Recent data from the Pakistan Bureau of Statistics, compiled by a stock brokerage and financial company, reveals a widening inequality in incomes and assets between the rich and the poor of the country. The data shows economic prosperity is flowing upwards while financial strain is dissipating deep downwards, making the rich richer and the poor poorer. Based on the latest Household Integrated Economic Survey (HIES), it is observed that the real purchasing power for the common man has been declining between FY19 to FY25.

As the HIES provides a review of socioeconomic conditions of the country, it was deemed a key tool for evidence-based planning and policymaking by the Ministry of Planning. That means the ministry will follow the results of the survey as evidence for future economic planning, ensuring data-driven governance. The morbid situation not only raises questions about the much-debated economic stabilisation but also demands an informed analysis of what is fundamentally wrong with the country's economy. The literature shows that inequality is not always bad if the economy is on the right track. For this purpose, however, long-term economic growth policies need to be based on principles of inclusivity, balancing the power relations between the powerful and the powerless. Most economic growth theories and quantitatively sophisticated econometric models do not treat balanced political power as a determinant of economic growth in a country, but it is a major mistake.

Although the concept of long-run determinants of economic growth does accommodate such factors as culture, geography and religion of a country, an........

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