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Old Tuesday, March 31, 2009
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Cost of political insecurity

By Shahid Javed Burki
Tuesday, 31 Mar, 2009

SEVERAL political commentators have used hyperbolic terms to describe the political developments on and after March 16. It has been said that the concession by the government on the matter of the judges and the decision by the opposition to call off the long march in response has ushered in a new era of Pakistani politics.

It has been described as a revolution, the beginning of a major structural change in the country’s political system. One writer declared that there is no other example in the political history of the developing world where people working together have brought about a political development of this dimension.

This is, of course, an exaggeration. People in several other countries — most notably in several states of the former Soviet Union, were able to force the authorities to take the democratic route. Nonetheless, the significance of the contribution made by those who led the long march and participated in it should not be minimised. It does appear that the Pakistani political system is likely to see a greater balance among the several pillars that support it and the judiciary may be able to exercise an influence that was denied to it for so long. Given all this, do I need to revise arguments I made in this space a couple of weeks ago?

It was then argued that the politicians in deciding to call their followers out on the streets and agitate against the established order would do well to look at their decision from the prism of economics. Working up the street to agitate is economically costly — and not only for those who may lose their daily wage or a part of their income for participating in this kind of political play. It is also costly for the economy to settle political differences on the street.

I then went on to suggest that this approach to politics inflicts damage on the building of durable political institutions which serve the purpose of resolving differences among political players. Even though the long march appears to have produced some positive developments, the main substance in the case I put forward still holds.

There is a close relationship between economic and political developments that economists recognise but politicians and political scientists often ignore. A well functioning political system serves several economic functions. It allows a voice to the people. Those in policymaking positions get to know the aspirations as well as the grievances of the citizenry or a section of the population.

As Amartya Sen, the Nobel Prize-winning economist, suggested in the work that brought him fame and fortune, famines don’t usually occur in democratic societies. Famines, he observed, happen when governments fail to create the economic environment that would provide incomes to the poor to buy the food they need.

When an economy reaches that point, a democratic political system forces the government to act. There are no such compulsions in non-democratic systems. Even a country like China, known for its concern about the welfare of the common citizen, saw millions of people die of hunger when political whims led to the disruption of the economy. The human catastrophes that followed the launch of the Great Leap Forward in the late 1950s and the Cultural Revolution in the late 1960s would not have happened in a functioning democratic system such as the one in India, Sen maintained.

What this suggests is that for Pakistan to gain a political system that works for the masses, its institutions must begin to deliver policies and programmes that work for the citizens. The country must move away from the politics of confrontation and agitation and towards the resolution of conflicts by institutional means.

Bringing about change through agitation has a very high transaction cost. One estimate of the cost to the economy of the use of shipping containers to block the long marchers is Rs1bn. The transaction of the cost of politics is considerably lowered when the political system has strong institutional underpinning. There are several aspects of institutional development that could reduce the cost of transaction in society. One of these is particularly important for a country in Pakistan’s situation. It is also pertinent for the goal the long marchers had before them.

The goal is improving the effectiveness and efficiency of the legal and judicial systems. A country’s legal system is made up of laws that are on the books. The most important of these is the constitution, the basic law of the land. But there are hundreds if not thousands of other laws and regulations. Laws need to be enforced and disputes amongst individuals, economic establishments and between these two and the state resolved. This is the function of the judicial system. Pakistan is weak in both areas.

First take the constitution. Originally promulgated in 1973 as a result of consensus among a number of different groups, it has been repeatedly tinkered with, especially by military rulers. The several published constitutions of Pakistan don’t make an easy read since they are cluttered with footnotes, explanations and amendments that have been incorporated in it over time. Cleaning up the text should receive high priority perhaps through an amendment. A constitution should be an easy document to read and understand; it is meant not only for the legal community but for the people at large. Uncluttering needs to be done for other parts of the legal system as well. Some laws have been there for decades and have lost their initial purpose. Take for instance the various provincial agricultural marketing acts which are derived from the original law promulgated in the late 1930s. Its objective was to protect the Muslim peasantry from the Hindus who dominated agricultural marketing. The acts have been kept alive and now serve to hinder the development of agricultural trade and agro-processing rather than protect the peasantry. In the meantime, new vested interests have developed that draw ‘rents’ from the restrictions the provincial acts place on the modernisation of this important part of the economy. The best way to deal with this situation is to repeal the acts rather than continuously amend them.

I believe the Egyptian government has launched a programme to review all economic legislation placed on that country’s books over many decades, if not over centuries, and modernise the legal system. Perhaps Pakistan could do something similar. The promise of change that has come with the success of the long march should result in improving the structure of governance and reducing the cost of doing political business in the country. I hope this opportunity will not be lost.
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