Pakistan is going through its worst economic crisis that has deeply affected the country. It is widely held that amongst many ills pushing Pakistan to this position, mafia hold plays a crucial role.
The term mafia is in incessant circulation in the country and it has become a serious issue compelling all and sundry to comment on it and showing concern. It is essential therefore to look at the issue from a rational perspective and attempt to find a way out of such a predicament.
To begin with, it must be borne in mind that mafias operate in a socio-political environment that is inherently weak because it does not follow principles of equality and fairplay. It seriously lacks credible organs of accountability and pays lip service to the requirements of propriety. Such an environment provides incentive to mafias to favour some business enterprises over others in their provision of protection and assuring preferential treatment.
Mafia breeds economic inefficiency, insecurity, and in most cases instability but sustained economic development is possible only in a society where reliable institutions guarantee consumer rights and overcome the natural distrust and collective action problems. Mafia operations are classic examples of economies operating without institutions.
Underdevelopment becomes chronic and subjects populations to ongoing long-term cycles of civil unrest. Mafias often act as middle-men, working within patronage systems that span international borders.
Since mafias are skilled at colluding with state leaders and weak state bureaucracies to manipulate and evade the rules that those bureaucracies are designed to enforce, they are also associated with illegal border activities and the result is economic inefficiency, stunted growth and weakened states.
A corrupt political order is vulnerable to being influenced from the outside as well as the inside and mafias control both these ends often holding states to ransom.
The members of a mafia are known to control parts of the political economy of a country and provide the protection that is seen as a scarce and valuable commodity. The viability of a mafia is the direct outcome of the belief of people that the administrative apparatus of a state has become dysfunctional and that the police and courts have become unable to prevent and punish burglaries and arson.
This situation provides an ideal ground for the mafia as it perpetuates the impression of the environment being a dangerous place with uncertainly prevailing everywhere. Mafia tends to limit the range of commercial activities in its areas of influence to benefit members of its personal networks, while ensuring that those outside the network fail.
This activity has the unintended consequence of limiting the incentive for innovation, since business success and increased market share stem from network protection, not from how well merchants appeal to consumers. There may very well be periods of booming economic growth on mafia territories, as the favoured businesses shine and expand but these will not lead to sustained and diversified development. Instead all of the development will be controlled by the mafia’s patronage network.
It is not incomprehensible therefore that leaders of weak states often choose to cooperate with mafias in order to avoid the chaos that they could otherwise unleash, in hopes of avoiding conflict in areas that would otherwise be difficult to manage. It is often the case where bargains with mafias are associated with glaring economic underdevelopment and corruption and they make state failure an enduring outcome.
Yet in many cases no one who holds power has and incentive either to replace the bargains with universally applicable state institutions or to consider the pernicious long-term effects of patronage networks on society. Mafias provide a form of passive protection to local businesses and populations but such protection is costly, however. It is observed that criminal networks can provide some sense of stability and security to private businesses when state legal systems are weak.
They can obtain and distribute information about potential partners and can enforce business contracts. This allows commercial activity to occur in an environment that would otherwise be anarchic and devoid of trust.
Though the mafia hold may provide a temporary resolution of issues but it leads inexorably to a number of major problems. A control system centered on one individual or a select arbitrary group is also inherently unstable unless it arises in a context where both the contours of the system and operational rules are reliable and permanent. Mafia networks are usually personal and informal, and that means that generation of wealth in their domains is subject to contestation.
The patronage of political economy, when its networks are firmly established and its rules are longstanding and known by everyone, can become a mechanism for organizing society and getting things done but this does not hold true for the individualistic political economic systems perpetrated by mafias.
A punitive action against mafia can throw the entire local patronage system into disarray, leaving favoured merchants in the lurch and scrambling for support as their protection evaporates.
