Wheels Of Change: Tracing Pakistans Automotive Evolution Through Political Economy And Technology Acquisition

Edited by Usman Qadir

in PIDE Books from Pakistan Institute of Development Economics

Abstract: This book examines Pakistans success in technological and organizational capability development for enhancing competitiveness in its industrial sector, focusing on the automotive industry as a case study, under several policy regimes. Pakistan has had to face many adverse conditions since it gained independence and as a result its growth has been sporadic, with periods of growth spurts followed by periods of slow growth. Successful interventions supporting capability development have happened in other developing countries without ‘good governance’ and with rent-seeking so a deeper analysis of the institutional failures in Pakistan is required. The book locates Pakistan’s institutional choices and performance in the context of changes in its political settlement to explain why performance was weak at key points in the automotive industry’s history. The analysis focuses on the contests over potentially growth-enhancing rents in the context of the distribution of power between the groups and organizations affected by these policies. Policy had to be implemented in the context of extensive political clientelism that was increasing in its fragmentation with low levels of political stability and frequent changes in government. The proliferation of clientelist groups resulted in the state compromising on long term economic growth in an effort to ensure its short-term political sustainability. Production in the automotive industry has also become increasingly globalized in recent years and Pakistan has found it hard to break into global value chains on account of the weak technological capabilities that it could develop. Two case studies of relatively more successful instances of technology acquisition within the automotive industry of Pakistan show that even in this adverse policy environment, intervention can still assist some capability enhancement. The policy challenge is to develop instruments that can enable capability development on a broader level in the context of the clientelist processes that characterize the political settlement.

Date: 2024 Written 2024 Originally published 2024.
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