By Dr. Nayyer Ali

May 13, 2005

Patronage Versus Policy

This column has been harshly critical of the Benazir Bhutto and Nawaz Sharif era that cost Pakistan tremendously throughout the 1990’s. In contrast, the Shaukat Aziz era has seen consistent and significant economic progress. Just last week Aziz announced that Pakistan will achieve its goal of 14 billion dollars of exports this fiscal year, and he wants to double that by 2010. In addition, tax receipts are coming in above expectations and should clear 580 billion rupees this year. Compare that with only 300 billion in Nawaz Sharif’s last year.
The big question of Pakistani politics is whether Sharif and Bhutto have learned anything over the last decade that would give us any confidence in their ability to run the economy? Or is there something very different about how Aziz does things that allows him to be so much more successful?
The answer to this is buried inside the very nature of the political parties that Sharif and Bhutto run. In a Western democracy, political parties exist to carry out policies. People support those political parties because they want those policies enacted, whether it be tax cuts, new social programs, changes in foreign policy, or greater attention to a given social problem. People do not join these parties or vote for them in anticipation of direct benefit for the most part. One does not vote for George Bush or work for the Republican party in order to get a government job. In fact most Republicans want the government to leave them alone and cut their taxes. Support for policies are based on the sense that those policy choices are best for the country as a whole, and as the country is better off, the individual voter becomes better off. Now opposing political parties can have a very different sense of what is good policy and that is why there needs to be elections.
In Pakistan, there are very few policy based political parties. The PPP and PML (Nawaz) are not policy based but rather patronage based. A patronage party offers no particular policy, but exists as a vehicle for its supporters and core members to access government power and thereby personally benefit. A supporter of Benazir expects to get a government job in a government run company, or get a loan from a government bank that he otherwise would not be entitled to, or have the ability to manipulate the bureaucracy or legal system to his benefit. The same goes for Sharif supporters. As the two groups alternated in power, their brazenness in grabbing personal benefits became astonishing. This is why Pakistan drifted into such severe high level corruption. For Benazir or Nawaz to try to stop this whole process at any point became impossible, as the very basis of their political support was this patronage system.
In contrast to the PPP and PML N the religious parties are not patronage parties. They are true policy based parties. The policy they want to enact though is rather disturbing to the rest of society, which is why they cannot get above 15% of the total vote, as the rest of Pakistan does not want to live in a Taliban style state.
What sets Aziz apart is that he has pursued policy rather than patronage as his core approach. Politics always requires some degree of compromise, and the recent package of goodies for Baluchistan fit that mold, but the overall direction of the state has been driven by growth-oriented economic policies. These have yielded fantastic results. For the business sector, they are now seeing that real business in a briskly growing economy returns far greater profit than what could be had under the patronage economy of the 90’s.
The opposition of the PPP and PML N to the privatization process is also rooted in their patronage reality. Because they need a vast network of government run businesses and banks to provide adequate patronage opportunity for their supporters, they can never accept real privatization in the economy. By reducing the size of the economy run by the government, Aziz has reduced the patronage opportunities for Benazir and Nawaz. This is what has them so distraught about the process. Comments can reach me at Nali@socal.rr.com.

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