Development Economics and Issues in Pakistan Economy (ECO530) S Akbar Zaidi This is a graduate course over twelve three-hour

sessions, designed to introduce students to the study of issues in Pakistans economy, the nature of its state, how Pakistani society has changed over the last six decades, and how the economy behaves and develops in a globalised world. The analysis and discussion on Pakistan and its issues in the economy, society and structures, will be embedded in a broad theoretical and historical perspective, focussing on economic development. Theories of economic development will help frame the specific experiences of Pakistan. This will be a course which will examine theory, Pakistans economic history and contemporary issues which affect the economy today. This course will try and provide a broad historical review of the nature of changes which have taken place in Pakistan and have affected many of the impressions which are now part of conventional wisdom about Pakistan. The emphasis of the course will be on social and structural change and transformation, of society, the state and the economy. Requirements: Since this will be an interactive course, students are advised to go over the reading material before class and participate in the discussion. Grades: 1. Class participation and discussion, 20 percent. 2. A midterm essay exam 20 percent. 3. A final essay 40 percent. 4. In-class and take-home assignments as and when assigned, 20 percent. Recommended Texts: I am always hesitant to request students to buy any books for any course, especially books written by the course instructor. However, students will benefit from having frequent access to S Akbar Zaidi, Issues in Pakistans Economy, Oxford University Press, Karachi, 2005, since a great deal of the material for the course will be found in this text. Like many other books, this is an extensive economic history of Pakistan, but unlike any other, is set in a political economy and institutional framework, and covers all the themes to be discussed in the course. There are, of course, additional readings with each topic below. While there is no single text which examines Pakistans political economy, there are a few narratives which cover some of the themes to be discussed during the course, some of which also look at political developments, which we will not be examining as sharply during the course. Hence, a selective and frequent reading of these suggested texts is recommended throughout the course. Consider these texts to be texts largely for regular reference, rather than for compulsory reading. Topical academic and newspaper articles will also frequently be provided, as and when required. Viqar Ahmed and Rashid Amjad, The Management of Pakistans Economy, Oxford University Press, Karachi, 1984. An excellent introduction to the first 35 years of Pakistans economic developments, largely in a development economic framework, rather than one which is located in political economy. 1

Parvez Hasan, Pakistans Economy at the Crossroads: Past Policies and Present Imperatives, Oxford University Press, Karachi, 1998. Another very good economic history of Pakistan. Mohammad Abdul Qadeer, Pakistan: Social and Cultural Transformations in a Muslim Nation, Routeldege, New York and London, 2006. A more recent account of social change, written by an urban sociologist rather than an economist. Shahrukh Rafi Khan (ed), Fifty Years of Pakistans Economy: Traditional Topics and Contemporary Concerns, Oxford University Press, Karachi, 1999. An extensive economic history text with contributions on different sectors of the economy. For a critique of some of the writings on Pakistans political economy, also take a look at, S Akbar Zaidi, The business of giving advice: Pakistan economy and society, Economic and Political Weekly, Vol. 35, No. 19, 2000, pp. 1625-36. Schedule of Classes Will be modified as we go along 1. Introduction to the Course. Overview.

The first session will introduce students to the political economy context of Pakistan, how we will be looking at different themes during the course, how we hope to understand how change has taken place over six decades. This first session will try and raise some of the many questions that we will be addressing, and will hope to answer. It will give a broad roadmap of what we will cover during the course, examining if one can periodise different regimes, examine issues of continuity, path dependence, and ruptures. We will also examine broad issues of what constitutes economic development, looking at a comparative map, HDI, etc. What is political economy? 2. Agriculture

We will examine the role of agriculture in economic development, theories of agricultural development, etc. We will look at the history of the agricultural sector in Pakistan, and then examine core issues which affect the agricultural sector, such as land holding, feudalism, productivity, water shortages, etc. .3. Industry

Theories of industrial development will be examined, and also how and which of them have been applied to Pakistan over the last six decades. We will then examine Pakistans history of industrial development and industrialisation, identifying key current issues, such as privatisation, competition, globalisation. 4. Trade

The role of international trade will be examined and we will examine Pakistans historical trade pattern. The direction and nature of trade will be examined, as will competition and globalisation. We will also examine contemporary issues, in particular India-Pakistan trade. 2

5.

Public Finances I: Resource Mobilisation and the Structure of Taxation

Public policy is one of the most important factors of government. How governments raise revenue and spend these resources are core issues of economic development. Issues of the role of the state will be raised and discussed. Pakistans taxation structure has a core bearing on its political economy and on its economic development. We will discuss these issues in detail. 6. Public Finances II: Debts and Deficits

Based on the taxation structure and resource mobilisation, governments create debt and deficits. Is the budget deficit always bad? Does it always create long term debt passed on to different generations? Pakistans debt has been rising over the last many years: what are the implications of this? What are the possible solutions to deal with this? 7. IMF, the World Bank and Aid in Pakistan

Aid and assistance is considered by some economists to be an essential component of economic development. It is considered to be a complete waste of money by others, who argue that tax payers in one country subsidise the rich in another. Aid also causes dependence which some countries may never be able to give up. We will examine the history of aid to Pakistan, looking particularly at the IMF, its role and influence, and performance, in Pakistan. 8. Devolution and Decentralisation, Fiscal Federalism

In recent years, economic development has argued for the need of devolution and decentralisation of state structures, because lowers tiers of government are said to be more responsive to the needs of the people. We will examine the theory behind such claims and also examine Pakistans devolution, its provinces and the Eighteenth Amendment and its implications. 9. Social Sectors

Can there be economic development without an educated and health population? Is health and education a goal of development or an input? What has been Pakistans performance in the social sectors compared to economic growth? What is Pakistans double development dilemma? 10 . Poverty in Pakistan

Estimates suggest that around one-third of Pakistans population lives below the poverty line. Why does poverty persist in Pakistan? How can it be eradicated? What does the experience from countries which have successfully eradicated poverty teach us, and why does Pakistan not learn from such initiatives? We will examine how and when poverty has risen and fallen in Pakistan.

11.

Social Change I: Urbanisation and Urbanisms, the Middle Class

What does economic development result in? One answer is that it leads to industrialisation, modernisation and urban growth. What has been the pattern of urbanisation in Pakistan, and why is the study of cities important? Can there be high growth without urbanisation? What are the new development issues which emerge with urbanisation in Pakistan? 12. Social Change II: The State, Institutions, Civil Society, Democratisation

.Economic development is said to result in the growth of the middle class and growing democratisation. What evidence do we have from Pakistan about this phenomenon? Institutional development and governance, are considered key features of economic growth and development: how does Pakistans experience match up with other countries? How does political economy play out as economic development takes place?