Pakistan spent much of 2022 mired in economic crisis and in 2023 the IMF arrived to negotiate an agreement, economic reforms in exchange for a large loan. It would be easy to be pessimistic about the prospects of Pakistan completing the 2023 vintage IMF programme and its multitude of conditionalities. Pakistan has signed off on more than 20 such agreements since 1958 and failed to complete all but one of them. There are grounds for optimism. Pakistan responded successfully to both the 2000-01 and 2013-16 IMF programmes in respect to a wide-range of economic and policy variables. This paper draws on a theoretical framework from Mancur Olson – the distinction between ‘roving’ and ‘settled’ bandits - to help think about the wider political economy that allowed Pakistan to (briefly) implement successful economic reform during these two periods. This paper uses this theoretical perspective to think about whether Pakistan will successfully complete the 2023 IMF programme. The tantalising conclusion is that Pakistan is more likely to do so if the criminal convictions against Nawaz Sharif are dropped and he is allowed to run for political office in the 2024 general election.
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