Subsidizing the Pakistani Elite: Aid, Taxation, and Development [i]
S. Akbar Zaidi*

With high rates of tax avoidance by Pakistan's elite and the rich, tax payers from countries supporting Pakistan's development initiatives have been subsiding Pakistan's elite. Pakistan's ruling elite are unwilling and loathe to tax themselves, and exploit the country's geopolitical vulnerabilities, extracting rent for many strategic alliances. Powerful and influential western governments and their leaders parrot the Pakistan-is-too-important-to-fail mantra, which suits Pakistan's elite perfectly, as the economy is constantly bailed out. Both Pakistan's elite and western governments are equally to blame for the absence of more equitable taxation efforts in Pakistan.

[i]A version of this paper has earlier been presented at the conference on Development Challenges Confronting Pakistan in May 2011 in Islamabad, Pakistan.
* S. Akbar Zaidi is a social scientist based in Karachi, Pakistan. He is the author of a number of books including The New Development Paradigm: Papers on Institutions, NGOs, Gender and Local Government (1999), Pakistan’s Economic and Social Development: The Domestic, Regional and Global Context (2004) and Issues in Pakistan\'s Economy (2005).