(Short: 1/n) A good description of how policy works in #Pakistan. Different govt departments hav their own list of activities which they want to incentivise (e.g. auto, textile, sugar etc). But, in doing so, they often end up incentivising nothing. How? openknowledge.worldbank.org/handle/10986/1… 
(2/n) When u give an incentive, u want more economic resources to flow towards tht activity. In other words, u want to make ur preferred activity more attractive than others. But if u incentivise everything, resources will stay wherever they are. In short, nothing changes.
(3/n) This is probably the reason why, despite giving direct/indirect subsidies to almost every sector out there, nothing really has changed. One evidence of this is that the overall composition of our import/export baskets has remained almost similar for last many decades.
(4/n) For comparison, the incentive structure East Asian economies started putting in place frm 60s onward was consistent with their policy objective (exports). So, whatever the policy objective is, the incentive structure must be consistent with it: nber.org/chapters/c8543…
(5/n) In short, govts in pak hav i) Neither let markets figure out how resources shud get allocated; ii) Nor put in place a coherent incentive structure which promotes whatever govts' objective is. The few cases where it did (e.g. IPP), it only led to more troubles down the road.
(n/n) To conclude, it seems economic policy in Pakistan has provided a bit too much stability by making sure nothing changes. Policymakers will have to give up on their (seemingly noble) desire to incentivise every industry if they are to achieve their policy objectives, if any.
