Over the past few decades, the performance of governments around the world has increasingly been judged, both internally as well as externally, by notions of how the economy has performed over a relatively short period of time. For democratic governments, this span usually coincides with an election cycle of four to five years.

Given the complexity of judging economic performance over a wide set of measures, the opaqueness of the underlying data, the short span of time for which judgement is being made, and for ease of comparison across different time periods as well as with other countries, the preferred measure used by default for such benchmarking has come to be GDP growth. According to William Davies in a recent piece in The Guardian, despite its obvious drawbacks, `this single indicator … took on a hallowed political status, as the ultimate barometer of a government`s competence. Whether GDP is rising or falling is now virtually a proxy for whether society is moving forwards or backwards`.

The benchmarking of how well a government has done for its citizens by such a narrow, imprecise and opaque measure has engendered a classic agency conflict economic managers have an incentive to not only engage in short-term behaviour that could be detrimental to the long-run interests of `shareholders` (citizenry), but also to fudge the data or `cook the books`. An example of a perverse incentive created by a near-singular focus on a short-term measure such as annual GDP growth is the tendency of governments to over-borrow and under-reform. The availability of additional liquidity from borrowing eases the budget constraint of the government and allows for higher spending, while the postponement of reform avoids pain to the electorate. Both these are potent election-winning strategies, but both are damaging to the longrun health of the economy.

For this reason, some more forward-looking and `progressive` governments have begun to tout their economic success in terms of development outcomes(such as improvement in the country`s Human Development Index ranking) or in terms of their reformist credentials (as measured by the number of reforms introduced or improvement in standing in the World Bank`s Ease of Doing Business survey).

While the long-run health of the economy and the citizenry can be compromised by a short-run focus of economic managers, how is democracy undermined? There are a number of channels through which this can work.

First, as already alluded to, the government both `controls` national statistics as well as has an incentive to manipulate the numbers to show a more favourable (or a less adverse) economic situation than is the case otherwise. The debate since last year over the of ficial GDP growth rate in 2015-16, or the amount of debt taken on by this government in the past three and a half years, amply demonstrate both the stakes as well as the incentives. The debt debate is particularly relevant as well as interesting.

The PML-N government under Finance Minister Senator Ishaq Dar has accumulated an unprecedented amount of both external as well as domestic debt, contracting $34.6 billion of new foreign loans since 2013, according to State Bank data. The cumulative public debt stock has increased from around Rs14,600bn on June 30, 2013, to Rs20,272bn as of end-December 2016, an increase of nearly Rs5,700bn, or 40 per cent. Not surprisingly, the PML-N government has chosen to downplay this increase using a combination of spin-doctoring and outright misrepresentation. (Drs Hafiz Pasha, Salman Shah, Ashfaque H. Khan and myself have jointly issued a response to the finance minister`s article of Feb 1, 2017, on the debt situation).

Second, economic data can be both opaque and complex, and analysing the numbers and drawing out the larger picture is usually beyond the capability of the average voter, especially in a country like Pakistan. Parsing the data and providing context and meaning is left to a handful of experts andcommentators. The media plays a large role in shaping perceptions about the economy as well, but it usually does so from a f airly uninformed, or even outright partisan, prism hence not helping the cause of democracy by allowing voters to make an informed choice.

With an out-sized emphasis on the economy shaping the narrative of the success or failure of a government as it heads into elections, this small group of elite experts, commentators and media persons (mostly TV anchors) can have a disproportionate influence on voters` opinions. This state of affairs has been referred to as an Econocracy in a new book by Joe Earle et al (The Econocracy: the Perils of Leaving Economics to the Experts ). According to their book, `Politics and policymaking are conducted in the language of economics and economic logic shapes how political issues are thought about and addressed. The result is that the majority of citizens, who cannot speak this language, are locked out of politics while political decisions are increasingly devolved to experts.` Catriona Watson has also referred to this recently in The Guardian.

Increasingly in advanced economies, `big data` gathered, analysed and used by a few mega-corporates, combined with the use of `nudges` by marketeers and even government itself (the combination being referred to as `big nudging`) could marginalise citizens from democratic processes. That is a relatively new challenge to democracy that mercifully is one that Pakistan is unlikely to experience for a while.

The bottom line is that a government`s performance in a democracy needs to be viewed through a wider prism than just GDP growth, and the electorate should have access to accurate and credible economic data, as well as the capacity to analyse it for an informed choice. The writer is a former economic adviser to government, and currently heads a macroeconomic consultancy based in Islamabad.

This story was originally published by Dawn, Pakistan

`Chaste to her husband, frank to all beside / A teeming mistress, but a barren bride` – Alexander Pope

From Brazil to Malaysia, democracy around the world is under threat. Not from the march of army columns, but from the greed and corruption of a rapaclous global political elite. While nation-destroying corruption of leaders such as Ferdinand Marcos, Mobutu Sese Seko, Sani Abacha, Alberto Fujimori, or Robert Mugabe was the accepted `norm` till the 1990s for a select band of unfortunate Third World countries whose people had been made destitute by their leaders` insatiable greed, the latest wave of democracy was thought to have brought in a newer, and lesstainted, leadership.

From Benazir Bhutto in Pakistan to Cristina Fernandez de Kerchner in Argentina, Hugo Chavez in Venezuela to Uhuru Muigai Kenyatta in Kenya, citizens of newly democratic countries have looked up to young, educated and dynamic leaders to provide salvation from the curse of history. But this was not to be.

Wildly popular leaders elected via freer and fairer elections proved to be a false dawn in most countries much like the lament from Alexander Pope`s Rape of the Lock.

Far from strengthening democracy in their respective countries by building or consolidating institutions, most of these leaders chose to become elected autocrats by dismantling, brick by brick, constitutional checks and balances against misrule and established systems of good governance. Their popularity – born out of a politica dynasty, a successful acting career, leadership in the independence movement or just charismatic demagoguery – combined with the decimation of legitimate democratic opposition and institutional safeguards more often than not has bred a sense of entitlement and a culture of impunity. These are fertile grounds for corruption and misuse of unbridled power.

Hence, the scale, brazenness and pervasiveness of corruption in these countries. Hugo Chavez`s family in Venezuela, Tamil Nadu`s chief minister Jayalalitha, the Rajapakse family in Sri Lanka, are just a handful among a host of other recent popularly elected leadersaccused of amassing untold wealth while in office. Similar accusations dog the family of the prime minister of Bangladesh and the erstwhile prime minister of Thailand, Ms Yingluck Shinawatra.

In Brazil, the leftist President Dilma Rouseff and her predecessor Luiz Inacio Lula da Silva are embroiled in a multi-billion dollar embezzlement scandal involving Petrobras, the country`s stateowned oil producer. Prime Minister Najib Razzak of Malaysia has had the good fortune of `someone` crediting his account with $700 million overnight (linked to Malaysia`s state fund 1MDB), while Turkey`s President Recep Tayyip Erdogan is accused of wasting state funds on building a new palace for himself costing over $600m.

Nor is abuse of public office for personal enrichment limited any longer to dirt-poor developing countries. Even in countries with an established, albeit turbulent, tradition of parliamentary democracy, such as Spain and Italy, popularly elected leaders voted into office on a promise of change have quickly become tainted with allegations of corruption.

Closer to home, proceedings of hearings before the US Senate in 1999 provide a detailed account of millions of dollars of funds being moved through Citibank`s private banking centres on behalf of Mr Zardari between 1994 and 1997, including on account of commissions by the Swiss company Cotecna.

Details of beneficial ownership of a web of offshore companies in the British Virgin Islands by the thenprime minister and her spouse is provided in the official record of the proceedings. Further material on beneficial ownership of offshore companies and transactions amounting to millions of dollars during this period is provided in the Global Corruption Report (2004) in the section titled `The hunt for looted state assets: the case of Benazir Bhutto`

Recent revelations about offshore companies and accounts belonging to the prime minister`s family dating to the 1990s a period of intense speculation about corruption involving South Korea`s Daewoo, and in the yellow cabs import scheme that apparently caused a $1 billion loss to Pakistan`s exchequer reinforce the perception that the transition to democ-racy in Pakistan has taken a familiar, and less desirable, path.

Not unlike other parts of the world, where elected kleptocrats have been caught out with their `snouts in the trough` (as the late Ardeshir Cowasjee would put it), Pakistani politicians start crying hoarse about the threat to `the system` whenever their corruption is exposed. Presumably, the system they are out to protect is not one that guarantees education, jobs or basic health services to Pakistan`s teeming poor, but one that allows the entitlement to loot.

However, there is nothing constitutional or democratic about the systematic pillage of state resources for personal enrichment. About the only democratic thing about such large-scale corruption is that, barring the handful who benefit from it, it affects all other Pakistanis indiscriminately, with the poor and the vulnerable bearing the brunt of its pernicious consequences.

These consequences have been on egregious display time and again: when public schools in Azad Kashmir collapsed due to poor construction in the October 2005 earthquake killing thousands of innocent children; when poor Thari children die each year due to lack of basic facilities; when faulty scanners are imported to protect our cities; when expired medicines and vaccines are purchased for public hospitals; when the government does not have the money to pay pensioners, doctors, nurses, teachers and Lady Health Workers their dues for months on end but can cough up $2bn for vanity bus and train projects; when an illfunded and ill-equipped police has to take on wellarmed criminal gangs baclced by powerful politicians; ad nauseam.

True democracy is an aspiration worth pursuing. But passing off large-scale looting and plunder as constitutional democracy does not serve the interest of Pakistan`s citizens or its future generations.

Banay hain ahlay hawwas muda`ee bhi, munsifbhi Kisay vakil karein, kis say munsafi chahein (Faiz)

The writer is a former economic adviser to government, and currently heads a macroeconomic consultancy based in Islamabad.

This story was originally published by Dawn, Pakistan