ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Resistance to Market Regulation

Caste and Capitalism in Pakistan

Developing countries like Pakistan and many others face the challenge of taxing and regulating markets. Describing the textile sector in Pakistan at the turn of this millennium, this note discusses the push from international fi nancial institutions on Pakistan's national policy to regulate markets, and the resistance by the national capitalist class that find it in their interest to operate on traditional caste lines, thereby rejecting transparency of accounts and even taxation.

The article explores the relationship between the political economy and the rule of law in Pakistan from 1999-2004 with due historical context. It looks at international financial institutions’ (IFIs) governance reforms and the reaction of the capitalist and intermediate classes to them. It is based on case studies of a tax law (general sales tax (GST) imposed as value added tax (VAT)), a corporate sector regulatory body (Securities and Exchange Commission of Pakistan (SECP)) and a productive sector (textiles sector) in Pakistan. The case studies are discussed in the context of a Marxist political-economy framework. The textiles sector case study provides a linkage to the taxation and regulation issues in the corporate sector. The textiles sector case study also discusses caste capitalism as a social institution, both due to its historical specificity and also with an eye on the links to the wider rule-of-law issues.

The Political Economy

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