The purpose of the paper is to take an incisive glimpse into Pakistan’s political economy through the lens of a tax policy abnorm i.e. the tax amnesty scheme, 2018. The paper is theoretically anchored in the elitist framework which arguably best explains structural composition of the economy. The paper refines the elitist framework, accentuates its significance, and innovates on it to induct the competing Freudian concepts of “pleasure principle” and “reality principle” to sharpen our understanding of Pakistan’s political economy. It is argued that impending inflows of offshore bank and financial account information of Pakistan resident persons under the OECD’s Multilateral Convention was the main dynamic of the amnestization initiative in which the Supreme Court of Pakistan played the role of the agent provocateur. The empirical results obtained help conclude that the amnestization initiatives have helped proliferate underground economy, and enhance the elitist economic status quo in Pakistan.
―When groups are adequately stated, everything is stated!‖1 Management of actions and interest groups has historically been sovereign‘s existentialist imperative. The paper revitalizes philosophical state autonomy debate and then narrows down its focus to capture extractive antics of as erratic a state as Pakistan. A typology of factions – captioned as Elites – operative in extractive realm of Pakistan is developed to round them in theory, identify their properties, and lay bare mechanics of intra-elite and elite-non-elite transactions. The paper seminally develops the rational actor dilemma confronting Pakistani elites and identifies the modes through which the dilemma plausibly resolves itself. The transactional engagement between Pakistan‘s internal and external rational actors is dissected to theorize that Pakistan essentially is an equilibrium consensus subsistence state thereby opening up vast vistas for future research. The paper concludes with the glum finding that Pakistan in its current essence and manifestation is fundamentally a captive state – beholden to elites of Pakistan. JEL Classification: H1 Keywords: State Autonomy; Elite Capture; Pakistan‘s Tax System; Pakistani Elites; Elites‘ Rational Actor Dilemma; Equilibrium Consensus Subsistence State; Captive State
The governance crisis of Pakistan‘s public sector is wide, deep and historically imbedded. There are a host of factors which contribute at varying degrees towards the extant of governance mess. The body of scholarship created to analyse the underlying factors of public sector management mess of Pakistan is not only scant but also deficient in quality, coverage and construct validity. In the entire administrative morass of Pakistan, the quagmire of Federal Board of Revenue (FBR)—house of the state‘s extractive function—is by far the most sombre and serious one. The paper picks up FBR as the unit of analysis and there too, only one variable, that is, appointment of a non-professional generalist as its Chairman to analyse below par performance of Pakistan‘s revenue function—by far the lowest in the world. It posits that appointment of non-professional Chairman, FBR, is a compelling exposition of a collusive duopoly arrangement between elites and generalist cadres of Pakistan civil services—both symbiotically pursuing their perverse particularistic interests at the expense of citizenry at large. The paper develops a theoretical framework within which it attempts to analyse domination of Pakistan‘s extractive function over history from various dimensions. It argues that, since the entire institutional infrastructure of the state has fallen hostage to elitesgeneralist duopoly paradigm, the control of its extractive function is only a logical consequence thereof, and that a non-professional generalist chairman is imposed on the revenue function only to precisely, and fully control the extractive policy formulation process as well as the extractive operations on the ground—to the ultimate advantage of the duopoly. JEL Classification: H1 Keywords: Public Sector Management, Federal Board of Revenue, Civil Service of Pakistan, Inland Revenue Service, Chairman, FBR, Institutionalism
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