Stability-instability

Published March 16, 2024
The writer completed his doctorate in economics on a Fulbright scholarship
The writer completed his doctorate in economics on a Fulbright scholarship

ONE of the first concepts in undergraduate economics textbooks is the distinction between positive and normative analysis. A positive analysis describes the world objectively, or as it is empirically observed, while normative analyses focus on subjective value judgements, or how the world ought to be.

The electoral outcomes of Pakistan’s recent elections will have a tremendous bearing on the country’s political and economic future. Predict­ably, many analyses have been released on the future course of Pakistan’s politics and economy. But, somehow, most of these analyses were either knee-jerk reactions or clouded by the analyst’s normative bias.

What follows is a ‘positive’ analysis of Pakistan’s political system, as it only describes what is observed and, based on these empirical observations, what is likely to happen in the future. At no point should this analysis be taken as a position for how things ought to be. This is a very important point.

A great majority of recent analyses seem to take the position that, given post-election reality, volatility in Pakistan’s political and economic system will only increase, leading to, according to some analyses, a complete inversion of the system. What the analyses are hinting at is that this government will not be able to get its sea legs, and, sooner rather than later, Pakistan’s political system will sink into such bewildering chaos that it will also take down Pakistan’s democracy and its economy with it.

There will still be skirmishes but neither player will venture towards disturbing the new equilibrium.

It is true that a political system’s volatility always impacts economic sentiments, which, in turn, can have disastrous consequences for economies. In the midst of a political crisis, fearing the worst, people may decide to sit on their liquid cash, thereby drying up all demand in the economy. It goes without saying that such sudden evaporation of demand from an economy will invariably have a significant negative impact on economic growth and job creation.

Be that as it may, the structural characteristics of Pakistan’s political system are such that doomsday scenarios usually do not come to pass. The main reason behind this is the disproportionate amount of power that resides with the system’s ‘veto player’, which often works as an off-switch — or a circuit breaker, if you will — whenever the political system starts vibrating uncontrollably.

Still, the results of the recent elections in Pakistan have forced everyone to sit up and take notice, as a political party has done better than all others despite significant constraints. These unexpected results and the ensuing aggressive strategy employed by the party has thus convinced most analysts that the present government will neither survive nor be able to stabilise the economy.

Where analysts have a right to proffer their assessment, it is probably optimal to analyse the present political situation in Pakistan in light of the stability-instability paradox — an international relations theory regarding the effects of nuclear weapons. This theory came on the scene in the early days of the Cold War. The stability-instability paradox has wide currency, and international relations scholars are virtually unanimous in their belief that the paradox largely explains the conflict in nuclear South Asia.

Specifically, the stability-instability paradox is used to better understand how the introduction of nuclear weapons impacts relations between two adversaries. The paradox reveals that where the possession of nuclear weapons lends a certain strategic stability, given the exorbitant costs of nuclear conflict, these arms also inject tactical instability, meaning that short of breaching each other’s red lines, both adversaries are more likely to engage in low-intensity localised conflict with each other. The late Prof Kenneth Waltz, a leading international relations scholar, argued that the presence of nuclear weapons actually tempts nuclear-armed neighbours to fight ‘small wars’.

To be sure, analysts are correct in ascribing significance to the results of the recent elections in Pakistan. But, these results have only brought about a new balance of power, or an equilibrium, between the veto player and the political party, especially as the pendulum seemed to have swung too far in one direction.

In essence, both players have now demonstrated their capabilities, thereby imposing a stability-instability paradox on the political system. In a sense, red lines have been re-identified, boundaries have been redrawn, and spheres of influence re-demarcated. Under this strategic ‘stability’, there will still be skirmishes, but neither player will venture towards disturbing the new equilibrium. In other words, the skewed distribution of power in the Pakistani political system remains intact, and for this reason, where there may be social unrest, there is a very high probability that this government will stay in place unless acted upon by an exogenous force.

What this situation also points out is that under the veto player’s not-so-invisible hand, the new government will be successful in not only completing the present programme, but also in signing on the dotted line with the IMF for a new programme. Both programmes will go a long way in providing much-needed stabilisation to the economy.

All said and done, there is perhaps some efficacy of having an off-switch in the political system. But, the larger — and normative — question is about its control. Who controls the switch, why and how? In order to address this normative question, there is a need to first focus on the lopsided nature of power distribution in the political system.

To this end, all stakeholders, adversaries and players will have to sit across the table from each other to restructure the characteristics of this political system. There are multiple routes available for the willing. One route goes by way of Turkiye, while the other goes by way of Indonesia.

But, at least in the short to the medium term, it appears that the dynamic equilibrium described by the stability-instability paradox will dominate in Pakistan’s political system.

The writer completed his doctorate in economics on a Fulbright scholarship.

aqdas.afzal@gmail.com

X: @AqdasAfzal

Published in Dawn, March 16th, 2024

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