Governing the Ungovernable:

Institutional Reforms for Democratic

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Governing the
Ungovernable
Institutional Reforms for
Democratic Governance
Governing the
Ungovernable
Institutional Reforms for
Democratic Governance

ISHRAT HUSAIN

Ace No: 2 76 8S-

Da1e: 5 - JI- 2020

OXFORD
UNIVERSITY PRESS
 OXFORD
VNIVERSITY PRESS

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 Contents

Acknowledgements Vll

Preface xi

1. Introduction 1
2. Historical Background 35
3. The Economy 59
4. The Polity 96
5. The Society 124
6. Federal and Provincial Governments 157
7. Local Government 182
8. The Civil Services 210
9. The Judiciary 236
10. The Legislature 264
11. The Military 287
12. The Religious Edifice 322
13. The Private Sector 358
14. Administration of Justice 387
15. The Role of External Actors 410
16. Restructuring Key Institutions 443
17. Lessons from the Experience of Other Countries 467
18. Conclusions 488

WOrks Cited 511

Bibliography 530
Index 537

v
 Acknowledgements

T
his book is a culmination of my residential tenure as Public Policy
Fellow with che Asia Program ac the Woodrow Wilson Center at
Washington DC from June 2016 to March 2017. l wish to thank
che President and officers of che Center and particularly Michael Kugelman,
che Deputy Director, for providing me chis opportunity. The Trustees of
che Fellowship Fund for Pakistan and Mr Arif Habib were generous in
sponsoring che fellowship. Munawar Noorani and Zaffar Khan deserve
my gratitude for proposing and then making this happen. Ac che Center,
I wish co acknowledge Janee Sykes che Librarian who opened up all che
resources available at che Library of Congress, Bruce Griffith and Bill Kelly
of che IT department, Arlyn Charles, Lindsay Collins, and Krishna Ariel
for their support chroughouc my stay. The participants of che seminar ac che
Center where I presented che work in progress gave me helpful comments.
Two of my research assistants, Aleena Ali and Hamza Tariq, went
beyond their normal duties and responded promptly and diligently to all
my requests. Aleena did a superb job in carrying out che licerarure survey
and collating che material in a systematic way. Hamza volunteered to help
in preparing che bibliography and verifying che foot notes even after che
completion of his assignment. I wish to thank my friend, Steve Radelec,
an outstanding scholar in his own right who made che services of one of
his graduate students at Georgetown, Rayah Al Farah at my disposal. She
worked conscientiously and diligently on che assignment given to her. Two
ocher interns, Divya Sahni and Jamie Liang came to my rescue during che
period when I didn't have an RA.
The title of chis book was che brainchild of my friend, Shuja Nawaz,
who not only had several discussions ac different points of time but also

vii
viii ACKNOWLEDGEMENTS

provided some unpublished material and offered extensive comments on

the Chapter 'The Military'. Lieutenant General Asim Bajwa, Lt Gen. {retd)
Khalid Nawaz and their staff, and Major General Chaudhry Sarfarz Ali
made material available which added new insights on the defence forces
and their businesses. Three persons, among many, need ro be mentioned
for rheir conrribucions. Shahid Yusuf was as usual fierce in his critique of
the chapters he reviewed and commented upon. Michael Kugelman not
only provided candid feedback himself but also shared the work of the
participanrs of the Conference held in January 2017. Robert Hathaway,
a former Direcror of the Asia Program, rook a lot of time our to read the
drafts and offered valuable comments.
I am nor in a position to acknowledge everyone who participated in
the focus groups, filled our the srrucrured quesrionnaire, and responded ro
my queries and follow up questions. It was indeed a pleasure that a large
number of civil servanrs-acrive and retired, corporate CEOs, civil society
activ sts, academics and scholars, and donor representatives shared their
views and thoughts candi(lly and openly. The work produced here would
not have been possible withour their inputs. Ali Sarfraz and Waqas u1 Hasan
deserve special mention for getting me the missing data on government
employees and following up on the questionnaires. Nasim Beg also pushed
some of the C 100 members and has helped me throughout the srudy. Ismail
Qureshi deputed one of his staff at the National School of Public Policy to
make reports of the training syndicates available to me. Sakib Sherani was
kind enough ro share his own work in progress on Institutions of Reforms
with me. Naseer Rana of the World Bank, with whom I had collaborated
earlier, was generous by furnishing very exhaustive notes and substantive
comments at the inception stage. To ensure consistency of data, I relied
upon the State Bank of Pakman (SBP), and Farooq Arby and his colleagues
were extremely generous in preparing the time series on a large number of
variables. I wish to thank them for their oucstanding work
M} intellectual debt ro three of my former bosses who are gianrs in
the profession of economics-Stanley Fischer, Larry Summers and Joe
Stiglirz-from whom I learnt a lot, would always overwhelm me but my
interest in institutions and economic growth was sparked by Dani Rodrick
 ACKNOWLEDGEMENTS ix

of Harvard. I have found his work to be both illuminating but also relevant
for policy purposes. Thanks, Dani for seccing me on this course.
I was very fortunate when one of Pakistan's leading visual artists, Naiza
Khan, winner of che 2013 Prince Claus award, volunteered to adorn
the title cover of this book with one of her creative designs. Despite her
teaching engagements at Cornell she produced several outstanding pieces
and it became really difficult to choose one of chem. I am greatly indebted
to her for this generous offer and for sparing time to produce an excellent
piece of work which has enhanced the aesthetic value of this book.
I would like to express my profound thanks to Ameena Saiyid, Nadia
Ghani, and Raheela Baqai of the Oxford University Press for their consistent
and continuous support, and to my editor, Sunara Nizami, for her hard
work and dedication throughout this project.
Finally, I have no words to convey my heartfelt gratitude co my spouse,
Shahnaz, and daughters, Farah and Uzma. They have always been fully
behind me in whatever I have endeavoured to do, even ac the expense of
their own inconveniences. Shahnaz not only relocated twice during this
period bur took care of all the daily chores and allowed me complete space
and freedom co concentrate on my work. Farah and Uzma were both
interested in my work bur equally concerned about che long hours I was
putting in and the travels I was undertaking. I felt guilty that this project
kept me away from spending more time with my adorable grandchildren.
This book would not have seen the light of the day without their love and
support.
 Preface

hy is Pakistan perceived to be an 'ungovernable' state? A label

W it never carried in the past? Can anything be done to restore ic

to the track from which it derailed? These are questions thac
are often asked by the global community and the public at large in Pakistan.
We do nor pretend to have either a magic wand co answer these very
complicated bur relevant questions or a crystal ball to foresee the future. In
all humility, what we can do is to figure out why Pakistan was among the
top ten performing developing countries ahead of China, India, Vietnam,
and many ochers in economic and social indicators recording an average
GDP growth rate of 6 per cent annually for over 40 years until 1990. It was
a peaceful country enjoying respect amongst the world community. Tourists
and visitors from abroad were able to visit any part of Pakistan freely in
what they found to be a safe and secure country of friendly, hospitable,
and caring people. Thousands of students from African and Asian countries
studied at its universities and professional colleges. What happened then
over the following 25 years from 1990-2015? How did Pakistan get left
behind both economically and in terms of social development in the region,
lee alone in comparison to China and Vietnam? The Indian economy
was only five times larger than Pakistan's in 1990. According to the latest
estimates, it is eight or nine rimes larger now. Pakistan has, during this
period, gained notoriety in the international media as one of the most
dangerous countries in the world. Even visitors who need co visit it for
business purposes and are assured full security and safety, are reluctant to
come. Tourism has virtually vanished. Notwithstanding many excellent
institutions of higher learning in Pakistan, there is prevalent a famine of
foreign students.
xii PREFAC E

This book is a modest attempt co understand the reasons for chis

contrast in the performance of Pakistan during cwo different periods,
i.e 1947-90 and 1990-2015. The choice of the cwo periods is based on
a close scrutiny of che broad economic trends and social patterns. The
book strives co analyse che factors chat can adequately account for the
relatively robust accomplishments in che earlier period and the relative
decline and stagnation in the second period. le represents a kind of quasi-
natural experiment in exploring che ingredients chat contribute co these
different results.
The scarc~ng point is a survey of academic liceracure, policy and plan
reviews, and popular discourses since 1947 to identify che alternate
explanatory hypotheses that have been advanced, and chen test them
against empirical evidence. This methodology cannot hope to march the
rigorous standards set by professional economises as there is no underlying
quantitative model underpinning chis analysis which is, hence, necessarily
ad hoc in nature. The idea was, however, co use a multidisciplinary approach
and avoid che limitations of economic modelling, including abscractions
from the real world sicuacion; a sec of assumptions co keep the model simple
and the choices of variables co be included, some of which are not easily
amenable co quantification. Using dummy variables was an option chat was
considered buc chat could have also led co enranglemencs with econometric
issues of specification, omitted variables, estimation techniques, and the
cobuscness of the results. Data paucity was a further consideration. As chis
volume is intended for a wider audience than just economises, I decided
co follow a more eclectic, qualitative, evidence-based method and capture
the richness of the different prisms of political scientists, sociologists,
journalises, management and economises, and the like.
This study has beneficted from che insights of influential and thoughtful
individuals, focus groups, informal conversations, and consultations with
people from a wide range of walks in life. In addition co scholarly research,
scud es of various government commissions in Pakistan have also been
made use of
T1ere are several features char make chis case study discincc from earlier
ones The definition of governance here is not limited co scare-centred
 PREFACE xiii

institutions alone but is multi-dimensional, covering a wide range of them.

It is the first of its kind that examines in some depth the compiece array of
the institutions in a historical context. le blends academic literature with
popular opinion on these institutions expressed in the media. Most of
the academic literature and popular discourses analyse these institutions
in isolation. To overcome this weakness, an attempt has been made to
examine the behaviour, norms, and actions of the society, policy, private
sector, the military, religious organizations, and external actors that directly
or indirecdy impinge upon the performance and outcomes generated
by these institutions. Emphasis is placed on their incerlinkages and
interdependencies.
I utilize the broader concept of social, economic, and sustainable
development rather than simply economic growth. There are examples
where the countries have grown rapidly through indiscriminate utilization
of its natural resources, whose benefits accrue co a narrow minority at
the top, and which over time become unsustainable. Such countries have
wimessed civil wars, social conflicts, a breakdown of law and order, and
prolonged periods of economic decline. Pakistan has also been characterized
as an economy where the stare has been hijacked and markers rigged,
with uneven development, pronounced income inequality, and gender and
regional disparities. This strategy was pursued by successive governments-
whether military or civilian, or a mixture of these-in order co further their
own interests and of those belonging to a small elite class. In my definition,
development is a more all-encompassing endeavour that results in better
education and higher literacy, adequate healthcare, productive jobs and
livelihoods, an acceptable level of nutrition and access to clean drinking
water, eleccricicy, roads, and infrastructure for ordinary citizens.
Economic growth is critical as it induces investment in human and
social development. An educated, healthy, well-nourished, and skilled
labour force then enhances productivity and raises output and incomes,
resulting in higher economic growth. This virtuous cycle is therefore the
key to broad-based development. Over 80 districts of Pakistan rank low on
the deprivation index, and the aim of the strategy should be to spread the
xiv PREFACE

benefits of development in such a way that these accrue disproportionately

to the citizens of these deprived districts.
The growing militancy, and the ascendancy of the jihadist elements and
groups can also be explained in terms of the withering away of the scare
and its institutions. As the people became increasingly disillusioned and
disaffected by the scare institutions, these non-scare actors stepped in to fill
the vacuum and operated parallel systems of justice, service delivery, and
security. For example, the people in Swat joined or supported the militant
group because they were able co provide swift justice against criminals as
was earlier the case during the Wali of Swac's rule. Those unwilling to join
the jihadiscs were coerced into doing so as there was no fear of retaliation
or punitive action by the dormant and dysfunctional state institutions. The
army continues to administer Swat even after eight years of the operation
as the civil administration is not yet equipped to assume charge.
This brings us to che instruments, structures, and processes through
which che institutions exercise their authority, i.e. civil services, the federal,
provincial, and local governments, the police, the prosecutory body, prisons,
the parliament, and judiciary. The entire spectrum of institutions is critically
evaluated to assess their capabilities and shortcomings but proposals have
been developed for reforms of only a few selected institutions concerned
with accountability, delivery of services, economic growth, social equity,
and security that should have been prioritized. Successful restructuring
of these rwo dozen institutions would have spill-over effects on the other
institutions and the islands of good governance would go on expanding
over time.

"'*"'

Going forward, Pakisra n s economy has to face a myriad of complex

challenges arising from an uncertain global environment, an explosive
knowledge economy, disruptive technologies, demographic transition, and
di mace change. Regionall}. the country can take advantage of its strategic
location linking South Asia with Central Asia, and Central Asia and China
with the Middle Ease. The China-Pakistan Economic Corridor (CPEC),
 PREFACE xv

currently being implemented, can play a crucial role in establishing these

linkages.
In the domestic arena, the battle against terrorism and extremism,
equipping the youthful population with education and skills for productive
employment, bringing about inter-provincial harmony and social cohesion
by reducing inequalities and disparities, and managing urbanization need
to be aggressively cackJed.

***

Is Pakistan preordained t0 remain 'ungovernable', mired in a state of

ceaseless, recurring crises, or can it become 'governable' once more? The
long-term agenda for economic revival and social change that could help
in transforming Pakistan into a 'governable' state, derived from the analysis
and views solicited for this study, is spelt out below, and addresses these
global, regional, and domestic challenges. These reforms, if properly
implemented over a period of time by successive governments, should
enable Pakistan t0 get back to the trajectory of an average annual growth
of six per cent recorded in its first 40 years and achieve the status of an
upper middle income country by 2035. However, the successful execution
of chis agenda will depend upon the willingness of the ruling parry and
the Opposition to adopt it and assiduously work to maintain political
stability, provide a continuity and consistency of policies, and ensure clarity
in their sense of direction. The most important factor, as revealed by the
findings of this study, is the resuscitation of institutions functioning under
the executive, legislative, and judicial branches of governance to enable
them co become sufficiently strong to effectively translate these policies,
programmes, and projects on the ground. By doing so, it is possible to
make up for lost rime because effective, responsive, and well-functioning
institutions would help co minimize the politics of patronage, unshackle the
entrepreneurial energies of the private sector, assure delivery and equitable
access co basic services to the citizens, and empower civil society and local
governments. It may be recalled that a study by the World Economic
Forum had concluded that a slight improvement in governance results in
xvi PREFACE

a threefold increase in per capita income in the long run. This is the likely
gain which would be accrued by improving the civilian institutions of
governance in Pakistan.
The entire ambit of civil-military relations, a highly contentious
and emotional issue, ought co undergo a drastic change if the civilian
institutions become capable and effective, thus allowing the democratically
elected leaders to asserr their supremacy over the affairs of the state. The
juscificacion for seeking the aid of the army at the drop of a hat and thus
opening the doors for their intrusion in the civilian affairs would become
redundant (the polls show that they are perceived by the public in Pakistan
to be the strongest and most trustworthy institution in the country at
present). The armed forces would themselves welcome the opportunity
co concentrate on their core functions of ensuring the external security of
Pakistan, particularly ac a cime when ic is faced with serious threats from
several directions.
Ayub Khan and Z ia ul-Haq could not have ruled Pakistan for as long as
they did without the acti\e help of competent civil servants and the highly
efficient institutions they manned. The military had to withdraw co their
barracks soon after the takeover to keep their professionalism intact but also
because the command and control system to which they were accustomed
was not attuned co civil administration. By the time Pervez Musharraf
assumed power, che corrosion had set in. Although his devolution scheme
was commendable, the abolition of the offices of the Commissioner, DC,
ere. further weakened the institutions of governance. le is no longer possible
for an ambitious general to hold the country together with the present
cadres of civil servants and the institutional set up in a situation when
Pakistan is beset by a magnitude of complex and difficult problems.
These civilian institutions, once strengthened, have co work
collaboratively and collectively in a coordinated manner to achieve the goals
before them. The federal, provincial, and local governments, the parliament,
and the judiciary have to respect the boundaries within which each has
co function witho ut encroaching on each other's domains. The current
practices, norms, and mind-set that are characterized by confrontation,
polarization, fighting for turf, and engaging in 'blame the other' games will
 PREFACE xvii

need to end. This will indeed be the most challenging undertaking which
will either make or break the economic nervous system and the security
backbone of the country. The likelihood of this materializing will only
be high when the gap berween the insticutional capability (including the
capacity to adapt and change), and the changing development needs and
aspirations of the population can be bridged.
It is my contention that the police and law-enforcement agencies,
if properly recruited, trained, incentivized, and equipped, along with a
responsive judiciary can arrest the inroads of the extremist and jihadist
groups and help in implementing in letter and spirit the National Action
Plan (NAP) that is intended to eliminate these non-state actors. This, along
with the delivery of basic services to the ordinary citizens is the way in
which the essential ingredients that had led to the perception of Pakistan
as an 'ungovernable' state would slowly and gradually dissipate.
The important question chat is often asked in Pakistan is: who will
drive this change agenda? The concluding chapter attempts to address
this pertinent question at some length. There is almost a consensus in
Pakistan that institutional decay, aggravated over the last 25 years, has
been responsible for bad governance, and this malaise has to be fixed. Pase
experience has vividly demonstrated that sweeping reforms across the board
that affect the entire system are neither politically feasible nor economically
desirable. Therefore, a second best solution has to be tried that limits the
disruption and keeps the political noise and resistance to a minimum.
The focus of this volume is, therefore, to select a small subset of a core of
highly vital institutions for reform and restrucruring on a priority basis. The
premise of this approach is that if these key institutions can be effectively
reformed, it would create a demonstration effect that would help in moving
towards the path of overall insticutional rejuvenation on a sustained basis.
The purpose of this volume is to trigger popular and academic debate and
discussion on the proposals developed here and push the envelope further
to press forward the actions necessary to arrest and reverse the process of
the institutional decay.
 1

Introduction

P
akiscan was one of the top cen economic performers among the
developing countries in the world during the first 40 years of its
existence. Beginning with a very weak economic base at the time
of Independence in 1947 and a tumultuous period of nation building,
marked by continuing political instability in the aftermath of che death of
its founder, Mohammed Ali Jinnah, ics record of achievement during the
first four decades was impressive. It successfuUy absorbed and rehabilitated
eight million refugees, or one fourth of its total population, fought a
war with India, a much larger and more powerful neighbour, in 1965,
and underwent a painful and traumatic dismemberment of che country
in 1971. The emergence of a populist political regime chat undertook
massive nationalization of private assecs in the 1970s, accompanied by
an external shock of a major escalation of oil prices, dealt a massive blow
to business confidence and led to a complete dislocation of the economy.
Close involvement with the US in the Afghan war to oust the Soviet
Union in the 1980s and the associated faUout, i.e. che spread of sectarian
violence, drugs, and Kalashnikovs, tore asunder the social fabric of the
country. Notwithstanding these and many other chaUenges, boch internal
and external, Pakistan was able to register an average of 6 per cent annual
growth during ics first 40 years of existence. Pakistan was ahead of India
and Bangladesh in all economic and social indicators.
According co some analyses, Pakistan had reached the threshold of
becoming a middle income nation in the lace 1980s. According co Burki:1

In the lace 1980s, Pakistan had begun co exhibit many of the characteristics
of a middle income country: ic was less dependenr on agriculrure than most
2 GOVERNING TH E UNGO VERNABLE

low income countries and had an industrial sector that was comparable in
size and diversity to those in many middle income nations; ic had a vast
reservoir of highly trained labourers; it had a middle class numbering more
than 30 million people, and it was as urbanized as the more developed
countries of East Asia and the Middle East. In the 1990s, however, the
expectation that Pakisnn is on the verge of the crossing the threshold to
become a middle income country has ceased to exist.

Since 1990, Pakiscan has fallen behind ics neighbouring countries, and
has had a decrease in the potential growth race from 6.5 to 4.5 per cent2
with episodes of boom and bust. The booms were shore-lived and could
not be sustained over excended periods of rime. Political instability and
frequent changes of government in the 1990s may have creaced uncertainty
for investors, thus slowing down che pace of economic activity. There
has. however, been smooth and orderly transition of power from one
elected government to the other twice since 2008 but economic and social
indicators have not shown much improvement. Growth has been slow,
less stable, more volatile, and far less sustained than that of other countries
in the region, and also relative to ics own performance in the 2000-2007
period. It is only over the past two years thac some change for the better is
becoming visible but whether it will be stable and sustainable in the years
leading up co the general elections is yet to be seen.
Externally, the popular image of Pakistan is that of a fragile or failed
scare with a large and expanding arsenal of nuclear weapons encircled by
Islamic extremists, and a safe haven for nurturing and craining cerroriscs
who pose a threac co other countries. There is considerable unease in the
international community about the ceaseless rivalry and hostility between
nuclear armed India and Pak.iscan who have thrice fought wars against
each other. T he eascern pare of Pakistan was separated from the wescern
in 1971 as a consequence of a war in which India played a decisive role.
Kashmir continues to remain a highly contentious and volacile powder keg.
Relations with Afghaniscan remain cense, and mutual recriminacions and
mistrusc have vitiated the atmosphere. Although Pakistan is a non-NATO
ally of the Uniced Scates, che general sentiment in both countries about
 INTRODUCTION 3

each other is not overly favourable. The US considers Pakistan duplicitous

in its dealings with the Afghan Taliban and the Haqqani network, while
Pakistan is bitter that notwithstanding it incurring significant losses and
sacrificing hundreds of thousands of lives, its role in the war against terror
is not fully appreciated.3 Pakistan is perceived by those beyond its borders
as a source of regional instability and as an ungovernable counuy.
Therefore, the popular hypothesis about Pakistan's economic drift is
explained by this increasing influence of religious extremists and terrorists
who have threatened law and order and disturbed the peace and security.
Economic agents are reluctant to undertake new investments in this
environment. This hypothesis may be partially valid but the economic
decline had begun in the 1990s, well before Pakistan was embroiled in the
war against terror in the post-2001 period. The average growth rate in the
1990s, when the country was relatively peaceful and tranquil, was already
down from 6.5 per cent in the 1980s to 4 per cent. Investment ratios, export
growth, and social indicators all cook a dip in chose years. Poverty, which
was showing a downward decline until the 1980s, worsened by the end of
the 1990s. In contradiction co this trend, the 2002-2008 period, which
was a period of acute violence and terror activity in Pakistan-including
assassination attempts and terrorist attacks on the sitting president and
prime minister-the country recorded a remarkable turnaround. The
growth rate couched 6 to 7 per cent on average, the investment/GDP
ratio peaked at 23 per cent, and foreign direct investment (FDI) flows
exceeded US$5 billion.
The Chief Investment Officer of a Swedish Mutual Fund4 had this
to say:

It was not until the end of 2008 that I first travelled to Pakistan and met
with around 30 companies. Some of these companies were family-owned
and had been around for 40-50 years. The businesses were growing at an
average of ten per cent and the policical or security situation was not having
much negative impact on their performance.

During the past seven years of tumultuous turmoil resulting from terrorist
4 GOVERN ING THE UNGOVERNABLE

ac:ivicies reaching a peak, che corporate sector's earning growth on annual

compound average growth race basis has been around 20 per cent wich che
return on equiry (RoE) in excess of 25 per cent.
The recent experience of che 2013-16 period is illuminating.
Macroeconomic stabiliry has been achieved, economic growth races are
moving in an upward direction, and the confidence of domestic and
internacionaJ investors has been restored (Pakistan has been upgraded to
the MSC! EM Index from the FM Index and its credit ratings by Moody's
and Standard & Poor have also risen), negating che view chat Pakistan's
securiry situation and its deep involvement in the war against terrorism is
responsible for its poor economic and social performance. Therefore, the
securiry deficit hypothesis does not stand up to serious scrutiny.
[c is true that if che huge financial and human coses incurred in
combating terrorism, che restrictions on cravel to and from Pakistan, and
the suspicion with which Pakistanis are regarded were eliminated, the
economic uprurn would have been even higher in che 2002-16 period.
There is a group of analysts who argue that availabiliry of generous
foreign assistance has been che principal determinant of Pakistan's economic
success or failure, and chat its fortunes vacillate with the ebb and flow of
resources from external donors. le has been argued chat the three periods
of economic spurrs in the history of Pakistan, i.e. the 1960s, 1980s, and
early 2000s, can be attributed co the heavy infusion of these resources
into the country. In che 1960s, Pakistan was a CENTO and SEATO ally
and was closely aligned wich che US in che Cold War, in che 1980s the
country participated actively with che US in ousting che Soviet Union from
Afghanistan, and in che early 2000s Pakistan was rewarded for its pivotal
role in che war against terror. le is therefore argued chat Pakistan was che
recipient oflarge military and economic assistance and chat was the major
reason for the turnaround in these periods. Notwithstanding chis popular
perception, the empirical evidence does nor prove chis assertion.
In che 1950s, Pakistan received huge military, civilian, and food aid, with
the PL 480 imporrs of food from the US keeping hunger at bay. In the
1970s, Pakistan was granted (through debt rescheduling) substantial debt
relief; with over two-thirds of the debt payments of US$650 million, due
 INTRODUCTION 5

during 1974-7, being written off. Western aid through the World Bank-
led consortium amounted co $700 million annually but on top of this,
official grants and concessional loans (some of which were subsequently
transformed into grants or waived) from oil rich Arab countries and overseas
workers remittances financed the huge imbalances in current account. 5
During 197~ co 1977-8, commitments of assistance from Iran and
the Arab countries totalled $1.2 billion, largely on concessional terms.
Pakistan was therefore comfortably able to meet as high a current account
deficit as 10. l per cent of GDP in 1975, followed by 7.1 and 7 per cent
over the next two years. Parvez Hasan has calcuJaced that aid disbursements
during the mid- l 970s were at a level far above those reached during the
1965-70 period (averaging $600 million annually, which included flows
co East Pakistan) after allowing for international inflation.
In the 1990s, the foreign currency deposits of resident and non-resident
Pakistanis in Pakistani banks, amounting to $11 billion, were utilized
to finance external payments. These deposits, as chey had already been
consumed, were then frozen in May 1998, causing a huge crisis ofliquidity
and market confidence. This spilt over into the early 2000s. The IMF,
World Bank, and Asian Development Bank (ADB) continued to make
loans amounting to several billion dollars between 1988 to 1998, while
Japan was the largest bilateral provider of concessional loans and grants
uncil the nuclear tesc of May 1998.
In the post-2008 period, the Kerry Lugar Bill authorized $7.5 billion
US economic and military assistance co Pakistan for a five year period.
MuJcilaceral banks and the IMF increased the quantum of their support
while Pakistan became the largest recipient of UK aid. In this way, higher
volumes of foreign assistance have been received in the post 2008 period
bur the average growth rate has hovered around 3 to 4 per cent. It can
thus be seen that the periods of high growth rates, i.e. che 1960s, 1980s,
and early 2000s, did not receive any exceptionally high foreign assistance
flows as compared co the periods of the 1950s, 1970s, 1990s, and post-
2008 years.
McCarmey6 finds no credible evidence co attribute Pakistan's episodes of
growth co foreign aid inflows and circumstances emanating from the global
6 GOVERNING THE UNGOVERNABLE

economy. 'Using more rigorous econometrics over a longer period of time,

there seems co be little generalised evidence that GDP growth in Pakisran
has principally been of the [externally] dependent variety.' McCartney is
of che view that accelerarion of economic growth occurred when the state
successfully created conditions in which high profits were generated for
investors and credit was channelled towards them. Therefore, the hypothesis
of high foreign assistance resulting in high economic performance is not
validated by the facts.
Coterminous with the foreign aid syndrome is the widespread belief
that the US and the Western countries in general have supported military
dicr.uors at the expense of democratic governments. Their belief is that
they are able to manipulate the strongman running the country to follow
their agenda and interests, and therefore Pakistan's economy has fared well
only under che military regimes with the blessings of the US. The frequent
dis!T'issal of elected regimes in the 1990s and the coup co overthrow Z. A.
Bhu 1:0 in 1977 were all engineered under this compact, and the drop in
economic performance was caused by the consequential political instability.
While it is true that US national interests did coincide with those of
Paki~tan during the Cold War, the war against the Soviets in Afghanisran,
and that against Al-Qaeda in the 2000s, it must be recalled that the US
suspended or curtailed economic and military assistance ac crucial times in
Pakistan's history when the military dictators were still in power.
U ~ aid was suspended soon after the 1965 war with India, the 1971
separation of Ease Pakistan, and under the Symington amendment in the
early period of Zia ul-Haq's rule. Sanctions were imposed in 1999 when
General Pervez Musharraf took over the reins of the government. President
Bush's National Security Adviser, Condoleezza Rice has chronicled in her
book, A Memoir ofMy Extraordinary, and Ordinary Family and Me (Ember,
2000) the efforts made by the US administration to bring in Mohcarma
Benazir Bhutto co take over power from Pervez Musharraf in the posc-2007
period. The ambivalent attitude of the US can be gauged from the fact
that d1ey have supported dictators in Egypt but have for the past 15 years
been engaged in the overthrow of Saddam Hussein, Muammar Gaddafl,
and Bashar Al Assad in Syria. The close defence, nuclear, and economic
 INTRODUCTlON 7

relations between India, the largest democracy in the world, and the US
do not lend any credence to this theory either. US national interests in
Pakistan have not remained static; US interest has vacillated over time and
their support to Pakistan has been opportunistic rather than strategic or
deterministic. Whenever these interests converge with those of Pakistan and
notwithstanding irritacions and quibbles on both sides (1950s-SEATO/
CENTO; 1980s--expeUing the Soviets from Afghanistan; and the 2001-
16 War in Afghanistan), the US has chosen to assist Pakistan irrespective
of the nature of the government in power.
We then examine another factor, namely the global economic conditions
that may have played a negative role in this outcome. The reality is that che
external environment between 1990 and 2008 was an excremely favourable
a period in which most emerging and developing countries made great
economic strides, as Steve Radelec chronicles in his book The Great Surge,7
while Pakistan feU behind India, Bangladesh, Sri Lanka, Vietnam, and other
countries during that period. Since 1995, the real GDP of emerging and
developing councries (EDCs) has grown by 4.7 per cent annually on average
and per capita incomes have increased by over 70 per cent between 1995
and 2013. On a populacion weighted basis, excluding China, the increase
has been about 90 per cent. Consequently, the relative share of EDCs in
the global GDP (measured at purchasing power parity) increased co 57 per
cent in 2014. The number of poor living at $1.90 per day has halved from
2 biUion in 1990 co 897 million by 2012, bringing down the share of poor
people in the tocal population from 37 co 13 per cent in 2012.
The number of people living at low levels of human development fell
from 3 billion in 1990 co slightly over 1 billion in 2014. 8 The share of
EDCs in the world exports rose from 24 co 41 per cent during this period
and international capital flows jumped from $91 co $1,145 bilUon. All
the social indicators, such as life expectancy, maternal mortality, infant
mortality, adult literacy, net enrolment ratios, and average years of schooling
have shown significant improvements. We can therefore rule out that the
external economic environment was a major faccor in explaining Pakistan's
poor performance during this 25-year period. Other countries in the
neighbourhood who were lagging behind Pakistan have taken advantage of
8 GOVERNING THE UNGOVERNABLE

the dynamic global economy to bring improvements in the living standards

of che majority of their people.
Some analyses have attributed Pakistan's poor performance co the
'Garrison Stace' syndrome. 9 As Pakistan has been obsessed with confronting
a much larger arch rival India since its formation, ic has co allocate a much
larger amount of its resources to defence expenditure, and preserve and
expand che corporate interests of the military. Hence, the neglect of
education, health, and human development in general, and the diversion
of resources to meet the demands of defence, nuclear capability, and ocher
security-related expenditure has led to the present economic and social
outcomes. The ratio of defence expenditure co GDP has been consistently
high in the first 40 years and is now 2.9 per cent of GDP, almost one half
of what ic was in che 1980s. Mose of the nuclear-related expenditure was
incurred in the 1970s and 1980s. In FY 2016, the budgetary allocation
°
for education was 2.7 per cenc. 1 Combining health and education, the
budgetary allocation is 3.7 per cent, higher than char of defence and
internal security. In the education and health sectors, ic is governance
and management issues char are the impediments in the delivery of these
services rather than budgetary aUocacions.
A popular myth thac has now become quire entrenched as accep ted
truth is chac of che large corporate interests of the military. le is crue that
the; have foundations and trusts chat run enterprises, but the proceeds
and profits they earn are utilized for the welfare of army pensioners,
particularly the soldiers who retire at an early average age of 45 to 50.
The education and healthcare of their families are financed by the income
generated by these foundations and trusts. To put chis in perspective, the
total market cap in November 2016 of all the listed companies owned
by the Fauji Foundarion, Army Welfare Trust, Shaheen Foundation, and
Bahria Foundation represents only 4.5 per cent of the coral market cap
of the companies listed on the Pakistan Srock Exchange. These are the
big players and everyone points fingers cowards these companies. All of
chem pay all their taxes on their income, sales, and imporrs, and do not
enjoy any preferential exemptions or receive any special concessions. The
share of other unlisted companies in the cotal assets of unlisted companies
 INTRODUCTION 9

is not known but is likely to be quite insignificant as the universe of

privately owned enterprises and businesses is substantial. Therefore,
the Garrison State hypothesis too does not meet the test of evidentiary
confirmation.
Having ruled out faccors such as security and terrorism, inflows of foreign
assistance, preference for military rule, external economic environmenc, and
diversion of public expenditure towards defence which may have all played
some role but were not the principal determinant of the poor performance,
we turn our attention co the institutions of governance. There is by now
a great deal of theoretical literature and empirical evidence chat poincs us
in this direction.
The principal argument of chis study is that the intermediation
process through which good economic policies are translated inco rise in
incomes and equitable distribution of benefits involves the institutions
of governance. It is the quality, robustness, and responsiveness of these
institutions through which the implemencation of social and economic
policies rakes place. The principal institutions of governance comprise
the judiciary, necessary for the protection of property rights, and the
enforcement of contracts; the legislature which prescribes laws and the
regulatory framework; and the executive which makes policies and supplies
public goods and services. If the access to the institutions of governance for
common citizens is difficult, time-consuming, and expensive, the benefits
from growth get distributed unevenly, for the gainers are only those who
enjoy preferential access to these institutions.
The Human Development in South Asia reports of l 995 and 2005 lay
bare the incidences of unequal access d ue to poor governance:

South Asia presents a fascinating combination of many contradictions.

le has governments chat are high on governing and low on servi ng; it has
parliaments that are elected by the poor but aid the rich; and [a] society
chat asserts the rights of some but perpetuates exclusion for ochers. Despite
a marked improvement in the lives of a few, there are many in South Asia
who have been forgotten by formal institutions of governance. These are
the poor, che downtrodden, and che most vulnerable of che society, suffering
10 GOVER...'llNG THE UNGOVERNABLE

from acute deprivation on account of their income, caste, creed, gender or

rdigion. Their forcun~ have not moved with chose of the privileged few
and chis in itself is a deprivation of a depressing nature.
(Human Development South Asia Report, 1999)

Governance constitutes for [ordinary people) a daily struggle for survival

and dignity. Ordinary people are coo often humiliated at the hands of public
institutions. For chem, lack of good governance means police brucalicy,
co rruption in accessi ng basic public services, ghost schools, teachers'
absenteeism, missing medicines, high cost of and low access co justice,
criminalization of politics, and lack of social justice. These arc just a few
manifestations of the crisis of governance.
(H uman Development in South Asia Report, 2005)

It must be conceded that there is no definitive or conclusive definition of

governance. I use, for the purpose of this study, the World Bank definition
set out in WDR 2017 (discussed later on in this Chapter). The link between
institutions and economic and social development is through investment
in physical and human capital. Both the efficiency and the volume of
investment could depend upon the quality of institutions. The writ of
the state, delivery of services, macroeconomic stability, and equitable
distribution of benefits can be effectively achieved only if these institutions
are functioning effective!).
Mancur O lson et al. (1998) were among the earlier scholars who
demo nstrated the link between governance capacity, institutions, and
economic growth. 11 Their principal argument was chat countries with
unstable governance make economic agents act under uncertain conditions,
determining weak property rights, and enforcement and protection, and
therefore fail in attempting to activate a constant growth process. Property
righ ts protection are an essential ingredient for private sector investment
and therefore, overall economic growth. However, in a situation of political,
econo mic, and legal uncertai nty, the risk perceptions of investors is
heightened. T hey, therefore, demand higher than normal rates of return
and a quicker payoff period before they decide to invest. Their inability
 INTRODUCTION 11

to find such investment opportunities results in stagnant or declining

invesrment ratios.
The academic literature on governance and economic growth has
empirically examined questions such as: (a) whether there is a positive
relationship berween good governance and economic growth, (b) whether
this relationship is unidirectional or does the relationship run in both
directions, i.e. does good governance contribute to economic growth and
vice versa, (c) if this relationship holds good, what are the components
and aspects of good governance that influence such an outcome, (d) how
do countries select among these components because such measures are
highly correlated, (e) which public sector reforms will effectively strengthen
these measures of good governance, and (f) what are the incentives
for the decision- makers to put in place such reforms and zealously
implement them.
The available evidence in a number of studies across countries suggests
that there is a positive relationship berween good governance and economic
growth. An IMF empirical study (2003), 12 using geographic variables as
instruments, found that governance has a statisticaJly significant impact on
GDP per capita across 93 countries, and that governance explains nearly
75 per cent of the cross country variations in income per head. A study by
Huther and Shah (2005) 13 found that there is a high correlation berween
the quality of governance and per capita income. The positive correlation
berween the 10-year economic growth rate and governance quality supports
the argument that it is an important determinant in economic development.
As the highest income countries have generally not had the highest growth
rates over the past decade, the positive correlation berween higher growth
and better governance suggests that good governance improves economic
performance rather than vice versa. Kaufmann and Kraay (2002) 14 found
direct causal effect from better governance to higher per capita income
across countries in relation to 175 countries for the period 2000-01.
Negative causal effect is also found from poor governance in relation to
per capita income, implying that improvements in governance are unlikely
to occur merely as a consequence of development. The simple correlation
coefficient between per capita income and the quality of governance is
12 GOVER,."IING THE UNGOVERNABLE

significanrly positive as the strong positive effects of governance dominate

the correlation result. Using the technique of non-sample information
(our-of-sample technique) through the Unobserved Component Model,
the authors do not find any positive feedback from higher income co better
governance outcomes (see Kaufmann and Kraay, 2002).
Barro has reported that better maintenance of che rule of law and
political stability affect economic growth (Barro, 1991). 15 Dollar and
Kraay found that the rule of law indicator is positively and significantly
correlated with the growth in per capita incomes of che poorest quintile.
They concluded that greater rule of law may be associated with a greater
share of growth accruing to the lowest 20 per cent of che population. 16
Chong and Gradstein 17 discovered that political stability and the rule of
law have a negative and significant relation with inequality as measured by
the Gini coefficient. Kraay's 18 analysis leads him co conclude that the rule
of law and accountability are both positively correlated with growth and
distributional changes, while openness co international trade has a positive
correlation with growth and poverty, reducing shifts in income. Kimenyi 19
argues that pro poor reforms cannot have che intended impact unless there
are significant changes in the institutions of governance.
Cross-country studies by Mauro (1995) and Knack and Keefer (1995)
have demonstrated chat political instability, corruption, a poor quality of
bureaucracy, and absence of the rule of law and the risk of expropriation
are strongly correlated with lower investment and growth races. In response
co the critique of these studies by Khan (2002), the relationship between
governance and growth for a sec-limited only to developing countries-
was rested, and it was concluded that governance-caused growth remained
scacistically significant. The exclusion of Ease Asian countries from the
sample maintained the statistical significance but weakened the results.
Having made some tangible progress in meeting the Millennium
Development Goal (MDG) of halving che incidence of poverty
between 1990 and 2015, attention is now focused on inequality and the
concentration of income. There is a popular feeling that the slowdown in
economic growth and rising unemployment, particularly among the youth
in advanced countries, can be traced to rising inequality and concentration
 INTRODUCTION 13

of income in the hands of a few. This issue no longer remains confined to

academic discussion bur is now at the forefront of political dialogue and
electoral debates in both advanced and developing countries.
The analysis of factors behind che global recession of 2008 and its
lingering aftermath received a jolc from the seminal volume by Thomas
Pikeny. 20 He demonstrated char in contemporary market economies, the
race of return on investment outstrips the overall growth rate, and if that
discrepancy persists over time, the wealth held by capitalists increases far
more rapidly than other kinds of earnings, eventually outstripping chem
by a wide margin. Capital wealth is much larger than annual national
income; in the case of developed economies it is about five co six rimes as
large. Work by Nobel Prize laureate Joseph Sciglitz, Branko Milanovic, and
many other serious economists has brought to the fore the phenomenon
of growing inequality, particularly among the developed countries. The
evidence co substantiate this viewpoint is overwhelming.
The incomes of the cop one per cent of che population in the US, after
adjusting for inflation, rose by 275 per cent berween 1979-2007, chose
of the middle class by only 21 per cent, and the poor class a mere 11 per
cenc. 21 This miniscule group (the cop one per cent) earns about a sixth
of total income, and the top ten per cent earn as much as half of it. The
median household income in the US, adjusted for inflation, fell 6.7 per
cent, and was lower in 2009 in comparison co 1997. The cop one per cent
in the US owns as much wealth as 90 per cent of the population. George
Packer notes, 'the more wealth accumulates in a few hands at the cop, the
more influence and favour the well-connected rich acquire, which makes it
easier for them and their political allies co case off restraint without paying
a social price. That, in turn, frees chem to amass new money.'
Fifty-eight per cent of economic growth in che US over a 30-year
period was captured by chis tiny group. The IRS reported in 2007 chat the
cop 0.01 per cent of taxpayers had a combined income of $1 trillion. In
Europe, austerity measures in the peripheral countries resulted in cues in
public expenditure, layoffs, retrenchments, a salary freeze, and rising youth
unemployment-all adversely affecting chose at the bottom of the income
distribution scale. The majority of the population is suffering from weak
14 GOVERNING THE UNGOVERNABLE

growth, high unemployment, severe austerity, and anxiety about the future
in an uncertain, globalized world. At the same time, the chief executives of
large firms rook home 250 rimes as much as their average worker as against
a differential of 20 to 30 times in the 1970s. The number of millionaires
and billionaires is expanding at an unprecedented pace in all parts of the
world, even in a country such as India, which has a third of its population
living below the poverty line.
The Arab Spring is demonstration of the disenchantment of the educated
unemployed with the rapacious lifestyles of the elite, the repression by the
e) state to maintain the Status quo, and the inability of the Arab States
to generate productive jobs. The backlash against globalization, trade,
immigration, and the flood of refugees entering Europe and the US and the
rise of nationalist parties is also a manifestation of the same phenomenon.
Whether it is the monarchs, dictators, and elected leaders becoming rich,
or '1ighly paid bankers, or big multinationals avoiding payment of their
fair share of taxes, the disaffected are using the power of the social nerworks
and the instantaneous communication they offer to coalesce and shake up
the entrenched vested interests. The rage and fury of these disenchanted
classes is spilling acros~ national boundaries. Contagion is no longer
confined to the international financial system bur is equally applicable to
social movements. There is ample evidence to demonstrate a correlation
between elitist capture of economy and politics which is apparent from
concentration of income, and the pace of economic development and
political stability.
Mancur Olson has argued 'that nations decline because of the lobbying
power of distributional coalitions or special interest groups whose growing
influence fosters economic inefficiency and inequality'. 22 Jonathan Ostry
and Andrew Berg23 believe that inequality makes an important difference co
the eve! of economic growth, such that more unequal societies have slower
and more fragile economic growth. Deep inequality breeds resentment and
political instability, and discourages investment. It can lead to political
polarization and gridlock as it cleaves the political system between
the interests of the rich and the poor. It can make it more difficult for
governments to deal with brewing crises and economic imbalances. Growth
 INTRODUCTION 15

is faster in more equal societies than in those that are less equal, regardless of
whether they have redistributive tax systems. Inequality strongly correlates
with a spell of economic expansion and thus less growth over time. For
emerging and developing economies, inequality might foster political
instability and lead to violence and economic destruction. H
Analyses of the factors contributing to this rising income inequality
have sparked heated debate among scholars as well as policy-makers
and the popular media. Martin Wolf25 amibuces chis to globalization,
technological changes, and winner takes all markets. Ochers believe that
globalization contributes to inequality by creating a global labour pool
that holds down wages while boosting corporate profits. Nigel Lawson is
of the view that when businesses are considered coo big, coo important, or
coo interconnected, the crucial discipline of the market-place disappears
and disaster is almost inevitable. What can possibly be done co cope with
this phenomenon of growing inequality and elitist capture? Does chis
phenomenon arise due co malfunctioning of markets?
New Institutional Economics has advanced economic theories chat
identify institutional capabilities that states needed co make the markets
function efficiently. Douglass North defines institutions 'as humanly
devised constraints chat structure political, the economic, and social
inceractions and include the laws, rules, customs, and norms conscrucced
co advance and preserve social order'. 26 In regard co the link of institutions
to economic developmenc, his view is: 'How do we accounc for poverty in
the midst of plenty? We muse create incencives for people to invest in more
efficienc technology, increase their skills, and organize efficient markets.
Such incentives are embodied in institutions.' 27
Daron Acemoglu and Robinson in their study, 'Why Nations Fail?',28
demonstrate that ic is institutions chat determine the face of nations.
Success comes when political and economic institutions are ' inclusive'
and pluralistic, creating incentives for everyone co invest in the future.
Nations fail when institutions are 'excraccive', protecting the political and
economic power of only a small elite that excraccs income from everyone
else. Institutions chat promote good governance and facilicace broad-
based and inclusive growth enjoy pride of place in development strategy.
16 GOVERN ING THE U NGOVERNABLE

According co Acemoglu and Johnson (2003), good institutions ensure

two desirable outcomes: they provide relatively equal access co economic
opportunity (a level playing field), and appropriately reward chose who
provide labour and protect their property rights.
Among the components of good governance, human capital is considered
one of the factors that is associated with both economic growth and equity.
In a srudy29 on human capital and economic growth, the authors, using the
data for the 1996-2011 period for 134 countries, found strong evidence
in support of the hypothesis that the relationship between human capital
and economic growth is much less pronounced in countries with a low
quality of governance. Preconditions in the form of good governance
are necessary for an educated labour force co contribute to the economic
growth of a country. Weak governance, indicated by inadequate law and
order, corruption, and maladministration result in inefficient utilization
of human resources.
Rashida Haq and Uzma Zia30 have explored linkages between governance
and pro-poor growth in Pakistan for the period 1996 to 2005. The analysis
indicates that governance indicacors have low scores and rank at the lowest
possible percentile in comparison co other countries. They found that
the share in income of the bottom 20 per cent has decreased. The results
of their study show that there is a strong linkage between governance
indicators and pro-poor growth in the country, and econometric analysis
showed chat there is a strong relationship between good governance and
reduction in poverty and income inequality. They concluded that voice
and accountability, political stability, regulacory quality, and the rule oflaw
can control corruption and encourage pro-poor policies which ultimately
reduce poverty and inequality in the long run.
The model of an elitist economy that was articulated in Pakistan: The
Economy ofan Elitist State published in 1999,31 sets our the historical context
and che drivers of the capture of the state and market-rigging in Pakistan
by a small elite--constituting about 1-2 per cent of the population-for
self-aggrandizement, neglecting the majority of the population, particularly
the poor and the less privileged segments of society. This small minority
was thus able co enjoy chis accumulation of wealth amidst widespread
 INTRODUCTION 17

poverty and squalor. In the absence of a neutral umpire, markers are

rigged by the elite for their own advantage, and thus market outcomes
and resource allocation are inefficient. The stare, which has co ensure
equitable distribution of gains of economic growth, is also controlled by
the same elite who evade taxes and appropriate the public expenditure for
their own benefits. Inequities-interpersonal, regional, gender-become
commonplace in such an environment. Over the past decade, there has
been a growing concern about the glaring and growing income inequalities
and the capture of the economy by small, elite classes elsewhere in the
world, both advanced and developing.
Thus, both theoretical and cross country empirical evidence, as well
as Pakistan's own experience, lend a great deal of weight co the argument
char poor governance manifested by weak institutions, among many other
factors, could be the predominant reason for Pakistan's unsatisfactory
economic and social performance over the past quarter of a century, in
relation to both, ics own last four decades and ocher countries in the region.
The evidence for chis is the gradual decline in Pakistan's ranking and score
on the following indices compiled by international and multilateral bodies,
independent chink tanks, academics, researchers, NGOS, and ochers for
various years:

World Bank: World Governance Indicators

World Economic Forum: Global Competitiveness Report
UNDP: Human Development Index
Freedom House: Economic Freedom Index
Transparency International: Corruption Perception Index
International Country Risk Guide
UNESCO: Education for All Index
Legatum Prosperity Index

Sakib Sherani (2017)32 has reviewed the World Governance Indicators for
the period 1996-2015. His analysis shows chat Pakistan has performed
poorly in all six sub-components of governance. The average percentile
rank for the 16 years, excluding political stability and absence of violence
18 GOVERNING THE UNGOVERNABLE

(extremely low), ranges from 18 to 32. He notes that in four of the six
parameters-Government Effectiveness, Control of Corruption, Regulatory
Qualiry, Political Stability and Absence of Violence, the best scores were
recorded under President Musharraf (a period during which economic
growth was also averaging 6-7 per cent annually). Again, there is some
modest improvement in World Governance Indicators, Ease of Doing
Business, and Corruption Perception Index for 2015 and 2016, when the
economy was beginning to perform well. The same picture emerges by
examining other indicators and indices comparing Pakistan with India
and Bangladesh. Pakistan has fallen below these countries in the Human
Development index, Corruption Perception Index, and Legarum Prosperity
Index, and continues to lag behind India and Bangladesh in Education for
All and the Economic Freedom Index. The gap with India has also widened
in the Global Competitiveness Index and Global Innovation Index.
The latest nationwide survey,33 carried out in 2016 by the Pakistan
Institute for Legislative Development and Transparency (PILDAT) on
Quality of Democracy and Governance in Pakistan, shows that among its
instirutions, the highest approval rating of 76 per cent was scored by the
armed forces and the lo\\-est, at 25 per cent, by the police. Government
officers, i.e. civil servants, were second to the bottom with a rating of 29
per cenc, and the political parties were third from the bottom with a score
of 35 per cent. Following the armed forces, the second top rank was that of
the Supreme Court at 62 per cent, and the electronic media at 54 per cent.
A leading thinker, I. A. Rehman, very cogently sums up the state of
institutions in Pakistan:

In a stable democracy, fair elections produce a change only ac the cop, whilst
the rest of the system does nor suffer a personnel change. In an unstable
state, elections are not fair and the result is a change of personnel along the
line-deparcmenc heads are changed, DPOs are replaced, heads of media
organizations are changed and above all, the qabuz groups and commission
agents that manipulate the sale of land and construction of plazas are
replaced. Institutions are handed over to good-for-nothing individuals,
mt rit is derided, and sycophancy rewarded. Can anyone fail to see what
 INTRODUCTION 19

Pakistan has become after six decades of a crusade against its people and
their democratic right?
... the disintegration of the basic institutions of the scate-the parcy, the
parliament, the judiciary, the executive, and the military-has affected, in
varying degrees, all subsidiary institutions such as educational institutions,
industry chambers, the trade unions, the media and its commentators who
never stop pontificating ... 34

The decay of civilian institutions can also partially explain the nature
of civil-military relations in Pakistan and the gradual ascendancy of the
military during this period. In the earlier decades of Pakistan's history, ics
civil services attracted the best talent and enjoyed the highest standards
of competence, integrity, and commitment to resolve the problems faced
by the citizens. The armed forces, on the other hand, recruited moscly
mediocre people ac the entry level and their breadth and range were quite
limiced in their education and exposure. While the civil services abandoned
the principle of selection on merit, rigorous training to prepare for the
next level, promotion based on performance, regular weeding ouc of
chose who did noc keep up to the standards, the armed forces adopted
and continued co religiously follow these principles. They transformed
mediocre individuals into Hrsc rate human resource material while the civil
services took the creme de la creme and turned the first race talent either
into cynics or self-serving individuals. To illuslrate this, one example is
quite striking. The IBA, a leading Pakistan business school, was invited by
the Pakistan Armed Forces to send their faculty to military bases to provide
in-house training. They were also asked to help design their programmes,
such as Bachelor of Defence Management, in 1981. T his continuing
upgradation and rejuvenation of the armed forces was pare of che strategy
to lransform the armed forces into a highly professional, efficient, and
effective institution of the scare. On the other hand, the sloth, inertia,
preservation of the status quo, and alignment with the parochial interests
of the ruling parties have made the civil services, and thus the institutions
they man, quite unresponsive, inefficient, and ineffective. T his is noc by
any means co suggest that the first period (1947-90) was an idyllic era
20 GOVERNI NG THE UNGOVERNABLE

when everything was hunky-dory, and all inscirutions functioned efficiently

without interference from the politicians or indulgence in corrupt practices.
Far from it. Even then there were reports and incidents of political leaders
and then some of the military engaging in corruption, nepotism, and
favouritism. The allegations of election rigging during General Ayub Khan's
presidential election and acquisition of Gand.hara Industries by his son,
Gohar Ayub reverberated loudly. Zulfikar Ali Bhutto reportedly used the
Federal Security Forces (FSF) co settle personal scores against his opponents.
Several leading politicians were disqualified under Public Representatives
Disqualification Order (PRODA) and Elected Bodies Disqualification
Order (EBDO), and the service of thousands of civil servants summarily
and arbitrarily terminated by Ayub, General Yahya Khan, and Bhutto on
charges of corruption and malfeasance. Petey corruption and extortion
by lower government functionaries was rampant during both periods.
Patronage, kinship, biradari, tribal, and feudal relations pervaded
throughout the system. However, on balance, the contribution of the civil
servants and the instirutions they manned during the first four decades far
outweighed the negative damage perpetrated by a minority in their ranks.
During informal consultations, focus group participants maintained chat
out of ten randomly selected higher civil servants in the earlier period, only
two or three were found to be corrupt or pliable co extraneous influence.
The rabies began to rum from 1990 and today, out of a sample of ten such
officers, only two or three would be found co be honest, conscientious, and
immune co political pressures.
Whenever there is an instirutional vacuum, the stronger entity fills in the
space. Whether it is fighting the Taliban, clearing Karachi of the criminals
and extortionists, evacuating people from the flood-affected or earchquake-
struck areas, constructing highways in difficult terrain, or even collecting
electricity bills, the armr is called upon by the civil administration co
take the lead and deliver The constitutional requirement of holding a
census every ten years was not being met because the army jawans are
not available to assist in this. It is the incapacitation and inability of the
civilian institutions of governance chat has opened the way for the military
co directly or indirectly assert itself and become the dominant player. The
 INTRODUCTION 21

instirucional imbalance between the military and the civilian scruccures

can, inter alia, be ascribed largely co this growing gap in the capabilities
of these two structures. This does not, by any means, absolve some army
chiefs and their close confidants, whose personal ambitions to seize power
have been a major factor in the disruption of the democratic framework.
However, the malaises of corruption, incompetence, mismanagement,
personal vendettas, and point-scoring among politicians and their cronies,
and the failure to deliver public goods and services co the population at
large, provided these generals the opportunity and justification to intervene.
Hence, che actions of those who usurped power by removing elected
governments and retarded democratic continuity cannot be condoned.
This periodic disruption in conscicucional rule also contributed co che
weakening of political inscicucions. The institutional imbalance between
the military and the civilian strucrures can, inter alia, be ascribed largely co
chis phenomenon. The statement by an analyst that 'The Military can be
the stabilizer in [a] situation where Pakistan might otherwise falter being
a weak state',35 appears co be largely true.
This scudy is an arcempc co address a difficult question: 'How can this
asymmetric and unequal power relationship between the weak civilian
instirutional sec-up and strong institution of the military be reversed for
the long-term development of democracy and sustained economic growth
and shared prosperity in Pakistan?' The troika of the chief of the army
staff, president, and prime minister was perceived co have ruled Pakistan
in the 1990s, and in the posc-2008 democratic era, ic is popularly believed
that the army appears to be dictating terms in the areas of defence and
nuclear capability, internal security, and foreign policy in relation to India,
Afghanistan, and the US. The frequent calls to the military for overt or
covert interventions by some politicians and opinion-makers is nor in
the interest of the long-term policical, economic, and social stability of
Pakistan. There is a widely accepted belief that if the disrrict adminisrration,
law enforcement agencies, and the civilian intelligence agencies were
performing their job well, the illegal and unlawful activities of the militant
and extremist elements would have been nipped in the bud, and Pakistan
would have avoided such a massive dislocation in its economic and social
22 GOVERNING THE UNGOVERNABLE

life. Were basic services such as education, healthcare, and justice accessible
co common citizens, the drifc cowards the criminals-extremists nexus would
not have taken root in society.
The challenge which is widely recognized by both the policical leadership
and the bureaucracy is how a vibrant, agile, and effective civilian inscitucion
can be rebuilt which is capable of delivering basic goods and services co the
people, including access co justice, the provision of security to their life and
propercy, and reigniting the growth impulses thac had characcerized the firsc
half of Pakistan's existence. As a retired general very succinctly expressed
it: ' While the armed forces maincain exceptionally high morale, prolonged
involvement is not only purring the army under stress but also keeping it
away from its conventional preparedness.'36
Any demarcation of boundaries between different periods can be
chal enged for its arbitrariness. Binary classifications suffer from the
inherent problem of everything being painted either black or whice. If
we adopt a continuum approach, then the shift from grey cowards black
becomes percepcible somecime in the late 1980s and early 1990s. It must
be conceded that the seeds of the institutional weakening were sown much
earlier in the 1970s but the past momentum and the intervening period of
Zia's rule in the 1980s did create a buffer which unravelled in the 1990s.
The dominant tendencies became apparent and the black clouds began
appearing during that period. T he exception was the brief tenure of Prime
Minister Mohammad Khan Junejo which provided an inceresting interlude
wheP a feudal politician from Sindh instituted sound government practices
but this was not sustained over rime. Ironically his successors, who ruled
the country between 1988 and 1999, the leaders of two major established
political parries, undid all his good work when they assumed power, and
the pendulum swung in the opposite direction.
Diagnostic studies, particularly the conference volumes based on the
Annual Conferences on Pakistan organized by the Woodrow Wilson Center
at Washingcon,37 suggest that every single crisis faced by Pakistan-low tax-
mobilization, energy shortages, unsatisfactory law and order sicuation, losses
sustained by the public sector enterprises, poor delivery of education and
health services, and stagnating trade-<:an be traced back co chis governance
 INTRODUCTION 23

deficit and inscicucional weaknesses. Tax collectors enjoy wide discretionary

powers which they utilize co extort money and enrich themselves rather than
raise additional revenues for the exchequer. Power and gas companies find
a huge gap berween the sales revenues they assess, bill, and collect, and the
purchases of units which they have co pay. Thefts, leakages, non-recovery,
and overbilling have created a huge void becween the receivables and
payables. Law and order is bound co suffer, and the common citizen bound
co feel insecure when police officials are appointed on the recommendations
of elected members of the parliament and assemblies or in exchange for
bribes rather than on their professional competence. These officials, after
appointment in this manner, carry out the bidding of their benefactors
rather than arresting, investigating, and prosecuting the criminals. Public
sector enterprises are naturally bound co face losses when they become the
dumping ground for thousands of surplus, incompetent employees on their
payroll at the behest of the ruling party. In competitive markets they lose
market share and in public monopolies they fleece their consumers but still
incur losses due to inefficiency, waste, and corruption. There is a general
consensus in Pakistan endorsed by international organizations that civilian
institutions have decayed over time.
The World Bank, in one of its policy notes which forms part of its
Country Economic Memorandum of 2013, seated: ' In a recent analysis of
binding constraints co Pakistan's economy, bad governance and a poor civil
service appear to be undermining economic growth. Without improving
governance, other efforts in realizing the country's growth potential are
destined co be less effective than they would be otherwise.'38 The same view
was echoed in the Framework for Economic Growth, which was adopted
by the government of Pakistan during che Zardari period.
The Herald magazine and the Sustainable Development Policy Institute
(S DPI) carried our a large-scale survey in 2013, and asked Pakistanis whac
the most important obstacle to economic progress was. T he most frequent
answer was 'corruption', followed by 'incompetent leadership', and 'poor
governance'. Young entrepreneurs in Pakiscan 39 believe chat corruption is
a major constraint to industrial and economic development.
The National Commission for Government Reforms (NCGR) members
24 GOVERN ING T H E UNGOVERNABLE

drawn from both the private and public sector travelled throughout Pakistan
during 2006-08, consulted a range of stakeholders, conducted field studies,
made on the spot observations about the delivery of public services, and
reviewed research work in compiling their report. The Commission has
made exhaustive recommendations regarding the structure, human resource
policies, the business process reengineering of the federal, provincial, and
local governments, public enterprises and corporations, auconomous
bodies, and the like. The recommendations of the Commission have not
been accepted or implemented by three successive governments. It would
therefore be unrealistic to expect that comprehensive reforms of the civil
services and the civilian institutions of governance are feasible. These
recommendations have not been implemented even though the top political
leadership feels frustrated that the gap between their pronouncements and
actual delivery is widening and damaging their credibility. Notwithstanding
this recognition, resistance to changing the status quo is strong. Inefficient
policies and weak institutions can be easily manipulated by the politically
powerful elite.
This study reflects upon the experience of the past five years since
the submission of the report, particularly in the light of the Eighteenth
Amendment co the Constitution devolving legislative, administrative,
and financial powers to the provinces. The recent elections of the local
governments provided another opportunity to devolve these powers further
co the grassroots level which has been done only in one province, i.e.
Khyber Pakhtunkhwa (KP). Other provinces have retrogressed by returning
the powers to the provincial governments.
The political economy of reforming policies and restructuring
institutions for broad-based growth of the majority of the population is
not well understood. 'Lack of political will' has become the catch-all phrase
to describe the failure to change, but this is a loose and imprecise term.
The question that arises then is: 'How can the incentives of political leaders
be aligned to make them compatible with the desired change agenda, and
make the "political will" work for a desirable outcome.' The dilemma facing
academics and technocratic policy reformers is that inefficient policies
and institutions exist and the status quo is defended because it suits the
 INT RO D UCTION 25

politically influential elite, buc the constituency and coalitions for efficienc
policies and strong institutions do not exist. If the first best solution of
comprehensive, across-the-board reforms is not feasible, can a second or
third best solution of a selective and incremental approach of ta.king up a
few key institutions of democratic governance be designed, which does not
meet the same kind of fierce resistance bur has powerful spill-over effects
that may over time embrace and occupy a larger space?
In Pakistan, the labelling and characterization of the state as the 'Invisible
Stace', 'Deep Stace', or 'Garrison Stace' has become the popular narrative,
and all the prevailing ills are arcribuced to this sec of characteristics of
the stare. A great deal has already been written on the subject by both
academic scholars as well as the popular media. This study does however
examine the organs of scare and at the same time also looks at the society,
polity, economy, private sector, religious edifice, and external actors, as
they have all played or play a role in the way Pakistan has been governed
over time, and economic and social policy choices it has made. It is the
incerrelation and interaction of all these forces and the state that produces
the final outcomes. A preliminary attempt has been made co divide history
inco several phases and offer subjective judgemenc abouc which of these
institutions have actually dominated that particular period.
However, I focus on the state-oriented institutions for possible
restructuring and reform, and among them a few key institutions that can
play a catalytic role in bringing about and rescoring the original position
of equilibrium from which Pakistan began its journey in the early decades
of its existence. This is possible if these key civilian institutions can be
put back on the same pathway-merit, incegrity, dedicated service, and
problem-solving-that historically was their principal asset. Democratic
governance can be strengthened only if the supporting institutions regain
their lose stature and are able to assert the writ of the state, i.e. governmenc
effectiveness, control of corruption, improvemenc of regulacory oversight,
establishmenc of the rule of law, accouncability, and facilitation of the
private sector and civil society.
This study also attempts co explore and understand the critical
factors which enabled India and Bangladesh, facing an identical external

National \1anagl'ment
Culki,:" Llbn1ry

2. 7 68 s :-~~
26 GOVERNING THF UNGOVERNABLE

environment with weak institutions, to do so well economically while

Pakistan became a laggard and failed to exploit its potential.
India, Bangladesh, and ocher developing countries have made great
strides in growth, poverty reduction, and improved living standards, and
moved forward over the past 25 years. Were they able to find safeguards
or checks and balances chat minimized the adverse political influences
on the key institutions of democratic governance? How far did they use
private sector and civil society organizations to compensate for the pitfalls
of the public sector in the economic revival and delivery of social services
to the population? Given the historical, legal, and cultural similarities with
Pakistan and the prevalence of widespread corruption in these countries,
how were they able to forge ahead? The lessons learnt from these countries'
experiences will help Pakistan to sequence and phase the proposed agenda
for governance reforms. Identifying the sources of the political compatibility
and feasibility of reforms would be a val uable contribution of this study.
The hypothesis underlying chis study is chat the roots of the decline in
the economic growth rate of Pakistan and its diminishing participation
in the dynamic global economy can be traced to the gradual decay in
its key institutions of governance and their malfunction. This is not to
acknowledge many success stories of organizations chat have survived over
time and succeeded in delivering the desired results. There are already
many examples of successful institutions working quite well in the
midst of chis general atmosphere of institutional decay and their success
reflects adherence to the same principles. The performance of the Punjab
government in many respects is much superior to that of other provinces
and it can be attributed to strong exemplary leadership but its sustainability
wi 1 only be assured if its institutional infrastructure is also strengthened.
Mahmood Ayub and Turab Hussain, in their study Candles in Dark,'•0
have documented at least ten such institutions in various sectors run by
the government, private foundations, and NGOs, and drawn lessons
underpinning their success. In addition, the State Bank of Pakistan, the
National Highway and Motor Police, the National Data Registration
Authority (NADRA), the Sind Institute of Urology and Transplant (SIUT),
Indus Hospital, Aga Khan University and Hospital, Punjab Education

I I
 INTRODUCTION 27

Foundation, Benazir Income Support Program (BISP), HEJ lnscicuce, and

che Skills Development Co, are usually considered islands of excellence
amidsc overall decay. A new form of organizational suuccure, i.e. companies
escablished by che governmenc of Punjab under che Companies Ace, provides
an alcernace model in che organizational archicecture of che government.
le is cherefore possible char che lessons learnc from these success scories
can be applied co ocher key inscitucions, and chis is cricical in achieving
che developmenc objeccives. The thrusc of the argument is, however,
that most of key institutions responsible for discharging the functions
of security, growth, and equity have fallen behind and are suffering from
governance malfunction.
The analycical framework for this study is based on the 201 7 Worl.d
Development Report on 'Governance and Law' .41 The Report uses the
cerm 'governance' as 'the process through which state and non-scare
actors interact to design and implement policies within a given set of
formal and informal rules that shape and are shaped by power'. Power is
defined by ic 'as the ability of groups and individuals co make others ace
in their inceresc and co bring abouc specific ouccomes'. The WDR secs our
three principles for rechinking governance for development. Racher than
investing in designing che righc form of policies, the emphasis should be
on the funccions char institutions muse perform. Second, while capacity-
building macters, how co use the capacity and where to invest in capacity
depends upon che relacive bargaining power of actors. Third, in order co
achieve che rule oflaw, Countries muse first screngchen the differenc roles of
law co enhance concestability, change incentives, and reshape preferences.
In praccical cerms, che framework is cranslated inco a Policy Effectiveness
chain that comprises five steps:
1. define the developmenc objective,
2. identify che underlying functional problem (commicmenc,
coordinacion, cooperacion),
3. idencify the relevanc encry poinc for reform (incencives, preferences/
beliefs, concestability),
4. identify the besc mechanism for intervention (menu of policies and
laws),
28 GOVERNI NG THE UNGOVERNABLE

5. identify key stakeholders needed to build a coalition for

implementation (elites, citizens, international).

This study will apply. wherever possible, the elements of the policy
effectiveness chain co Pakistan and make recommendations that can help
in strengthening this chain.
Using the above framework, (I) the development objectives for Pakistan
which are broadly shared by a vase majority of people as well as political
parties and other stakeholders are Security, Growth, and Equity; (2) for
Pakistan, the underlying functional problem is a lack of commitment by
successive political and military leaders co replace what suits their parochial
interests but not collective public interests in the existing patron-client
re.ationship; (3) the institutions chat should carry our these functions
will encompass state, society, and markets but this scudy will limit itself
co stare-oriented institutions alone; (4) this study proposes a second and
third best solution of selective and incremental intervention rather than
comprehensive reforms sweeping across the board; (5) the key stakeholders
fo r implementation would be the legislacures, federal, provincial, and local
governments, the judiciary, the military, and law enforcement agencies, the
private seccor and businesses, civil society and citizens' organizations, and
international accors
In light of the above. it is important chat first the relationship between
the state, markets, and society is revisited and the boundaries clearly
demarcated. Markets are efficient in producing, exchanging, and trading
goods and services and allocating scarce resources bur in doing so only
those that are already well-endowed are rewarded. If an individual possesses
land, capital, natural resources, or skills, the marker will do a good job
in ensuring a decent return on these assets. If, however, an individual is
uneducated, poor, handicapped, or unskilled, the market inflicts pain, for
it has litcle use for such a person. For such segments of the population,
the state has to seep in by taxing a fraction of the incomes earned by
the well-endowed and transfer char co the less well-co-do through public
expenditure on education, skill upgradacion, healthcare, drinking water,
sanitation, and social transfers. Moreover, Dani Rodrik has ably argued
 INTRODUCTION 29

that markets are organized around private property and neither property
rights nor markets can function on their own. They require other social
institutions to support chem. Therefore, property rights rely on courts and
legal enforcemenc, and markets depend upon regulations co rein in abuse
and fix market failures. State institutions have co therefore sec che legal and
regulatory framework and the ground rules under which private businesses
operate. The regulators have co ensure that competition and nor collusion
prevails in the marketplace, consumers are protected, and health, safety,
and environmencal standards are observed, and that a level playing field is
ensured for all chose participating in the marker. The stare has co intervene
co promote innovation and encrepreneurship by investing in STEM
education, vocational and technical training, research and developmenc,
technology parks ere. The scare is also responsible for maincaining law and
order and security, enforcing the rule of law, proceccing property rights,
and adjudicating and arbitrating in disputes and contracts between the
private parties. All chese functions are heavily dependenc upon the quality
of institutions and governmenc effectiveness.
Sensible economic policies do nor gee cranslaced inco action because
of the dysfunccionality of the inscicucions implementing those policies.
Society, through the media, NGOs and CSOs, professional bodies, labour
unions, citizen groups, human rights and women's rights organizations,
and the like, has co play an important role in maintaining vigilance on the
stare and marker inscicucions, and also participate in the provision of social
services such as education and health wherever possible.
Although there are linkages and overlap in the inscicucions aimed at
implementing the three developmenc objectives, a preliminary skecch of che
casks before the predominant institutions co achieve each of chese objectives
is provided below.

GROWTH

According co the IMF, Pakistan's pocencial GDP growth has gradually

declined over the years and the output gap has nearly closed. 42 The way
30 GOVERNING THE UNGOVERNABLE

forward to improve Pakistan's potential growth is through productivity.

In turn, an improvement in produccivity requires a business-friendly
environment where the government delivers basic services efficiently,
promotes the rule of law, reduces corruption, and streamlines business
regulation. Pakistan currently ranks 138 out of 189 economies in the
World Bank's Doing Business Report 2016 and 126 our of 140 in the World
Economic Forum's Global Competitiveness Report 2015-16 Technology
Transfer through FDI has been shown to diffuse new technologies and
management methods to local firms, raising their competitiveness. Thus,
in the ultimate analysis, it is the strength of the institutions centred on
markets, the private sector, and businesses that will raise the growth
potential of the economy. Creating jobs for 1-1.5 million new entrants
to the labour force is a challenge that can be met only through growth

races of around 7-8 per cent annually. Increased female labour force
participation would contribute both co growth as well as a reduction in
gender disparities.

EQUITY

In a multi-ethnic and multi-linguistic country such as Pakistan, redressal or

mitigation of regional and provincial income and social disparities becomes
an issue of paramount importance co maintain national and social cohesion.
Punjab, as a province, has progressed ahead of the other three provinces.
WhJe there may be some cogent and rational reasons for this outcome,
the perception that the majority province is moving ahead at the expense
of the smaller ones must be boldly addressed. However, the disparities
are not along the provincial boundaries because there are better-off areas
and deprived ones within each province. Central and northern Punjab,
urban Sindh, Peshawar valley, and parts of Hazara division, Islamabad, and
Querta are relatively better off in terms of their standing as measured by
the Deprivation Index and Multipurpose Poverty Index but the situation in
southern Punjab, rural Sindh, Malakand and DIK divisions, and the rest of
Balochistan is a matter of great concern. Some of the factors responsible for
Another random document with
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son aspect d’irrémédiable misère, ce bungalow était le plus répugnant de
tous ceux où il m’était arrivé de m’arrêter.
Il n’y avait pas de foyer et les fenêtres refusaient de s’ouvrir. Un brasero
de charbon de bois eut donc été inutilisable. La pluie et le vent
éclaboussaient, gazouillaient, gémissaient autour de la maison.
Les palmiers arack craquaient et grondaient.
Une demi-douzaine de chacals aboyaient dans la clôture.
Une hyène, arrêtée à quelque distance, les narguait de son rire. Une
hyène pourrait convaincre un sadducéen de la résurrection des morts, de la
pire sorte de morts.
Alors arriva le ratub, mets curieux dont la composition est à la fois
indigène et anglaise, et le vieux Khansamah resta debout derrière ma
chaise, me parlant d’Anglais de jadis qui étaient défunts, pendant que les
flammes des bougies, agitées par le vent, jouaient à cache-cache sur le lit et
la moustiquaire.
C’était bien la sorte de dîner et la sorte de soirée qu’il fallait pour
disposer un homme à passer en revue, un à un, ses péchés d’autrefois, et
tous ceux qu’il comptait commettre s’il continuait à vivre.
Il était difficile de dormir pour plusieurs centaines de raisons.
La lampe de la salle de bain projetait dans les chambres les ombres les
plus grotesques et le vent commençait à dire des bêtises.
Au moment même où les motifs de mon insomnie s’assoupirent, gorgés
de sang, j’entendis la formule connue: «Nous allons le prendre et le
soulever» dont se servent les porteurs de doolies.
Cela venait de l’enceinte.
Tout d’abord, il arriva un doolie, puis un second, puis un troisième.
J’entendis le bruit des doolies posés lourdement à terre.
Le volet qui faisait face à ma porte fut secoué.
—C’est quelqu’un qui s’efforce d’entrer, dis-je.
Mais personne ne parla, et je tâchai de me persuader que c’était l’effet
d’une rafale.
Le volet de la chambre contiguë à la mienne fut attaqué, repoussé en
arrière, et la porte intérieure s’ouvrit.
 —C’est quelque sous-commissaire auxiliaire, me dis-je, et il aura amené
ses amis avec lui. Maintenant, ils en ont pour une heure à causer, à cracher,
à fumer.
Mais on n’entendait ni voix, ni pas.
Personne n’apportait de bagages dans la chambre voisine.
La porte se ferma et je remerciai la Providence de ce qu’on me laissait
tranquille. Mais j’étais curieux de savoir ce qu’étaient devenus les doolies.
Je descendis du lit et allai regarder dans l’obscurité. Il n’y avait pas la
moindre trace de doolies.
Au moment même où j’allais me recoucher, j’entendis dans la chambre
voisine un bruit auquel personne ne peut se tromper, s’il jouit de l’usage de
ses sens, celui que fait une bille de billard en roulant le long de la bande,
lorsque le joueur joue son premier coup.
Il n’y a pas de son qui ressemble à celui-là.
Une minute après, autre roulement. Je me recouchai.
Je n’avais pas peur, non, je n’avais pas peur.
J’étais très curieux de savoir ce qu’étaient devenus les doolies, et c’est
pour cela que je me recouchai d’un bond.
Une minute après, j’entendis le double bruit de déclic d’un carambolage.
Mes cheveux se dressèrent. Il est inexact de dire que les cheveux se
dressent. Le cuir chevelu se contracte, et vous sentez sur toute la tête un
fourmillement léger, général. Voilà ce que c’est exactement que des
cheveux qui se dressent.
Il y eut un nouveau roulement et un bruit de déclic.
Les deux bruits n’avaient pu être produits que par une seule et même
chose, une bille de billard.
Je raisonnai en moi-même sur l’aventure, et plus je raisonnais, moins il
me semblait probable qu’un lit, une table et deux chaises—à cela se bornait
le mobilier de la chambre contiguë à la mienne—pussent imiter aussi
parfaitement le bruit qu’on fait en jouant au billard.
Après un autre carambolage, un trois-bandes, à ce qu’il me parut,
d’après la sonorité, je cessai de raisonner.
Je tenais mon fantôme, et j’aurais donné tout au monde pour m’esquiver
de ce bungalow.
 Je prêtai l’oreille, et mieux j’écoutai, plus je perçus clairement les détails
de la partie.
C’était tour à tour le bruit de roulement et celui du choc.
Parfois il y avait un double choc, puis un roulement, puis un autre choc.
Il n’y avait plus de doute; on jouait au billard dans la chambre à côté. Et
la chambre à côté était trop petite pour contenir un billard.
Dans les intervalles où le vent se calmait, j’entendais la partie se
poursuivre, les coups se succéder.
Je fis un effort pour me persuader que je n’entendais pas de bruit. Cet
effort fut un échec.
Savez-vous ce que c’est que la peur? Non point la peur ordinaire
qu’inspirent une insulte, un dommage ou la mort, mais la peur abjecte,
frissonnante au sujet de quelque chose qui reste invisible pour vous, la peur
qui vous sèche l’intérieur de la bouche, et la moitié de la gorge, la crainte
qui rend moite la paume de vos mains, et vous fait faire des efforts pour
avaler, afin que la luette continue à fonctionner.
Cela est la belle peur,—une grande lâcheté, et il faut l’avoir ressentie
pour l’apprécier.
La simple invraisemblance d’une partie de billard dans un bungalow de
relais prouverait la réalité de la chose.
Nul homme,—ivre ou à jeun,—n’était capable d’imaginer une partie de
billard ni d’inventer le crachement d’un massé.
A fréquenter régulièrement les bungalows il y a un inconvénient: on
entretient éternellement sa crédulité.
Si l’on disait à un homme qui passe toute sa vie dans les bungalow: «Il y
a un cadavre dans cette chambre-ci, une jeune fille atteinte de folie dans
cette autre. La femme et l’homme qui montent ce chameau viennent de
s’échapper d’un endroit éloigné de soixante milles», l’auditeur ne se
refuserait point à le croire, parce qu’il n’est rien qui ne puisse arriver dans
un bungalow, quelle qu’en soit l’étrangeté, si grotesque, si horrible que ce
soit.
Malheureusement cette crédulité s’étend aux fantômes.
Une personne raisonnable qui serait récemment sortie de chez elle, se fût
tournée de l’autre côté et rendormie.
Moi, pas.
 Aussi vrai que les centaines de créatures qui se trouvaient dans le lit
finirent par m’abandonner comme une carcasse vidée, parce que la grande
masse de mon sang refluait à mon cœur, j’entendis tous les coups joués
pendant une longue partie de billard, dans la chambre aux échos sonores qui
touchait à la mienne, de l’autre côté de la porte barrée de fer.
Ma crainte la plus forte, c’était que les joueurs eussent besoin d’un
marqueur.
C’était une crainte absurde, car les êtres qui peuvent jouer dans les
ténèbres sont au-dessus de ces superfluités-là.
Tout ce que je sais, c’est que je craignais cela. C’était une réalité.
Au bout d’un certain temps, la partie cessa et la porte claqua.
Je m’endormis parce que je tombais de fatigue. Sans cela j’aurais préféré
rester éveillé.
J’aurais donné toute l’Asie plutôt que d’enlever la barre de la porte, pour
jeter un coup d’œil dans l’obscurité de la chambre voisine.
Le matin venu, je me dis que j’avais agi sagement, prudemment, et je
m’informai des moyens à prendre pour m’en aller.
—A propos, Khansamah, dis-je, qu’est-ce que faisaient ces trois doolies,
cette nuit, dans mon enceinte?
—Il n’y avait pas de doolies, dit le Khansamah.
J’allai dans la chambre voisine où la lumière entra à flots par la porte.
J’étais plein de bravoure.
A cette heure j’aurais joué l’Enfer contre le diable en personne.
—Cet endroit a-t-il toujours été un relais de poste? demandai-je.
—Non, dit le Khansamah, il y a dix ou vingt ans, j’ai oublié l’époque,
c’était une salle de billard.
—Une quoi?
—Une salle de billard pour les Sahibs qui ont construit le chemin de fer.
Alors j’étais Khansamah dans la grande maison où logeaient les Sahibs, et
je leur servais souvent des sorbets au brandy. Ces trois chambres n’en
faisaient qu’une où il y avait une grande table où les Sahibs jouaient tous
les soirs. Mais tous les Sahibs sont morts maintenant, et le chemin de fer va,
m’avez-vous dit, jusqu’à Kaboul.
—Vous vous rappelez-vous quelque chose au sujet des Sahibs?
 —Il y a longtemps de cela, mais je me rappelle un Sahib, un gros
homme, toujours en colère. Un jour, il jouait ici. Il me dit: «Mangal-Khan,
servez-moi un brandy-pani-do». Il se pencha sur la table pour jouer. Sa tête
se baissa, se baissa et finit par toucher la table. Ses lunettes tombèrent, et
quand nous—les Sahibs et moi,—nous accourûmes pour le soulever, il était
mort. J’aidai à le porter dehors. Et c’était un vigoureux Sahib, mais il est
mort, et moi, le vieux Mangal-Khan, je vis encore, par votre faveur.
C’était suffisant, et plus que suffisant.
Je tenais mon fantôme, un article de premier choix avec preuves à
l’appui.
Je comptais écrire à la société de Recherches psychiques: je jetterais
l’Empire dans la stupeur par cette nouvelle. Mais je jugeai bon de mettre
tout d’abord quatre-vingt milles de terres cultivées et cadastrées entre moi
et ce relais de poste, et cela avant la nuit.
La Société pourrait ensuite envoyer son agent officiel examiner le cas.
Je rentrai dans ma chambre et fis mes paquets après avoir mis par écrit
les détails.
Pendant que je fumais, j’entendis de nouveau le bruit du déclic. Cette
fois il y eut un raté, un queuté, car le roulement fut fort court.
La porte était ouverte, et je pus regarder dans la chambre. Clic! Clic! Un
carambolage!
J’entrai sans peur dans la chambre, car il y faisait soleil et au dehors
soufflait une fraîche brise.
Le jeu invisible marchait avec un entrain terrible.
Et cela n’avait rien d’étonnant: un petit rat infatigable courait de tous
côtés au-dessus du plafond enfumé, et un fragment du châssis de la fenêtre,
qui s’était détaché et que la brise secouait, battait contre le verrou de la
fenêtre.
Cela imitait à s’y méprendre le choc des billes de billard.
Impossible aussi de ne pas reconnaître le roulement des billes sur la table
du billard. Ah! j’étais bien excusable. Même quand je fermais mes yeux qui
s’étaient ouverts à la lumière, ce bruit ressemblait extraordinairement à
celui d’un jeu animé.
Alors entra, de fort mauvaise humeur, le fidèle compagnon de mes
peines, Kadir Baksh.
 —Ce bungalow-ci est très mauvais, bon pour les basses castes. Pas
étonnant que Votre Présence ait été dérangée et soit toute mouchetée. Trois
équipes de porteurs de doolies sont venues cette nuit à une heure avancée
pendant que je dormais dehors. Ils ont dit que c’était leur habitude de
coucher dans les chambres réservées aux Européens. Le Khansamah est-il
un homme d’honneur? Ils ont essayé d’entrer, mais je leur ai dit de s’en
aller. Rien d’étonnant, si ces Porias ont passé la nuit ici, que Votre Présence
soit toute couverte de taches. C’est une honte. C’est l’œuvre d’un homme
dégoûtant.
Kadir Baksh omit de dire qu’il avait fait payer à chaque équipe deux
annas d’avance pour leur logement et qu’alors n’étant plus à portée d’être
entendu de moi, il les avait chassés en les battant avec ce grand parapluie
vert, dont jusqu’alors je n’avais pu deviner l’usage. Mais Kadir Baksh
n’avait aucune notion de morale.
Ensuite eut lieu une entrevue avec le Khansamah, mais comme il ne
tarda pas à perdre la tête, la colère fit place à la pitié, et la pitié aboutit à une
longue conversation au cours de laquelle il plaça la mort du gros ingénieur
Sahib dans trois stations différentes, dont deux étaient éloignées de
cinquante milles. La troisième déviation l’amena à Calcutta, et cette fois le
Sahib mourut en conduisant un dogcart.
Je ne partis pas aussi promptement que je l’avais décidé.
Je passai la nuit, pendant que le vent, le rat, le cadre de la fenêtre et le
verrou jouaient une bruyante partie en cent cinquante.
Puis le vent changea, et les billes s’arrêtèrent.
Je m’aperçus que j’avais réduit à néant une authentique histoire de
fantôme.
Si j’avais seulement arrêté mes investigations au bon moment, j’aurais
pu faire de cela quelque chose.
Et c’était là ma plus amère pensée.
 TABLE DES MATIÈRES
Préface VII
L’Education d’Otis Yeere 1
A l’Entrée de l’Abîme 57
Une Comédie sur la Grande Route 75
La Colline de l’Illusion 107
Une Femme de deuxième catégorie 133
Rien qu’un petit Officier 181
Le Rickshaw fantôme 219
Mon Histoire vraie de fantôme 283

E. GREVIN.—IMPRIMERIE DE LAGNY
 BIBLIOTHÈQUE COSMOPOLITE
OUVRAGES PARUS
I —Au delà des forces, par Bjornstjerne Bjornson,
première et deuxième parties. Traduction de MM. Auguste
Monnier et Littmanson. Un volume in-18. Prix 3 50
II —Le Roi, drame en quatre actes; Le Journaliste, drame en
quatre actes, par Bjornstjerne Bjornson. Traduction de
M. Auguste Monnier. Un volume in-18. Prix 3 50
III —Les Prétendants à la Couronne, drame en cinq actes;
Les Guerriers à Helgeland, drame en quatre actes, par
Henrik Ibsen. Traduction de M. Jacques Trigant-Geneste.
Nouvelle édition. Un volume in-18. Prix 3 50
IV —Les Soutiens de la Société, pièce en quatre actes;
L’Union des Jeunes, pièce en cinq actes, par Henrik Ibsen.
Traduction de MM. Pierre Bertrand et Edmond de Nevers.
Deuxième édition. Un volume in-18. Prix 3 50
V —Empereur et Galiléen, par Henrik Ibsen. Traduction de
M. Charles de Casanove. Quatrième édition, revue et
corrigée. Un volume in-18. Prix 3 50
VI —Nouveaux Poèmes et Ballades, de A.-C. Swinburne.
Traduction d’Albert Savine. Un volume in-18. Prix 3 50
VII —Œuvres en prose, de P.-B. Shelley, traduites par Albert
Savine. Pamphlets politiques. Réfutation du déisme.
Fragments de romans. Critique littéraire et critique d’art.
Philosophie. Un volume in-18. Prix 3 50
VIII —Souvenirs autobiographiques du Mangeur d’opium,
par Thomas de Quincey. Traduction et préface par Albert
Savine. Deuxième édition. Un volume in-18. Prix 3 50
IX —Confessions d’un Mangeur d’opium, par Thomas de
Quincey. Première traduction intégrale par V. Descreux.
Nouvelle édition. Un volume in-18. Prix 3 50
X —Aurora Leigh, par Elisabeth Barrett Browning. 3 50
 Traduit de l’anglais. Troisième édition. Un volume in-18.
Prix
XI —Un Gant, comédie en trois actes; Le Nouveau Système,
pièce en cinq actes, par Bjornstjerne Bjornson. Traduit
du norvégien par Auguste Monnier. Un vol. in-18. Prix 3 50
XII —Le Portrait de Dorian Gray, par Oscar Wilde. Traduit
de l’anglais par M. Eugène Tardieu. Cinquième édition. Un
volume in-18. Prix 3 50
XIII —Un Héros de notre temps, récits; Le Démon, poème
oriental, par Lermontoff. Traduit du russe par A. de
Villamarie. Deuxième édition. Un volume in-18. Prix 3 50
XIV —Intentions, par Oscar Wilde. Traduction, préface et
notes de J. Joseph-Renaud. Un volume in-18 3 50
XV —La Dame de la mer, pièce en 5 actes; Un Ennemi du
peuple, pièce en 5 actes, par Henrik Ibsen. Traduction de
MM. Ad. Chennevière et C. Johansen. Un vol. in-18 3 50
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préface d’Albert Savine. Un volume in-18 3 50
XVII —Poèmes et poésies, par Elisabeth Barrett Browning.
Traduction de l’anglais et étude par Albert Savine. Un
volume in-18 3 50
XVIII —Le Crime de lord Arthur Savile, par Oscar Wilde.
Traduit de l’anglais par Albert Savine. Un vol. in-18 3 50
XIX —Derniers Contes, par Edgar Poë. Traduits par F. Rabbe.
Un vol. in-18 3 50
XX —Le Portrait de Monsieur W. H., par Oscar Wilde.
Traduit de l’anglais par Albert Savine. Un vol. in-18 3 50
XXI —Poèmes, d’Oscar Wilde, Traduction et préface par
Albert Savine. Un Volume in-18 3 50
XXII —Simples Contes des Collines, par Rudyard Kipling.
Traduits de l’anglais par Albert Savine. Un vol. in-18 3 50
XXIII —Le Prêtre et l’Acolyte, nouvelles, par Oscar Wilde.
Traduction et préface par Albert Savine. Un vol. in-18 3 50
XXIV —XXV.—XXVI.—Œuvres poétiques complètes de 3 50
Shelley, traduites par F. Rabbe. Précédées d’une étude
 historique et critique sur la vie et les œuvres de Shelley.
Trois volumes in-18, se vendant séparément chacun
XXVII —Nouveaux Contes des Collines, par Rudyard Kipling.
Traduits de l’anglais par Albert Savine. Un volume in-18 3 50
XXVIII —Mystères et Aventures, par A. Conan Doyle.
Traduction d’Albert Savine. Un volume in-18 3 50
XXIX —Trois Troupiers, par Rudyard Kipling. Traduction
d’Albert Savine. Un volume in-18 3 50
XXX —Autres Troupiers, par Rudyard Kipling. Traduction
d’Albert Savine. Un volume in-18 3 50
XXXI —Le Parasite, par Conan Doyle. Traduction d’Albert
Savine. Un volume in-18 3 50
XXXII —Au Blanc et Noir, par Rudyard Kipling. Traduction
d’Albert Savine. Un volume in-18 3 50
XXXIII —Théâtre.—I.—Les Drames, par Oscar Wilde.
Traduction d’Albert Savine. Un volume in-18 3 50
XXXIV —La Grande Ombre, roman, par A. Conan Doyle.
Traduction de M. Albert Savine. Un volume in-18 3 50
XXXV. —Poèmes et Ballades, de A. C. Swinburne. Traduction de
M. Gabriel Mourey et notes de Guy de Maupassant. Un vol.
in-18, nouvelle édition 3 50
XXXVI —Un Début en Médecine, roman, par A. Conan Doyle.
Traduction de M. Albert Savine. Un vol. in-18 3 50
XXXVII —Chants d’avant l’Aube, par A. C. Swinburne.
Traduction de M. Gabriel Mourey. Un vol. in-18 3 50
XXXVIII —Sous les Déodars, par Rudyard Kipling. Traduction de
M. Albert Savine. Un vol. in-18 3 50
XXXIX —Nouveaux Mystères et Aventures, par Conan Doyle.
Traduction de M. Albert Savine. Un vol. in-18 3 50
XXXX —Théâtre. II.—Les Comédies. I. par Oscar Wilde.
Traduction d’Albert Savine. Un volume in-18 3 50
XXXXI —Idylle de Banlieue, par Conan Doyle. Traduction
d’Albert Savine. Un volume in-18 3 50
 Imprimerie Générale de Châtillon-sur-Seine.—A. Pichay.

NOTES:
[A] Elisabeth Barrett Browning, Poèmes et Poésies.
[B] Causeuses.
[C] Grand dîner.
[D] Improvisée.
[E] Maîtres d’hôtel.
[F] Causeuse.
[G] Petites tables.
[H] Barque hindoue.
[I] Voiture légère à deux roues.
[J] Deliriurm tremens.
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