ntroducing and implementing austerity has been a recurring political need in Pakistan. Every regime, whether civil or military, has used austerity measures to cut public expenditure by claiming that the nation was at a critical juncture. Whether those measures applied equally to those at the helm has often been a contentious subject. Austerity drives in the country have largely oscillated between genuine fiscal adjustments and symbolic demonstrations of elite sacrifice. The political outcomes have depended not simply on how much money was saved, but also on whether citizens perceived the sacrifices imposed on the ruling elite as proportionate to those imposed on the working classes.

Recent history provides several instances of the practice, such as the austerity drive in 2009, framed largely as administrative rationalisation and reduction of state expenditure; in 2013, when it was associated with a promise of simpler and smaller government; in 2018, when government leaders claimed that they abhorred elite symbolism. The 2026 austerity drive is linked to a fuel and energy crisis.

Why Nations Fail: The Origins of Power, Prosperity and Poverty by two Nobel laureates, Daron Acemoglu and James Robinson, argues primarily that the success or failure of nations is determined mostly by their political and economic institutions. It makes a distinction between inclusive and extractive institutions. The former distribute political and economic opportunities broadly, protect property rights, encourage investment and innovation and allow people to participate in economic life by diversifying the economy. The latter concentrate political and economic power in the hands of a narrow elite, who use the same institutions to extract wealth and privilege from the wider population.

Economic institutions do not emerge independently of politics. Those who hold political power determine who makes the rules that govern property, taxation, markets, labour and investments. Frequent demands by governments regarding the observance of austerity measures tend to cause a trust deficit between the citizens and state institutions. People are quick to spot extravagance in the government and the elite and link it to extractive taxation targeting other, typically wider, segments of the society. These perceptions have far-reaching consequences because they not only affect whether people obey the laws, but whether they regard state institutions as legitimate, impartial and capable of serving public interest.

When citizens repeatedly encounter evidence that state institutions are inefficient, arbitrary, politicised or inaccessible, they begin to distinguish between the state as a constitutional guarantor and its institutions as they actually experience them. Hence, a citizen may formally accept the authority of the courts, police, bureaucracy, military or tax authorities while privately believing that some of these institutions do not treat people equally. This produces a dichotomy of compliance based on necessity rather than legitimacy.

When the citizens see taxes and prices of essentials rising, while privileges of the elite remain intact, austerity programmes risk becoming politically counterproductive, even when they are fiscally rational.

It has been pointed out, for instance, that the salaries of the judges of the Supreme Court and Federal Constitutional Court have been raised lately. The chief justice now receives Rs 1.6 million monthly, with Rs 1.5 million superior judicial allowance provided under the new arrangement. There is also a Rs 150,000 monthly medical allowance. The judiciary was recently ranked 130th in 143 countries by the World Justice Project.

Observers say the state of Pakistan does not suffer from an inability to impose and implement austerity measures; what it does suffer from is an inability to institutionalise it. A government can save millions by reducing official cars and foreign travel, but when the citizens see taxes and prices of essentials increasing, while privileges of the elite remain intact, austerity programmes risk becoming politically counterproductive, even if they are fiscally rational. In other words, the failure of austerity in Pakistan is not necessarily the failure to cut expenditure; it is the failure to convince the people that the austerity measures represent a durable and equitable redistribution of sacrifice.

Another significant challenge is the implementation of austerity programmes. The government ordered a 15 percent cut in current expenditure during the 2023 austerity programme. It specifically instructed ministries to withdraw luxury vehicles and a committee was established to ensure implementation and report violations. Such measures, more often than not, encounter bureaucratic resistance, exemptions, institutional interests, political pressures, weak monitoring mechanisms and lack of continuity after a regime change.

For long term and result oriented transformations, austerity drives should be replaced with structural reforms aimed at permanently improving the country’s fiscal position and state capacity. The emphasis should shift from cutting visible and cosmetic expenditures to changing structures that generate fiscal space. Assessments by leading financial institutions recommend tax reforms; energy sector restructuring and reform of state-owned enterprises; better public financial management; effective and efficient governance; and better prioritised government expenditures. A government announcing that its ministers will surrender cars or reduce foreign trips demonstrates sacrifice, but a government that brings foregoing reforms changes the rules of the political economy.

Key institutions in Pakistan face a trust deficit among the citizens. Its electoral, governance, judicial and administrative organs are seen as deteriorating rapidly. This is a frightening situation in a youthful country. There needs to be an immediate course correction through a dialogue with all political and economic stakeholders.

The writer heads the History Department at University of Sargodha. He has worked as a research fellow at Royal Holloway College, University of London. He can be reached at [email protected]. His X handle: @AbrarZahoor1.