Both the enormous challenges facing Pakistan’s economy and our rather dismal economic governance over the last four and half years are redefining the relationship between national institutions responsible for taking key economic decisions and also amongst the main power centres in the country.

The apex court whose focus should be dispensing justice and cementing its role as the principal custodian of the constitution, law and order, citizens’ security and national wealth, is instead having to meddle into executive management decisions like fixing sugar or CNG prices and debating merits and demerits of government revenue generating levies.

In the absence of a comprehensive national vision from the Planning Commission on ethical and optimal usage of domestic natural resources or in lieu of a consistently underperforming Federal Board of Revenue (FBR) one can quite understand the frustration and eagerness of the court to step in to fill the vacuum created by the inadequacy of the concerned institutions. However, the concern is that in doing so, it not only enters a domain it has not been trained for, but in the process it also ends up unintentionally compromising the efficacy of the very economic tools so important to any government’s successful management of an economy.

Post-2008 financial crisis and owing to the prevailing ‘Great Recession’ (as the current global economic downturn is being referred to), there has been a paradigm shift in the global economic thinking and Pakistan’s economic priorities also need to change accordingly.

The global crisis and its aftermath have seriously challenged the relationship between citizens and the government, and there exists this new consensus amongst economic leaders that gaining the trust of citizens is the most crucial element to good governance.

The public finances in many countries of the world are in perilous state and Pakistan is no exception. Unemployment remains stubbornly high and chances of real recovery appear fragile and extremely slow.

At the same time, income inequality has soared, with the gap between the rich and the poor reaching its highest level in over 30 years (the earlier data simply not being available).

Against this backdrop, the public confidence in the government is dwindling and its frustration and anger reaching a tipping point where it feels that matters are more likely to be solved on the streets, rather than in the executive’s offices. The irony is that this Pakistani public behaviour is in no way unique, but also being witnessed in the most developed global economies like Spain, Greece, USA and UK.

In our case, though the fear is that if such a growing trend, especially in a volatile country like ours, is not timely arrested, it runs the danger of unleashing the proverbial ‘destructive genie’, which once out may prove to be very difficult to put back into the bottle!

Now to overcome this, we need to take some bold decisions in order to regain the trust of the citizens. And given our economic health, this again may not be simple. The dilemma for economic managers being that while, on the one hand, is the requirement of adopting supportive macroeconomic policies to buttress economic activity and revive growth; on the other hand, remains the continuous challenge of instead having to consolidate spending to ensure the very sustainability of our public finances. Such diverse endeavours often entail difficult and yet astute policy choices that, in turn, need to be backed by popular public opinion in order for them to succeed.

Also, it is all very well to advocate structural (basically referring to making the economy more open, competitive and transparent) and social reforms for fostering new sources of growth and at the same time investing in people, labour skills and education. In doing so, however, what we need to remember is that this cannot be done by policies alone, but requires institution building.

Any policy action needs to be based on a comprehensive and multifaceted underlying drive of strengthening the related institution that will ultimately be the tangible conduit to implementing such a measure. And this is precisely where the judiciary also needs to be extremely watchful. That in its eagerness to correct matters, it does not take its eyes off the ‘sustainability’ aspect and that its proactive behaviour strengthens institutions and not weakens them.

What it implies is that the judiciary engages itself more with the overall framework of economic laws governing the country and its monitoring mechanism, and less with its micromanagement. The focus being on convincing the citizens that laws and regulations have been framed to protect the interests of all and for establishing equitable social well being in the country, and, more importantly, that they need to be observed.

For example, in the Organisation for Economic Cooperation and Development (OECD) countries as a group have embarked on a conscious effort to collectively revise the existing legislations on conflict of interest in public life and disclosure of outside income by all public officials.

Economists are also busy focusing on new principles of how best to provide incentives so that individuals and firms transparently take into account their externalities.

To summarise, what the judiciary needs to ensure is that the legal system does not generate rents to chosen firms or individuals at the expense of the rest of the society - a system where there is justice for all and not one where there is an arms race, and those with the deepest pockets are in the best position to fight and win.

The political system in Pakistan seems to be failing as much as the economic system. The failures in politics and economics are related and they reinforce each other.

While every legal aspect of our legal and regulatory code is important for both efficiency and equity, the laws governing the economy need special attention and it would be a pity if the larger picture of overall economic management loses focus amidst a maze of sector-specific issues that are always best resolved through market-based solutions.

Public integrity is not only about honesty and morality, but it is also about laying foundations for long-term sustainable growth, followed by its equitable distribution. We will not successfully emerge from our present economic crisis without the trust of our citizens, and without restoring the confidence in our markets and the institutions monitoring them.

Good national and global governance depends as much on integrity and trust as it does on placing mechanisms in place that allow the freedom to the national institutions to autonomously take micro decisions, as long as their decisions remain aligned with the overall national economic vision!

The writer is an entrepreneur and economic analyst. Email: kamalmannoo@hotmail.com