Constitutional political economy: Pakistan’s perspective

August 16, 2014

By: Dr Zafar Altaf – BR Report

economy-pakistans-perspective

Please understand that this article is an intellectual endeavour in which the notions of efficiency and justice are necessarily balanced. One may well ask the question that in my country as well as yours there seems to be no balance at all in simply understanding the constitution and then implementing it. There are laudable sections and philosophical underpinnings in the constitution. The only person I have ever seen in the corridors of power read the constitution is the late President GIK. His copy of the constitution was so beleaguered that it seemed as if the pages would come off. Every time I had a meeting with him the constitution copy was on his desk. Whatever task he undertook he was a meticulous follower of the rules and regulations that are imposed on him by the state. Justice is assumed in the world of constitutionalists to merge naturally but efficiency emerges from a conscious process. All key issues therefore follow from the interplay of these two notions. Is it true that given the current culture there is no understanding of the issues in constitutional authority and the words are being used and thrown around without any understanding? Have we adhered to the lacklustre rules that have been provided under the constitution? If the constitution gives us the formal rules then how do humans use their informal structures to misinterpret the constitution? How is the interplay between the formal and the informal structures and what is the connection between them? The debates that I have been hearing from the unlawful law ministers give me the impression they are not versed in their own profession what to speak of the constitutional aspect.

What forms the part of positive economics and the misinformation given by some of them and accepted on the TV by the anchorpersons only indicates the level of the debates. What should be is part of normative constitutional economics. One person on the show had the audacity to say that Foreign Direct Investment (FDI) is no longer coming into Pakistan because of the current protests. Please yourselves and keep on being in a state of denial. The fact is that there has been no FDI for umpteen years. The only FDI that came in was in exploitative industries or in the food and beverage industries. They have perverted the pricing system in whichever food sector they have come in. But that aside the MNCs pricing structures militates against the income of the countries poor and middle class. Premier Shaukat Aziz furthered the perversion when the MNCs were allowed in the retail trade; thoughtless outsiders creating a massive problem for the general public. Reko Diq is another case in point. The legal foundations of economics have been messed up as a result of the mafia in the property business. Are our leaders not in the mafia business? Why has the FBR not taxed the stocks and shares and not the prize bonds. Well, I went through the assets lists of the elected individuals (given in their own hand writing) and I was aghast. Now one can understand why they will hold on to the last straw in order to get more of the same. I can tell you that the ruling party’s asset list would be more than the budget of the country. One of them was a file carrier for a lambardar in the DHA area. The lambardar was put aside lest the beans were split. I came across massive literature on the land mafia of Lahore in my last assignment. The interplay of the formal and informal outcomes leads to outcomes. I recall that the Pakistani community in Birmingham was saving their earnings and buying house after house. A law was then enacted whereby the rented houses were taxed to the extent of 80%, 10% was allowed for repairs and 10% was the profit. The houses came on to market and were an excellent example of fiscal policy management by rules and procedures. All of a sudden the policy went forward that a critical aspect of living was to be relieved of greed. Rules are only effective in their implementation. Their effectiveness and implementation is dependent on the institutions that we have created in the process of our political existence. If state’s personnel behave as they do then there is hell for leather work cut out for the innocent citizens of this country. The constitution has been mentioned so often by those that have violated the letter and spirit of the constitution that it seems that scoundrels are hiding behind the sections of the document. The courts then come into play and it has to be seen whether the state performs as it should in the dispensation of justice. Written constitutions are in a dilemma all over the world. Other countries have a written constitution but cannot adhere to the document as they should. So in the case of Pakistan does the constitution matters or is it only a tool in the hands of a political mafia. Do politicians become tyrannical and fascist in order to complete their hold on power? Why is power so fascinating for the political system? The power structure gives them untold access to acquisition of economic power and with it the ability to continue to remain in power. There is no question of preserving the life, liberty, property and well-being of the common people. If Imran Khan is to be believed then the party in power has been part of the mafia. How they do this is interesting and will be the subject of the next article. In a free economy and a free country the constitution is written in such a way that it benefits the maximum number of peoples. In the implementation of the constitution the country seeks much but is unable to force the governments to logically enforce the rules made thereunder. The use of mere polemics is generically enforced. Words that generally have no meaning. We are at the moment in politics that is ordinarily understood and constitutional politics. The former is merely majority rule. This majoritarian rule does not give anyone absolute right to quote numbers to govern and do as one pleases. It is when we are in constitutional role that here are constraints that one has to abide by them. Who enforces these rules and here we have the courts to implement the order that is designed in the constitution. Since this implies that the choices are then governed by the rules of the game and if these are wanting in any way then the interpretation has to be with the well-defined rules of construction. The consistency that is required in implementing ordinary rules that are changeable easily and those that are long lasting and therefore should defy any or frequent changes. The contractarian construction of ordinary rules is through discussion, persuasion and mutual agreements. It is consensual in nature. The economic agents in many ways are then subjected to the imposition of these rules rather than those laid down by the institutions of the country. The institutions themselves are subjected to some relevant rules that belie interpretation that is parochial in nature. The criterion invoked is thus in furtherance of the social compact as defined in the constitution. What if the constitution is silent on the economic aspects? In such cases the fairness principles would replace the advantages conditions. In other words the constitutional ability must be there for an interpretation that does not qualify and give any segment of the society any undue benefit. The order of things should be based on what Tawney called the equality of conditions. Instead we have the acquisitive society and the greed that he pointed out. Economic systems exist in a changing environment and they must adapt to these changing conditions. These adaptive qualities determine their continuance. How then should an economic situation respond to globalisation, internal as well as external changes? Pakistan’s constitutional position is silent on these issues.
The closest we have got to are the ‘Principles of Policy’ embedded in the constitution and which must be placed before the provincial and the national assemblies. It has not been done in decades. The last time I heard that the principles of policy were to be laid before the houses was in 1973. The lapse has not been examined by the legislative institution. Is the current debate and opposition is to merely the rigging of votes? I do not think so. If this were so why should the ECP expect and direct every elected representative to submit each year their assets in their own handwriting? The battle for the political system has within its fold the misuse of economic rules and procedures. My own cursory examination of the assets leads me to believe that the political system is rigged by the unholy efforts of a few that are taking the systems to the deepest and smelly pits of the world. Why were these assets sought by the ECP if these were to remain in the cold storage? Is courage lacking? Are the courts to give selective relief and what should be the time span for giving this relief? I checked up on the liquidation process from one of the lawyers and I found that even that is rigged. So where does the country go from here. Nowhere unless distinct order is brought to play and we decide amongst ourselves that the political and bureaucratic orders are to follow the rules laid down by the constitution. But then if wishes were horses I would be riding them.

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