Political economy and policy research – limits of political conveniences

Many things stand out when those who are at the helm in the government address academics and researchers, and the advice they offer can be as revealing as the policies they pursue. One such piece of advice they give is related to the type of policy prescriptions researchers should offer: not to offer such policy prescriptions that are, no matter how sound, difficult to implement within Pakistan’s political economy.

On the surface, this particular advice sounds reasonable, wise even. Policymaking does not occur in a vacuum, and it has to be cognizant of social and political realities: as political constraints matter, coalitions must be built, and reforms must be sequenced. In politics especially, timing is often everything. No serious social scientist would disagree. However, there is a crucial distinction often overlooked: understanding political constraints and the content of research are different realms.

A researcher’s job is to identify what needs to be done and explain why. It is the job of those in decision-making roles to find ways to make the case and build implementation support. However, those two roles are different, and they cannot be collapsed into one. Thus, asking researchers to propose such policies that are politically feasible amounts to asking them to think like politicians before the thinking has even begun.

If researchers are expected to recommend only what is politically acceptable, policy research becomes an exercise in compiling comfortable reports about often uncomfortable reality. The researcher essentially aids in maintaining the status quo rather than forging alternative futures.

Pakistan’s economic history is replete with several examples of what happens when policy decisions are guided primarily by myopic vision.

The CNG story immediately comes to mind. In the 1990s, the government actively promoted CNG as a cheap fuel for vehicles. The policy was popular and politically painless. It resulted in thousands, if not hundreds of thousands, of vehicles—rickshaws, taxis, and private cars—being converted to CNG and spawned an entire filling-station industry. Today, the country imports LNG to meet commercial and domestic demand. The power sector tells a similar story. For years, successive governments kept electricity tariffs below cost-recovery levels, which, unsurprisingly, pleased consumers. It helped governments gain popularity. However, it has resulted in a circular debt of almost PKR 2 trillion.

Both of these policies were very easy to implement as they respected Pakistan’s political economy and avoided swallowing the bitter pill, especially the low electricity tariffs. However, both these decisions have structural problems that refuse to go away, and the following governments do not have the political capital to fix these.

The lesson is not that policymakers should ignore political economy; the lesson rather is that what is politically convenient today is not necessarily what is economically prudent tomorrow.

Global examples support the same point.

Germany offers a particularly instructive case. In 2003, Chancellor Gerhard Schröder introduced Agenda 2010, a far-reaching package of labour-market and welfare reforms. The reforms faced fierce opposition from trade unions and members of his own party. However, disregarding the short-term political gains, he did not sacrifice the long-term gains. As a result, Schröder’s approval ratings nosedived, and, consequently, he lost the next election. Many commentators credit the policy for Germany’s rise as one of the most competitive economies in Europe. Irrespective of the assessment of the reforms, they proved to be politically costly.

New Zealand’s “Rogernomics” is another example. During the 1980s, Finance Minister Roger Douglas introduced reforms that slashed tariffs, removed agricultural subsidies, and privatized SOEs. The reforms were very controversial, and many believed that the reforms would result in the collapse of New Zealand’s heavily subsidized agricultural sector. The sector not only survived but transformed into one of the most efficient export sectors in the developed world.

Admittedly, these examples are far removed from the often complex realities of developing countries, such as Pakistan. However, the examples are not presented here as blueprints to be replicated. The common feature in these examples is that the policy decisions were politically difficult and controversial at the time they were made. Arguably, the easiest course of action for Gerhard Schröder and Roger Douglas was to prioritize short-term political gains over long-term objectives, but they chose not to.

The broader point is simple, viz., policies that prove to be beneficial in the long run are more often than not the most convenient in the moment. Political expediency is often fluid, not something carved in stone. Thus, what is deemed impossible today, given the political economy, can become inescapable in the future.

It is important to understand that researchers, especially in social sciences, are not elected officials, political tacticians, or coalition managers. Their role is to identify problems, ask the right questions, analyse causes, evaluate alternatives, and provide intellectually honest policy prescriptions. But if research is bound by what is politically acceptable, it cannot perform its most important function.

To be sure, this whole argument does not deny pragmatism; policy advice should take into account institutions, incentives, and implementation constraints. Nevertheless, there is a difference between being aware of political economy and being subservient to it. The former is analytical realism, the latter intellectual self-censorship.

In the words of Milton Friedman – who probably understood a thing or two about the relationship between ideas and policy – the economist’s role is to keep alternative policy ideas alive and available until circumstances make them possible. This observation applies far beyond economics.

It is easy to find ample evidence from Pakistan itself. Time and again, policies once considered politically impossible have eventually been adopted, often under the pressure of IMF programmes rather than through domestic intellectual leadership. It shows that decisions that are apparently impossible do get made. The problem, however, is that such decisions are often taken only when circumstances leave little room for manoeuvre, and the costs of delay have already accumulated.

None of this is meant to question the sincerity of those offering advice to researchers. The concern is that such advice can lead research in the wrong direction. Asking researchers not to transcend political constraints while offering policy prescriptions limits their analytical ability and confines them to their comfort zone. It limits the space of free and critical inquiry precisely when that space should be expanded.

The purpose of policy research is not merely to describe what is currently possible. It is to expand the realm of possibility itself, shift what is considered thinkable, then feasible, and ultimately inevitable. That is a slow and often thankless process. It requires seeing ideas ignored, dismissed, and ridiculed before they are eventually adopted by the same people who once rejected them.

Pakistan today, as it has been many times throughout its history, stands at a critical crossroads. It does not need researchers to seek permission before they think. It needs researchers who think clearly and say so plainly, along with policymakers who are eventually brave enough to listen.

Copyright Business Recorder, 2026