I. Introduction: The Crisis of an Extractive State of Pakistan
Elite Capture (EC) is one of the fundamental cancers eating away at Pakistan’s socio-economic and socio-political sustainability.
It is not merely the presence of corrupt practices, but the intentional institutionalisation of extraction, where a small, interconnected group of elites manipulates the state’s legal and financial architecture and structure for personal gains.
This systemic and intentional failure drives the country's recurrent debt crises, fiscal instability, poverty, injustice and widening inequality.
The conventional analysis of EC often focuses on the military, judiciary, politicians, and bureaucrats. However, a deeper, more painful truth lies in the co-option and incompetence of institutions that are theoretically designed to serve as checks and balances: the Judiciary, the Parliament, and, notably, the influence wielded by powerful Religious Clerics and Local Political Groups.
By failing in their duties, these institutions become active or passive partners in maintaining the extractive status quo.
This comprehensive analysis therefore, dissects the anatomy of EC and critically examines the incompetent or co-opted roles of these four critical pillars of the state.
II. The Anatomy of Elite Capture
Elite Capture in the context of Pakistan is deeply rooted in the survival strategy of a powerful nexus, often referred to as “Elites Ltd.” This nexus systematically operates under an unwritten rule: collective preservation of privilege outweighs the public good.
The primary objective is to maintain a state structure that can raise revenue from the poor (via direct and indirect taxes as well as inflation) while simultaneously transferring wealth to the rich (via subsidies, exemptions, and rent-seeking).
The blood-sucking mechanisms of this capture include:
Fiscal Capture: Engineering and drafting a tax system that is regressively dependent on consumption and imports, while granting massive, politically-sanctioned tax exemptions (tax expenditures) to powerful industries, entrepreneurs, property dealers and landowners.
Regulatory Capture: Co-opting regulatory bodies (e.g., in energy, banking, transport, finance) to issue policies that guarantee profits for oligarchs, often through risk-free, dollar-indexed contracts (e.g., often unknown and suspicious Independent Power Producers—IPPs).
Patronage Capture: Transforming State-Owned Enterprises (SOEs) and public institutions into vast patronage networks, overloading them with politically appointed staff, massive corruption, mismanagement, lack of accountability and diverting funds, leading to colossal, recurring losses that the national exchequer must absorb.
The total cost of these elite privileges, including subsidies, tax exemptions, cheap land, and non-performing loans, is estimated to run into many percentage points of the Gross Domestic Product (GDP), forming the core of Pakistan’s structural deficit.
III. The Incompetent Role of the Judiciary
The Judiciary in Islamic Republic of Pakistan is constitutionally designated as the guardian of the law, the protector of fundamental rights, and the ultimate check on executive overreach. However, the outdated judicial system has completely been failed in fulfilling its responsibility.
When the judiciary is incompetent or co-opted, it ceases to be a check and instead becomes a sanctuary for the elite and a source of socio-economic and political instability.
3.1. Judicial Endorsement of Extractive Power
Historically, the Judiciary has frequently provided cover for systemic political interventions and extractive policies, prioritising a perceived need for stability over constitutional fidelity. .
Doctrine of Necessity: The most infamous example is the repeated use of the "Doctrine of Necessity," where judicial decisions sanctioned military coups or extra-constitutional changes, validating the illegal and unconstitutional power of the military elite over democratic institutions. This precedent repeatedly undermined the delicate balance of power, normalising the military's involvement in politics and the economy, and thereby protecting one of the largest elite groups.
Political Engineering: Through highly controversial suo motu actions and selective application of contempt laws, the judiciary has often involved itself in political engineering, intervening decisively in non-judicial matters (like development projects, administrative policy, construction of dams or the fate of elected officials). This shift from law adjudication to political governance creates uncertainty and diverts institutional energy, but critically, often avoids confronting the deep, structural financial and tax policies that benefit the powerful and suppress the common man.
3.2. Failure to Uphold Economic Justice
The judiciary’s most critical failure, in the context of elite capture, is its inability or reluctance to ensure economic accountability:
Protecting Tax Evasion: The judicial system is glacially slow in prosecuting high-profile financial crimes, tax evasion, and money laundering cases involving the powerful (including politicians, bureaucrats, businessmen, judges, and military personals). The protracted, complex legal battles often allow the elites to outlast the accountability process, benefiting from stay orders and procedural delays until public and political interest fades. This de facto impunity shields the financial foundations of elite power.
Contradictory Policy Rulings: The apex court including lower courts often issue sweeping policy mandates, sometimes intervening in highly technical economic matters (e.g., setting tariffs or intervening in privatisation efforts) without the necessary expertise. While seemingly well-intentioned, these interventions often create regulatory uncertainty, deter investment, and contradict sound economic management, further slowing development. In essence, the judiciary often addresses the symptoms of poor governance while insulating the structural causes, the untaxed wealth and the patronage networks from legal scrutiny.
IV. The Incompetent Role of the Parliament
The Parliament, comprising the Senate, the National Assembly and Provincial Assemblies, is meant to be the true sovereign body, holding the executive accountable, drafting public-interest legislation, and ensuring the fiscal responsibility of the state and its units (provinces). Its failure lies in its transformation into an elite club that legislates for itself.
4.1. The Veto Power of the Elite Parliamentarian
Pakistan’s Parliament is predominantly populated by the same elite classes it should be regulating: feudal landlords, industrialists, entrepreneurs, religious clerics and dynastic politicians. This creates a fundamental conflict of interest where the legislators are also the chief beneficiaries of the extractive system.
Self-Serving Legislation: The Parliament consistently fails to pass legislation that would threaten the economic interests of its members. The most glaring example is the perennial failure to introduce a meaningful agricultural income tax at the federal level, or to implement robust laws for the transparent valuation of urban land for wealth tax purposes. These tax reforms are technically simple but politically impossible because the lawmakers are the very landlords and property owners who would bear the cost. Same is the case as far as the so called charity trusts and non-profit organisations are concerned.
Weak Accountability: Parliamentary committees, meant to be powerful oversight mechanisms, often become arenas for inter-elite bargaining or are rendered toothless due to partisan rivalry. Instead of scrutinising fiscal policy, the Parliament often rubber-stamps high-cost foreign loans, approves bloated budgets rife with untargeted subsidies, and fails to rigorously challenge the mounting losses of SOEs, thereby socialising the costs of elite failure.
4.2. Legislative Incompetence and Institutional Erosion
Beyond self-interest, the Parliament suffers from a decline in competence, leading to outdated, out of the context and poorly drafted laws and an erosion of its own stature:
Ordinance Culture: Governments increasingly rely on Ordinances (executive decrees) instead of rigorous parliamentary debate, bypassing scrutiny and debate. This shift indicates a willingness by both the executive and, passively, the legislature to circumvent the hard work of consensus-building, allowing policies that favour elite interests (often rushed and opaque) to be implemented quickly.
Focus on Personal and Partisan Gains: Debates and legislative energy are overwhelmingly focused on partisan point-scoring, personal accusations, and short-term political maneuvering, rather than the complex, long-term work required to fix structural issues like the energy crisis (Circular Debt) or the widening trade deficit. The Parliament thus becomes a venue for political spectacle rather than substantive reforms place the people of Pakistan.
V. The Influence and Co-option of Religious Clerics and Groups
Religious clerics and powerful faith-based organisations represent an increasingly crucial, though often indirect, element of elite capture, especially in the sphere of social policy, taxation, lack of accountability and mobilisation.
5.1. Leveraging Influence for Economic and Social Gains
While not directly involved in industrial lobbying, influential religious leaders and organisations operate within the EC framework by using their moral authority and ability to mobilise masses to secure financial and political concessions:
Tax Exemptions and Financial Benefits: Many religious institutions, seminaries (madaris), and associated charities benefit from broad tax exemptions, state land allotments, and direct or indirect financial support from politically powerful individuals. This structure creates a protected economic space, shielding significant financial assets from regulation and taxation, further narrowing the state's revenue base.
Veto Power Over Reform: Religious groups often exercise effective veto power over social and economic reforms they deem contradictory to their ideology. Attempts to legislate in areas like family law, interest-free banking, rule of law, accountability, poverty reduction or education curricula are often stalled or diluted due to the threat of street mobilisation, which is a powerful deterrent for stability-conscious political and military elites. This makes the implementation of modern, growth-oriented policies, often required by multilateral donors, difficult or impossible.
5.2. Redirecting the Narrative of Accountability
The most critical role of religious influence in sustaining EC is the redirection of public accountability and anger.
Shifting Blame: When economic distress (inflation, unemployment) peaks which is a direct result of the financial structure maintained by the Elites Ltd., the narrative is often successfully shifted away from structural issues towards external factors, corruption of a single political dynasty, or moral failings. This keeps the public focused on cultural, ethnic and sectarian battles, diverting collective anger away from challenging the core economic structures: the untaxed agricultural wealth, the IPP contracts, and the military’s economic footprint.
Maintaining the Status Quo: By prioritising social conservatism and moral issues in the public discourse, religious elites help maintain a societal environment where discussions about transparent wealth taxation, asset declarations, and merit-based governance are suppressed or deemed secondary, thus passively supporting the economic status quo that massively benefits the entrenched elites.
VI. Systemic Consequences and Conclusion
The collective incompetence and co-option of the Judiciary, Parliament, Bureaucracy, Military Establishment and Powerful Religious Groups cement the extractive nature of the Pakistani state. The result is a system of managed instability where crises are just severe enough to justify external borrowing (like IMF programs), but never severe enough to demand the necessary structural reforms that would dismantle elite privilege.
The consequences are stark and measurable:
Perpetual Debt Cycle: The failure of the Parliament to legislate for fiscal justice, the inability of the Judiciary to enforce financial accountability, military coups and unconstitutional interventions or the influence of powerful groups seeking exemptions collectively ensure the state cannot raise adequate revenue, leading inexorably to the next round of borrowing.
Erosion of Trust and Law: When the institutions meant to protect only the public interests; the courts and the legislature, are seen as serving themselves, public trust erodes completely. This societal cynicism leads to widespread tax non-compliance, misuse of power, disregard for regulation, and a cultural embrace of transactional corruption at all levels, solidifying the extractive culture.
Breaking this cycle requires a unified political will and public awareness to implement radical, institutional reforms.
This includes transformativs judicial reforms that restrict intervention in policy matters and prioritise financial crime, contextual parliamentary reforms that mandate disclosure and prevent legislators from voting on laws that personally benefit them, and regulatory overhauls that force all powerful economic entities, regardless of their nature, into the formal tax and regulatory net.
Until these pillars of the state cease to be captured and start serving the citizens, Pakistan’s socio-economic and socio-political crises will continue to compound.
✒️ By: Raja Bahar Khan Soomro
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