close
Money Matters

Time for an overhaul

By Mansoor Ahmad
Mon, 03, 22

The government of Pakistan seems to lack the will to implement its writ. Successive governments over the year have been ineffective in implementing the laws of the land, and seem incapable of challenging the tax evaders and corrupt individuals.

Time for an overhaul

The government of Pakistan seems to lack the will to implement its writ. Successive governments over the year have been ineffective in implementing the laws of the land, and seem incapable of challenging the tax evaders and corrupt individuals.

To attain sustainable growth, effective governments are a necessity. It can happen only in countries where exist at least some form of an effective government, whereas countries that are ruled by weak states, national resources get drained.

The reason for this is simple. To put a stop to leakages, governments need muscle to confront those with vested interests. Failure to do so results in massive mayhem.

Government in Pakistan lacks the capacity to govern because of a deficiency in regulation and shortage of enforcement capacities that are the foundations needed to ensure that laws and regulations are obeyed. Weak governments have leaders who are selfish; they break the rule if it suits them.

This gives a lot of rooms to other rule-breakers. It is because when the rulers themselves break the rule, those operating at a lower level find it easier to bypass them for personal gains. In such situations, businesses find it difficult to operate and only those businesses capable of operating in a low regulatory environment, flourish.

For genuine businessmen, working in a low regulatory environment gets even more difficult because the courts are also ineffective and can neither help them retain their ideas or rewards for their ideas, nor do they help get relief in case of breach of contract.

Ideal governments exist nowhere. But the checks and balances in better governed economies ensure that rulers do not overstep their authority. Individual rulers even in most advanced economies also tend to act beyond their legal boundaries, but they are effectively checked by the system.

Many prime ministers in Europe had to resign on minor deviations from their legal mandates. US president Richard Nixon was removed after it was found that he may have encouraged illegal tapping of his opponent party meetings during the presidential elections.

In ineffective governments like that in Pakistan, the persons tainted with graft, loot and illegalities can continue to occupy offices in various capacities. Its prime ministers, even if admonished for wrongdoings by none other than the Supreme Court of Pakistan, can continue in the office.

In a developed economy, people do have reservations about their government, yet the same government collects taxes and provides services in return. It makes their lives comfortable.

These grumbling citizens may have complaints about their rulers, but they have no doubt in mind about the legal and regulatory system. They know that their children will learn at par with the best schools by going to the public schools. They enjoy health care and a social security system, which ensures that even their elderly are properly looked after.

Citizens in developed economies enjoy the best infrastructure, which is regularly updated and maintained in most cases. They also enjoy full security and protection not only in their homeland, but also in foreign countries through their embassies in case of any emergency situation.

Developed governments invest heavily in research, particularly in medical research. These services might not fully satisfy many citizens, but they pay their taxes honestly and if they have objections on the way their tax money is spent, they initiate a lively debate to convince the majority electorate, which may cost the ruling party heavily in next elections.

In Pakistan, the state lacks the capacity to raise taxes. The regulators have documented proof of the ill-gotten wealth stashed by millions of citizens, but they dare not ask them to pay their due taxes.

In fact, when some zealous officer tries to go after tax evaders, they get transferred to a far off place. Since the state cannot collect the due taxes, it also lacks resources to deliver the basic services transparently to all its citizen.

On one hand, the state hospitals provide global standard services to the influential, and on the other hand, they provide third-rate services to ordinary citizens. Water, sanitation, and cleanliness are superb in posh localities, but these basic services keep deteriorating as the economic status of the dwellings declines.

In slums there are no such services. We can safely say that the contract between the government and its citizens in Pakistan is almost altogether absent.

In Pakistan, like in most poor countries, police target the people who they are supposed to protect. The police act as extortionists and feel no shame in persecuting the poor people at the behest of powerful segments of the society.

Ghost public schools and public clinics are a norm in Pakistan, with absentee doctors and teachers enjoying all the associated benefits that are given to full time state workers. When such individuals get rewarded for not performing, why would they make an effort to perform. Similarly, private doctors are free to rip off patients.

There is a lack of accountability and regulation on injections, intravenous drips, and antibiotics prescribed to the patients. Quacks operate in most neighbourhoods across the country, without any fear of prosecution.

It is not uncommon in Pakistan that children die in large numbers from diseases that are preventable. This criminal neglect would never be condoned by a developed and responsible government. Without an effective state and zero accountability, these children will continue to die.

The donor agencies regularly provide assistance to ineffective governments. The recipient governments need no contract with their citizens; they need no parliamentary approvals or go all out for improving the tax-collection system.

They are accountable to the donors or International Monetary Fund in our case. Poor people need effective governments to lead better lives; instead of improving things temporarily, the donors should keep governments engaged so as to improve their capacities.


The writer is a staff member