Entrepreneurship in Pakistan
PIDE Working Papers
2007:29
Entrepreneurship in Pakistan
Nadeem Ul Haque
Formerly Vice-Chancellor
Pakistan Institute of Development Economics, Islamabad
PAKISTAN INSTITUTE OF DEVELOPMENT ECONOMICS
ISLAMABAD
2
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means—electronic, mechanical, photocopying, recording or otherwise—without prior permission of the author(s) and or the Pakistan Institute of Development
Economics, P. O. Box 1091, Islamabad 44000.
© Pakistan Institute of Development
Economics, 2007.
Pakistan Institute of Development Economics
Islamabad, Pakistan
E-mail: publications@p ide.org.pk
Website: http://www.pide.org.pk
Fax: +92-51-9210886
Designed, composed, and finished at the Publications Division, PIDE.
C O N T E N TS
Page
Abstract v
1. Introduction 1
2. Understanding Entrepreneurship 2
(a) What Makes up an Entrepreneurial Economy? 5
(b) Entrepreneurship as Rent-seeking 5
3. The Nature of Pakistani State 7
4. How Did Entrepreneurship Develop in Pakistan? 9
(a) The Big Push for Industry 9
(b) The Neglect of the “Small” 11
(c) Agriculture and the Elite Bias 12
(d) Subsidies for Export 13
5. The Unintended Consequences 14
(a) Inequality and Bank Defaults 14
(b) Crippled Innovation 15
(c) Rent-seeking and Land Development 16
(d) Non-commercial Cities 17
6. Understanding Business in Pakistan 21
(a) The Attraction of Rents 22
(b) The Costs of Corruption 22
(c) Lack of Research, Expertise Skills and Knowledge 23
(d) City Administrations Unfriendly to Small and Trading
Businesses 24
(e) Poor Legal Framework 25
(f) Lack of Trust and Social Capital 25
(g) The Constraint of Financing 26
(h) Why There is No Consolidation? 26
4
Page
7. Conclusion 27
(a) Reinventing the Role of Govern ment and Ensuring Rule of Law 27
(b) Removing the Instruments of Rent-seeking 28
(c) A New Growth Strategy 28
(d) Building Growth Cities 29
2007:29
Entrepreneurship in Pakistan
Nadeem Ul Haque
Formerly Vice-Chancellor
Pakistan Institute of Development Economics, Islamabad
PAKISTAN INSTITUTE OF DEVELOPMENT ECONOMICS
ISLAMABAD
2
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means—electronic, mechanical, photocopying, recording or otherwise—without prior permission of the author(s) and or the Pakistan Institute of Development
Economics, P. O. Box 1091, Islamabad 44000.
© Pakistan Institute of Development
Economics, 2007.
Pakistan Institute of Development Economics
Islamabad, Pakistan
E-mail: publications@p ide.org.pk
Website: http://www.pide.org.pk
Fax: +92-51-9210886
Designed, composed, and finished at the Publications Division, PIDE.
C O N T E N TS
Page
Abstract v
1. Introduction 1
2. Understanding Entrepreneurship 2
(a) What Makes up an Entrepreneurial Economy? 5
(b) Entrepreneurship as Rent-seeking 5
3. The Nature of Pakistani State 7
4. How Did Entrepreneurship Develop in Pakistan? 9
(a) The Big Push for Industry 9
(b) The Neglect of the “Small” 11
(c) Agriculture and the Elite Bias 12
(d) Subsidies for Export 13
5. The Unintended Consequences 14
(a) Inequality and Bank Defaults 14
(b) Crippled Innovation 15
(c) Rent-seeking and Land Development 16
(d) Non-commercial Cities 17
6. Understanding Business in Pakistan 21
(a) The Attraction of Rents 22
(b) The Costs of Corruption 22
(c) Lack of Research, Expertise Skills and Knowledge 23
(d) City Administrations Unfriendly to Small and Trading
Businesses 24
(e) Poor Legal Framework 25
(f) Lack of Trust and Social Capital 25
(g) The Constraint of Financing 26
(h) Why There is No Consolidation? 26
4
Page
7. Conclusion 27
(a) Reinventing the Role of Govern ment and Ensuring Rule of Law 27
(b) Removing the Instruments of Rent-seeking 28
(c) A New Growth Strategy 28
(d) Building Growth Cities 29
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