It is almost universally held and agreed that efficient allocation of resources to ensure widespread and equitable economic and social development of a nation is the basic responsibility of any government. This can only be achieved through good governance. Unfortunately, the people of Pakistan have been denied their due share in the allocation of resources. Those who governed remained oblivious of this need. The people continue to hope. This hope may be realised one day with a more responsive government in power. The pall of rising poverty and the unequal distribution of benefits of economic growth bear testimony to the ineffectiveness of policies framed and executed by various governments in Pakistan since its inception. Governments in Pakistan have been physical giants in every sense of the word. They have straddled, and continue to do so, all economic, social and cultural activities through a variety of official agencies, quasi-government, and public sector corporations. They are the single largest employers. They consume disproportionate amounts of credit and generate the largest amounts of rents. However, their contribution to equitable and sustainable economic and social development is dwarfed by the quantum of resources they pre-empt and the inefficient manner in which these are allocated. The essential problem hindering efficiency is in the composition of government. While MQM and JUI have withdrawn themselves as coalition partners, a new coalition consisting of parliamentarians associated with commando ex-President General (retd) Pervez Musharraf is likely to join the ruling Peoples Party at the centre and maybe, later in the Punjab. While politics does make for strange bedfellows, the problem is that such a coalition midwifed by greed of office is unlikely to ensure the delivery of basic social services, redistribution of resources and ensuring economic and social development. The current trend of inefficiencies, corruption and rents is likely to worsen further with benefits accruing only to vested interest groups.The role of misplaced public expenditures should not be forgotten. The bulk of investment is made in high-profile low-yield projects, such as the motorways, support for inefficient organisations such as PEPCO, Pakistan Steel, PIA, and inefficient subsidies to the detriment of social sector expenditures. For every dollar spent on the social sectors, defence and debt servicing consume as much as $4.32 in Pakistan. In Pakistan, well over 60 percent of all government non-defence, non-debt expenditure is consumed for salary payments and this has been increasing over time. Nearly three quarters of all government expenditure goes to pay for defence and debt servicing. Other significant claims on government resources are for payment of subsidies (which are inefficiently distributed and are misdirected), welfare projects such as Benazir Income Support Programme and various dole outs by the Pakistan Bait-ul-Mal (which are also misdirected, centrally controlled, politically motivated, have high unit costs, and often exclude the disadvantaged segments of society for whom they are meant), and public enterprise losses. And last but not least, increasing democratisation has claimed a good deal of public resources. In the name of democracy, being the best revenge, President Asif Zardari has been authorising expansion of the Cabinets. The country will soon witness induction of a large number of parliamentarians as Ministers, all for the sake of national interest and to strengthen democracy. Development resources have increasingly been sought after by politicians for personal use, and public money has more often been spent on politically motivated projects. One of the consequences of this breakdown in economic governance results from the failure of successive governments to institute a progressive taxation structure. Today, taxes are imposed on and collected from the poor. Large segments of the civil society, particularly the rich remain inadequately taxed - to wit, the exemption of tax on agricultural incomes and capital gains. Furthermore, the bulk of taxes are generated iniquitously through indirect taxes, which are regressive. In Pakistan, the tax incidence on the upper strata of incomes is 4.5 percent and on the lowest 10.3 percent. Further, the taxation structure creates inefficiency in the economy.A small but rapidly growing segment of the populations view of legislation, in Pakistan, is passed not necessarily for the benefit of those who are really deserving of relief. Such legislation contains lacunae, which may be used for access to pecuniary benefits by vested interests. Moreover, there are built-in provisions to legislate without recourse to legislature. The competent authority is empowered to set aside any mandatory requirement, waive any mandatory prohibitive provisions either for the public good or in the public interest without reference to any elected controlling body of individuals. In addition, discretionary quotas for access to infrastructure, services and economic opportunity provide rents to the chosen few at the cost of the larger body of civil society with disastrous costs to the exchequer. These lead to distortions and inefficiency in public institutions and are seen to be a major avenue for corruption. The first objective should be the removal of discretionary quotas followed by the removal of discretionary powers from the entire body of legislation. At the very least, the power to circumvent mandatory requirements and set aside mandatory provisions should be made transparent by requiring all such actions to be taken by a decision of a committee of elected representatives drawn from all shades of opinion and only after public hearings. While this would delay the process of development, it would, nevertheless, ensure equity, transparency and accountability - the cornerstones of good governance. The writer is a member of the former Civil Service of Pakistan. Email: shakeelahmad941@yahoo.com