Although Pakistan came into existence at a time when there was a deeply renewed focus on economic thought process globally in the wake of establishment of Bretton Woods institutions a few years earlier to bring stability to both international financial system after years of sufferings caused by the two Great Wars the practice of ultra-nationalist/protectionist policies in the inter-war period, and the need for physically rebuilding, particularly the war-ravaged Europe, yet the country lacked any meaningful focus in evolving the otherwise very nascent level of economic acumen at the national level, and to forge partnerships globally with major economic institutions for creating much-needed economic intellectual space locally.

On one hand, during the 1960s, in the tradition of Keynesian Economics, the role of government in economic planning was not only made significant, it was also adequately inclusive and attractive for the private sector; along with adopting welfare policies for overall greater sustainable growth.

During the same time, on the other hand, neoclassical policies center-staged primarily ‘market fundamentalism’ that is basically market knows best, and requires very low level of regulation.

Therefore, the government made no concerted effort to analyse the domestic economic institutional, and market structures, to bring better price discovery, and to reduce information asymmetry, not only for reaching greater macroeconomic stability, but also for addressing otherwise rising equity concerns.

Therefore, an overall ‘trickle down’ economics model was practiced – even thought there was greater role of government involved in 1960s than in subsequent decades – and lack of ownership reform or private property reform, in particular right-sizing the agriculture land holding – unlike India where appropriately deeper cuts were made in this regard – resulted in rising income inequality, which together with an already lopsided initial distribution of property rights during colonial times perpetuated extractive politico-economic extractive institutional design over time.

Later, there remained a big gap between declared ‘social democratic’ policy stance, and actual practice of socialist policies during the Bhutto era, but that too to the extent of nationalizing industry and banking. Here, private enterprise was unnecessarily hurt while no meaningful distributional consequences were reached both due to lack of land reforms and insignificant role of government in enhancing agricultural productivity or strengthening industrial policy, especially in terms of improving the efficiency of public sector enterprises.

Moreover, there was lack of allocative efficiency in terms of neither enhancing physical infrastructure, especially of electricity, and railways, nor improving intellectual/social capital with regard to enhancing productivity of public health-, and education sectors.

During Zia’s tenure, and under subsequent governments – both civil and military – while moth-eaten socialist policies of the 1970s were rolled back to return once again to an otherwise economic policy norm of the country, and which was following neoclassical policy, and within it market fundamentalism, since this allowed lose control of economy which, in turn, suited perpetuation of ‘elite capture’ policies.

Hence, even though economic growth spurts were achieved due to either global windfall gains – given the country remained primarily an import-led one – or episodes of high inflow of foreign aid, yet overall the economy continued to remain stuck in rather frequent boom-bust cycles; resulting in high level of income and wealth inequality, high poverty levels, and........

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