Country Session 3: Pakistan

Chaired by Ijaz Nabi (Country Director, IGC Pakistan), Session 3 on Pakistan was divided into two parts. The first half of the session based on Tax work in the country was opened by Asim Khwaja (Harvard University) who presented his work on property tax. He shared the findings from his study that gathered experimental evidence on incentive pays for tax collectors in the Punjab. His most important policy conclusion was that monetary incentives to the tax inspectors increased collection of property tax. He also presented preliminary evidence that collecting more property tax did not have any significant political cost.

Keeping with the theme, the next presentation was made by Michael Best (LSE) who shared his work on overcoming frictions in the labor market and looked at responses by firms and workers to taxes in Pakistan. His research has found that the income tax regime for the salaried individuals was creating frictions in the labor market. He research implies that tax evasion by salaried individuals can be reduced if the system is simplified.

The second half of the session concentrated on discussing work in garments manufacturing. Ijaz Nabi (IGC), Turab Hussain (LUMS) and Naved Hamid (IGC) shared their studies on understanding the under-performance of the garments manufacturing sector in Pakistan. The findings support the view that garments manufacturing can be critical to boosting exports, generating employment and maximizing value addition. Ijaz Nabi further elaborated on the subsequent deliberations by the government on formulating a workable strategy for the Punjab garments sector, as an excellent example of policy impact of evidence-based research by IGC.

The final round of discussion focused on the country strategy for IGC in Phase II. The country team stressed on deepening work in the key thematic areas that include macroeconomics, state capabilities, firm capabilities and urbanization. There was particular emphasis on expanding the urbanization program and also strengthen engagement with KP and Sindh, in addition to Punjab. IGC Pakistan now has an enhanced opportunity to engage in meaningful policy work, given the continuation of the democratic process and the 2013 electoral outcomes. Asim Khwaja (Harvard University), IGC Lead Academic, highlighted IGC’s mode of engagement on research that focuses on demand-driven policy oriented research hoping to strengthen linkages between researchers and policymakers. He also emphasised the importance of building local research capacity and promoting collaborations with international researchers.