Islamabad, Pakistan – A new assessment by the International Monetary Fund (IMF) has concluded that corruption in Pakistan is behind an economic crisis driven by “state capture” – where public policy is manipulated to benefit a narrow circle of political and business elites.The Governance and Corruption Diagnostic Assessment (GCDA), finalised in November 2025, presents a grim picture of a system marked by dysfunctional institutions that are unable to enforce the rule of law or safeguard public resources.Recommended Stories list of 4 itemsend of listAccording to the 186-page report, corruption in Pakistan is “persistent and corrosive”, distorting markets, eroding public trust and undermining fiscal stability.The report, requested by the Pakistani government, warns that without dismantling the structures of “elite privilege”, the country’s economic stagnation will persist.While corruption vulnerabilities are present at all levels of government, according to the report, “the most economically damaging manifestations involve privileged entities that exert influence over key economic sectors, including those owned by or affiliated with the state.”The report argues that Pakistan stands to gain substantial economic benefits if governance improves and accountability is strengthened. Such reforms, it notes, could significantly lift the country’s gross domestic product (GDP), which stood at $340bn in 2024.“Based on cross-country analysis of the reform experience of emerging markets, IMF analysis projects that Pakistan could generate between a 5 to 6.5 percent increase in GDP by implementing a package of governance reforms over the course of five years,” the report said. Advertisement Stefan Dercon, a professor of economic policy at the University of Oxford who has advised the Pakistani g …
