Rents and state authority

Pakistan's economic troubles are often pinned on Zulfikar Ali Bhutto's nationalisation program in the nineteen-seventies. But according to an analysis in Dawn, that's a misleading diagnosis. While Bhutto's reforms did reshape the economy, India's even larger nationalisation didn't permanently break its capitalist class — they later powered high growth rates. The real culprit, the piece argues, was how Pakistan's state fragmented in the decades that followed, letting competing business groups and officials collectively extract public resources through subsidies, protection, and corruption. This rent-seeking happens regardless of whether regimes are democratic or authoritarian, because competing factions keep fighting over state power instead of building growth. The deeper problem: unlike authoritarian regimes that succeeded elsewhere, Pakistan's state is neither revolutionary enough nor insulated enough to discipline these competing claims.

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