Humankind & Resource Distribution—XIV: Towards equitable economic order

Pakistan’s poverty amid material and human potential presents a question more demanding than whether the country possesses sufficient resources. It asks why available resources, accumulated knowledge and collective labour do not consistently become secure livelihoods, productive opportunity and human development. The preceding instalment argued that credible measurement must precede reform. The next task is to specify the institutions through which a different economic order might emerge, without confusing distributive justice with the promise of unlimited abundance.

An equitable economic order is neither a command to divide every income equally nor a licence to accumulate without regard to social consequences. It is a system in which people have meaningful access to the assets, capabilities and public goods necessary to contribute productively, and in which the rewards and risks of economic activity are allocated through intelligible, fair and enforceable rules. 

Equality before the law, equality of opportunity and equality of outcomes are distinct ideas. An economy may legitimately reward effort, innovation and risk-taking while refusing privileges secured through monopoly, political access or the exclusion of others.

The starting point is a change in what economic policy measures. Gross domestic product records the value of production, not whether a child can learn, a worker can obtain treatment, a farmer can secure water or a young entrepreneur can obtain finance. Nor does an increase in asset prices necessarily indicate additional productive capacity. 

A useful national account of prosperity should therefore accompany conventional growth statistics with reliable measures of household consumption, multidimensional deprivation, wealth and land concentration, learning, health, access to services and environmental depletion. The World Bank’s human-capital framework and the United Nations Development Programme’s multidimensional poverty work provide established, though imperfect, starting points.[1]

Measurement must also identify the channels through which advantage is reproduced. Who owns agricultural land, urban property and productive capital? Who benefits from subsidised energy, public guarantees, tax preferences and privileged credit? 

Which communities receive functioning schools, clean water, reliable transport and primary healthcare? How much public investment reaches places where deprivation is greatest? These are questions for linked, anonymised and independently audited data, with protections for privacy and due process. Without such evidence, policy may reward visibility and influence rather than need or economic return.

The second foundation is productive access. Land reform cannot be reduced to a slogan about ceilings; it must examine secure tenure, tenancy arrangements, cadastral records, women’s property rights, irrigation governance, dispute resolution and the viability of farms. 

Secure and enforceable rights can encourage investment, but formal title alone cannot overcome unequal bargaining power, fragmented markets or costly credit. Public investment in storage, extension services, rural roads and water management can raise returns to labour while reducing the losses that keep small producers dependent on intermediaries.[2]

The same logic applies outside agriculture. Small enterprises require predictable rules, electricity, transport, payment systems, skills and fair access to markets. A registration campaign that imposes compliance costs without delivering these services may merely drive lawful livelihoods further from public institutions. 

The proper distinction is between informal work that needs a pathway to productivity and protection, and organised criminal accumulation that requires investigation and enforcement. Treating both as one taxable category obscures the economic and legal differences between them.

Finance must be reorganised around productive use rather than the passive appreciation of existing claims. Credit for machinery, housing construction, farm improvements, innovation and working capital can expand output and employment. 

Credit used chiefly to bid up land prices or exploit state guarantees may enrich asset holders without comparable social gains. The policy question is not whether interest-bearing finance or markets should simply disappear; it is how financial institutions price risk, disclose costs, protect depositors, allocate capital and answer for losses. Cooperative and mutual finance may widen access, but they too require professional governance and independent supervision.

Taxation forms the third foundation. A credible revenue system should raise resources for shared capabilities while minimising arbitrary burdens and unnecessary distortions. Its fairness cannot be assessed solely from statutory income-tax rates. 

The incidence of consumption taxes, exemptions, withholding arrangements, property-related levies and public subsidies must be examined together. A broad base, transparent expenditure and predictable administration are preferable to repeated demands upon those already visible in official records. 

Tax expenditures should be published regularly, with their beneficiaries, costs and stated objectives subject to evaluation. The IMF’s work on fiscal transparency offers a framework for assessing the disclosure of public finances and fiscal risks.[3]

Redistribution through taxation, however, cannot substitute for the distribution of productive opportunities. A household may receive temporary assistance yet remain trapped by poor schooling, illness, insecure work and exclusion from credit. 

Conversely, a public school that teaches effectively, a clinic that prevents disability and a reliable water system can alter a family’s lifetime earning capacity. This is why education, health and social protection must be treated not merely as expenditure but as components of economic infrastructure. Their quality, coverage and long-term financing matter as much as their announced budgets.

The fourth foundation is labour’s bargaining position. Productivity gains are unlikely to generate broadly shared prosperity when workers lack enforceable contracts, safe workplaces, timely wages and practical means of collective representation. 

Informal and unpaid care work must also enter economic analysis, even where it is not fully captured in market transactions. The International Labour Organization’s decent-work approach connects productive employment with rights, protection and social dialogue; its value lies in measurable conditions rather than ceremonial declarations.[4] Markets remain indispensable for discovering demand, coordinating exchange and rewarding innovation. But competition requires institutions. Transparent procurement, independent regulators, accessible courts, competition enforcement and predictable insolvency procedures reduce the advantages of firms whose principal asset is political proximity. 

Public enterprises and industrial incentives should face equally demanding tests: what market failure is being addressed, what additional investment or learning is expected, how long will support last, and what happens if performance targets are missed? The history of successful industrial development demonstrates the importance of institutional capacity, but it does not establish that every subsidy or state-directed project is productive.[5]

Environmental limits cannot be placed outside this framework. Water tables, fertile soil, forests and a stable climate are forms of wealth whose depletion can temporarily coexist with rising measured income. A development strategy that raises output by exhausting aquifers or exposing poor communities to preventable climate risks transfers costs to future generations. Resource accounting should therefore record both the benefits of current use and the depletion of natural capital. The World Bank’s Changing Wealth of Nations programme illustrates why national wealth should be examined beyond annual production alone.[6]

A practical programme would proceed through institutions capable of learning from evidence. Government should publish a baseline of deprivation and asset access; specify a small number of outcomes; assign responsibility across federal, provincial and local authorities; protect independent evaluation; and disclose the distribution of both costs and benefits. 

Pilot programmes should be compared with credible alternatives before expansion. Policies that fail should be revised or discontinued, even when their sponsors remain influential. This is an argument for democratic accountability, not for an infallible technocratic plan. Pakistan’s federal structure makes this especially important. Revenue collection, local services, education, health, water and infrastructure involve overlapping responsibilities and incentives. No durable reform can rest upon one institution’s promises while leaving the delivery chain opaque. Citizens must be able to discover which authority is responsible, what funds were allocated, what services were delivered and how grievances can be remedied. Fiscal transfers should be assessed not only for their arithmetic distribution but for their contribution to measurable human capabilities.

The resulting economic order would neither abolish private wealth nor treat every inequality as proof of injustice. It would distinguish returns arising from productive contribution and genuine risk from gains secured through exclusion, monopoly and the socialisation of private losses. It would protect enterprise while making the foundations of enterprise—knowledge, infrastructure, health, law and ecological stability—widely accessible. Above all, it would recognise a reciprocal relationship: fairer access strengthens productive capacity, and higher productive capacity makes durable social protection more affordable.

This proposition is a research hypothesis, not an article of faith. Its strength must be tested against comparative evidence, institutional performance and the possibility of contrary findings. If more equitable access fails to improve productivity in a particular setting, the explanation must be investigated rather than dismissed. A scientifically defensible theory of shared prosperity must identify mechanisms, limits and conditions under which its claims hold.

The challenge ahead is to move from a persuasive moral vocabulary to an operational political economy. Who should own, who should decide, who should contribute, who should benefit and who should bear risk are questions that can be answered only through evidence, institutions and public consent. Wealth becomes a foundation of freedom when the capacity to create and use it ceases to be the privilege of a narrow circle. The next instalment will examine how such principles can be translated into a measurable framework of economic rights, responsibilities and institutional accountability.

Notes

1. World Bank, Human Capital Project; UNDP and OPHI, Global Multidimensional Poverty Index
2. FAO, Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests (2012) 
3. International Monetary Fund, Fiscal Transparency Code
4. International Labour Organization, Decent Work
5. Dani Rodrik, Industrial Policy for the Twenty-First Century (2004), and subsequent research on institutional design 
6. World Bank, The Changing Wealth of Nations 2024

[To be continued]

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Dr. Ikramul Haq, Advocate Supreme Court, Adjunct Faculty at Lahore University of Management Sciences (LUMS), member Advisory Board and Visiting Senior Fellow of Pakistan Institute of Development Economics (PIDE), holds an LLD in tax laws. He was full-time journalist from 1979 to 1984 with Viewpoint and Dawn. He also served Civil Services of Pakistan from 1984 to 1996.