Property Rights, Contracts, and Development: A Study of the Traditional Institutions of the Federally Administered Tribal Areas (FATA) of Pakistan

Abstract

As a recipe to stem the tide of militancy in the region in the aftermath of 9/11, the FederallyAdministered Tribal Areas (FATA) of Pakistan received unprecedented local andinternational focus on development. This thesis argues that framed under the pressingexigencies of the „War on Terror‟, the on-going multi-billion US dollar development plan forthe region betrays insufficient understanding of the Pukhtun tribal society and side steps thereality of the traditional institutions while aiming for institutional change through exogenousmeans. The thesis highlights the perils of such a development approach in FATA‟straditional society, and, as a prerequisite for viable development, underscores the vital needfor an alternative approach, one that does not confront the traditional institutions of theregion.Towards the latter objective, the study embarks on an exploratory journey to unravel thenormative characteristics and role of the traditional informal institutions of FATA ineconomic exchange or contracts. The study attempts to reveal the hazards in exchange andhow the parties are able to stabilise their contractual relationships within the parametersdefined by the traditional institutions in order to achieve mutually beneficial gains. Guidedby a conjoint theoretical framework based on the Ostrom-Williamson governanceapproaches, the study first explores the traditional property rights regime to identify itsnormative principles and enforcement mechanisms. It then moves on to explore the dynamicsof its functioning in two contracting domains of commonly owned mineral resources(common-pool resources) and private property. The study reveals that the traditionalinstitutions are fairly robust particularly in relation to the former and thereby commercialenterprise therein holds a promise for the much desired economic turnaround of the regionwithout hazard prone exogenous measures.