology, which almost doubled inspection rates, is highly localized to competitive constituencies.
Amongst other things, these findings buttress the need for political competition something that is slowly and gradually growing in the country. Indeed, as the famous politics-of-development scholar Richard Doner once said: Economic institutions ultimately arise from the rough-and-tumble of elite politics, not from the choices by private parties to enhance mutual welfare. In that vein, the growing political competition in the wake of battle for Punjab by PML-N and PTI will likely bear the most fruits for the people of Punjab province, compared to the other three provinces.
With the gradual rise of middle class in Pakistan, and the economic growth, hopefully spilling over from the CPEC, political competition can be expected to increase further in this country. In the case of the latter, at present there are fears that CPEC will only benefit narrow interests rather than broad public interests. Some of those fears are well grounded; some arent. But either way, the growth of new elite can be expected to stoke political competition over the next two decades.
Here. the role of human agency, a subject not covered in the World Banks report cited above, is paramount. It is true, as Marx famously said, that men make their own history, but they do not make it just as they please; they do not make it in circumstances chosen by themselves, but under circumstances directly encountered, given and transmitted from the past. The tradition of all the dead generations weighs like a nightmare on the brain of the living.
However, it is equally true that leadership and human agency cannot be ignored; scholars oft refer to leadership and human agency as the hallmark of developmental states. For instance, take the case of Lee Kuan Yew in Singapore or Mahatir in Malaysia. Or take the case of civil service reform in the nineteenth century UK which only occurred when there was strong political support from a handful of senior politicians at a time when middle class values were moving in a meritocratic direction.
At a time when there are islands of excellence within the world of business (such as Sialkot) and among the array of local institutions (such as the motorway police; or Ishrat/Shamshads SBP), and at a time when political competition is growing in the country, the media and the academia would do well to focus on the role of leadership and human agency, not merely for the sake of understanding but also for the sake of making and showcasing the success stories.
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