ACCORDING to the ‘standard’ theory on state formation and development, usually the first step in the emergence of a nascent ‘state’ historically has been when a ruler, more often than not the thug-in-chief, has managed to impose some degree of centralised authority over a territory by employing scale economies of violence. The next step has been to impose and collect taxes (okay, we missed this one) and promote commerce. The next big step in the stylised evolution comes when the ruler wanted to borrow to protect the kingdom or go to war, and the elites demanded a share of power.

Depending on factors such as the size of the ruling elite class, the broad routes that have been chosen next include historically: setting up an ‘extractive’ state that redistributes resources from the masses to the elites, or grow the economy and partially share the benefits (but not power). The first has been dubbed a redistributive state by Professor Tim Besley of LSE (quite opposite to the way the term is commonly used), and the second the common interest state. A common interest state where the interests of the elites are aligned closely with the people, and where democracy with institutionalised checks and balances is allowed to take root, is the inclusive state promoted by Acemoglu and Robinson in their book, Why Nations Fail.

Where does Pakistan stand along this evolutionary timeline of state development? Clearly, elite capture and domination remains strong. While the size of the ruling elite appears to have increased over the past few decades, institutional democracy with checks and balances remains a distant dream. There is minimal sharing of economic benefits by those at the top, and a clear ‘redistributive’ transfer of resources from the masses to the ruling elites is evident, most noticeably by the near-absent share in tax collection of the latter. This state of affairs exerts a large influence on economic choices, policymaking and management of the economy.

The status quo of weak or near-absent institutions is unsustainable both from the perspective of political as well as economic governance. Quite obviously, Pakistan needs wide-ranging institutional reform to dilute the elite capture and domination it is under, and to spread not just political power but also economic benefits more fairly across society.

A structured and formal process is needed to ‘negotiate’ reforms within the polity.

However, given the nature of institutions, as a public good that benefit everyone, they face the same challenges as other public goods — the ‘collective action’ problem with lots of free riding. Since the benefits of public goods are spread over many people, and are usually inter-generational as well, individuals have little incentive to undertake the effort to bring about their provision. They either leave it to ‘other people’ or the government to provide these.

The problem with most governments, civilian or non-civilian, is that they too have little incentive to provide effective institutions that are more than likely to introduce checks and balances on their working or ability to stay in power.

Overcoming the hurdle of the lack of collective action and the prevalence of free riding is therefore a major challenge in attempting to bring about institutional reform in Pakistan. Effort has to be directed at ‘seeding’ a reform constituency in Pakistan consisting of stakeholders from across the societal spectrum — ie a rainbow coalition consisting of politicians/parliamentarians, civil society (media, youth, opinion leaders, academics/experts, think tanks, lawyers, teachers, NGOs), the bureaucracy as well as the military.

This effort will require a structured process, as well as time, to gain traction. Finding a common motivation for multiple stakeholders with different, and usually conflicting or competing, interests and agendas to converge and agree on a reform path is absolutely critical to success. It is also perhaps the most difficult part. In this context, studying the political economy of reform by engaging with the multiple stakeholders and understanding their positions, motivations, interests, as well as concerns is key. The next step is ‘framing’ the issue(s) and challenges that need to be addressed via reform in a way that reflects the concerns and interests of the various stakeholders, and provides a strong motivation to act.

The role of parliament and the political parties is critical. As the insiders within the status quo, reform champions from within the political system have to emerge to ensure success. A multiparty ‘reform caucus’ needs to be identified and formed within both the houses of parliament.

Important lessons can be gleaned from efforts undertaken in different parts of the world to bring opposite sides in seemingly intractable political conflicts to the negotiating table, as a first step in moving towards eventual resolution. One process employed with a measure of success in some of the most difficult conflicts in modern history — transitioning from apartheid in South Africa, negotiating peace with the FARC in Colombia, seeking a peaceful cohabitation between Israel and the Palestinians, etc — has been dubbed ‘transformative scenario planning’. Originally pioneered by Shell for its long-run risk assessment, the process has been adapted for use in ‘political’ negotiations, and involves a five-step process:

Convening a core team from across ‘the system’; undertaking a collective learning journey; constructing stories about possible futures; discovering what can and must be done; and finally, acting to transform the system.

In the case of the transition from apartheid in South Africa, the joint scenarios constructed by representatives of ANC, the radical Pan-Africanist Congress and the white Afrikaan government were dubbed ‘ostrich’ (for no negotiated settlement), ‘lame duck’, ‘Icarus’ (unfeasible) and ‘flight of the flamingos’ — where the country takes off as a united South Africa.

Pakistan needs to work towards its own version of the ‘flight of the flamingos’, where different stakeholders and constituencies arrive at a shared vision for reforming the polity.

The writer is a former economic adviser to government, and currently heads a macroeconomic consultancy based in Islamabad.

Published in Dawn, April 14th, 2017