In an age of economic disparity, social unrest and climate volatility, the concept of ‘moral economics’ is no longer an abstract philosophical ideal but rather a pragmatic response to a system that is failing too many, too often.
First coined by British economist E F Schumacher, moral economics emerged from the idea that economic systems must be anchored in ethical responsibility, human dignity and social justice.
Schumacher's work challenged the growing mechanisation of society, arguing that economies should be evaluated not merely by their output, but by how effectively they serve people, especially the most vulnerable. This would include the estimated 95 million Pakistanis living below the poverty line.
In Pakistan, where institutional fragility, elite capture and public distrust coexist with untapped potential, the concept of moral economics offers a strategic opportunity to redefine the purpose of governance.
The country's economic model has too often been shaped by external prescriptions and transactional policy tools that prioritise macroeconomic stability at the cost of social cohesion. Adopting a moral economics framework would allow Pakistan to reclaim its development narrative, aligning economic decision-making with the ethical priorities and cultural values of its people.
This is especially important as Pakistan navigates its recurring engagements with institutions like the IMF, World Bank and other international lenders. Historically, these interactions have been characterised by conditionalities that reflect a one-size-fits-all approach, focused on fiscal austerity, privatisation and structural reforms often detached from ground realities.
A shift towards moral economics offers a values-driven development framework that positions Pakistan not as a passive recipient of reform templates, but as a co-author of its economic future. It allows the government to engage with international financial institutions (IFIs) with a clear moral compass, advocating for policies that are not only economically sound but also socially equitable and politically sustainable.
Such a paradigm shift begins with institutionalising moral policy design. Under the leadership of Prime Minister Shehbaz Sharif, this can translate into a national framework where every major fiscal, monetary or structural decision is assessed not only for its economic impact but also for its moral consequence.
The creation of an Office of Moral and Public Value within the Planning Commission or Cabinet Division could serve as a cross-cutting body to evaluate whether government programmes uphold fairness, prioritise dignity and ensure inclusiveness. This body could develop Pakistan’s Moral Economy Scorecard, measuring national progress through lenses like access to opportunity, inter-generational equity and environmental stewardship, moving beyond narrow GDP calculations.
A key aspect of this shift lies in redefining success metrics. Pakistan must expand its economic performance indicators to include social and moral dimensions, similar to how New Zealand has developed a Wellbeing Budget and Bhutan follows the Gross National Happiness Index.
Ministries should align their planning cycles with this broader index, giving equal weight to both fiscal performance and social justice outcomes. For example, education reforms should not only seek higher enrollment numbers but focus on reducing gender gaps, ensuring emotional wellbeing and fostering civic values.
In fiscal management, a moral budgeting model should be adopted. The Ministry of Finance can embed ethical prioritisation in the Public Sector Development Programme (PSDP), redirecting resources from politically expedient, non-impactful projects towards long-term investments in public health, foundational literacy, water security and digital access. In taxation, reforms should focus on progressive structures that shield the poor and tax the rent-seeking elite. The tax system must be morally defensible and economically efficient, not extractive.
Moral economics also calls for a reframing of Pakistan’s public-private partnerships and regulatory regimes. Institutions like Nepra, Ogra, PTA and Pemra should be evaluated not just on financial balance sheets but on accessibility, fairness and citizen benefit. When privatising state-owned enterprises, decisions must factor in not only investor interest but also affordability and quality of service for the average citizen.
A Moral Licensing Framework can be developed to ensure that private entities receiving public contracts or concessions demonstrate their contribution to public value through job creation, local innovation or environmental safeguards.
Pakistan’s international narrative would also benefit significantly from this repositioning. Presenting moral economics as the central philosophy of the country’s development strategy can reframe Pakistan’s identity at global forums, not as a fragile state in need of rescue, but as a values-driven reformer building a human-centred economy.
In negotiations with the IMF and World Bank, Pakistan can advocate for a flexible programme design that includes moral risk assessments, evaluating the social impact of subsidy withdrawals, public wage freezes or indirect tax hikes. Rather than blindly accepting fiscal targets, Pakistan can present alternative policy paths that achieve stability without sacrificing dignity or public trust.
In the current political landscape, moral economics is not just a governance framework but a strategic political opportunity.
With the sustained popularity and emotional penetration of the PTI among the youth, middle class, and urban voters, the ruling government faces a political opponent as well as a narrative vacuum.
The PTI has successfully captured the imagination of large segments of the population through the language of hope, anti-elitism and national pride — regardless of its actual delivery record. In contrast, traditional parties are often perceived as disconnected from aspiration and morality.
Moral economics offers the government a credible, values-driven alternative to this populist momentum, one that grounds its promise of hope not in rhetoric but in ethical policy. If presented clearly and delivered credibly, it can offer the public a new promise: dignity through work, equity through reform, and stability through justice.
For the 95 million people living below the poverty line, for the unemployed graduates seeking a future and for the overburdened middle class demanding fairness, this approach can restore faith in the idea that governance can still serve the many, not just the few.
This shift, if accompanied by strong delivery and honest communication, could reclaim the narrative of progress. Instead of defending past performance or reacting to opposition momentum, the government could position itself as the moral custodian of Pakistan's future, transforming efficiency into empathy and development into dignity.
Disclaimer: The viewpoints expressed in this piece are the writer's own and don't necessarily reflect Geo.tv's editorial policy.
The writer is a public policy expert and leads the Country Partner Institute of the World Economic Forum in Pakistan. He posts amirjahangir and can be reached at: ajmishal.com.pk