The Economist as Plumber: Fixing Pakistan's Policy Pipes

Pakistan economy continues to face persistent challenges, yet we have no shortage of economists working tirelessly in universities, think tanks and government departments. They churn out papers, climb the ranks, and stay in their university paradises, obsessed with impact factors and tenure tracks. Meanwhile, the real economy remains a mystery to them, a distant world they rarely engage with. In think tanks, many economists follow donor-driven agendas, crafting reports that look impressive but have little relevance to Pakistan’s real issues. In government departments, they are masters of abstract solutions—ingenious models and theories that float high above the messy realities of the ground. It’s been 77 years and we are still grappling with the same economic challenges, even though we seem to know exactly what the problems are.

Enter Esther Duflo’s concept of the "economist as plumber." Rather than living in the clouds of academia or working on donor spreadsheets, this approach suggests economists should get their hands dirty. They should not only design policies but also get into the trenches, fixing the leaks and blockages that prevent policies from working. In Pakistan, this idea is particularly pertinent. We have policies in place, but what we lack is practical execution, knowing the frictions and continuously fine-tuning that ensures things work as intended.

Take the Benazir Income Support Programme (BISP), for example. On paper, it’s a model programme, designed to support the most vulnerable households. Yet in practice, ensuring that cash transfers reach the right people without being siphoned off or delayed is an ongoing challenge. Economists need to act as plumbers here, addressing real-world issues like bureaucracy, corruption, and logistical bottlenecks, ensuring that the funds actually flow to those in need.

Similarly, with the Sehat Sahulat Programme, providing health insurance to low-income families is a fantastic policy in theory. But on the ground, the system encounters problems—people struggle with accessing healthcare, understanding the claims process, or even getting hospitals to accept their coverage. Economists have to constantly adjust the mechanisms, ensuring the programme isn’t just a shiny object but something that works for the people it was intended to help.

Energy pricing reform is another area where theory meets reality. The government’s introduction of tiered tariffs was meant to encourage energy efficiency and curb wastage. However, factors like energy theft, distribution losses, and the inefficiency of power companies mean the policy often falls short of its goals. Economists have to keep tinkering with the system, ensuring that the poorest households are not disproportionately affected, while still incentivising responsible energy use.

In the tax system, particularly the Federal Board of Revenue (FBR), economists design elaborate policies to improve compliance and revenue collection. Yet, practical issues—low public trust, bureaucratic inefficiencies, and corruption—continue to thwart these reforms. Like plumbers, economists need to fix the leaks in the tax system, ensuring that what’s collected reaches the state without being lost along the way.

Even in education, where voucher programmes for low-income families offer private schooling subsidies, the real challenge is ensuring that the money is used correctly, and that students are benefiting. The programme’s success depends on continuous troubleshooting to ensure that schools are meeting quality standards and that resources are going where they are most needed.

Lastly, in agriculture, the issue of subsidies for wheat and fertiliser shows the same need for practical problem-solving. Corruption, poor distribution channels, and market distortions often prevent subsidies from reaching the smallholder farmers who rely on them. Economists here, too, need to act as plumbers, ensuring that subsidies are distributed fairly and efficiently.

In all these cases, the economist's role goes beyond crafting policies or analysing data to validate theories for publication. It is about getting into the details, troubleshooting, and making sure the system works in the messy, unpredictable reality of the economy. Like plumbers, economists in Pakistan need to be hands-on, adjusting and fixing the system’s failures, rather than merely theorising from afar. Without their constant adjustments, the pipes of policy will remain clogged, and the economic system will continue to underperform.

This article builds on the ideas I shared at the CraftEcon School: Economics Redefined 2024 in Lahore, following up on my earlier piece, 'Does Pakistan Need the Chicago Boys to Save its Economy?', published on Global Village Space, available here