Key takeaways
- Elite capture means policy is shaped by narrow interests rather than the public good.
- Agriculture, real estate and trade remain lightly taxed while indirect taxes hit the poor.
- Protection creates rent-seeking monopolies instead of competitive firms.
- Selective enforcement pushes small firms into informality.
- Taxing wealth and linking subsidies to results would break the cycle.
In this Minute Mirror column (February 2026), Dr. Ghulam Mohey-ud-din argues that Pakistan’s reform programmes keep failing for the same reason: they are designed so that political and economic elites avoid the sacrifice while ordinary citizens carry it.
The argument
Elite capture, the column explains, is policymaking controlled by narrow interests. It shows up in tax exemptions, favourable regulation and the selective application of law. The tax system is the clearest case. Large parts of agriculture, real estate and trade avoid meaningful taxation, while indirect taxes fall hardest on poor and middle-income households.
Industrial protection works the same way. Firms shielded by tariffs and special treatment earn rents rather than competitiveness, and monopolies survive without innovating. Enforcement is two-tier: connected enterprises escape scrutiny while smaller businesses face harassment, which pushes them into informality.
This is why IMF programmes look successful at first and then unravel. The structural advantages of the elite are never touched, so once the programme ends the old patterns return. The result is both more inequality and less growth, because resources keep flowing to unproductive sectors and genuine entrepreneurs are discouraged.
What needs to change
- Tax wealth, property and rents rather than transactions and wages.
- Tie every subsidy to measurable results.
- Simplify regulation to remove discretion in how it is applied.
- Insulate institutions from political influence and make them accountable.
None of this is technically difficult, the author notes; it requires political will to impose costs on those who have been protected.