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Muhammad Zeeshan Younas

September 30th, 2024

Are Elections Characterised by Rent-seeking in Pakistan?

3 comments | 7 shares

Estimated reading time: 10 minutes

Muhammad Zeeshan Younas

September 30th, 2024

Are Elections Characterised by Rent-seeking in Pakistan?

3 comments | 7 shares

Estimated reading time: 10 minutes

Elections in Pakistan have long been tainted by ‘rent-seeking’, characterised by campaign-spending that far exceeds the limits set by the Election Commission of Pakistan. Muhammad Zeeshan Younas discusses the issue based on a sample study from which useful conclusions may be drawn for the country at large.  

 

Every adult in a democratic society has the right to participate in elections and potentially become part of the government. Similarly, all adults also have the opportunity to elect individuals they believe are capable of governing effectively. In the lead up to the elections, candidates explain their policies and programs to the electorate, enabling them to make informed decisions about whom to select to form the government. The election campaign process plays a vital role in disseminating crucial information and shaping government formation in democracies at various levels, including the federal, provincial and local.

The effectiveness of the election campaign process requires that costs incurred do not exceed the expected returns that the elected government promises to deliver to society. Put differently, the election process should generate non-negative net returns. Also, during an election campaign, private expenses incurred by each contestant should not exceed the specified limit set by constitutional bodies like  the Election Commission of Pakistan (ECP). Failure to comply with this principle in both letter and spirit may lead to the claim that the election campaign process includes rent-seeking practices.

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The concept of ‘rent-seeking’ was introduced by economist Gordon Tullock in 1967, and postulates that people engage in rent-seeking behaviour when they try to obtain benefits for themselves through political channels. This is often achieved by securing subsidies for the goods they produce or for being a particular class of people, by imposing tariffs on their goods or by lobbying for regulations that impact their competitors negatively. It hinders innovation and the efficient distribution of resources, thereby impeding productivity and placing society at a disadvantage.

The election process in Pakistan has been tainted by allegations of rent-seeking with several stakeholders involved in activities aimed at extracting privileges or economic benefits through political influence. One evidence of rent-seeking involves the total cost of the election process for society being greater than the developmental funds for which the same process is conducted. To analyse whether this kind of rent-seeking occurs in Pakistan, obtaining campaign spending data is crucial for generating reliable and authentic analyses.

In the general election of February 2024, the ECP set spending limits for candidates campaigning for National Assembly seats at PKR 10m (US$36,000 approx.), while for Provincial Assembly seats it was PKR 4m (US$ 14,400 approx). Given the absence of publicly accessible data on campaign spending, it is very challenging to determine if a candidate surpassed these limits or not. Only a handful of estimates exist, each based on different assumptions and scenarios.

To evaluate the effectiveness of the campaign process with some real data, Anwar Shah, Nasrullah Habib and I conducted a comprehensive survey with the primary objective of examining the disparity between total spending on an election campaign and the expected developmental funds allocated for the same area. We analysed 324 candidates running for chairmanship/vice-chairmanship seats in 54 Union Councils (UCs) during the local bodies’ election in Punjab, Pakistan.

Our findings showed that all candidates exceeded the spending limit set by the ECP. The allocated developmental funds for these 54 UCs were PKR 128m (US$461,000 approx.) in total, while the total money spent on the election campaign was PKR 473.3m (US$1.7m approx.), exceeding the limit significantly. It means the entire process of the local bodies’ election imposed a rent of PKR 345m (US$1.2m approx.) on society — which is already grappling with non-monetary challenges like conflicts, enmities, rivalries and the like. This process also empowers individuals who themselves violate ECP rules.

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While acknowledging the limitations of this study (focusing on 54 UCs only), its insights are significant for understanding the wider dynamics of election campaigns in Pakistan. Although not generally applicable to every aspect of the electoral process, these outcomes shed light on key realities that resonate across electoral realms. By extrapolating from the particular contexts examined in this study, we can extract valuable insights valid to elections on a larger scale.

According to official data released by the ECP, a total of 17,816 candidates participated in the 2024 election, with 5,121 contesting for National Assembly seats and 12,695 contesting for Provincial Assembly seats. If candidates remained within allocated spending limits, the total amount would be PKR 102bn (US$368m approx.). The ECP budget for the 2024 election is PKR 49bn (US$176m approx.), which brings the total to PKR 151bn (US$544m approx.). If we generalise from our survey estimates to all UCs of Pakistan, the total spending on the election in 2024 would be approximately equal to the total number of UCs multiplied by the per UC expenditure, resulting in 7,979 UCs x PKR 8.75m (US$31,500 approx.) = PKR 70bn approx. (US$252m approx.). If we adjust these numbers for the current inflation rates and add the ECP budget for the 2024 elections, it would total around PKR 250bn (US$900m approx.), which is significantly higher than the developmental funds allocated for all these UCs. It is important to mention here that the money spent on an election campaign may vary depending on the geographic significance of the region. Also, there is a general perception that candidates affiliated with political parties possess greater spending capabilities compared to independent candidates, as political parties have a larger platform for raising funds for campaigns.

Based on these numbers, it seems that the election process costs society more than the benefits it will yield after the formation of the government. To give it a radical interpretation, a society could improve its socio-economic conditions by discontinuing these elections and instead urging candidates to directly spend their campaign funds on public policies/programs without participating in the electoral process. Undoubtedly, political candidates would firmly dismiss this proposal.

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When candidates spend heavily in election campaigns, it often raises questions about the motivations behind these expenditures and the source of such funds. Securing a seat after such extravagant campaign spending may lead to concerns about the candidate’s intentions upon taking office. In certain instances, there may be suspicions of rent-seeking behaviour as candidates seek to pass laws that benefit certain interests/groups, with the aim of off-setting their campaign costs.

The convergence of politics and money underscores the vital importance of accountability and transparency in electoral processes to ensure that elected representatives prioritise public good over personal enrichment. Our conversations suggest that imposing stricter regulations on campaign funding, aimed at minimising the influence of affluent individuals or special interest groups and curbing excessive spending could be advantageous in terms of fostering societal progress and reducing associated costs.

To safeguard society from rent-seeking during elections, there should be a clear inspection and regular oversight of campaign spending of all candidates. Otherwise, successful candidates may potentially recover unwarranted election spending through various means such as non-mandatory developmental expenditure or other initiatives that may or may not align with the best interests of the constituency.

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The views expressed here are those of the author and do not represent the views of the ‘South Asia @ LSE’ blog, the LSE South Asia Centre or the London School of Economics and Political Science. Please click here for our Comments Policy.

This blogpost may not be reposted by anyone without prior written consent of LSE South Asia Centre; please e-mail southasia@lse.ac.uk for permission.

Banner image © Shuttergames, “Faisal Mosque, Islamabad’, 2020, Unsplash.

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About the author

Muhammad Zeeshan Younas

Dr Muhammad Zeeshan Younas is Lecturer in Economics at the Higher Education Department, Punjab, Pakistan.

Posted In: Pakistan

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