ABSTRACT

Pakistan remains a weak state. Domestic extraction is hampered by the demand

for private goods from a narrow winning coalition. Poor governance and political exclusion resulting from a dysfunctional fiscal sociology provide opportunities for challengers to pursue quasi-states. Suboptimal extraction, emerging quasi-states, and poor governance are mutually reinforcing, contemporaneous processes. The analysis suggests paths whereby weakness is potentially exacerbated to ensure state collapse and failure, and conversely, how the low extraction/quasi-state emergence cycle may be stalled or altered. Extraction is a key state activity, as noted in numerous formulations (Levi, 1988;

Organski et al., 1984; Tilly, 1990). Extraction strategy refers to the means by which rulers appropriate the financial resources needed to fund their policies. These means are broadly divided into taxation, non-tax revenues (including borrowing and foreign aid), and money creation. The strategy that is actually followed is usually some combination of these three. According to the “fiscal sociology of the state,” broad-based extraction is associated with better governance and delivers more public goods in comparison with narrow-based or external rents-based systems (Moore, 2004). This view was elucidated by Joseph Schumpeter and found explicitly or by implication in the “rentier state” literature (e.g. Beblawi and Luciani, 1987; Mahdavy, 1970). High non-tax revenues (such as income from oil or foreign aid) provide resources for social spending and contribute to regime stability (Morrison, 2009). By helping circumvent the politically more risky taxation route of generating needed funds, non-tax revenues help support political survival. This in turn may perpetuate a weak fiscal skeleton and associated poor governance outcomes. Pakistan is distinguished by a relatively narrow tax base and low tax effort.

Moreover, Pakistan has had opportunities to invest in its extractive capacity, enhance its domestic extraction, and improve its bureaucratic apparatus. While there have been some incremental changes, major steps such as effective agricultural taxation and reform have not been taken. Furthermore, Pakistanis and Pakistanobservers often express concerns that the state is near failure or collapse, that it is already a failed state, or that it has failed at specific historical moments (e.g. Qureshi, 2005). Existing explanations have emphasized macro level forces such as the extraordinary defense burden on Pakistan, its lack of a unified indigenous nationalism, and philosophical problems with the idea of Pakistan (Cohen, 2004; Jalal, 1990; Nasr, 2001a). Other studies with a more individual-level focus have emphasized idiosyncratic personalities and unique historical circumstances (Talbot, 2005; Ziring, 1997). This book offers a framework that incorporates macro forces into micro strategic calculations by key agents and generalizes these based on the logic of political survival. In analyzing Pakistan and similar contexts, ideology is often emphasized over

strategic and tactical decision-making. This study questions the causal primacy ascribed to ideology and suggests that incumbents and challengers seek to manipulate religious and ethnic affinity groups in strategic ways responsive to weak state circumstances. Ideology in such contexts is not best understood as a handbook or guide to actual policies. Rather, ideology serves as an idiom for rationalizing policies and articulating interests, and for signaling an affinity between

group members. Ideologically diverse actors exploit common political opportunities, such as space for creating quasi-states, in similar ways. Path dependence matters; Pakistan’s history has signaled to challengers that quasi-state and secessionist strategies can achieve results. The theoretical framework and hypotheses generated by this study suggest a mechanism by which quasi-states can emerge: a continuing fiscal crisis of the state, a governance vacuum, para-institutional proliferation, and autonomous extractive and security entities, bolstered by prior examples.