Disempowered: Electricity, Citizenship, and the Politics of Privatization in South Asia a Thesis Submitted to the Faculty Of

Home , Ethnic groups in Karachi, Gazdarabad, Perween Rahman, Taiser Town

Disempowered: Electricity, Citizenship, and the Politics of Privatization in South Asia

A Thesis submitted to the Faculty of the Graduate School of Arts and Sciences of Georgetown University in partial fulﬁllment of the requirements for the degree of Doctor of Philosophy in Government

Erum Aly Haider, M.A.

ii Disempowered: Electricity, Citizenship, and the Politics of Privatization in South Asia

Erum Aly Haider, M.A.

Thesis Advisor: Irfan Nooruddin, Ph.D.

Abstract

The ability to maintain political control over public goods is at the heart of the debate on distributive politics. Scholarship on patronage suggests that citizens’ dependence on political representatives for selective benefits leads to a perverse form of accountability. The privatization of service delivery is offered as a potential solution to remove debilitating effects of political influence on economic distribution. However, I argue that privatization can diminish the ability of citizens to voice dissatisfaction with public goods, and to be substantively represented by the state. I find that the economic redistributive effects notwithstanding, the political effects of privatization are under-theorized. This study uses the case of electricity privatization in Pakistan to answer the question - what happens to the relationship between citizens and their representatives, when the latter no long influence distributive outcomes? I suggest first that privatization diminishes the ability of citizens to use political representatives to lobby for better provision. Next, I argue that being ‘stuck’ in low-provision neighborhoods makes individuals less likely to exercise their political power overall, even for non-privatized public goods. Finally, I propose that the mechanism by which this happens is the diminishing of inter-personal and institutional trust, as a consequence of households blaming their neighbors, and not the state or its subsidiaries, for poor service delivery. Over twelve months of qualitative research in Karachi, Pakistan, are used to generate these hypotheses and identify potential causal mechanisms. A unique spatial dataset of

iii 25,000 service delivery clusters across the city, and an original survey and survey experiment (N≈1000) are used to quantitatively test each part of my theory. I find that a virtuous cycle of trust between private institutions and consumers can create efficiencies in the consumption of scarce resources, and provide important psychic benefits. Conversely, a cycle of mistrust can create uncertainty that spills over into the political sphere. This work joins emergent scholarship that suggests that patronage in hyper-local contexts, far from being a one-way relationship between powerful state actors and powerless clients, is an important feedback loop for citizens to express priorities, preferences and satisfaction within and beyond the electoral cycle.

Index words: Political economy, Electricity, Electoral politics, Pakistan, South Asia, Urban politics, Privatization

iv Acknowledgments

This work was funded by the American Institute for Pakistan Studies and the Georgetown Graduate School of Arts and Sciences travel and dissertation research grants. The survey in Karachi that was conducted between January 2018 and April 2019 was funded by the International Growth Center at the LSE, UK and implemented by Gallup, Pakistan. This project was also supported by the United States Institute of Peace (USIP) Jennings Randolph Peace Scholar Award. I gratefully acknowledge and thank all these organizations for funding and supporting my work; the views expressed here are those of the author alone and do not reﬂect the views of these organizations. Thank you to my committee: Irfan Nooruddin, Marko Klašnja, Mubbashir Rizvi and Rajesh Veeraraghavan, without whose patient guidance, feedback and encouragement this project would not be possible. Thanks to faculty and friends at Georgetown University’s Government department for providing multiple opportunities to present chapters of this work over the last six years, thanks in particular to Charles King, Desha Girod and Nita Rudra for their mentorship. Thank you to Adam Auerbach, Tariq Thachill, Gabrielle Kruks-Wisner and Alison Post for reading this work at various stages and providing invaluable feedback. A very special thanks to Milan Vaishnav and the members of the India Politics workshop in Washington D.C., for making the city one of the best places to study and present work on the South Asian subcontinent.

v I want to express immense gratitude for my cohort: Inu Manak, Shubha Kamala Prasad, Alex Podkul, Caitlin McGowan, Jeﬀ Poushter, DongJoon Park, Nik Kalyanpur, Kristen Collins and Andrew Szarejko. You are the best colleagues anyone could ask for. Thank you to the colleagues and friends from other departments and schools who’ve seen this work evolve over the years: Madhulika Khanna, Rabea Kirmani, Paula Ganga, Saad Gulzar, Mashail Malik, Niloufer Siddiqui and Sarah Khan. Thank you to Zaineb Majoka and Ali Hamza, and to Sauleh Siddiqui and Lacey Johnson, for making Washington, D.C my second home. A very special thanks to Ahsan Butt, for failing to convince me not to apply to graduate school. In Pakistan, I am grateful for the friendship and guidance of Nida Kirmani, Umair Javed, Sameen Mohsin Ali and others at the Lahore University of Management Sciences. I am grateful to Nausheen Anwar, Noman Ahmad and Gulraiz Khan at IBA, NED and Habib University in Karachi. Thank you to Khurram Hussain and Faiza Mushtaq, for being constant mentors and supporters of this project. Thank you to Zia-ur-Rehman and Abubakar Baloch for your wealth of knowledge, and for helping me navigate Karachi’s neighborhoods. I am grateful to the geographers and statisticians at the Census Bureau in Sindh and at the Orangi Pilot Project, and to the librarians at the Dawn News Library at Haroon House and the Sindh Archives. I thank Mutaher Khan for his excellent assistance with data entry and research. This project would not be possible without the individuals and communities in Karachi and Lahore who invited me into their homes, who took out the time to speak with me and my team of enumerators. Thank you. Thank you to Samira Hussain, to the Sultanalis and the Peermohommads for your unwavering support and faith in me. My thanks and love to Asad Rehman, for his wisdom and years of tech support. My love to Ammara, Asad, and Mehreen, and

vi to my dearest Chris, and to your families. You’ve provided me with a place to write, and powered me through these years with humor, kindness, and tea. I can never thank you enough. This work is dedicated to my family: to Nani, my mother and father, and to Sara and Shaan. Your love and support has made this possible.

vii Table of Contents

Chapter 1 Introduction ...... 1 1.1 Electricity in urban Pakistan ...... 3 1.2 State-making and political embeddedness ...... 5 1.3 Patronage, citizenship and a language of rights ...... 8 1.4 Alternative hypotheses and tests ...... 14 1.5 Research design and methodology ...... 16 1.6 A roadmap ...... 17 2 The new politics of doing business in a developing megacity ...... 20 2.1 ‘Everyone is stealing’: Politics and state provision ...... 20 2.2 Political mobilization and the welfare state ...... 31 2.3 City planning and political subjectivity ...... 37 2.4 Post-privatization: Segregated citizenship in Karachi ...... 49 2.5 Discussion ...... 53 2.6 Conclusion ...... 58 3 Participation and citizenship in privatized service delivery regimes . . . 64 3.1 ‘What can they do about it?’ ...... 64 3.2 Existing literature and theoretical expectations ...... 69 3.3 Hybrid service delivery in practice ...... 74 3.4 Expectations, eﬃcacy and entitlement ...... 83 3.5 State embeddedness and private service delivery ...... 95 3.6 Discussion ...... 98 3.7 Conclusion ...... 103 4 Disempowered: Political trust and service delivery ...... 112 4.1 ‘Paying Bacha’ for the bills ...... 112 4.2 Stealing from your brother: The invention of ‘theft’ ...... 119 4.3 Priming on theft: A survey experiment ...... 124 4.4 Survey and service delivery data ...... 127 4.5 Institutional and inter-personal trust ...... 136 4.6 Discussion ...... 139 4.7 Conclusion ...... 142 5 Conclusion ...... 149

viii 5.1 ‘Nothing gets ﬁxed if you don’t go in a group’ ...... 149 5.2 Summary of ﬁndings ...... 152 5.3 Theoretical contributions and policy implications ...... 154 Bibliography ...... 156

ix List of Figures

2.1 An example of a pirated connection bill ...... 60 2.2 An electricity transformer with pirated connections ...... 62 2.3 Example of K-Electric advertisement from 2010 ...... 63 3.1 Quality of private services: Electricity outage by District ...... 76 3.2 Ranked means of service delivery priorities ...... 105 3.3 Service delivery in Karachi, 1998-2018 ...... 106 3.4 Electricity transformers in District South, Karachi ...... 107 3.5 Electricity bills and household income ...... 108 3.6 Complaint and claim-making ...... 109 3.7 Political embeddedness and stratiﬁcation: Marginal eﬀects ...... 111 4.1 Trust and service delivery: High and low outage areas ...... 131 4.2 Trust and service delivery: Proximate neighborhoods ...... 132 4.3 Advertisement campaign for Karachi Electric Supply Corp., c. 2009 . 148

x List of Tables

1.1 Privatization and political outcomes ...... 10 1.2 Privatization, stratification and political outcomes ...... 13 1.3 Service delivery and political participation ...... 14 2.1 Consumption of electricity by sector, percentage total sales ...... 39 2.2 Class, privatization and claim-making: Survey results ...... 61 3.1 Theoretical expectations of privatized service delivery ...... 71 3.2 The quality of service delivery and outage ...... 80 3.3 Comparing high and low quality service neighborhoods ...... 88 3.4 Comparing very low quality service neighborhoods ...... 93 3.5 Mechanisms summary ...... 100 3.6 Service delivery and political participation ...... 110 4.1 Privatization, stratification and political outcomes ...... 124 4.2 Trust, voting and participation ...... 143 4.3 Trust, voting and participation: Spatially clustered ...... 144 4.4 Experiment results ...... 145 4.5 Experiment results, class effects ...... 145 4.6 Institutional and interpersonal trust: Behavioral results ...... 146 4.7 Sharing recent bills and trust ...... 147

xi Chapter 1

Introduction

Service delivery is the cornerstone of the social contract between citizens and the state - access to clean water, sanitation and basic electrification have come to represent the state’s capacity to provide welfare and economic security to its citizens. States are increasingly taking a back seat in service delivery. A steady demand for bureaucratic efficiency, coupled with looming state debt in the 1990s prompted governments in medium income countries in Latin America and Europe to seek private investment in traditional state-provided services such as water, electricity, and garbage collection. In recent decades, however, private investment in public service delivery has increasingly become the norm in low and very low income countries in Africa and Asia. These aren’t always the informal, low-cost services that supplement state service delivery: the World Bank dataset on private investment in public infrastructure notes an uptick in privatization of top-down, centralized state services. Governments in very poor countries turn to private investment in the public sector for many reasons - to fulfill donor demands for fiscal discipline, as a way to engage in political rent-seeking, or simply to cast off large, expensive state enterprises. How does the relationship between citizens and the state change when service delivery in low and low-medium countries is privatized? How do highly unequal and stratified urban centers transform when centralized utilities are unevenly provided, prioritizing those who can pay for these services over

1 those who can not? How do attempts to rationalize and commodify certain public services alter citizens’ perceptions of government, private ﬁrms - and each other? This book attempts to answer these questions. The city of Karachi, Pakistan, with a population of over 14.4 million people is the site of this study. Pakistan, having gone through a series of autocratic and semi-autocratic regimes, is currently in its 13th year of democratic rule after a prolonged military dictatorship that lasted from 1999 to 2008. The country faces challenges that are similar to much of the developing world, including institutional instability, a struggling industry, and economic crisis. In spite of its frequent lapses to authoritarianism, periods of electoral politics have resulted in a robust multiparty system, with national parties vying for dominance at the center, and at the local, municipal level. In Pakistan’s largest city, Karachi, ethnic-based patronage politics has occupied the dominant narrative in academic scholarship. The city’s dominant party, the United People’s Movement, and its major rivals the Pakistan People’s Party and the People’s National Party have for decades provided protection against the police and rival parties to their constituency. Ethnic, and, by extension, political linkages provided access to jobs, land for informal settlement, transport routes for private buses, piped water, and electricity. Local public goods are provided through a series of formal and informal, private and public arrangements. Pakistan’s largest and oldest colonial-era distribution company for electricity, Karachi Electric Supply Corporation, was privatized in 2005. The privatization of a centralized electricity utility, serving over two million regular consumers and several thousand irregular ones, provides an unprecedented opportunity to understand the role of a private bureaucracy in a highly unequal, overwhelmingly poor and informal developing megacity. The study of private service delivery in very low-income contexts is somewhat limited to decentralized formal and informal public goods. Multiple studies, for

2 example, note the high uptake among poorer and middle income households of private schools and hospitals. In contrast, the sale of electricity and water utility ﬁrms marks a formal, top-down form of privatization. Unlike the decentralized privatization of schools and hospitals, the centralized and ‘ﬁxed’ nature of electricity and water grids create a complex geography of urban service delivery. As this study demonstrates, access to high-quality services in a central, privatized network is contingent on individual income, and also on location within the city. Private utilities rely on prioritizing areas of the city that are ‘good’ consumers, and excluding non-payers - I demonstrate that this form of sorting is imperfect, and inevitably traps good households in bad neighborhoods.1 Therefore the study of centralized, privatized services forms a distinct and under-theorized category. This study demonstrates the range of behavioral responses, including acquiescence, disappointment, and resignation, that complicate binary public choice outcomes such as ‘approval’ and ‘disapproval.’ In particular, the experience of electricity in Pakistan becomes a lens to examine the political salience of service delivery issues, or the relative absence of them.

1.1 Electricity in urban Pakistan

1.1.1 Jug¯ad, hacks, and citizen technology

While parts of this study have examined the role of water and other services in Pakistan, the focus on electricity provides important advantages. Primarily, it enables an examination of the discourse created around a particular resource, and the political and social institutions that engage in securing resources at the local level. At ﬁrst blush, electricity is not an ‘artisanal’ good, because individuals are not

1And vice versa.

3 directly involved in its cultivation and distribution. A person puts on a light switch, and electricity is either there, or not there. Simmons (2016) suggests in her definition of artisanal relationships with certain goods and services that ‘people need to exert daily effort specifically and consciously to procure (the good) to meet their needs.’ In this case, the effort of women in urban spaces to be home to fill buckets and tanks when the ‘chavivala’ turns valves on (Anand, 2017; Hyun et al., 2018) is a perfect example of an urban artisanal relationship. Similarly, in Karachi, access to electricity should be understood as a series of efforts that include complaint, bill payment, electricity management, tampering and pirating, and negotiation. The experience of electricity, as with water, varies across the city. Urban elite experience the city in ways that are similar to the developed world (Beall, 2000): when the water and electricity ‘mains,’ that is, state-provided services fail, a series of private backups almost seamlessly ensure uninterrupted supply. These include diesel and gas-powered stand-by generators, rechargeable high-voltage batteries, and water tankers. In 2019, a new high-end residential enclave on the outskirts of the city promised services that were in every way siloed from the vagrancy of public provision, from setting up a stand-alone electricity generation plant on site. The individuals who experience life in this way in Karachi, as with other highly unequal cities, are few, but are politically influential. This study finds that electricity is collectively experienced in Karachi, Pakistan. I examine first the attempts of the state to uncouple electricity from a communal, public service to a commodified, private service. I suggest that the attempt was partially successful - individuals associate the provision of electricity with the payment of utility bills. I also find that this association is ideational and constructed: the actual provision of electricity is contingent on an individuals’ ability to pay bills, but also where she lives, who her neighbors are, and whether the

4 utility company views her neighborhood as being ‘good’ or ‘bad’ consumers. I use archival materials to trace the construction of a consumer-commodity relationship with electricity, suggesting the use of top-down instruments such as privatization, but also bottom-up desires for modernity and de-politicization. Finally, I unpack the central puzzle of this project: why are these highly unequal and costly arrangements not contentious, that is, why do they not give rise to political opposition? I find that access to electricity is inscribed with meaning, that is, the ‘cost of living,’ often articulated in political terms as ‘the cost of doing business’ in a city. In every instance where the loss of access to resources results in political opposition, scholars note the ability of resources such as water (Simmons, 2016; Von Schnitzler, 2008), electricity and food to be inscribed with meanings that make individuals relate to each other, as communities, nations and popular movements. Ironically, the equilibrium of increasingly rising costs and diffused, individual interests is achieved because individuals at all levels of an economic hierarchy are engaged in such transactions - the economic stratification of the city is intimately tied to a political stratification that is intensely individualistic, and intensely clientalistic. I explore cases where the project of privatization has been less successful at atomizing individuals, presenting evidence from community organizations and anjumans that resist collective punishment by the private utility company and the state.

1.2 State-making and political embeddedness

The history of why states provide certain goods and not others is as old as the state itself. The original social contract between states and citizens - that of ‘protection’2

2Tilly (1985)

5 - has been expanded to include multiple forms of security. These include food and energy security (Hossain et al., 2018) and expansive ideas of rights. Access to potable water, clean air and basic education and health are just some of the areas that states have considered rights. The political discourse of rights enables states to selectively expand services such as electricity, water and even the internet to individuals who may not be able to aﬀord it at the market rate Gore et al. (2019). It provides the necessary discursive structure for service providers to ignore the theft of these goods, and to tolerate the piracy of services in low-income (and occasionally high-income) settlements (Burgess et al., 2020). As Gore et al. (2019) and others point out, it also lays the groundwork for resisting the liberalization of markets for determining the distribution of good and services that have been conceived of as ‘rights’ (Simmons, 2016). Throughout political economy scholarship, the debate on whether technologies such as electricity should be conceived of as ‘rights’ or ‘commodities’ is considered largely dichotomous, with leftist political parties and populist autocrats demanding the former, while neoliberal elites, technocrats and the World Bank asserting the latter (Burgess et al., 2020; Gore et al., 2019; Murillo, 2001, 2009). This view, while useful for categorizing contemporary privatization and policy outcomes, risks taking an ahistoric view of the expansion of public utilities in the developing world. I suggest that expansion of electricity infrastructure to countries such as Pakistan was central to the state-building project. At times, this took the shape of centralized economic planning, backed by technocratic expectations of industrialization and economic expansion, at other times, of more populist agendas of creating a modern, connected citizenship. Between 1989 and 1990, the consumption of electricity per capita in low-medium countries jumped from 518 kwh to 873 kwh.3 The domestic consumption of

3World Bank Data repository, Accessed 3-12-2020

6 electricity has increased since then, driven in part by improved and efficient generation systems, increased production of fossil fuels, particularly coal, but also by a global transition where energy security was not simply the domain of rich industrialized countries, but of relatively low-income ones as well (IMF, 2008; Mitchell, 2011). The expansion of electricity connections in rural and low-income urban areas officially became part of development goals in 2012 (Burgess et al., 2020). By 2015, over 95% of citizens living in urban centers in low and middle income countries had access to electricity. The expansion of rights is at the core of the democratic commitment of states to citizens, regardless of whether states are ultimately capable of delivering on these promises (Heller, 2000). Periods of political upheaval, including the independence struggle against colonialism in many of these countries, led to the articulation of rights. Frequently, infrastructures that had been used in the extractive process of colonial industrialization were re-imagined as broad-based rights under nationalist independence movements. Therefore, Kwame Nkrumah promised Ghanaians ‘equal opportunities’ for economic development (Nkrumah, 1967), and Julius Nyerere directly referenced the centrality of technology to the expansion of rights. Nyerere marked the inauguration of Tanzania’s Hale hydroelectric dam as representing ‘the application of science to the needs of the people’ (Hoag and Ohman, 2008). Crucially, the regimes of Nkrumah and Nyerere, like other newly independent nations at the time, borrowed from international lenders to develop hydro-electric power in the country. Some scholarship rightly points out variation across elite leadership in newly independent countries - electricity in Uganda, for example, was largely driven by right-wing, pro-market elite who primarily conceived of electricity to lead industrial growth, and to prioritize middle-income, paying consumers over broad-based electrification (Gore et al., 2019). A striking and under-theorized

7 thread is the persistent role of borrowing from international donors to fund electricity expansion, regardless of regime ideology - whatever the stated political objectives of the newly independent nation were, providing power was quintessentially a state-making function. To simply conceive of electricity provision to citizens a matter of politically-constructed ‘rights’ is therefore a ‘thin’ reading of a much older project of projecting power - literally - by the state,4 in creating infrastructures that are visible, expansive, and enable the penetration of private and public bureaucracies into everyday lived experiences (Larkin, 2013; Rizvi, 2017). To this end, the World Bank and international technocrats oﬀered unquestionable support, seeing the project of modernization, that is, grid-building, as part of the urgent need to build coherent states in post-colonial polities.

1.3 Patronage, citizenship and a language of rights

The dilemma of ‘rights’ and ‘commodities,’ therefore, is a matter of which groups the state chooses to patronize (Mitchell, 2011). However, in the vast literature that examines the phenomenon of public service delivery and privatization, ‘patronage’ is almost uniformly reserved for the preference of political parties to provide expansive services to very low income constituents, who can only aﬀord it by virtue of their electoral importance to political patrons. The foundation of scholarship on privatization therefore conceives of the state’s project of extending support to capital and markets as ‘programmatic politics,’ and to citizens as ‘patronage politics.’ Classic scholarship suggests competing interests in society between the constituency for bureaucratic independence and the constituency for patronage (Shefter, 1977), transitions to programmatic politics in Latin America and Eastern

4Inevitably, these infrastructures are part of the ‘civilizing mission’ of the state (Scott, 1998).

8 Europe are marked by the expansion of the middle class and popular demands for less paternalistic, and more transparent, access to public services (Kitschelt et al., 2007; Murillo, 2001; Weitz-Shapiro, 2014). In particular, while party ideology might shape the eventual details of bureaucratic reform, scholarship universally agrees that upwardly-mobile middle-income populations create a sizable push for challenger parties to demand bureaucratic autonomy, and de-politicized access to public services. The reason the middle class has a stake in such policies is because the alternative is a highly politicized dependency of voter-clients on party-patrons, leading to a breakdown of democratic accountability and bad, ill-informed policy making (Weitz-Shapiro, 2014). The extent to which political influence determines local service delivery outcomes is a property of public provision that this book is interested in. Scholarship on privatization processes in Latin America, India and Africa suggests the degree of party influence in privatization reforms is highly context specific - even during privatization and technological shifts, parties and sub-national institutions can choose to implement policies to their liking (Bussell, 2012). Parties can make privatization market-compliant, by enabling competition and providing terms for private investors, or they can use privatization for graft and rent-seeking (Murillo, 2001; Szakonyi and Urpelainen, 2013). In spite of decades of rich theoretical examinations of policy, we know relatively little about how these impact day-to-day interactions between parties and voters. Borrowing from work on bureaucracy and social contract literature, this study is therefore interested in the degree to which political actors are embedded in the everyday process of service delivery access. Throughout this study, the term ‘political embeddedness’ is used to mean a system by which citizens approach political parties seeking resolution for day-to-day service delivery issues. The exercise of approaching political leadership has been

9 Table 1.1: Privatization and political outcomes

Public Service Centralized Decentralized Institutional Private Electricity (Karachi) Tanker Water Arrangement Political embeddedness ↓

State Electricity (Lahore) Garbage Collection Piped Water Political embeddedness ↑

called ‘active citizenship’ (Houtzager and Acharya, 2011), and the act of seeking better service delivery ‘claim-making’ (Kruks-Wisner, 2018). While these terms describe what happens when the state is responsible for service delivery, it does not enable an examination of claim-making and citizenship when services are privatized. Theories of active citizenship are generally conﬁned to situations of high political embeddedness Table 1.1: where, irrespective of the infrastructural technology, service delivery is provided by the state. The framework presented here allows an examination of what happens when claim-making frameworks are not available, because a service is no longer administered by a public, politically embedded bureaucracy (Pepinsky et al., 2017). The ﬁrst expectation is that where services are provided privately, opportunities and incentives for political parties to be involved with day-to-day service delivery will be limited. Equally, citizens will be less likely to turn to politicians with complaints for that particular service. I expect that these take place concurrently and unevenly - pockets of citizens will continue to demand their representatives take action, and highly motivated politicians may continue to support citizens in gaining access to privatized services. Overall, however, the literature suggests that the privatization of service delivery will lead to a decline in

10 the systematic, institutionalized process of exchange of goods and services for political support. This study departs from a classic framing of patronage that examines it from the perspective of holding elected representatives accountable. The ‘unfairness’ of clientalism assumes that citizens do not exercise considerable autonomy when negotiating for services in routinized, personalistic ways. In low-capacity, low-information settings, this framing of patronage does not consider the vital channel of feedback and demand-making that ‘politicized’ public goods provide. I therefore consider patronage a channel of communication between citizens and the state that is dynamic and responsive. The erosion of these channels by commodiﬁcation and privatization has important implications for the provision of public goods, but also for the practice of citizenship.

1.3.1 Cities and spatial inequality

The state-building electrification projects of the 1980s and 90s focused primarily on rural electrification. Indeed, much of the conversation around service delivery in the developing world tends to focus on rural areas, although over half of the population in low income countries lives in its cities (Post, 2018). Cities in low- and very-low income countries offer intriguing service delivery challenges: often they are the site of severe inequalities, and also political competition (Auerbach, 2019; Nathan, 2019b). Like other large urban centers in the developed and developing world, Karachi is an unequal city. A very large percentage of the population is poor, while a substantive higher income population engaging in consumption and lifestyle patterns similar to their industrialized country peers (Beall, 2000). Formal and informal privatization makes up for the lack of state-provided services, in sectors such as health, education and transport, similar to that in other emerging economies

11 (Post et al., 2017). On the one hand, sociological work suggests higher income households are able to opt-out of state provided services (Holzner, 2010; Nucho, 2016; Sassen, 1996). In South Asia, multiple studies have noted the entry of low-cost private schooling and health as alternatives to public provision (Andrabi et al., 2006). On the other hand, middle income households continue to be dependent on state services such as road maintenance and policing (Weitz-Shapiro, 2014). The type of service and its technology, as suggested in the previous section, is therefore of utmost importance. It determines which channels of compliant and resolution people are likely to access for privatized and state-provided services. The second part of this argument suggests that privatization of major public services does not simply result in changed behavior for that particular service, but has wide-reaching political impacts. A key driver of this political spillover is the way cities and infrastructure are spatially and geographically organized. Particularly for services like electricity, the centralized technology of the grid and dependence on built infrastructure creates division between neighborhoods that are better and worse off. A analogous example is that of transportation, roads and public transit. Early decisions in infrastructure capacity dictate which parts of the city are better or worse-off relative to others. In the case of electricity, the first form of differentiation in a large developing country city is that between the core and periphery - neighborhoods closer to the city’s commercial and industrial centers are more likely to have built infrastructure, compared to those in suburban locations. The next form of stratification, intuitively, is that of income. Under a state-provided service, low-income neighborhoods may have access to service delivery through their political capital. By privatizing services, the state attempts to differentiate between payers and non-payers by entrusting non-political, private bureaucracies to administer distribution and bill collection.

12 Privatization, therefore, creates tiers of service delivery, that are generally spatially located. Depending on where citizens are located, they will have diﬀerential access to a range of private and public facilities. While the ‘hybrid regime’ of service delivery (Post et al., 2017) has been documented in multiple instances, there are few attempts to systematically study the range of behavior that citizens engage in when confronted with a hybrid and unequally distributed service delivery landscape. Primarily, service delivery in low-income contexts is diﬃcult to study because of the lack of data. Creative alternatives such as night lights are used as a stand-in for provision (Michalopoulos and Papaioannou, 2013; Min et al., 2013), or consumer- and neighborhood-level data is provided by the utility company (Kumar et al., 2018; Mahadevan, 2019). This study leverages access to private utility company data to create a map of spatial inequality in a large and highly unequal developing city. This novel use of data allows the examination of political behavior at a neighborhood level. In particular, it allows me to examine not just very high and very low income neighborhoods, but the large and richly varied in-between middle income and mixed neighborhoods.

Table 1.2: Privatization, stratiﬁcation and political outcomes

Neighborhood income Private Service Delivery Institutional Trust High High Quality High Mostly high/medium Medium Quality Mostly medium/low Low Quality Low Low/very low Very Low Quality

The typology outlined in Table 1.2 suggests that privatization creates income-based segregations. This is by design, as privatization moves service delivery from a rights-based framework to a commodity based framework (Burgess et al., 2020). From the previous section, I assume that behavior normally expect across

13 voter blocs - for example, trust in parties and institutions, and expectations of the state - are highly contingent on location and services provided. Table 1.2 therefore proposes the expectation of these behavior in privatized, non-state-provided settings. I suggest that in the period immediately post-privatization, the ﬁrm engages in sorting good and bad neighborhoods. The result is four ideal types of neighborhoods: at the lowest end are the very poor, surrounded by very poor neighbors. At the highest end are the very rich, living among other very rich peers. We can therefore directly observe the impact of privatization on democratic trust and participationn using location in each of these neighborhoods as the key independent variable. In particular, associational membership is low where individuals are subject to low-quality service delivery (Table 1.3).

Table 1.3: Service delivery and political participation

Political embeddedness Private Service Delivery High Low High Quality Participation ↑ Medium Quality Low Quality Participation ↓ Very Low Quality Participation ↑ Participation ↓

1.4 Alternative hypotheses and tests

There is considerable evidence that the poor tend to be disenfranchised. In the industrialized world, the poor are less likely to take part in politics (Berinsky, 2005). While there is some optimism that the poor may want to participate in politics (Ahuja and Chhibber, 2012), they may face systematic barriers to political participation, including the high cost of participation (Holzner, 2010; Kasara and Suryanarayan, 2015). Is it possible that in the spatial segregation created in the previous section, the poor are simultaneously resource-poor and less likely to

14 participate? A viable alternative hypothesis is that lack of motivation to participate is concurrent with, if not prior to, low-income status. (Nathan, 2019b; Resnick, 2014) and others attempt to untangle these phenomenon by suggesting that the inability or unwillingness to take action is fundamentally an information gap: the poor and low-income, particularly in developing country cities, may not know who’s to blame for poor service delivery. To this end, it is important to examine the role of information on individuals’ ability and willingness to trust institutions. In Karachi, the discursive role of media and advertising provides a unique opportunity. In order to motivate citizens to pay their bills, the private utility firm implemented an extensive and far-reaching campaign against ‘theft.’ Chapter 4 uses messaging on theft to examine its impact on institutional trust. In particular, it allows us to differentiate between communities that are prone to institutional mistrust by virtue of their economic status, and those who are mistrustful because they are informed of theft by institutions. A second important alternate hypothesis involves the ability of communities to solve problems. Particularly where income is heavily reflected in the quality of privatized service available, it may be that those who are unwilling to cooperate with each other to vote, are also unable to cooperate to pay their bills. The survey experiment discussed in Chapter 4 examines the impact of messaging on inter-personal trust, and suggests that iterating the link between theft and low-quality service delivery diminishes individuals’ likelihood of reporting trust in their friends and neighbors.

15 1.5 Research design and methodology

The methodological approach in this study deliberately employs both qualitative and quantitative methods. It draws from political anthropology and sociology to develop a theoretical framework to examine the phenomenon of privatization and citizenship. The study of resources and the politics of distribution is particularly ripe for mixed methods, primarily because the everyday materials of electricity and water are embedded with meaning (Geertz, 1973) - these meanings, in turn, come to deﬁne the nature of citizenship and the lived experience of being in a city. The study of patronage, as discussed in the previous section, is itself context-speciﬁc. Therefore, the use of a single case - Karachi, Pakistan - and the focus on a single resource - electricity - enables a deeper qualitative understanding of the way resources and service delivery evolve in a post-colonial city. The study follows Geddes (2003), Schwartz-Shea and Yanow (2013) and others in using archival materials, interviews and focus groups to generate hypotheses. The next stage makes use of quantitative methods to test each of the hypotheses, using data from comparative cases and from spatial, survey, experimental and administrative sources. These data are described in detail below.

1.5.1 Data and sources

This study makes use over a year of ethnographic research in Karachi, Pakistan, and follow-up interviews in Lahore. It uses a novel dataset of 30,000 service delivery clusters across the city for two time periods, using data provided by the private utility ﬁrm as a document of how private providers ‘view’ the city as ‘good’ and ‘bad’ neighborhoods. These data are matched with local government maps, including demographic and electoral data from the Pakistan Census in 1998, Local

16 Government elections in 2015 and General Elections in 2018. The complete dataset has over 25,000 data points across an area of near ﬁfteen hundred square miles, identifying service delivery across a population of over 15 million individuals. These data are combined with an original survey and survey experiment (N=1000) that will test each part of the theoretical framework presented here. Three districts in Karachi were identiﬁed and forty clusters were randomly selected, each tagged to a data point from the service delivery data. This enables unique, household-level data on what the actual quality of services are, in addition to household-reported services. The survey included a survey experimental component, in addition to questions on political participation, electricity consumption and public policy priorities. The next sections outline the theoretical expectations, and detail how each part of the data were used to answer these questions.

1.6 A roadmap

The ability to maintain political control over public goods is at the heart of the debate on distributive politics. Political science literature commonly refers to the phenomenon using the pejorative term ‘patronage.’ According to these arguments, patronage diminishes the ability of citizens to choose policies, and instead forces them to vote based on the promise of contingent, individualized benefits (Weitz-Shapiro, 2014). Citizens’ dependence on political representatives for selective benefits leads to a perverse form of accountability, one where citizens are worse off because they exchange their vote for goods and services (Stokes, 2005). However, I suggest that in the absence of political linkages between service delivery and politics, citizens can face diminished incentives to participate politically or in associational life.

17 This study examines one instance of this phenomenon - the privatization of a large state utility in Karachi, Pakistan. Pakistan is an important test case for this theory, having a long history of autocratic rule and having recently transitioned to democracy, it also has had varying experiences in utility privatization. This study asks - what happens to the relationship between citizens and their representatives, when the latter no long influence distributive outcomes? I suggest first that privatization diminishes the ability of citizens to use political representatives to lobby for better provision (the effect on patronage). Next, I argue that being ‘stuck’ in low-provision neighborhoods makes individuals less likely to exercise their political power overall, even for non-privatized public goods (the spillover effect). Finally, I propose that the mechanism by which this happens is the diminishing of inter-personal and institutional trust, as a consequence of households blaming their neighbors, and not the state or its subsidiaries, for poor service delivery. This section outline each of these findings for the remainder of this book. Chapter 2 uses archival planning records from the 1960s, court documents, and loan agreements between the state and international lenders, to process-trace privatization in a low-income economy. In examining the case of electricity privatization in Pakistan, it shows that privatization alters but does not diminish the scope of patronage, transforming it from electoral-focused to more narrowly rent-seeking, typically between powerful elites. Chapter 2 demonstrates that the access low- and medium-income individuals have to patronage diminishes when public goods are privatized. I show that in Karachi’s energy sector reforms, privatization excluded two major historical beneficiaries - unions, and low-income electoral constituents. I show that commercial and industrial associations are more successful at lobbying the new ‘hybrid’ service delivery regime. I suggest the mechanism by which these privatization reforms are made palatable is a

18 combination of virtue signaling on behalf of constituents, and the narrative of rationalism and modernity by the political government. Chapter 3 focuses on the core puzzle of this book: what happens to the relationship between citizens and political leaders, when the latter no longer influence service delivery? Using the spatial dataset of 25,000 service delivery clusters in Karachi, this chapter demonstrates the economic stratification of service delivery under privatization. I find that it creates variation in political expectations of the state. Interviews from ten months of fieldwork are used to establish neighborhood-level variation in private, semi-private and state-provided services, constructing a measure of ‘state embeddedness.’ I test conditional effects of state embeddedness on political participation using an original survey of over 1000 households. I find that improved service delivery under privatized service delivery regimes can reinforce political participation, but only if some services continue to be provided by the state. Conversely, low quality private services across sectors can lead to voter exit. Chapter 4 presents findings from the survey experiment. It examines impacts on institutional and inter-personal trust when households are quasi-randomly assigned to ‘high’ and ‘low’ electricity outage areas, and finds that high outage areas are considerably less trusting of institutions but not of each other. Survey experiment data (N=1019), is used to suggest that messages linking outages and theft, when delivered by an authority, reduce trust in neighbors. I use qualitative data and vignettes to suggest that transitions to liberalized utility regimes, while beneficial to some consumers in the short term, have unintended long-term negative outcomes for accountability and collective action.

19 Chapter 2

The new politics of doing business in a developing megacity

2.1 ‘Everyone is stealing’: Politics and state provision

One of my earliest interviews takes place on a humid July day in Karachi in 2017, with a man I am introduced to by my journalist friend. Abubakar is in his late thirties, Pashtun, and aﬃliated with a small local newspaper. He says he lives in a Pashtun colony on the outskirts of Karachi. He shows me a piece of paper, torn from a booklet of similar stubs, titled ‘Receipt for Kunda (Pirated) Bill’ (Figure 2.1). The bill, printed in smart blue ink, has a cell phone number, the bill amount (Rs 750, or about $6), and the date - May 10th, 2012. A few days later, I visit Abubakar’s neighborhood in Korangi, navigating increasingly narrow and rough roads among low, semi-permanent structures. The settlement is relatively new and predominantly Waziri, occupied by Pashtun migrants from the latest wave of violence in the tribal belt of Pakistan. I ask about the kunda bill, and people look puzzled. ‘You’re talking about Afroz,’ someone ﬁnally says. ‘He was an ANP1 guy, he used to run a medical store. People gave him money for electricity, he got 50 meters (installed) for all the houses, he used to take about two, two and a half thousand rupees (about $20). The rest he settled with KESC.2’ I asked if I could meet Afroz, and was told that he was killed by the Taliban some years ago. ‘Anyway

1Awami National Party, the ethnic party most popular among Karachi’s migrant Pashtun population 2The Karachi Electric Supply Corporation

20 that system ended, 6-7 months ago they took down all those meters and installed a regular meter for every house. Now we each get a bill of three, four thousand. And meanwhile, this,’ he gestures around us. ‘Seven and a half hours of loadshedding.’3 Electricity theft in Karachi was once widespread and thoroughly institutionalized. Pirated connections called kundas, consisting most frequently of thin metal wires hooked on to over head electricity cables, were used as a primary source of electricity for low-income and informal neighborhoods in the city (Figure 2.2). In high and medium income neighborhoods, these hooks or more sophisticated variants were used as a backup source of power during rolling blackouts.4 Political parties participated in electricity provisioning to various degrees: the vignette describes the most intimate of these, where party representatives were also local electricity providers. In middle-income neighborhoods in District Central, which was the stronghold of the dominant party the MQM, electricity would primarily be provided through regular, metered connections, but bills would frequently remain unpaid, the area’s privileged position as a party stronghold barring it from disconnection. In working-class neighborhoods in District South, the MQM’s main political challenger, the PPP, was notorious for preventing meter inspectors and bill collectors from entering the area. Finally, in upscale neighborhoods and industrial areas, individuals paid oﬀ utility company bureaucrats, and were advised to install multiple meters to ‘split’ the units consumed. Local service delivery arrangements such as Karachi’s electricity system are typical of patronage arrangements in the developing world, but with important caveats - the political institutions of Karachi, like the rest of Pakistan, were marked

3Interview, Muslimabad Colony, Korangi, July 15th 2017 4As the neighborhood is subjected to a blackout, individuals reported switching the household to a source of electricity from a pirated connection in the most proximate neighborhood on a diﬀerent outage schedule.

21 by frequent shifts in power between military and civilian government. Second, the intensity of violence through much of the 1980’s and 90’s led to political parties frequently boycotting the electoral process, or being barred from it, making access to power in the way patronage parties are expected to Stokes (2005) less certain. It is therefore remarkable that services at the local level functioned with regularity - intermediaries were paid off, settlements on the edge of the city thrived under party patronage Gazdar and Mallah (2013), and inner-city strongholds were guarded against party rivals Gayer (2014), but also utility company bill collectors. The kunda bill I was shown by Abubakar seems like an artifact from another time, where the governance of service delivery followed local institutional arrangements. Today, the provision of electricity is marked by the presence of a standardized bill, with a corporate logo - ‘K-Electric’ - on the masthead. The sale of majority shares in Karachi’s electricity company, with an official consumer base of 2.2 million but a service area that covers well over 15 million individuals, serves as an entryway to understanding the everyday politics of a modern megacity. Under what circumstances do political parties acquiesce to the handover of potentially lucrative patronage vehicles - such as electricity - to private firms? And how does this change the nature of citizenship? Existing literature suggests a wealthier, governance-driven electorate might drive the transition to programmatic politics, party competition, and privatization (Kitschelt, 2000; Shefter, 1977; Weitz-Shapiro, 2014). This argument suggests that parties, motivated by anti-corruption demands from the electorate, agree to tie their hands and commit to an impartial distribution of services. A critical gap in this literature is that it has primarily focused on ‘upper middle-income’ countries, where the size of the middle-class is substantively large enough to form a coherent pressure group (See Post (2014), PPI dataset, World Bank). While this study is indebted to the

22 analytical frames from Latin America and Eastern Europe, the GDP of these countries is many times that of Pakistan, even during the period of liberalization. Yet privatization of public service delivery is not limited to emerging economies - over 40% of privately-owned projects in the developing world are in low and low-middle income countries, which include Pakistan, several countries in Africa and others outside of Eastern Europe and Latin America. This chapter will demonstrate the particular history of service delivery and its privatization in a lower-middle income country. I argue that by engaging in privatization, the scope of state patronage narrows from a broad segment of low- and middle-income groups to special interests, which include commercial and business elite. I examine institutions that are ubiquitous to lower-middle income countries, including histories of colonial rule and selective infrastructure investment, the role of authoritarian governments and international lenders. I use process-tracing to develop a analytical framework that views energy and electricity as discursive political frames, created in part by political parties but also by state technocrats and bureaucrats who write planning documents for the city. I argue that the success of privatization of electricity in Karachi can be attributed to the construction of a spatially and morally segregated electorate, where horizontal sympathetic ties across low-income households, labor unions, and civic institutions appear in contrast to vertical sympathies and ideas of fairness between corporations and consumers. I test this hypothesis by leveraging original survey data from 2018-19 in Karachi, and show that while middle- and upper-middle income individuals are indeed more likely to support ‘market’ solutions to service delivery problems, they are no less likely to experience low-quality service delivery.

23 2.1.1 Why electricity?

The state’s role in the provision of services and goods is evolving. It has shifted over time, as market reforms have swept the developing and developed world, and reduced the scope of welfare provision by the state. And it varies across space: material resources that are considered rights in certain contexts are commodities in others, sometimes within the same cultural and political context. This chapter examines the processes that enable states to divest of some part of their service delivery role. In particular, it examines the claims of patronage literature that suggests reforms to de-politicize services are likely to be resisted by political actors, both in democratic and autocratic contexts (Murillo, 2001, 2009; Post, 2014). Where parties are part of liberalization reform, there are frequently constituencies that demand the shift from patronage to programmatic politics - typically, competition between parties and a robust middle class drive parties away from using state services to secure votes, and towards a more rule-based platform (Kitschelt, 2000; Weitz-Shapiro, 2014). This scholarship similarly examines privatization through the lens of how successfully it shifts away from paternalistic, individual decisions to deliver services towards a rule-based organization - vestiges of political influence are viewed as forms of corruption. (Szakonyi and Urpelainen, 2013) use the Indian case of privatization in industry and find that larger, wealthier companies continue to use rents to get favorable access, but that smaller firms are ‘priced out’ of the new system. In multiple contexts, privatization is used synonymously with bureaucratization, suggesting that a desire to reduce the role of political arbitrariness is at least part of the decision to seek investment and management from private firms (Bussell, 2012; Post, 2014; Weitz-Shapiro, 2014). The privatization of public infrastructure - water, fixed telecommunications, sanitation

24 and in this case, electricity - is a significant example of interfacing between private firms and citizens. First, because public infrastructure is fixed and tends to favor localized monopoly ownership, private firms are vulnerable to political appropriation and nationalization. Investments in public infrastructure are also more likely to be politicized, precisely because there is direct interaction between firms and citizens (Wells and Gleason, 1995, pg. 6), (Post, 2014, pg. 36). Finally, competition and short political horizons make private investments riskier, largely due to political opponents using foreign investments to target incumbents (Murillo and Martínez-Gallardo, 2007; Wells and Gleason, 1995). This is at odds with the ‘transition’ literature that suggests moves towards rule-based service provision are necessarily bi-partisan, or at least politically expedient (Shefter, 1977). I suggest that a crucial gap is insufficient attention to the role of elites. By every measure, the privatization of electricity in Karachi was a hugely successful and virtually unchallenged enterprise. In spite of being initiated under an autocratic government, it faced little to no resistance after the transition to democracy. During its initial sale, the international engineering firm Siemens became the face of political controversy, and ultimately resulted in its exit from the utility. The subsequent buyer was not a local or domestic firm but another international entity, and continues to be the major stakeholder and management institution fourteen years into privatization. While the success of K-Electric serves as a role model for using the foreign investor’s playbook, it poses several questions for political science. The simplest explanation for its success, and a relatively under-theorized one in the field, is a shift in patronage from a large base of voters to smaller, high-value clients. There is some precedent for this, especially in democratic contexts: when faced with narrower margins of victory, incumbent parties may implement policies that redirect patronage to narrowly-defined groups of clients,

25 such as increasing civil servant salaries, instead of broad-based service delivery reform Nooruddin and Simmons (2015). Traditionally, teachers and workers unions have reaped higher dividends from social programs, precisely due to their ability to target legislation and their larger organizational capacity5. Where utilities were primarily built to serve narrow consumers bases such as industries, their privatization has been met with much less resistance, since these transfers are unlikely to take place without buy-in from special interest groups (Gore et al., 2019; Kale, 2014a; MacLean and Brass, 2015). Yet the dependence of industry on Karachi’s electric utility has decreased over time - in 2018, over 60% of its consumer base was commercial and domestic users. Higher energy costs led many major industries to adopt on-site gas-powered generators. The commodification of public services, particularly in weakly institutionalized democracies, marks a fundamental change in political party structure and ideological ambitions. By appealing to shifting identities, including those of modernization and anti-corruption, political parties enable the state to take a muted role in service delivery provision. Surprisingly, only part of this shift is due to external pressure from international lenders and technocrats, as suggested by Mitchell (1999) and Vreeland (2005). In Pakistan, political competition during brief periods of democratization led to a rapid expansion of the welfare role of government at the expense of long-term financial security for the state; ironically, it also debilitated democratic participation at the local level.6 The other part of this theory emphasizes the role of international financial institutions that seek investment in states with weak institutional capacity. I suggest that the role of

5Eg. FDR’s New Deal and the role of unions 6This mirrors the permeation of political parties in political society: Chhibber and Shastri (2014) note the erosion of civic life as political parties became the only form of local organization, tying service delivery to local organizations.

26 private firms in weak institutional contexts is under-theorized. Firms that have domestic linkages, but that are incorporated internationally, reap certain advantages in low regulatory contexts. This chapter draws from two streams of scholarship to build its theory. The first is the use of privatization and private contracting to legitimize forms of state spending, giving governments credibility domestically and among the international lending community. I find that creating buy-in from elites, including political parties and courts, is fundamental to creating narratives of modernity and impartiality around privately-provided services, and makes debt and firm-targeted subsidies more palatable Mitchell (2011). The other side of this processes is necessarily driven by firms themselves: scholarship suggests that domestic private firms have better experience investing in infrastructure than international firms due to their ability to navigate local laws and utilize informal networks Post (2014). This chapter suggests that distinctions between domestic and international firms are blurry - an international firm, incorporated outside the host country, can benefit from local knowledge by having allies among local elite. I discuss the advantage of such firms, finding that they both carry legitimacy as being ‘independent’ and non-political outsiders, but also have considerable advantages in navigating courts and local institutions. The second part of the theory presented here asserts that savvy contracting by states can shift attention away from the provision of services as a right or an article of citizenship, towards being viewed as a commodity. I draw on Simmons (2016) to suggest that electricity in Karachi does not carry a shared political meaning, but multiple meanings across contexts that are often at odds with each other - for example, its status as a source of energy in homes is distinct from the company’s role as a major employer of unionized labor during the 1970s and 80s.

27 While later chapters in this manuscript discuss privatization in water, and use case studies elsewhere in Pakistan, I ﬁnd it advantageous here to focus only on electricity in Karachi. This study joins other that use an a isolated phenomenon (such as water, electricity, or corn) to understand larger political processes.7 Using process-tracing to follow the discursive history of electricity and energy in Karachi from the colonial period to the present day presents the advantage of seeing the technological evolution of this service, and its impact on the everyday negotiations that citizens undertake to secure it.

2.1.2 Independence and the growth of Karachi’s industrial base

Until the turn of the 20th century, the only integrated electricity in Karachi was for the purposes of telegraph lines. Colonial gazetteers note the presence of telegraph infrastructure in the cities and towns of Sindh, marking an important initial stage of technological expansion under colonial rule (Hughes, 1876). One of the earliest indications of a central electricity grid in the provinces that were to become Pakistan is in 1913; the journal Indian Industries and Power notes the eﬀort of Mssrs. Forbes, Forbes, Campbell and Co. Ld. to apply for a license to supply Karachi with electricity. The journal notes that the license would ‘will be granted by Government’ in that year. ‘The (distribution) area includes all the main streets, and it is anticipated that nearly every bungalow, club, house and shop will, before long, be lighted by electricity’ (Indian Industries and Power, 1913, pg. 238). Notably absent was the interest of industry; the company’s primary consumers were expected to be the postal and telegraph oﬃce and the railways, although it was ‘rumoured (sic) that some of the Flour Mills contemplate altering their machinery to enable them to utilize the power that will be lying close at hand’ (ibid). The

7In particular, Anand (2017), Björkman (2015) and Simmons (2016)

28 company is incorporated on September 13th, 1913 (Govt. of India, 1922) and floated ‘with a capital of ten lakhs, of which only four or five lakhs will be subscribed to start with.’ (Indian Industries and Power, 1913). The colonial government classifies the company as one of the ‘Public Service Companies’ - providing ‘Gas, Water, Electric Light Power and Telephone.’ Notably, in 1920, most of the institutions providing ‘public’ services, particularly in India’s urban centers, were private companies, many of with initial investments by British capital (Kale, 2014b). In the first decade of the 20th century, British Indian manufactures and industrialists note the need for electricity, even though the vast majority of the Indian public did not use electricity. Electrical plant and equipment were imported, even though ‘incandescent lamps are used by the million and electric fans by the tens of thousands.’ (p. 55). The Report of the Indian Industrial Commission (1918) notes that while the Bombay Presidency has made important progress in securing electricity, India’s mineral wealth is underperforming due to the lack of electric power. The authors note that India had large reserves of ferro-manganese, chromite and mica; however, industries continued to be dependent on importing steel and finished products from these raw materials. ‘The immediate want is a supply of cheap electric power’(Report of the Indian Industrial Commission, 1918, pg. 53). The report urged the colonial government to encourage investment by foreign firms in manufacturing by conducting assessments of hydro-electric power. From the report and elsewhere, it is apparent that electricity at the turn of the 20th century in India was produced by and for the mining and extraction purposes of colonial corporations. The first hydro-electric installation in India, set up on the Cauvery River in Mysore in 1903, carried electricity over 90 miles to Kolar gold fields. Some of this was driven by the lack of demand - in Jammu and Kashmir, for example, the geographic ease of setting up hydro-electric generation was offset by

29 the absence of its demand. The report notes that the electric generation project in Bombay was ‘formed with Indian capital’ and supplied the cotton mills in the city (Report of the Indian Industrial Commission, 1918, pg. 67), no doubt referring to the investment by Tata and Son’s investments in the area in 1910, 1916 and 1919 (Kale, 2014b). The manufacturing role of Bombay sets it apart from the other major city on the Kutch coast, Karachi. In 1918, Karachi was a critical source for the export of grains from Northern India, but not as a manufacturing center. It is likely, therefore, that investments in energy largely took place by private firms, to both assist the government’s operation in the city, but also serve a small, elite group of consumers - primarily attached to the colonial government and its business interests. In 1944, Bombay had an installed capacity nearly 18 times that of the Sindh province. In 1947, Karachi was the newly-independent Pakistan’s largest city and the site of its incipient industrial growth. The country overall had an ‘exceptionally low’ industrial base Khan and Blankenburg (2009), which early governments attempted to stimulate by import substitution and high tariff policies. By 1951, Karachi’s generation of electricity increases to 60.6 GWh (IBRD 1958), substantially lagging behind Indian industrial cities such as Bombay with installed capacities producing well over 2400 GWh (Kale, 2014b). Two diesel-powered steam plants located on Karachi’s coast supplied electricity, the first which was operational during the colonial period, the second was completed in 1959 (IBRD 1958). Loan documents from the period suggest that the Government of Pakistan bought majority (58%) shares in KESC in 1952 and took over the management of the company due to high operating costs attributed to the rising price of fuel. The first decade of Pakistan’s independence had significant impact on industrialization and electrification in Karachi - first, an artificially high exchange rate encouraged the import of machines for industry, at the cost of the cash value of agriculture to farmers. Second, the

30 emphasis on import substitution enabled a lucrative service sector industry in Karachi, benefiting educated Muslim immigrants from Bombay (Khan and Blankenburg, 2009). Between 1948 and 1952, the industrial consumption of electricity in Karachi increased from 6 million to 100 million kwh, however the generation capacity of KESC remained underutilized because of the slow-down in supply of raw materials. Remarkably, shortfalls in revenue for KESC remain relatively stable at 19-20% between 1950 and 1958; the government’s attempt to take over the company seems primarily due to its unprofitability, and the need to secure external loans from international lenders. The IBRD makes two loans to the Pakistani government for KESC in 1955 and 1956, respectively, amounting to a total of $27.8 million, anticipating a consumption requirement of 690 GWh by 1966. The strong industrial drive and central planning of this phase are illustrated by the lack of investment in electricity for residential use. Residential tariffs in 1953 were 4.6 US cents per kilowatt-hour, compared to 2.4 US cents for industrial use. Restrictions on the use of electricity for commercial and industrial purposes were driven both by the increase in cost of raw materials for generation plants, and the country’s overall industrial policy. While it is likely that some part of this prioritization was driven by technological inefficiencies in using electricity for residential purposes, the absence of provisions for residential street lighting and transport are notable.

2.2 Political mobilization and the welfare state

The growth of Pakistan’s industrial base under Ayub Khan saw the emergence of popular movements among groups that felt excluded from the country’s industrial progress. Prominently, this included educated salaried groups in East Pakistan who

31 were largely excluded from the bureaucracy and decision-making process (Jalal et al., 1995), and working-class movements led by industrial labor unions (Ali, 2015). The extractive policies that favored a few industries over the predominantly rural and agricultural population lay the groundwork for resistance in East Pakistan, under the populist urban leader Mujibur Rehman, that would ultimately result in its secession from the state and the creation of Bangladesh. In the West, urban and rural grievances would come together in an unprecedented moment of cross-class mobilization, spearheaded by labor unions in Karachi and Lahore (Ali, 2015; Gayer, n.d; Shaheed, 2007) and agricultural workers. In 1967, a former member of Ayub Khan’s cabinet and the son of a prominent landed family from Sindh, Zulfiqar Ali Bhutto established the Pakistan People’s Party and declared his intention to contest elections. Bhutto’s role in driving the politics of West Pakistan during this period is difficult to over-state: unlike East Pakistan, which had a history of popular movements and a deeply embedded national identity, West Pakistan until the 1960s was little more than a loose collection of feudal and tribal leaders who had supported the secession of a Muslim homeland from India (Tudor, 2013). Bhutto’s decision to not accept the results of the 1970 election, which saw a clear victory for Mujibur Rehman’s Awami League, contradicted his socialist and democratic rhetoric, and led to the violent repression of the democratic movement in East Pakistan, and ultimately to its independence. Bhutto’s movement for popular democracy brought with it the first national expression of a welfare state, governed by and at the service of its poorest citizens, while also undermining labor and class movements that had led him to prominence.8 He continued to assure access to resources for business and industrial leaders in 8Several excellent discussions of Bhutto’s attempts to undercut labor and co-opt its leaders exist: see Ali (2015); Gayer (2014); Shaheed (2007)

32 Karachi: in a speech at the industrial area of Baldia, Karachi, the then-President and Chief Martial Law Administrator remarked that he would work to reschedule government loans, and promised stability in economic policy (Jan 26 1973). Ironically, a few months after a clash between labor and protestors in Karachi in June 1972 Ali (2015), Bhutto welcomed a delegation of labor in Lahore where he promised to implement labor laws that protected the rights of union workers to strike, and protected the rights of agriculture workers (Jan 30th 1973). The delegation, in turn, assured him that they ‘stood for industrial peace and were anxious to raise the production level...’ (ibid.). Undermining popular mobilization, while capturing state power to reward loyalists at every level, marks the ethos of Bhutto’s rise to power. While resources such as water, land and electricity continued to be priorities for industry, basic amenities - food, clothing and shelter - became the rallying cry at populist speeches. Bhutto’s other major support base were ‘junior government servants,’ whom he promised better salaries and opportunities to educate their children, creating a clear divide between them and senior oﬃcers in the government, whom he accused of drawing ‘fat salaries’ (March 1st, 1970). Clientelism became enmeshed with other non-material relationships of reciprocity between the PPP and its voters Gayer (n.d), including religious, spiritual and ethnic ties. Ali (2015) notes that Karachi during the 60s and 70s was a major center of socialist politics, centering around the industrial labor unions, but also student organizations such as the Democratic Student’s Federation, Labor Party and others. The expansion of an urban working class in Lyari was marked by the regularization of land in the settlement and by the expansion of liberal democratic policies for industrial expansion and labor. Importantly, while these policies pre-date Bhutto’s populist leadership, he repeatedly took responsibility for them, and this narrative

33 continues to be reproduced today. One particular example stands out: in 1970, addressing a rally in Lyari at Gabol Park, Bhutto mentions ‘the lease question’ - he suggests that although Ayub Khan had promised it, it had not been implemented for six years. He goes on to claim: ‘It was only done yesterday because I was to deliver a speech here today’ (April 12 1970). In 2019, in an interview in Lyari not far from Gabol Park, where Bhutto delivered his speech nearly four decades ago, a union council leader for the PPP tells me that ‘Bhutto gave us leases, in exchange for votes.’9 In an interview the following year, a key ﬁgure in the KESC labor union echoed this sentiment: ‘every beneﬁt that has come to Lyari is because of Bhutto.’10 After PPP’s victory in 1973, the restructuring of public enterprises and the nationalization of industries provided considerable opportunity for job creation (Ahmad, 2008; Ali, 2015). A resident of Lyari and a PPP stalwart, Habib Hasan notes that ‘we were given jobs in (the national airline) PIA, (Karachi Port Trust) KPT, (Karachi Municipal Corporation) KMC, (Karachi Electricity Supply Corporation) KESC.’ If Habib is aware of the pre-1970 history of the labor movement in Karachi, he does not elude to it. For him and many other residents in Lyari, the provision of welfare and jobs, and the People’s Party, are synonymous. The city’s administrative and municipal institutions, including the electricity company, become central to Bhutto’s erratic job creation program, and its land for settling what would become a loyal constituency for decades to come. In the 70s, the municipal government was directed to provide water and sewage lines in Lyari; when the Water Board is established in 1983, which is responsible for maintaining residential water supply and collecting revenues, Hassan informs me ‘those were also our people.’ The patronage of the party was not limited to Lyari, as it expanded

9Author interview, Habib Hasan, January 26th 2019 10Author interview, Aslam Samoo, February 10th 2020

34 support through the provision of water, land leases and protection in District West, Korangi, and the city’s agricultural suburbs of Malir. In 2019, a group of women in Korangi say they ‘voted for Mohtarma (Benazir Bhutto) in the 80s, and MQM in the 90s - they got us water’11. In the 80s, the rise of the ethno-nationalist United People’s Movement (MQM) forces splits in the city’s government, and the competition for state resources leads to government bloating and political entrenchment in service delivery. KMC (the Karachi Municipal Corporation), KWSB and KESC become distinct entities responsible for garbage collection, water and sewage management, and electricity, respectively (Ahmad, 2008). Each one of these were also opportunities for employment, carved up between the MQM and the PPP. These are legal forms of patronage - on the one hand, a demand on the state for secure, unionized and multi-generational employment, and on the other, heavily subsidized or virtually costless access to municipal services. In 2007 a newspaper reports over 3000 cases of unpaid electricity bills in lower courts - consumers disputed charges and were instructed not to pay bills until courts adjudicated on the issue, which could take months. Most were brought in by savvy traders and high-income domestic users, most low-income users hadn’t seen a bill in years. Simultaneously, a vast informal economy for land and transport thrives and is captured by remaining competitors - ANP, the ethnic party of the Pashtuns is a key player here, although MQM and PPP also use their bureaucratic embeddedness to settle populations on public land, provide hydrant licenses and sign away prime real estate to upmarket developers. While it is tempting to summarize the period of party rule over municipal amenities as one of largess for the citizens of Karachi, it is important to note that these forms of political capture were invariably costly. The two major political

11Author interview, Korangi, January 2019

35 parties - the PPP and the MQM, as well as the less electorally dominant but nevertheless prominent player the ANP - were regularly involved in extractive rent-seeking from businesses, industries and citizens. These rents were sometimes as regularized as the kunda bill illustrated at the beginning of this chapter. For business owners, receiving parchis or chits demanding rent payment were widely reported (Gayer, 2014). Similarly, residents in political strongholds report paying gang members to ensure bill collectors from KESC did not harass them. The Karachi Development Plan in 2020 places criminal rent-seeking at par with the lack of electricity in debilitating the manufacturing sector: ‘Manufacturing growth is slowing due to security problems, inadequate electrical power supply, and high informal payments... manufacturing’s share of metropolitan output has decreased from 37 percent in 1985 to 18 percent today’ (KDA 2007, Table 2.1). For many residents, the privilege of living in a political stronghold did not go unnoticed. ‘We are better oﬀ than most people in Karachi,’ a resident of Azizabad, in District Central, reported. District Central was the heart of MQM’s political base - this particular house was a few hundred meters from the party’s headquarters, Nine Zero. ‘The administration here, they gave us ways to steal. People (were running) three air-conditioners. There’s no way to do that anymore.’12 Between 2013 and 2015, the Pakistan Rangers conducted a city-wide crackdown against criminal gangs in the city, which included proxies of both major political parties (Kirmani, 2015; Siddiqui, 2017). In Azizabad, the eﬀects of this were particularly felt before the 2018 Elections, when the MQM was split into splinter groups, and no clear center of power, with the ability to provide access to services as it had done in the past, emerged. A woman in the same neighborhood said that her neighborhood was subject to electricity outage ‘even in Ramadan, at sehri (when preparing for the

12Author interview, Azizabad, Karachi. March 3rd, 2018

36 fast).’ I asked her if the political party offered ways to bypass the private utility company. ‘They (the party) have no way of stealing (electricity), even if we wanted them to. They’ve taken away our ability to steal.’ The ambiguity of MQM’s role in agreeing to the privatization of electricity is apparent: while individuals do not openly blame the party, there is a clear sense of betrayal that is heaped on councilors and local bureaucrats - in District Central, both are synonymous with the MQM. The party leaders deflect blame, suggesting that the crackdown made ‘ideologically committed’ - nazariati - people go underground, leaving those who were ‘profit motivated’ to run the party.13 MQM’s leadership is particularly vocal about the role of corruption in being the law of the jungle, and something that all parties, not just the MQM, participate in. In Azizabad, the local union council Vice Chairman insists that MQM didn’t create a corrupt system but must participate in it. To this end, the individualization of payments for utilities has debilitated ‘collective consciousness.’ The previous system of bill collection ensured the ‘collective bill for a building was 10,000 rupees. Now (the private company) is taking 2000 rupees from each... but people are happy, because they’ve been made greedy by K-Electric.’14 The roles of both parties during the transition to privatization is therefore important to examine.

2.3 City planning and political subjectivity

In direct contrast to the eﬀorts of political parties to capture and develop the city according to the demands of political expediency, the state undertook a series of eﬀorts to plan development. The earliest of these plans was under the interim government of Khwaja Nazimuddin, soon after the assassination of the country’s

13Author interview, Azizabad, Karachi. March 3rd, 2018 14Author interview, Azizabad, Karachi. March 3rd, 2018

37 first Prime Minister, Liaqat Ali Khan. The plan provided for the creation of low-cost housing for refugees from India in the 1950s (Gazdar and Mallah, 2013). Subsequently, the Government of Pakistan engaged the United Nations and other international donors to prepare planning documents for the city, based on the needs of its expanding economy, and growing population. A total of four planning documents were produced between 1952 and 2007, aided by local and foreign technocrats, reviewing progress made in the previous decade and projecting demands for housing, industrial development and social protection. At the outset, these technocratic documents expressed ambiguity about the priority of electricity for residential and domestic use. In 1972, the Karachi Master Plan debates whether the priority should be ‘firms and households thought to be contributing most to production and those who can pay...’ or to provide a ‘minimum adequate service’ to all households (KDA 1972, pg. 48). It suggests that the electrification of houses is ‘postponable,’ but depends on the type of housing program adopted. In a draft of the Development Plan that was published in 1991, the planners note that industrial consumption of electricity and natural gas might be a ‘better use of the resource... They require energy as a necessary input to creation (sic) of new employment’ (KDA 1991, pg. 58). By 2007, it is largely taken for granted that residential areas, including low-income housing, need to be connected to the electricity network. Whereas in the past water and sewage were key priorities for infrastructure provision, particularly for low-income households, in 2007 the Karachi Development Plan notes the need for goths or informal settlements within the city’s limits to be connected to the main infrastructure network. Thus, over the course of a century, electrical energy evolved from a luxury good lighting the bungalows and clubs of colonial settlers and their local subsidiaries, to a major industrial input and an engine of economic growth and employment, to

38 Table 2.1: Consumption of electricity by sector, percentage total sales

1947 1956 1970 1991 2004 2007 2015 Residential 21 30.5 13 35.86 42.1 33.28 Commercial 26.9 13.8 12 18.39 10.5 17.59 Combined 63 Industrial 26.4 53.5 61 40.29 35.7 45.3 36.8 Source: Karachi Development Plan 1972, Annual Report K-Electric 2015, Karachi Strategic Development Plan 2007, SDPI 2014. After 2015, only combined sales to residential and commercial consumers were reported.

ﬁnding its way into the homes of the poorest members of society. The transformation of electrical energy in the 20th century marks the creation of a ‘political subjectivity,’ where the ability to access electricity, just as access to water and sanitation, becomes an article of citizenship (Rizvi, 2017). As the planning documents of the 70s predicted, the expansion of electricity to residential areas would radically change the nature of housing, house building and settlement in the city. Where middle income individuals were once marketed West- and South-facing residences that they could take advantage of sea breezes, high-rise housing is increasingly speculated and sold on the promise of electrical cooling during hot summer months. Where land leases and water connections were importantly articles of formalization for informal settlements in the past (Gazdar and Mallah, 2013), in recent years the arrival of ‘metered,’ that is, non-pirated connections ensure a settlement its formal status. The ideals of Karachi’s planning eﬀorts stand in stark contrast to the everyday claim-making of its citizens to secure electricity. When asked how they secured electricity in the area, a group of residents on the outskirts of Karachi presented

39 paperwork they had filed to get electricity connection. A letter, dated May 2015 and bearing the header ‘Mohollah Committee’ (Neighborhood Committee) requests K-Electric to ‘please provide our neighborhood with its own PMT...Previously we were using kundas but now they have been cut (by your employees). This neighborhood is suffering in the intense heat, therefore we urge you to extend electricity to us, as part of our fundamental human right. The public is ready to pay its electricity bills in the j¯aaiz (just and fair) way.’ These claims were taken to K-Electric, who refused to extend electricity to the settlement without a guarantor. The neighborhood approached Muhammad Jameel Zia, the local leader for the PPP in PS-95, where the settlement is located. In August, Mr. Zia provided a letter to K-Electric, requesting a technical survey to determine the cost of extending electricity to the neighborhood, and guaranteeing that the ‘Sindh government’ will pay for set-up costs. Finally, in October, K-Electric responded with a quote of Rs. 17,059,340 (≈ USD 110,416) for the cost of metering and installing a transformer. In 2017, when I first visited the site, I was shown monthly payments of 3-4000 rupees on individual bills, and told they were ‘installments’ for paying off the cost of electricity infrastructure. It is worth emphasizing the complex and non-electoral role of the party in this case: in 2018, the PPP was not one of the top three parties in the constituency, suggesting that local politicians may acquiesce to pressure from well-organized citizens, and not attempt to use the favor in exchange for votes (Bussell, 2012; Kruks-Wisner, 2018). A concurrent process during this period of increased domestic dependence on electricity is the expansion of generation licenses for Independent Power Producers (IPPs). In 1994 Benazir Bhutto’s government issued a series of licenses to private power generation plants located across the country, and guaranteed a threshold of purchases, irrespective of demand for electricity. In 1996, KESC’s fuel purchases

40 increased to 10% of their operating cost, by 2000, the purchase of electricity from IPPs consisted of 46.6% of the company’s operating costs. In 2000, the company was in debt to the tune of $379 million in power purchases, and $71 in loans. Given the demands for fiscal austerity from the IMF, and the acknowledgement from international lenders that the private power generators had resulted in making energy more expensive and hugely inefficient, the move to further pass on the consequences of these policies on to consumers by privatizing KESC is striking. Mitchell (1999) examination of similar processes in Egypt suggest that the use of terms such as ‘privatization’ are ultimately misleading, in that they carry the expectation of apolitical decisions. The following section examines the final phase of privatization, and suggests that the decision to privatize the utility company ultimately entrenched political entropy and institutional weakness in Karachi.

2.3.1 The transition to private ownership - al-Jomiah and Abraaj

The decade of the 90s represents a major expansion in the electricity grid in Karachi. In 1985, 80% of the households in Karachi report having electrical connections (KDA 1991). In the 1998 Census, over 95% of Karachi’s households are dependent on electricity, although many of these are likely illegal connections. The rapid expansion of the grid is not without its costs. The government of Pakistan repeatedly engaged the Asian Development Bank and other technocrats to aid the upgrade of the grid. A series of technical reports note that these funds were largely used to extend the grid through a series of low-cost measures that increased heat losses. By the 1990s, multiple development plans have pointed to the growing domestic energy needs of the city, and the need to involve the private sector in the generation, transmission and distribution of electricity (KDA 1991; 2007). These calls are echoed by the World Bank, and by the ADB as it attempts to minimize

41 transmission losses for KESC to make it more attractive to private investors. In September 2000, the ADB released a technical assistance report, stating the government and the ADB’s objective to ‘move the power sector from an inefficient state-controlled monopoly to a competitive, market-driven system’ (ADB, 2000, pg. 2). This objective was part of a joint agreement between the ADB and the World Bank, and an ‘essential component’ of the IMF’s program for macroeconomic stabilization. Crucially, the agreement takes place at a time when the country is plunged into a political crisis, with the military coup of General Pervez Musharraf taking place in 1999, forcing leaders of the two major national parties into exile. By the time elections were held in 2002 and the MQM entered the political coalition led by Musharraf’s party, the government had committed $1 million to overhauling Karachi’s utility, and taken on multiple loans from the ABD and IFC to upgrade the company and make it more attractive to foreign investors. The calls for privatization and fiscal austerity during this period are at odds with the debt taken on by the government in the same time period, and the way in which these loans were used. At least $71 million was borrowed from the ADB in 2000 for power purchases (Abbasi, 2015), in addition to $1 million for the technical assistance for privatization. The World Bank and the IFC lent the company $375 million in the early 2000s and $190 million was borrowed from local commercial banks. Additionally, while subsidies to KESC were terminated with the company’s privatization in 2005, a yearly ‘tariff adjustment’ flowed from the government to the company, averaging $213 million a year for the next 14 years. Between 2005 and 2015, the cost of electricity sold in Karachi, including tariff subsidies paid by the government to K-Electric, increased from Rs. 4.58/kWh to Rs. 15.5/kWh. This increase in cost is due in part to improvements in recovery between 2005 and 2015, which increased from 65% to about 80%. In comparison, the city of Faisalabad,

42 which had a recovery of close to 97% in 2015, sold electricity Rs. 10.5/kWh, including the provision of government subsidies. If Karachi is truly a more expensive city to provide energy to, given the relative absence of hydro-electric power in the vicinity, then the privatization process has not made energy provision any more efficient. Second, the continued payment of large subsidies to the private sector firm suggests that a key expectation of liberalization - the reduction in government costs - is not being met. The increase in the cost of energy in the country is symptomatic of a rise in the basic cost of living, which affected low-income individuals disproportionately. In 1998, the state-owned utility firm in Karachi made less than four rupees on every kilowatt of electricity it sold. The primary consumers of this electricity, as noted previously, were domestic and commercial consumers - the industrial consumption of electricity had largely tapered off. In contrast, the current return on every unit of electricity sold is over three times what it was pre-privatization, suggesting that a form of political patronage has eroded. Holland (2017) describes the use of ‘forbearance,’ where political leaders and bureaucrats selective implement laws to benefit their constituents. The moral legitimacy of political leadership in the 90s was heavily invested in a somewhat equitable distribution of energy - the electrification of rural areas and inner-city informal settlements is a clear example of this (KDA 2007). The scholarship on patronage suggests that parties shift their electoral strategy on which support group they can least afford to alienate - those that depend on patronage, or those that are turned off by it (Weitz-Shapiro, 2014). The ‘constituency for bureaucratic autonomy’ is therefor at odds with the ‘constituency for patronage’ (Shefter, 1977, pg. 412-3) - the critical difference, as the definition suggests, is whether parties are from within the elite and have access to state

43 resources, or not. Elsewhere, party competition and income govern the demands of constituents for bureaucratic autonomy or continued patronage (Weitz-Shapiro, 2014). But the scholarship around ‘bureaucratic reform’ fits poorly with the context of privatization, particularly in weak institutional contexts. Patronage in Karachi during the 90s was a relatively stable equilibrium between two intensely competitive but ultimately oligarchic parties, neither of whom had significant interests in bureaucratic reform. The interest groups that govern the city are also not neatly categorized into ‘pro-’ and ‘anti-’ patronage. A more interesting and nuanced definition is the role that pressure groups play in articulating demands to the state, based on ideational and moral attachments to resources (Ali, 2015; Simmons, 2016). Technical documents from the 90s and early 2000s frequently attributed responsibility for the company’s hardship on its unionized and politicized labor - the company employed over 13,777 employees, and was dominated by party-backed unions from both major parties, and a left-leaning independent People’s Workers Union (Abbasi, 2015). Reports point out that KESC’s management struggled to making hiring and layoff decisions. In the absence of strong consumer rights groups, the unions became the face of resistance against privatization, criticizing the borrowing of capital, and having both the insight and organizational capacity to demand transparency. In 1999, just months prior to the military coup in October, the army took over the management of KESC, placing a ban on union activity (Dawn, 2002a). The transmission and distribution losses of the company at the time stood at close to forty percent. In 2002, KESC and the military government refused to restore trade unions, suggesting that it would deter prospective foreign buyers for the company (Dawn, 2002b, 2002a). In 2002, the resistance of the KESC union was typically directed to the army’s inability to turn the utility around, and the neglect

44 of workers rights due to the ban.15 In 2004, these protests increasingly focused on the threat of privatization, and included hunger strikes, rallies and press conferences held by the union leadership. In addition to demanding the rights for workers, the Employees Action Committee, led by former union leadership, raised concerns for the impact of privatization on ‘burdening domestic consumers’ and increasing production costs for industry (Dawn, 2004). The protestors raised concerns that the utility was being sold at an undervalued price, and raised suspicions of kickbacks to people in power. In January 2005, under intense pressure from their labor constituents, the PPP backed the anti-privatization drive, marking the ﬁrst direct involvement of mainstream political parties in the resistance to privatization. The protests were joined by government employees from other institutions; members of the party raised the issue in the provincial assembly, claiming that the company’s assets, ‘worth Rs. 80 billion had been sold for only Rs. 16 billion’ (Dawn, citeyeardawnkhuhro). The PPP leadership used the privatization drive to slam its opponent, the incumbent MQM in the provincial assembly, and suggest that they were acting on behalf of the World Bank. The protests ended temporarily in February, when workers were assured that the union would be restored after privatization, although the union leader Latif Mughal reiterated their commitment to resisting privatization.16 In November 2005 the company was formally privatized, and in December a large coalition of union leaders met the new management, where

15Dawn, 2002c. The MQM was conspicuously absent in its endorsement of the protests, most likely because it had been given a key position in the elections held under the military regime, and total control over Karachi’s local government. The PPP’s condemnation of the union ban consisted of raising the issue in the Senate (Dawn, 2003). 16Dawn, 2005a, 2005d, 2005c

45 they expressed their willingness to work with the management, but wanted assurances for job security and wages.17 The final Implementation Agreement signed between the president of Pakistan and KESC on November 14th 2005 is vague on the rights of labor. Extensive provisions were made for groups of consumers to be excluded from disconnection - in addition to essential services such as hospitals and water pumping stations, provisions were made to ensure that private residences of 24 judges of the Sindh High Court, and multiple offices and residences of the armed forces and the Karachi Water & Sewage Board were exempt from disconnection. Prominently, political offices, including the residence of the Chief Minister and the Governor House, are treated as ordinary consumers. The Agreement includes provisions for the use of Karachi’s paramilitary force, the Rangers, to arrest and intervene in instances of threat to the company’s personnel, including against unionized labor, and to facilitate arrests of civilian defaulters. The German firm Seimens was engaged to take over operations and technical management, and to improve the infrastructure of distribution. Ultimately, the government’s engagement with Seimens would come to illustrate the ability of the Pakistani state to renege on contracting to private firms; many of the issues during the first three years were placed on Seimens. At the time of its departure in 2008, Seimens threatened to withhold its expertise until dues were paid (The News, 2008). The company changed hands several times during this period, until finally in 2008 the takeover by Abraaj was announced (Rana, 2008). In the period between 2005 and 2008, the newly-restored unions were at the forefront of criticism against the utility, which struggled through a series of managerial reforms. In November 2008, three years into the privatization process, the leadership of the union claimed the new managers of the company had been

17Dawn, 2005b

46 offered lavish salaries and perks (Daily Times, 2007) the newspaper reported that this insight was ‘confirmed’ by a KESC officer. Unions had a unique position inside and outside the company: union leadership would regularly hold press conferences where he provided detailed and often accurate figures of the company’s performance. In 2008 Mughal alleged that Al-Jomiah had not invested ‘a single penny’ of its own in KESC, but had taken out loans against which the government of Pakistan was a guarantor (Daily Times, 2008). The labor unions were also uniquely placed as pressure points on the parties; the MQM and PPP’s dependence on labor mobilization and co-option increasingly caused issues for the parties’ leadership. Between 2005 and 2008, the MQM in particular came under fire from its labor constituents, as the party was a partner of the then autocratic government of General Pervez Musharraf. The city government of Karachi was under the MQM, and Mayor Mustafa Kamal frequently used the private company as a bugbear for grievances. In 2007 he decried outages in MQM’s stronghold in District Central, claiming that KESC owed citizens up to Rs. 17.7 million in back payments (Daily Times, 2007b). After the January 2008 election that brought the PPP to power, the People’s Workers Union brought grievances to the party co-chairman Asif Ali Zardari, widower of the recently-assassinated Benazir Bhutto. Labor unions, by appealing to the grievances of workers but also of citizens and consumers, therefore seek legitimacy that is beyond patronage, forming critical horizontal sympathies across middle-class citizens and labor and lower-income groups. The role of utility workers in this regard is not unique to Karachi, or to Pakistan. The local, experiential knowledge, or m¯etisScott (1998), of water valve operators in Mumbai makes them a central figure in the particular contextual knowledge of neighborhoods that may escape documentation or formalization by the state Anand (2017). Chavivalas - literally, key-men - report having to make

47 decisions based on the needs of a community, decisions that are embedded in contextualized experience over a period of time and motivated by a sense of justice and fairness that the state may be incapable of dispensing Kumar et al. (2018). There is little evidence that the role of unions as pressure groups placed them at odds with other institutions that demanded improvement in the quality of service delivery, and may have been less concerned with labor rights. On multiple occasions between 2005 and 2008, traders organizations and market associations protested prolonged outages and the lack of performance of the newly privatized utility. In 2007, MQM leader and advisor to the provincial government Wasim Akhtar openly endorsed threats by traders to attack the offices of the utility company, the headline declared ‘Govt (sic) can’t protect KESC any longer’ (Daily Times, 2007a). Meanwhile, KESC attempted to keep internal union protests at bay by offering 10% shares to permanent employees and increasing salaries for contracted employees by 20%. The final blow to the unions came in September 2009, when KESC announced that it would be laying off 3,500 employees (Saeed, 2008). Within days of the announcement, it was also announced that the company would be sold to Abraaj Capital of UAE, anticipating an investment of $400 million and taking over the management of the company. A series of protests and sit-ins that followed were ultimately resolved by the MQM, who claimed they received assurances from the company that some number of employees would be reinstated. The MQM committed to ‘overseeing’ the implementation of the agreement (Dawn, 2009b). The end of the protests against privatization, marked by the parties’ divestment from the union’s struggles, marks the formal end of the labor movement within the electric utility company. It also marks the end of the last serious engagement of politically representative groups with the legitimacy of the privatized company - subsequently, consumer grievances against outages and high tariffs did not elicit

48 broad-based support for protest in the same way. Periodic protests take places by traders and market associations, frequently in coordination with the MQM; a recent set of sit-ins was coordinated by the moderate party Jamat-i-Islami. From an electoral standpoint, however, the role of the private ﬁrm in providing electricity to Karachi is unchallenged.

2.4 Post-privatization: Segregated citizenship in Karachi

The overwhelming evidence from liberalization reforms in Latin America and Eastern Europe suggests that the core constituents of political parties that seek market-oriented reforms are upper- and middle-class voters Murillo (2001, pg. 36), Kitschelt (2000). Because privatization in Karachi took place under an autocratic regime, no one party can be said to come in with a market-oriented reform agenda: even the MQM that was relatively committed to private investment in the city had a large low- and middle-income base who depended heavily on state-provided resources. Therefore the puzzle of how these reforms were made palatable to the voter remain. In November 2007, as the management of KESC struggled to maintain an overloaded distribution system, prolonged outages were reported in various parts of the city. Newspapers report that parts of District Central and West were subjected to scheduled outage to make up for the shortfall, and that upmarket areas in Nazimabad, Clifton and Defence faced ‘prolonged outage... at least three times a day’ (The News, 2007). In the period post-privatization, many of these areas are designated as high recovery, meaning that the utility company expects to recover the cost of the electricity it distributes here. Therefore these areas are exempt from outage during most months of the year, with a few hours of scheduled outage in the summer.

49 An improved provision schedule is not without its costs. There is evidence that the ability of citizens to negotiate payments to the utility have also been limited. In 2008, just before the utility company was privatized, newspapers reported that over 3000 electricity consumers were not paying their bills. These consumers argued that they were being overcharged, and ‘challenged the amount in different courts’ (The Business Recorder, 2008). The newspaper notes that judges are generally sympathetic to consumers, and that while the case is pending in court, often for years, petitioners continue to use electricity without paying their bills. The use of courts was not limited to savvy higher income consumers. Another article notes that the utility company attempted to recover its charges by ‘illegally’ raising the bill on a village on the outskirts of the city, even though ‘villagers had paid off the bulk meter in full’ (Daily Times, 2008). Notably, in the absence of a functional helpline at KESC, citizens would often call the newspaper’s offices to report prolonged outage. In 2010, after the new management took over the utility, with the full support of the state and political institutions, the company engaged in dual processes of regularization and sorting. It first embarked on an extensive public relations program to cast the use of kundas or pirated connections as illegal. It also invested efforts in re-branding the company’s relations with workers, running a campaign titled ‘Azam’ or ‘determination’ Figure 2.3. These campaigns were directed at consumers, but also at the employees of the new corporate-style billing centers that became the focus of power riots between 2009-2011.18 In the period following 2009, the company also conducted multiple raids, drives and campaigns to clear the city of kundas. Aided by the police and Karachi’s paramilitary force, the Rangers, pirated connections were knocked down, and alleged culprits rounded up and imprisoned. In 2016, K-Electric also embarked on

18Interview with Sami Shah, former creative director for KESC, May 2019. Dawn, 2009a

50 an extensive drive to replace the existing overhead wires with a rubber-sheathed bundled cable that they claimed was more difficult to steal from (Figure 2.2). Around this time, the company also began a system of mapping and sorting the city into high, low and medium ‘recovery’ areas. The process of determining ‘recovery’ is central to the discursive reconfiguring of electricity in Karachi: areas that were cleared of kundas were marked as high recovery, and prioritized for service delivery, while those with high levels of pirated connections faced higher scheduled outage. However, the ability of the company to differentiate between paying- and non-paying consumers is limited, and the city’s infrastructure places limits on how accurately the utility can target punishment and reward. The practical outcome is a system of collective punishment, where large areas consisting of over 200 step-down transformers are subjected to outage, based on aggregate estimates of theft from each one. Bills are similarly provided to reflect not just the individual consumption of each household, but the difference between aggregate consumption and the amount delivered at the PMT level. This variation in the service delivery experienced across parts of the city has particular effects on middle-income households. Many such households find themselves ‘stuck’ in neighborhoods that are medium and even low recovery. In the survey conducted in 2018-19, over 71% of middle-income households reported receiving bills that they felt were unfairly high. Do middle- and upper-middle income groups support privatization because they are more likely to benefit from it? Using a series of fixed-effects linear models with reported attitudes towards state- and market-led service delivery, and reported consumer behavior, I find that while higher income categories are indeed more likely to support ‘market’ reforms, they are just as likely as low-income groups to suffer inconsistencies in privatized service delivery. The key dependent variables include a

51 question on attitudes towards privatization; the following question was adapted from Feierherd et al. (2017):

Some people think that the state cannot do anything to reduce diﬀerences between the rich and the poor, and the free market is the best mechanism for reducing poverty. Others think that the state should intervene to reduce poverty. Which statement is closer to your opinion?

Two other dependent variables are also used: the first is a question of whether respondents faced unfairly high bills in the last year, the variable is coded 0 if no unfair bills were received in the last year, and 1 if one or more months were unfairly billed. The second question asks whether respondents made complaints about any problems with electricity service delivery in the last year, including unfairly high bills, prolonged or unscheduled outages, or system faults. Complaints include those made to K-Electric, but also to local political leaders and government offices (such as the Federal Ombudsmen). The variable is coded 0 if complaints were not made, and 1 if they were. The key independent variable is income categories, which were created using the Household Integrated Economic Survey by the Government of Pakistan (HIES 2015-16) and are included as a categorical variable with ‘low income’ being the base category. In addition to income, I expect respondent’s party ID, captured by the variable ‘pro-incumbent’ if the respondent voted for the dominant political parties, to be of importance. Household-level controls for language, eduction, household size, home ownership and gender of respondent are included. Predictably, higher income groups tend to be pro-market (Table 2.2: Models 1 and 2). Model 2 shows that these effects hold when fixed effects for union council and clustered standard errors at the union council level are included. Model 3 shows that class is not a predictor of low-quality services: middle and higher income

52 groups are just as likely to report unfairly high bills as their lower-income peers. This null result is an important counter to the narrative that middle-income groups are beneficiaries of privatization reform. The final model shows that higher income categories are not more likely to engage with the privatized firm to make claims: indeed, middle income households are somewhat less likely to make complaints. Surprisingly, complaint-making is more likely among people who say they voted for the incumbent. A final observation in the statistical output is that urdu-speaking households are significantly less likely to support ‘market’ solutions to welfare issues. This lends credence to the discursive history of the state’s role in ameliorating poverty among a mobilized electorate that historically supported the MQM. This is significant because this group may not be a direct beneficiary of welfare, but may support it because of sympathies with low income groups, and an expectation of the role of the state.

2.5 Discussion

This chapter begins with a question: how did political parties that depended heavily on patronage agree to privatize a prime source of political largesse? It demonstrates the capacity of electricity to be used for patronage - on the one hand, as a source of energy in the homes, shops and factories of political constituents. Next, it shows the primacy of electricity as a source of employment for political workers. I demonstrate that while electricity began as a niche technological innovation for industry, it rapidly gained status as a necessity, and a language of rights and entitlements developed around it, fueled both by political parties and the technocratic eﬀorts of developmental organizations. The hypothesis I set out to test was that the nature of

53 patronage changes as the language of privatization, markets and competition is invoked by multiple sources. I suggest, as have other scholars, that these are constructed, meaning-laden structures: the agreement between the government of Pakistan and the investors who bought KESC is monopolistic, opaque, and the very opposite of a competitive market-based system it aspired to be. The nature of patronage changed in that it focused on ever-shrinking, atomized interest groups: first, by bringing the parties into a power-sharing agreement in the legislature, the state ensured their interests were at odds with their constituents who risked a loss of livelihood, or suffered excessive tariffs and outage. Next, by promising the union a restoration of rights under privatization, and then privileging permanent employees over contracted labor, and by finally laying off a third of the labor force, the ‘restructuring’ of KESC successfully dismantled a key, albeit flawed, institution of internal oversight. Perhaps one of the more interesting roles in this process was that of the courts. Post (2014) suggests that domestic firms are successful at investing in utilities because they are adept at navigating courts. In the 2005-08 period, another player in the economy of moral forbearance were the courts - through the early 2000s, the courts played in active role in resolving disputes between electricity consumers and the state, most often in the consumers’ favor. In 2008, the Sindh High Court directed KESC to restore electricity to Jamil Goth, after the petitioner claimed that the villagers had paid off the bulk meter in full, and that KESC had ‘illegally’ raised the bill (Daily Times, 2008). In the same year, a community on the outskirts of the city who had bought land through a resettlement project, claimed that they had paid for access to electricity through a self-finance scheme, similar to the one described previously. This community had subsequently become the target of political entrepreneurs who parceled out the land to squatters, taking advantage of

54 the presence of electricity to demand higher rates (Bhagwandas, 2008). However, in light of the considerable patronage judges themselves received, in the form of exempt status from disconnection of electricity bills, it is likely that these notiﬁcations were a form of window-dressing. For many years since KESC’s privatization, workers have taken multiple cases to the Sindh High Court, claiming that privatization took place under circumstances that violated transparency requirements. None of these cases, to wit, ever resulted in the utility being ﬁned or reprimanded; most importantly, when the political parties came to power in 2008 with a huge popular mandate, no attempts were made to roll back, or even investigate, the process of privatization.

2.5.1 Alternate Hypotheses

This chapter demonstrates that the privatization of electricity in Karachi was a symptom of and catalyst for weak political institutions. It suggests that the process of privatization demonstrated the inability, or unwillingness, of political parties to seriously engage the challenge of service delivery, and instead settle for kickbacks and selective benefits, some of which were passed on to influential constituents. The simplest counter-hypothesis to this, indeed one that is iterated by the utility company itself, is that privatization was a success, and benefited a vast middle class. There is little doubt that those who could afford to pay for electricity were better off after privatization, particularly once the firm made it a policy to prioritize ‘high recovery’ neighborhoods over ‘low recovery’ ones (see Chapter 3). However, to say that the transition to privatized electricity marks a shift towards programmatic politics ignores the checkered history of autocracy, and the inability of citizens to vote in pro-liberalization governments. Weitz-Shapiro (2014) suggests a robust participatory mechanism that builds the demand for rule-based policies. These were absent in Karachi.

55 It is undoubtable that the commercial areas of Karachi have benefited from private service delivery. The Karachi Development Plan (2007) notes that the service sector in Karachi grew by 8% in the early 2000s. Yet is difficult to imagine groups of traders as a broad-based ‘constituency for bureaucratic fairness’ - while they were and continue to be an influential interest group, they lack the features of a broad-based participatory movement. The second alternative hypothesis is one that many observers of Karachi, and Pakistan will find familiar - the issue of violence. This chapter started with the story of a service delivery broker, Afroz, who was killed by the Taliban. Political parties in Karachi have faced violence at the hands of the state and militants since the mid-1990s - the leader of the PPP, Benazir Bhutto, was assassinated by the Tehreek-i-Taliban Pakistan (TTP) in 2007. The TTP have since killed multiple members of her party and the ANP. From a service delivery standpoint, it is entirely likely that the civil war-like situation in Pakistan made it difficult to build constituencies for programmatic policies from the ground up. This situation was exacerbated by violence from the state against political parties at the hands of the Rangers - ironically, the very entity that was also entrusted to curb theft of electricity. As a party worker in district Central put it: ‘the violence sent all the ideological people under. But it left behind the self-serving ones.’ The senior party leadership that remains in both the PPP and the MQM has gained privileged positions in ensuring payments from consumers - multiple anecdotes suggest party leaders were given ‘theka’ - jurisdiction - over parts of the city to collect payments on behalf of the utility. It is likely that violence and the threat of state violence shapes priorities for the party; it may even make the extraction of rents and patronage of a narrower constituency a more stable bargain.

56 State and non-state violence in Karachi are not satisfying answers to the puzzle of service delivery in part because the period of military rule between 1999 and 2007, and the parallel takeover of the utility by military leadership, did not see an improvement in bill collections. By alienating the political parties, at least during the initial stages of the takeover, the military-managed utility saw recovery losses increase from 34% in the late 90’s to almost 40% in 2005. The institutional embeddedness of the two major political parties in over Karachi, and within its administrative structure, was only navigable through a series of buy-ins, co-optations and quid pro quos. These arguments are by no means meant to deny that the parties may have thought they were responding to a demand for bureaucratic autonomy. However, in the absence of a credible opposition that challenged the reform, or even attempted to examine its terms, it is not likely that this was an ‘electoral’ position in the sense that (Kitschelt et al., 2007; Murillo, 2001; Weitz-Shapiro, 2014) and other observers of economic reform have noted. A generous reading of the MQM and PPP’s role is that they took a gamble on what they thought middle income consumers wanted, no doubt precipitated by vocal interest groups among traders and the business community. Subsequent chapters show that the strategic use of theft as a narrative, and aspirations of modernity, have allowed parties to take on circumscribed roles in service delivery while claiming popular support - either through identity politics, or popular appeals to anti-corruption. It is worth noting that in 2018, both the PPP and the MQM would face a crushing defeat at the hands of an outsider, a party that had zero claims to patronage or service delivery, but enjoyed immense support among interest groups. Either way, none of these are even close to what we expect a transition to programmatic politics looks like.

57 2.6 Conclusion

The role of the modern welfare state is considerably different from the expansive provision of goods and services that it had taken on in previous decades. Many explanations exist for why states take limited roles for service delivery, particularly for low-income populations. These tend to center on the popular support for reform among a growing middle class, and party competition that makes it politically expedient to provide good, rule-based governance. Yet the discussion of why parties move away from patronage, and particularly towards private contracting, frequently under-theorizes the micro-processes that lead to the implementation of service delivery reform. In particular the role of private firms and elite is relatively unexamined. This chapter uses the history of the provision of electricity in Karachi to process-trace technological and discursive innovations in the provision of energy, from serving a finite group of high-value consumers, to more broad-based and loosely defined notions of citizenship. It suggests that the acquiescence of political groups to privatization is not possible without a long history of shifting dynamics between voters, parties and public goods. It suggests that while electricity became an article of citizenship, particularly in the 1990s, it was also an important source of employment as a state operated firm, and a factor of industrial growth. Unlike water in parts of India and Bolivia, electricity does not take on meanings of universal rights, making it more plastic and amenable to changing political narratives. Next, I show that the role of political parties and the private firm is central to the shift in narrative of the utility. The change in electricity in the public imagination from a right to a commodity could not come about without buy-in from political elite, including courts and law enforcement agencies. Similarly, I show that

58 political parties were given incentives to support the reform. In turn, they gradually divested of their patronage to voters and to the labor union that formed the backbone of resistance to privatization. Finally, the ability of the private ﬁrm to both draw on its internationally-incorporated status as a form of legitimacy, while navigating domestic political space with savvy alliances with elite, made it particularly successful.

59 Figure 2.1: An example of a pirated connection bill

60 Table 2.2: Class, privatization and claim-making: Survey results

(1) (2) (3) (4) VARIABLES Pro-Market Pro-Market Report low quality Make complaint Service Delivery Middle income 0.978*** 0.642*** -0.006 -0.050* (0.145) (0.148) (0.060) (0.026) High income 1.217*** 0.810*** 0.077 -0.003 (0.167) (0.192) (0.078) (0.047) Voted for incumbent† 0.170 0.064 -0.030 0.072** (0.125) (0.108) (0.048) (0.030) Urdu -0.357*** -0.060 0.057 -0.014 (0.119) (0.144) (0.050) (0.024) Female 0.141 0.124 -0.066 -0.050 (0.140) (0.223) (0.086) (0.051) Age 0.003 -0.000 -0.000 -0.001 (0.004) (0.005) (0.003) (0.001) Education -0.005 0.018 -0.008 0.004 (0.046) (0.046) (0.020) (0.019) Home owner 0.135 0.102* 0.064* (0.160) (0.056) (0.036) HH Size -0.005 -0.005 0.008 -0.006 (0.012) (0.009) (0.010) (0.006) Post-election 0.909*** 1.249*** 0.133 0.245** (0.124) (0.361) (0.081) (0.120) Version FEs Y Y Union Council FEs Y Y Y Clustered SEs Y Y Y Constant 1.716*** 1.603*** 0.899*** 0.774*** (0.311) (0.427) (0.158) (0.143)

Observations 721 721 1,019 1,019 R-squared 0.176 0.278 0.211 0.676 †: Individuals who voted for the PPP, MQM, PMLN or JI in the General Elections 2018. Robust standard errors in parentheses. *** p<0.01, ** p<0.05, * p<0.1

61 Figure 2.2: An electricity transformer with pirated connections

62 Figure 2.3: Example of K-Electric advertisement from 2010

63 Chapter 3

Participation and citizenship in privatized service delivery regimes

3.1 ‘What can they do about it?’

In January 2019, a group of women in a middle-income neighborhood in Korangi, a major industrial district in Karachi, Pakistan, sit on their stoops and chat in the cool evening air. The neighborhood is in darkness except for a few energy saver bulbs - a scheduled power outage is ongoing. Their constituency is two days away from a by-election that the city’s dominant party, the United People’s Movement (MQM) will comfortably win. These women, however, are voting for the rival Pakistan Movement for Justice (PTI). It’s not that the MQM hasn’t been popular among this group of voters - ‘the MQM brought water to this neighborhood.’ Since then, however, the MQM had ‘done nothing’: ‘They show up around election time, make slogans about being Muhajir,1 ﬁx a few pipes, and then disappear.’ I gestured around us, to the darkened alley, wondering why there is a power outage despite the relatively cool temperature - does the MQM or the PTI plan to ﬁx that? The women laugh. ‘But electricity is privatized! They can’t do anything about that... can they?’ How does the relationship between citizens and elected representatives change once public services are privatized? This vignette illustrates the core puzzle of this article: that service delivery privatization, particularly in low-income contexts, has

1The Muhajir are the city’s dominant ethnic group, tracing their roots to migration from India after Partition Gayer (2014). Most speak Urdu, but also regional languages from colonial Gujurat.

64 micro-level political consequences. The ability to maintain political control over forms of public goods is at the heart of the debate on distributive politics; the phenomenon is most commonly captured by the somewhat pejorative term ‘patronage.’ Scholarship on patronage suggests that citizens’ dependence on political representatives for selective benefits leads to a perverse form of accountability (Stokes, 2005), one where citizens are worse off because they exchange their vote for goods and services. Studies find that parties use the preferential distribution of goods to voters to ensure electoral turnout, if not outright loyalty (Auyero, 2000; Kitschelt et al., 2007; Nichter, 2008). Similarly, the privatization of public utilities is expected to improve the quality of service delivery (McRae, 2015) and economic activity (Djankov et al., 2002; Jordana and Levi-Faur, 2005). Moreover, public utilities such as water and electricity are expected to be particularly ripe for privatization (Zhang, 2018). However, I suggest that the economic redistributive effects notwitstanding, the political effects of privatization are under-theorized. I argue that privatization can diminish the ability of citizens to voice dissatisfaction with public goods, and to be substantively represented by the state. I expect that in some places, local political institutions adapt to the loss of patronage mechanisms for redress; in others, the erosion of these linkages is not easily replaced. I find that the relationship between privatization and political participation is co-dependent and non-linear. The evolving politics of one of the world’s largest cities, Karachi, Pakistan, provides a unique opportunity to examine not just the way citizens ‘manage’ and ‘resist’ new technology and the logic of commodification, but also how these logics push back and shape local political institutions, communities and individual behavior. This study examines the specific effect of privatized and partially-privatized service delivery regimes on political outcomes, namely, on claim-making and

65 participation. I propose that the privatization of utilities impacts local participatory institutions in the following sequence: 1) first, privatization reduces incentives for citizens to use political representatives to lobby for better provision (the effect on ‘patronage’). Assuming privatization geographically stratifies the economic distribution of service delivery across the city, I expect that 2) being ‘stuck’ in low-provision neighborhoods makes individuals less likely to exercise their political power overall, even for non-privatized public goods (the ‘spillover’ effect). Conversely, receiving high-quality privatized services can improve opportunities and incentives to hold the state accountable in other spheres. The outsourcing of traditionally state service delivery such as electricity and water to private entities is ubiquitous in the developing and developed world (Post et al., 2017), yet the majority of studies on distributive politics take for granted predominantly state-provided public goods. Even in robust democracies with expansive welfare states such as India, electricity is liberalized in several regions (Kale, 2014b), and water is commodified in others (Anand, 2017; Björkman, 2015). In some instances, the pressure to privatize is bottom-up. The inability of states to provide adequate healthcare, transport, housing and education has led to a patchwork of public and private, formal and informal provision (Post et al., 2017). These are qualitatively different from top-down, state-led market reforms, that were a key component of the democratic process in Eastern Europe (Kitschelt, 2007) and Latin America (Jordana and Levi-Faur, 2005). In these instances, middle-income voters, the ‘constituency for reform’ as Shefter (1977) defined it, are expected to have a greater stake in programmatic policies over selective benefits (Kitschelt, 2000; Nathan, 2019b; Weitz-Shapiro, 2014).

66 Yet the view that the middle class is inherently committed to, and beneﬁts from, privatization may not hold in lower-middle and low-income countries.2 The inability of elected representatives to credibly promise economic improvement for the poor and middle groups has been noted in countries as varied as Ghana, Malawi, Uganda and South Africa, leading to an exit from electoral participation (Nathan 2016, Resnick 2014). However, few studies have examined the impact of market reforms. This study makes a unique contribution by demonstrating that privatization leads to a deterioration of two types of social capital: ﬁrst, it diminishes incentives to reward and punish political leadership through voting. Next, it weakens citizen ability to mobilize collectively through associations, since the point of privatization is primarily to commodify and individualize service delivery (Björkman, 2015). Karachi, Pakistan presents several advantages as a site of this study. One of the key challenges of privatization reforms is that they can be driven by pre-existing institutional arrangements (Bussell, 2012). Studying electricity in Karachi provides the unique perspective of city-wide implementations of privatization reforms across highly varied District, Union Council and neighborhood-level institutional arrangements. A second advantage of studying Karachi’s hybrid service delivery3 is unique access to data. Since the privatization of electricity in 2009,4 the city’s utility

2These countries nevertheless make up more than 40% of private infrastructure investment in the developing world. The World Bank Privatization in Public Infrastructure dataset classiﬁes ‘low-income’ countries as those with GNI less than $1,025 in 2018 and ‘lower-middle’ as $1,026 and $3,995. Argentina, for example, has a GNI of $12,370; Ghana’s is $2,130 and Pakistan’s is $1,580. 3This term is used by Post et al. (2017) to refer to formal and informal privatization arrangements in service delivery of water, transportation and other traditional state-provided ‘public goods.’ 4The Karachi Electricity Supply Corporation was partially privatized in 2005, when the German engineering ﬁrm Siemens took over the technical, i.e. transmission and distribution functions of the company. The failure of that contract led to early termination. After several

67 company has invested considerable resources in locating and geo-tagging over 30,000 step-down transformers that provide electricity to the city’s residents. Because of infrastructure challenges that are common to the developing world, the utility company does not have the capacity to accurately differentiate between payers and non-payers. Therefore, the company enacted a policy of prioritizing neighborhoods where it believes it recovers all of its bill payments (terming these neighborhoods ‘low loss’), and disproportionately targets outages to those neighborhoods where bill collections are low (‘high’ or ‘very high’ loss) - each transformer therefore corresponds with a granular level of electricity outage at the neighborhood level - ‘very high’ loss areas experience 8-10 hours of outage throughout the year, and ‘low’ loss areas are virtually outage-free (Figure 3.4). The result is that several million homes in the city suffer from high outages by virtue of being located in a ‘high loss’ neighborhood. These data were made available for this study, making this the first attempt to use proprietary private utility data for academic research at this scale. These data show that the privatization of electricity has resulted in higher compliance of payment for electricity, as opposed to state-provided services such as water. However, several million individuals are also subject to low-quality service delivery because they or their neighbors are unable to pay their bills. I combine two time periods of a cleaned and verified dataset of 25,000 step-down transformers with original Census map layers created specifically for this study, based on the most recent (2018) delimitations. These delimitations are matched with Provincial and General Assembly election results from the most recent General Elections in 2018. Finally, I code and match 185 Union Council constituencies to socio-economic data buyers and fall-throughs, a Dubai-based company Abraaj finally purchased 74% of KESC shares, the remainder are with the federal government.

68 from the most recent Census in 1998, providing a unique image of extremely granular neighborhood-level service delivery data. My results thus show that the depoliticization of public service delivery through privatization has complex and ambiguous results. Improving the reliability and the eﬃciency of public good provision should be beneﬁcial for lifting citizens of developing countries - and particularly a rapidly-increasing population of urban dwellers - out of poverty. However, these gains may be outweighed by disempowerment of large swathes of the population, for whom robust political and civic participation are crucial for sustained democratic consolidation. The next section provides an overview of the literature and outlines theoretical expectations.

3.2 Existing literature and theoretical expectations

Globally, middle- and higher-income households in urban areas opt-out of public service delivery by turning to private providers (Holzner, 2010; Nucho, 2016; Sassen, 1996). However, they continue to participate politically, studies suggest that political participation is dependent on the interaction of multiple psychic and material needs (Bratton and Kimenyi, 2008; Kramon and Posner, 2013). Increasingly, the study of non-partisan forms of patronage by political agents suggest that relations between patrons and clients may not be as unequal as previously thought (Auerbach and Thachil, 2018; Kruks-Wisner, 2018). In particular, ‘claim-making’ by citizens bridges the gap between legal guarantees by the welfare state and distributive shortfalls (Kruks-Wisner, 2018): petitioning the state via political agents is therefore a key component of democratic participation.

69 Indeed, the political embededdness5 of bureaucrats has shown to improve welfare outcomes Gulzar and Pasquale (2017). State-provided service delivery forms the basis of citizen attempts to claim rights (Kruks-Wisner, 2018), politician efficacy at bridging the gap between de facto and de jure benefits is shown to be an important marker when selecting local leaders (Auerbach and Thachil, 2018). Simmons (2016), Kale (2014b) and others point out that collective bargaining by citizens can successfully reduce the political incentives for privatization. Yet we know relatively little about what happens to these crucial channels of access and accountability when states withdraw from public goods provision. My first expectation is therefore that citizens rely less on politicians when a public good is privatized. To state this expectation formally:

H1: Individuals are less (more) likely to seek intervention from political representatives when attempting to gain access to private (non-privatized) goods. I show that a key development post-privatization of electricity is that consumers, even those who have strong political connections are likely to pay their electricity bills. On the other hand, water provided by the state is politically embedded and intensely contested along partisan lines. I expect to ﬁnd fewer instances of claim-making in services such as electricity, and more in publicly-provided services such as water and sewage repair. Does the decline in citizen-politician linkages have impact beyond privatized public goods? My theoretical framework proposes that reduced dependence on politicians in one service delivery area aﬀects political bargaining and claim-making in other areas. In neighborhoods where households rely on private electricity and private water, I expect political associational life to be the weakest; measured by

5The ‘embededdness’ of economic behavior was used by Granovetter (1985) to argue that social relations which bounded rational choice were a prominent feature of modern economic society.

70 low voter turnout during general and local elections and low participation in civic associations. In comparison, where privatization led to an improvement, regularity and ‘fair’ distribution of electricity, and individuals continue to be dependent on state-delivered water, I expect relatively higher participation in voting and associational life. To state these expectations formally;

H2: Individuals in good (bad) neighborhoods for privately provided Service A, who are dependent on publicly provided Service B, are more (less) motivated to participate publicly. These expectations are summarized in Table 3.1. Table 3.1: Theoretical expectations of privatized service delivery

State Service Delivery Private Services Embedded Not Embedded

High quality Participation ↑ Medium quality Participation ↑ Type 1a Low quality Participation ↓ Type 1b Very low quality Participation ↑ Participation ↓ Type 2a Type 2b

Existing research points to several potential mechanisms that could lead to these outcomes. I will explore three here, namely 1) increased expectations from private providers 2) diminished expectation of entitlements 3) perceptions of government eﬃcacy.

Increased expectations from private firms

As noted elsewhere, part of the demand for privatization is bottom-up. Multiple studies have noted citizen-led pressure to remove partisan inﬂuence over services and welfare Weitz-Shapiro (2014), the use of private ﬁrms and technology is seen as

71 a signal of progress in this direction Bussell (2012). These expectations are not necessarily a reflection of successful anti-corruption reform: indeed many attempts to liberalize and ‘de-politicize’ state sectors continue to provide opportunities for rent-seeking to powerful actors (Szakonyi and Urpelainen, 2013). Nevertheless, private firms often project and become associated with ideas of modernity (Larkin, 2013) that are internalized by citizens and political actors. Finally, many citizens are savvy forum-shoppers and are quick to adapt to channels of influence and redress.

Diminished entitlements

That income inequality is linked to voting and membership is deeply contested (Kasara and Suryanarayan, 2015) and varies by context. Structural barriers prevent the poor from voting (Berinsky, 2005), yet the poor may be highly motivated to ‘be counted’ (Ahuja and Chhibber, 2012). Evidence suggests that participation becomes more costly as urban life becomes increasingly more expensive, as typiﬁed by privatized service delivery (Holzner, 2010). Poor service delivery in one key sector might shift fundamental beliefs about rights and citizenship, leading individuals to expect less of elected representatives overall (Von Schnitzler, 2008). Therefore even if voting is not impacted, ethnographic data should reveal diminished expectations of rights and entitlements in the aftermath of privatized service delivery.

Perceptions of government efficacy

The gap between the status and the reality of citizenship is a feature of many parts of the developing world, Kruks-Wisner (2018) suggests that the phenomenon of ‘active citizenship’ involves seeking to overcome these gaps by making claims on the state. Elsewhere, research suggests that it is in political leadership’s interest to help claimants, even if they do not belong to the same party or ethnic group (Auerbach,

72 2017; Auerbach and Thachil, 2018) suggesting a need to project efficacy. What is missing from each of these accounts is the impact on politician efficacy by rival institutions that are outside of the political sphere - namely, private institutions. Negative experiences when claim-making are expected to deter individuals from making claims in the future (Kruks-Wisner, 2018). Disentangling these processes requires a multi-method approach. To test my claims, I use qualitative data to create a typology of participation in the city, varying cases by high and low access to private and public services. Next, I measure the interaction of the quality of privatized service delivery and the embeddedness of state services using granular neighborhood level data to demonstrate a spillover effect. The remainder of this paper proceeds as follows. Section 1.2 provides an overview of the service delivery context in Karachi, Pakistan. Section 1.3 describes the data and provides an overview of the methodology. Section 2 presents two sets of case studies, and tests H1 - the diminishing role of local elected leadership as public goods are increasingly outsourced to private stakeholders. Section 2.4 provides a test of these hypotheses: I examine the interactive effect of services on individual measures of participation, providing a test for H2. To briefly summarize these findings, I show that neighborhoods that receive low-quality private services, and are dependent on state-provided water, tend to have lower reported membership. Conversely, high quality provision neighborhoods have relatively high levels of voting and membership. The final sections provide a discussion of these findings and conclude.

73 3.3 Hybrid service delivery in practice

Karachi, Pakistan’s largest city and industrial hub is home to 14.9 million people.6 An estimated 600,000 migrants moved to the city from India in 1947, sparking its first service delivery crisis (Hasan, 2015). Planning documents from 1972 detail government-led efforts to extend water lines and electricity to peripheral areas of the city, and to informal settlements near the center (Hasan, 2002; Master Plan Department, 1972). Subsequent population shocks during the Afghan war in the 1980s and the War on Terror in the early 2000’s increased pressures on service delivery in the city. The demand for water, housing and sanitation was met by informal private contractors (Gazdar and Mallah, 2013), the demand for electricity was met by extending pirated connections to the existing grid. If Pakistan typifies a rapidly urbanizing country in the global south - over 39% of the population lives in cities - Karachi is typical of cities in developing world: services are provided through a hybrid of informal and formal private and state institutions (Post et al., 2017). Urbanization in these contexts is marked both by weak state penetration, with gaps made up by informal private actors (Sassen, 1996), and the selective application of laws by the state, that exerts forbearance (Holland, 2017) where it observes illegal practices in access to service delivery. The stated welfare goals of the planning documents of the 1970s and 80s reflect populist drives to deliver ‘bread, clothing, housing’ to constituents7. They also lay the foundation for decades of patronage by the Pakistan People’s Party (PPP) and the United People’s Movement (MQM) to their constituents in Karachi (Gayer, 2014),

6Oﬃcial estimate, Pakistan Census 2017 (Government of Pakistan, 2017). World Bank estimates the population at 15.4 million. 7Speech by Zulﬁqar Ali Bhutto, leader of the Pakistan People’s Party, c. 1970 (Marching Towards Democracy, p. 48)

74 illustrated in the vignette at the beginning of this chapter. This section provides an overview of private and public services in the city. Private services in Karachi make up 60% of the health facilities in the city8 and provide the bulk of transportation services, private schools have an enrollment of 3.2 million students,9 reflecting a nation-wide private school enrollment rate of about 34% at the primary level (World Bank 2018). An average of 12% of the domestic water supply is provided by private water vendors, with some areas relying entirely on private water for domestic needs.10 These arrangements are typical of moderate- to low-regulation models (Post et. al 2014), for example, licenses are provided to private water vendors to make up for shortfalls, however illegal suppliers of domestic water are ubiquitous (Maher and Ilyas 2015). The privatization of electricity stands in sharp contrast to other hybrid services in the city. Approximately 90% of the city was electrified in 1998; distribution and revenue collection were taken up by the Karachi Electric Supply Corporation (KESC). Like other public-sector distribution companies in Pakistan, KESC managed peak demand months by instituting scheduled and unscheduled outages. KESC struggled through a series of reforms in the 1990s and was finally set up for partial privatization in 2005; at the time of privatization, KESC reported a shortfall in revenue of $136 million, primarily driven by non-payment of utility bills. A Dubai-based private equity firm bought majority shares in KESC in 2009, with the government retaining 26% of shares. In 2016, the parent group Abraaj reported a profit of $261 million for the newly-branded ‘K-Electric.’ The privatization of electricity in Karachi has, by most accounts, led to an increase in utility bill payments. In 2000, the National Regulator (NEPRA) reported

8Government of Sindh, Bureau of Statistics, 2016 9The Express Tribune, January 22 2018 10Survey conducted in Karachi, July 2018 (N≈1000).

75 Karachi’s electricity billing recovery at 63%, in 2017, it stood at 82% (Abbasi 2011, NEPRA 2017). In the survey conducted for this study, individuals reported paying bills in full at least 65% of the time, bills average at about PKR 4000 (≈ USD 25) a month. Challenges with service delivery remain: individuals reported electricity outages of six hours a day, even where payment were relatively regular (Figure 3.1). Signiﬁcantly, at least 80% reported receiving a bill in the last year that was ‘unfairly high.’ These grievances illustrate a dilemma that is central to privatization in weak regulatory contexts: while bills payments are demanded individually, electricity, like other services in the city, is experienced collectively.

District West District South 20 15 10 5 0

0 5 10 15

District Central 20 15 10 5 Reported electricity outage, hours/day 0

0 5 10 15 Reported bill payment in full, months/year N=1019

Figure 3.1: Quality of private services: Electricity outage by District

The key innovation of privatization is the commodiﬁcation and individualization of public services (Björkman, 2015); in Karachi, privatization achieved its goals by stratifying the city into high and low priority areas, which are described in detail in the next section. The utility company of Karachi in its present form is unable to

76 target punishments for non-payment or theft at the household level. Instead, it aggregates losses to the ‘feeder’11 level, subjecting areas to rolling blackouts depending on an estimate of collection from the area. The practical outcome of this policy is that many households who regularly pay utility bills get ‘stuck’ in low-quality service delivery neighborhoods. Therefore a direct result of privatization, in addition to improved bill collections, is the stratification of neighborhoods by the quality of service experienced. The improvement in bill collections for electricity would not be possible without the active compliance of political parties. Electricity is a top priority for domestic consumers (Figure 3.2), yet interviews conducted across the city, over a period of ten months between June 2017 and January 2019 suggest that politicians are unable to intervene in the two leading complaints against electricity - outage, and over-billing. About 11% of individuals reported going to a local government office or political leader with an electricity-related complaint; in contrast over 28% took a sanitation-related complaint to a municipal or party office, or approached a local leader (Figure 3.6). Both these figures are dwarfed by the nearly 80% of complaints made to the K-Electric office or helpline. Privatized service delivery is therefore an important bureaucratic front for the modern state, and a key point of interaction for citizens. The relative uniformity of outages and payments in electricity across districts (Figure 3.1) is markedly different from the large spatial variation in the provision of public services such as piped water (Figure 3.3). In District Central, nearly 80% of the domestic water supply is from pipes, supplemented by private vendors. In District West, over 50% of the supply is from non-state sources of water. The

11These underground cables supply electricity to groups of transformers; there are about 1589 identiﬁed feeders supplying Karachi’s 25,000 transformers.

77 Karachi Water and Sewage Board (KW&SB) reported that 2.5% of its consumer base pays utility bills; conversely, private water vendors charge an average of $15 for a 1000-gallon tanker of water.12 In interviews conducted in each of these districts, the availability of state water is highly contingent on whether a constituency is politically signiﬁcant. A councilor in District West, Fuqraj Bibi described the changing fortunes of her district in the following terms. As a councilor in the 2005 Local Government, she recalls leading her constituents to the nearby hydrant to protest over-use by private water tankers. ‘If you wanted to win in this neighborhood, get people water.’ By 2010, the demand for water from industries had made it less politically expedient to supply domestic users in District West. The increased dependence on private water vendors coincides with a disconnect between local political actors and the party leadership. ‘Now, I don’t know the chairman, I don’t know the councilor,’ Fuqraj Bibi told me in 2019. ‘No one listens to us (local politicians).’13 Hybrid service delivery therefore presents two ‘fronts’ of the state to citizens - the private, driven by incentives to provide to payers and to exclude non-payers, and the public, driven by political expediency, but facing a general retreat of embeddedness. If the distribution of public goods is one of the key links between citizens and representatives, perceptions of the state eﬃcacy and citizen entitlements are mediated by experiences with both private and public service delivery institutions. Neither of these act in isolation, making the interaction of these two fronts a key determinant of political behavior. The next section outlines the qualitative and quantitative data used to examine this interaction, and test its impact on political behavior.

12Al Jazeera English, 2017. 13Emphasis added. Author interview, Faqir Colony. February 25th, 2018.

78 3.3.1 Data and methodology

Quantitative data for this study comes from an original dataset of over 25,000 step-down transformers,14 that provide the final reading on electricity consumption before it goes to individual metered and un-metered homes and shops.15 A verified and cleaned subset of approximately 23,000 domestic PMTs were spatially combined with original geo-spatial electoral data from the 2015 Local Government Elections, data from the last complete census to take place in Pakistan in 1998, and results from the most recent 2018 General Elections. The quality of privatized service delivery The independent variable of interest is primarily the quality of post-privatization service delivery. Each cluster of 150-200 households in Karachi is served by a transformer, each transformer has been assigned a status of priority by the utility firm. This allows a fairly consistent map of the quality of services at the neighborhood level. Neighborhoods that are served by high outage transformers experience over 6 hours of power outages, regardless of the seasonal demand for electricity. Neighborhoods served by low outage transformers typically are free of scheduled outages throughout the year (Figure 3.4). The clusters are spatially matched to Karachi’s Union Council16 and Provincial Assembly boundaries, with every Union Council having on average 134 neighborhood clusters. The variable quality is simply the outage status assigned to the transformer that services the neighborhood (Table 3.2).

14The colloquial term for these, ‘PMT’, which is now deeply rooted in Karachi’s urban lexicon, simply means ‘Pole-Mounted Transformer.’ 15This study focuses on primarily those transformers marked for ‘domestic,’ and not ‘commercial’ or ‘industrial’ use. 16The Union Council is the lowest level of elected government in Pakistan, consisting of directly-elected representatives from four Wards. In municipalities such as Karachi, Union Councils within each District elect a District government, known as the District Council.

79 Table 3.2: The quality of service delivery and outage

Quality Oﬃcial ‘Loss’ Hours of outage Status, Jan ’18 High 1 0-2 Medium 2 2-5 Low 3 5-8 Very low 4 8-12

The hours of outage vary somewhat with seasonal demand, the range provided in the table indicates the upper and lower bounds. For example, in cooler months high quality service areas will be outage-free, but low quality areas will continue to receive five hours of scheduled outage in a day. These data were used for this study in two ways - first, using spatially-matched Census data from 199817 and electoral data from Local Government elections in 2015, I provide a descriptive overview of electricity service delivery. Next, these data form the basis for sampling for 47 clusters in 3 Districts of Karachi, creating a sampling frame for 1000 households across the city. Each cluster of approximately 21 households is therefore spatially matched to an service delivery status, providing a granular view of service delivery at the neighborhood level in Karachi. Households are therefore assigned a corresponding quality of service variable, as described above. Additionally, survey respondents were asked to reportage outages over several months. I find that

17These data are taken from publicly-available, Union Council-level Pakistan Census data for 1998. The data documents gender-disaggregated population, formal and informal housing, access to services such as piped water and electricity, literacy and Muslim and non- Muslim population. These were matched, manually and with some margin of error, by using Union Council names from 1998 and publicly-available 2015 Union Council shape-ﬁles.

80 reported outages tend to match the oﬃcial quality ‘status’ of the neighborhood, making this a unique identiﬁer of quotidian service delivery experienced by citizens. In order to test whether individuals are more or less likely to participate in high

and low quality service neighborhoods, the variable quality is interacted with a measure of state embededdness. Respondents were asked what percentage of their domestic water supply came from each of the following sources: pipes, tube-wells, and tanker (see below).18 The percentage of water that is state-provided, that is from the mains or through tube-wells, is collapsed into a single, continuous variable statewater. The percentage of domestic water that comes from state services therefore describes the degree to which the state is embedded in the neighborhood. Survey data 2018-2019 The main source of primary data for this study is from an original face-to-face survey conducted in 2018, with follow-up in 2019. A total of 1019 participants across 3 Districts in the city were selected using stratiﬁed random sampling. Within each District, 5-8 Union Councils were randomly selected based on population; within each Union Council, 2-3 points were selected from the dataset of electricity transformer geo-locations. The survey included questions on state and private service delivery consumption for water, electricity and other services. In particular, it asks the source of these services - whether provided by the state or from private vendors. It asked respondents to report whom they go to when services break down, or there are issues with payment and billing. It also requested copies of recent utility bills and recorded anonymized data on consumption, bill amount, whether the bill was paid, and outstanding dues. Finally, the survey asks a battery of questions on political behavior, party allegiances and voting behavior.

18In order to make these distinctions clear, enumerators were asked to emphasize the source of piped waters as ‘line ka paani’ - water from the main line.

81 Dependent variables - Electoral participation and claim-making The survey took place during the summer of the 2018 General Elections in Pakistan, with a follow-up survey taking place in April 2019. This provides a unique opportunity to measure political association and participation.The variable vote combines individuals who reported they were likely to vote pre-election, and the ones who reported voting post-election. The participation variable membership is an aggregated index from 0-3 and includes political, religious and ‘other’ forms of membership. Additionally, several ‘trust’ questions were asked, using standard language from the American General Social Survey, Afrobarometer and the Indian National Election Survey. Two of these measure trust in neighbors, for example, ‘Do you think most people can be trusted, or that you cant be too careful in dealing with people?’19; these are combined into the variable Trust Others. Similarly, trust in representatives (Trust Reps) is measured using responses to the question ‘Would you say that most elected representatives can be trusted to do what is best for the city?’20. Control variables Wherever appropriate, control variables for gender, language category (included as the dummy variable urdu), age, education, logged reported income, home ownership and household size were included at the household level. A variable for partisanship is included that takes the value 1 if the respondent voted for the anti-incumbent party PTI, and a negligible number who voted for the Pakistan Tehreek-i-Labbaik, a right-wing anti-corruption religious group. The variable takes a value of 0 for all other reported party affiliations. Union Council fixed effects are included where appropriate and standard errors are clustered at the Union Council

19NORC GSS 1998 20Adapted from Afrobarometer 2016

82 level. A dummy for proximity to the election was included to indicate surveys that took place immediate after the 2018 election, to control for exogenous increases to feelings of ‘trust’ or satisfaction with service delivery in the aftermath of a major political event. Finally, qualitative data from this study comes from over 10 months of ﬁeldwork in Karachi, Pakistan, between 2017 and 2019. These cases were selected uses least likely and most likely methods, sampling both low-income and politically-embedded neighborhoods and medium-income neighborhoods in District Korangi, South, West and Central. Introductions to the neighborhood were typically made through local journalists or community organizers; follow-up visits were made alone. Interviews were conducted using a snowball method, and where possible by going door-to-door. Over 70 primary interviews were conducted with politicians, bureaucrats, utility company representatives and citizens, all interviews were conducted in Urdu by the author. In addition, observational data were collected at over a dozen K-Electric facilitation camps, and Union Council oﬃces across the city, several of these were also used to conduct in-depth interviews with citizens. The next section draws on these data to illustrate the typology of participatory outcomes outlined in Table 3.1.

3.4 Expectations, efficacy and entitlement

3.4.1 The transformation of utilities

Should groups which are to be served (by electric utilities) include only ﬁrms and households thought to be contributing most to production and those who can pay an economic price for services; or should a major eﬀort be made to extend at least minimal adequate service to all of the

83 urban area’s households? - Master Plan for Karachi Metropolitan Region, 1972, pg. 48

These politicians are sellouts. They’ve colluded with the electricity company. - Ali Baloch, political worker, District West. Author interview, January 11th 2018.

City planning documents from 1972-1985 document a steady rise in services in Pakistan’s largest city. At the time, the Karachi Development Authority was responsible for oversight of housing and amenities. Networks of provision were typically slow to expand, but the demand for resources was also gradual. Piped networks for water, for example, double between 1972 and 1985, the Master Plan for Karachi 1972 reports 70% piped networks. Karachi is notable for its extensive electricity provision: over 80% of houses are electrified. By 1998, over 95% of the city was electrified, although water connections remained largely stagnant, supplemented by a network of makeshift large-capacity tankers (Figure 3.3, Rahman (2009)). As quoted above, the city’s planning document notes two clear slabs of consumers - those who can pay for high volumes of electricity, such as industries and high-end domestic consumers - and those who cannot, such as small, home-based industries and the poor. It wonders, as all state planners do (Kale, 2014b; MacLean and Brass, 2015), which group of individuals deserved to be prioritized when expanding the existing electricity network. In reality, these two ‘slabs’ are artificially constructed: industrialists and high income consumers regularly stole electricity - famously, the Governor House in Karachi, the seat of provincial power in the city, had a backlog of unpaid bills in the millions in 2018. 21 Similarly, in July 2017, I met a group of residents in a migrant colony in the industrial suburb of Korangi who regularly paid

21Daily Times, May 5th 2019. https://bit.ly/2vPCJHp.

84 a fixed pirated or ‘kunda’ bill.22 At the height of gang rule in areas of Lyari, individuals recall paying a fixed rent to gang units with the understanding that they would be protected from excessive electricity outages and bill collectors.23 A direct consequence of the 2009 privatization process in Karachi is the near-ubiquitous receipt and payment of electricity bills. In an original survey conducted for this study in July 2018, 96% respondents across income groups reported receiving an electricity bill every month. Over 60% reported paying their bills every month in part or in full, even though over 80% reported receiving bills that they thought were ‘unfairly high’ at least once in the last twelve months. Respondents report paying bills that average 12% of their monthly income, bill amounts are relatively inelastic across income groups (Figure 3.5).24 In the survey, individuals were asked to share their most recent electricity bill; enumerators noted the stated number of units and the current bill amount, the results are graphed against the calculated tariff in Figure 3.5. ‘Overbilling’ by the utility company is most frequently attributed to backlogs of payments or theft by neighbors. Similarly, the utility company subjects some neighborhoods to over 12 hours of outage every day, citing the non-payment of bills as a reason. In District West, a local councilor talks about a time when ‘party leadership would come with us to pelt rocks at their (K-Electric’s) offices.’ Looking at the cycle of over-billing, outages and frequent unscheduled breakdowns, the absence of public outcry against the electricity company in 2018 is conspicuous. Instead, individuals

22These bills are much less common now, but at the time I was shown a receipt, torn from a booklet of similar stubs, printed in cheap but smart blue ink (See Chapter 2, Figure 2.1). The bill is titled ‘Receipt for Kunda (Pirated) Bill,’ with a cell phone number, the bill amount (Rs 750, or approximately USD 7), and the date. 23Author interviews in Green Timber Market, July 2018. 24The accuracy of this ﬁgure notwithstanding, Pakistani households have measurably higher energy costs compared to the rest of the region, and to similar economies (Bacon et al., 2010).

85 report taking complaints to the oﬃces of the utility company (Figure 3.6), using their telephone hotline, and attending ‘camps’ set up, ostensibly to facilitate bill payment. Between 2017 and 2019 I attended over a dozen camps, ranging from spacious tents set up on a street-corner stocked with laptops, a printer and smartly dressed representatives of the electricity company, to tiny airless shops with two men and a thick ledger in which breakdowns of payments are made by hand. I did not observe any money being exchanged at these venues - they were simply opportunities for consumers to have large bills broken down into installments, and for the utility company to make note of the individuals’ attempt to pay and to not serve them with disconnection notices. One woman left in tears after being told there was nothing she could do about her bill that was three times the amount from the previous month. ‘They just keep telling me I have to pay. Pay now, pay it later. But I have to pay.’25 Bill payment in electricity is in marked contrast to virtual non-payment in water bills. While piped water is deeply embedded in political narratives and expectations, electricity is increasingly absent from promises made by political leaders. It is important to note that the relatively static nature of the quality of service delivery results in the breakdown of the most basic principal of private service delivery: the idea that ‘you get what you pay for.’ The most recent categorization available for this study is in January 2018. Compared to a previous version of the same dataset in August 2017, over 85% of the transformers remained at the same status. 9% received a better (i.e., less outage) status, and less than 3% were downgraded to a worse outage status. This suggests ﬁrst that even if individuals are attempting to improve bill payments, it does not result in immediate improvements at the neighborhood level. The second feature of this technological landscape is that

25Author interview, Singholane. January 26th 2019.

86 it is inescapably human - the meter readers and bill collectors, the individuals who run the facilitation camps and the people updating the feeder status - each are subject to pressure, misinformation and bias. In February 2018 I spoke with a young man, Moosa, who worked for the company K-Electric contracted to collect bills in District South. Moosa suggested that his company employs young men from the neighborhood, like himself, who can speak the local vernacular and persuade people to pay their bills. ‘A neighborhood will negotiate with bill collectors like myself, try and get us to agree to covering 15% of the backlog of bills to get the lights back on. This is not the oﬃcial policy, but this is how it works.’ In January 2019, when I spoke with Moosa again, he expressed being frustrated and cynical of the process. ‘The utility company will disconnect a whole building, and then squeeze people most aﬀected by the outage, such as white collar workers, to pay up.’ Elsewhere, individuals report temporary relief after a big payment has been settled with the company - ‘there will be reduced loadshedding for a week, two weeks,’ a shopkeeper in Ganchipara reported in 2018. ‘Then it will be back to what it was before.’ The next section presents four case studies that illustrate the variation in state embeddedness across neighborhoods, and the attempts to access public goods on behalf of citizens.

3.4.2 Learning entitlements - Gazdarabad and Ganchipara

In a neighborhood of UC 17 Ganchipara, Lyari, middle-income residents say they’re eager to clear the backlog of their building’s dues to the electricity company. A electric-powered motor pump that ﬁlls the overhead water tank in the building is paid for collectively. For many years, previous tenants neglected to pay their bills. Once the utility company began cracking down on defaulters, residents were encouraged to pay oﬀ the bill in installments. Ms. Farzana, one of the older

87 Table 3.3: Comparing high and low quality service neighborhoods

Gazdarabad Ganchipara Karachi

1998 Census Formal Housing 95.7% 94.6% 95.7% Piped Water 80.2% 72.3% 74% Literacy 74.6% 63.97% 63.8% 2015 Local Govt Elections Turnout 35.4% 34.5% 34.5% Party fragmentation 0.33 0.25 0.46 Herﬁndahl 2018 Service Delivery Data Quality of Privatized Services High Low

neighbors and the president of the building’s committee, sits in her neighbor Samina’s flat and tells the other women that they need to clear outstanding dues. ‘We should take advantage of (K-Electric’s) amnesty scheme,26 and just pay this bill off in one go.’ She informed us that the reason the bill was so high was because previous tenants skipped on the communal bill that paid for the water pump. After Farzana leaves, Samina and her sister-in-law Anum are quiet. I ask whether they agree, that it is better to pay off the bills in one go. Anum speaks up:

26Between June 2018 and January 2019, Karachi’s utility company introduced a limited- time scheme whereby some consumers with very high outstanding bills were given ‘amnesty’ of up to 85% on their outstanding bills. The terms of the scheme and the data on beneficiaries are not publicly available. To find out if they were eligible, consumers were expected to go to one of the 29 branch offices, or at makeshift ‘camps’ across the city set up on certain days of the month. From dozens of interviews across multiple camps, it is apparent that most individuals eligible for amnesty had backlogs of well over Rs.100,000 ($1000), and tended to have a history of regular payment in the past few years. One individual, after receiving 50% discount, was asked to pay the remainder (about $800) over the next 12 months, in addition to his current bill for that month. Protesting that he couldn’t an additional $70 every month, he was informed that he could either take the scheme as it was, or be bound to pay the full amount.

88 ‘I’ve heard that Farzana and her husband were stealing from the committee. Everyone I know says they paid their bills, but Farzana claims someone was not. I don’t know whom to believe.’27 Less than a mile away, in a neighborhood of UC 21 Gazdarabad, a group of women sit in the community center and ﬁercely condemn the utility company for ‘over-billing’ them. ‘No one here steals. We’ve known each other for years.’ The neighborhood is nearly identical to Ganchipara: clean rows of apartment blocks crowd narrow streets. Many of the women in these neighborhoods have completed secondary school. Some work as public school teachers. In both communities, ethnic homogeneity has enable deep ties, many families are related to each other and women play a large role in maintaining community cohesion (Ring 1968). These ties frequently overlap with voting preferences - in Ganchipara and in Gazdarabad, it is commonplace to have members of the same family be given tickets from rival parties in a bid for the communities’ votes. One key diﬀerence between the two neighborhoods is their geographic location - Ganchipara, Ms. Farzana’s neighborhood, is surrounded by neighborhoods that the utility company have marked ‘Medium’ and ‘Low’ loss, indicating a relatively higher bill recovery rate (Figure 3.4). They are therefore subject to fewer scheduled power outages in the day. Gazdarabad, less than a mile away, is in a zone containing mostly ‘High’ and some ‘Medium’ loss transformers, indicating that the area is subject to higher scheduled outages. In political and ethnic terms, the two neighborhoods are virtually indistinguishable: in Ganchipara, of the 50 households surveyed, 66% reported speaking at least one language other than Urdu, usually Gujrati or Memoni. Gazdarabad similarly has a large population of Memoni and Katchi speakers, in

27Author interview, January 18th, 2019

89 addition to a large Urdu-speaking population. In the most recent Local Government Elections held in 2015, both Ganchipara and Gadzarabad had relatively high voter turnouts at 34.5% and 35%, respectively. The party vote share index was 0.247 for the former and 0.333 for the latter28. In Ganchipara an Independent candidate who later switched to the Pakistan People’s Party (PPP) won the seat, and in Gazdarbad an Independent candidate won, the runner-up in both constituencies was the city’s dominant party of Urdu speakers, the United People’s Movement (MQM). Another key difference is that the two neighborhoods have had vastly different experiences making claims on the utility company. In 2015, a young man in Gazdarabad in District West was fed up with receiving inflated electricity bills. He mentioned this to his boss, who happened to run a well-regarded urban think tank in the city, his boss suggested approaching the Federal Ombudsman’s office in Karachi, since electricity is legislatively a federal subject. Waqar’s experience is worth quoting at length:

The Federal Ombudsman ordered K-Electric to give me a 20% discount. My friends told me to drop the case after that - you got relief, why are you still complaining. But I thought - why am I paying my bill. I thought I should appeal my case. So I wrote to the President,29 sent copies (of the Ombudsman’s decision) with the letter. I got a letter back - we are dismissing your case. I sent it to NEPRA.30 I was asked to meet the NEPRA reps, with K-Electric people there. I was happy that they were asking... They were grilling them as well. ‘What time period have

28Measured using the Herfindahl Index, lower numbers indicate a more competitive electoral playing field. See Olken 2006, Dalton 2008. 29As the head of the bureaucracy, the Federal Ombudsman’s office reported to the Presi- dent of the country. 30The National Electricity and Power Regulatory Authority, the federal energy regulator.

90 you billed him from?’ they asked. My next bill was also reversed. I was a success story. - Author interview, February 2nd, 2019

Waqar’s experience set off a chain of similar complaints to the Ombudsman’s office. His community in Gazdarabad regularly challenge their bills, and have active anjuman involvement in politics. Members of the community frequently cite their loyalty to the PPP, and that the rival party, the MQM, has punished them by redirected water from their constituency. The PPP knows Gazdarabad is a core constituency, and helps with water provision. ‘We get this work done, we make sure the Union Council does it.’31 Similarly, when it comes to dealing with electricity, the community attempts to intervene when the utility company threatens to cut someone off. ‘We did a peaceful demonstration against K-Electric... People are getting better at paying their bills. But we don’t want them to target people from the community even if they are stealing.’ The two neighborhoods are notable for their varying experience with local level associations. Ganchipara has relatively higher party fragmentation compared to Gazdarabad, yet participation rates are equitable, historically. This may explain why Gazdarabad is better at making claims by using state and political institutions. What is surprising is that the experience of low quality service delivery does not motivate the residents of Ganchipara to mobilize, instead, it exacerbates a sense of apathy and disconnection from political institutions. The next set of case studies explores how low quality privatized services impact lower income neighborhoods.

31Interview with Miss. Nazwar, General Secretary, Salawat Women’s Association. February 2nd 2019

91 3.4.3 Experiencing the state - Singholane and Haryana

Singholane, in District South, and Haryana, in District West, are both predominantly Baloch settlements with historical ties to the Pakistan People’s Party. Singholane in Lyari is one of Karachi’s oldest settlements (Gayer, 2014), that the PPP’s founder and former Prime Minister Zulﬁkar Ali Bhutto made his political base in Karachi. Lyari has been on the receiving end of decades of PPP welfare programs - including the regularization of informal housing in the 70s (Gazdar and Mallah, 2013), the provision of heavily subsidized domestic water, and the provision of jobs in state institutions. They also frequently prevented electricity bill collectors from targeting the constituency, leading to a considerable backlog of unpaid bills in the settlement. The PPP similarly mobilized electoral support in District West, promising water and municipal services in Baloch settlements. Unlike in Lyari, where the party tends to dominate, the PPP faces serious challenges from the MQM and the religious-centrist Jamat-e-Islami (JI). The table suggests that as recently as 2015, Haryana stood out as a highly competitive, highly mobilized constituency. A Jamat-e-Islami councilor and school teacher suggested that the ﬁerce political rivalry in the constituency helped secure local services - up to a point. ‘The Union Council is split,’ he said in an interview in February 2018. ‘We have no water in our pipes for nine years. We are surviving on (private) tankers.’ When asked whether the provision of electricity was an issue the parties were willing to intervene in, he laughed. ‘The party pressures us to pay our bills. It would cut electricity to this neighborhood if it could squeeze more money out of us.’32 Across Karachi, political parties have come to adapt to the new reality of privatized service delivery of electricity. Mr. Hassan, a Union Council Vice

32Author interview, Haryana. February 18th 2019.

92 Table 3.4: Comparing very low quality service neighborhoods

Singholane Haryana Karachi

1998 Census Formal Housing 91.8% 97% 95.7% Piped Water 76.4% 63.4% 74% Literacy 49.9% 52.3% 63.8% 2015 Local Govt Elections Turnout 32.0% 39.7% 34.5% Party fragmentation 0.33 0.43 0.46 Herﬁndahl 2018 Service Delivery Data Quality of Privatized Services Very Low Very Low

Chairman in District South insists he can do nothing to prevent his constituents from receiving inflated bills. Simultaneously, he invites K-Electric to use his Union Council office as a camp, watching over streams of petitioners come in to have their bills ‘adjusted’ and then turned away. He is occasionally asked to sign documents attesting proof of residence, so that individuals can get meters installed. Outside, pirated connections in the neighborhood are ubiquitous, and the outages go up to six hours regularly, even in cooler months. In contrast to his waning influence over electricity, Mr. Hassan’s knowledge of the water supply to the neighborhood is encyclopedic. During one of our interviews, two women come to his house to complain about the lack of water in the pipes. After they leave, he launches into an animated history of piped water in the neighborhood, anguishing over the over-use of public water. ‘Did you know, there are seven (pipes running under the street)! First there was a 14" line, that was given to us during Benazir Bhutto’s time. That developed a fault. Instead of repairing it,

93 they added another 7" line.’ He berates the Water Board for being ‘greedy,’ insisting that they make money off projects. ‘And local councilors get greedy too, everyone wants to promise voters a dedicated line.’33 When he is not at the Union Council office, he is supervising the cleaning of gutters, or on one of his two mobile phones to the Water Board. Whether or not Hassan’s efforts pay off, his constituents see his efforts. Hassan’s party, the PPP, continues to enjoy considerable support at the local level for bringing water to the area, winning practically every election in the area from 1970-2013. In contrast, Member of Parliament candidate from Haryana in District West, Rashid Raees, continues to insist he has influence over the provision of electricity, even where it is apparent that he does not. When asked how he helps petitioners who come to him with inflated bills, he cites two major contributions to improving service delivery in the neighborhood - getting bills broken down into installments, and ‘inviting’ the electricity company into the neighborhood to install the new, theft-proof overhead cables.34 However, he admits that when he calls his contacts in the company’s offices, he is told to improve collection from his neighborhood. This shift in relations has not gone unnoticed by his constituents: ‘does he work for us, or does he work for them?’ grumbles Ali, a political worker in the neighborhood. In the General Elections of 2018, the Provincial Assembly seat that contains Haryana colony had the lowest turnout among each of the case studies presented here: 36.3%, compared to a city-wide average turnout of 40%. Haryana illustrates the decline in participation in multiple ways. First, the politics of disempowerment are intensely local. In the survey conducted for this study, District West continues to have some of the highest rates of participation,

33Author interview, Singholane. January 26th 2019. 34Author interview, January 11th 2018.

94 compared to District Central and South. Second, while many constituencies are almost completely reliant on privatized state services, some continue to receive piped water (Figure 3.3). Finally, Haryana demonstrates that privatized service delivery is resisted, but not always successfully, by local political institutions - Ali’s vignette suggests that ‘pelting rocks’ at the utility company offices did not deter the implementation of privatization. Indeed, several years on, the political party is seen as a front for the private service delivery firm, and equally worthy of contempt. The party, in turn, has accepted its diminished role in the service delivery process. Rashid Raees, the former Member of Parliament of the PPP, admits that ‘there is a problem of electricity here.’ As with many of the interviews conducted in Karachi, this, too, took place in darkness in the afternoon, Raees apologized that his stand-by generator was out of diesel. ‘But outages are high because people don’t pay their bills.’ I suggested that some people complained that the party didn’t help them get better quality services. ‘I shouldn’t need to get people’s meters fixed, electricity fixed... this is a maintenance issue. (The private firm) asks me to help them get bills recovered... this isn’t my job.’35

3.5 State embeddedness and private service delivery

The outsourcing of traditional state services such as electricity and water to private providers changes both political incentives for provision, and also voter access to these services. In Karachi, the variation in the quality of privatized electricity, combined with varying access to state-provided services such as water, has created a patchwork of access, that drives and is driven by wealth, political capital, and local political institutions. This section leverages unique neighborhood-level service delivery information, to examine the eﬀect of this variation on political outcomes.

35Author interview, January 11th 2018.

95 Following the hypothesis set up earlier, I expect first that areas with privatized service delivery will have lowered incentives for participation, and likely lower expectations of political actors. Next, low-quality privatized service delivery and greater dependence on state-provided (piped) water should reduce incentives to vote and participate in associational life. It should also reduce trust in others and representatives. These hypotheses are tested using the following fixed-effects linear model, including an interaction term that captures the layered nature of service provision:

Yi = α + β1 X1 + β2 State Embededdness + β3 (X1*State

Embededdness) + β4 xi + β5 XFE +

The outcome variables Yi are measures of participation outcomes, including reported voting (1), membership in political and religious associations (2), trust in others and trust in representatives for models (3) and (4), respectively. X1 is the measure of private service quality, entered as four discrete categories of outage described in the data section: very low quality, low, high and very high quality service. The variable ‘state services’ is a continuous measure of reported household dependence on piped and tube-well water, both of which were found to be more state-dependent than on private tanker services. The interaction term interacts each category of outage with the percentage of household consumption of state-provided water. xi includes dummy controls for self-reported party ID, gender, language, age, education, income, homeownership, and household size.and XFE are entered as controls for socio-economic status and Union Council level ﬁxed eﬀects, respectively, and standard errors are clustered at the Union Council level. The results for the estimation are shown in Table 3.6. As expected, voting and ‘state embeddedness’ are highly correlated, suggest that individuals living in

96 neighborhoods where the state actively provides services such as water are highly motivated to vote, all else being equal. Examining the results for privatized service delivery where other services are not provided by the state, it is evident that reported political participation is highly contingent on the quality of services. In medium-quality neighborhoods, individuals report lower rates of membership compared to individuals in high-quality service neighborhoods (the base category). Conversely, in low-quality neighborhoods, both reported voting and membership are higher. Medium-quality neighborhoods are likely to be less trustful of others compared to the baseline category (Model 3) and very low-quality service neighborhoods that are not dependent on the state for other services report low rates of trust in elected representatives (Model 4). Controls for income, home ownership and partisanship suggest these results are highly contingent on the main independent variable - the quality of privatized service delivery. Given that individuals do not experience the variation in quality in a vacuum, what are the marginal effects of state services? The most prominent outcome from the interaction is the improved interest in voting and participation where service quality is the highest (Figure 3.7). Individuals who experience good private service delivery and continue to depend on the state for services such as water have significantly higher reported rates of participation. Similarly, individuals located in medium-quality neighborhoods report higher rates of voting. Somewhat predictably, individuals with very poor private service delivery and dependence on water tend to report somewhat higher rates of voting too, I discuss these implications in the next section. The most revealing is the significantly lower rates of membership for households that experience low quality service delivery, confirming that individuals confronted with low quality,

97 privatized service delivery may be less inclined to participate politically, even if they may be dependent on the state for other resources. The next two ﬁgures provide possible explanations for these varied outcomes. Prominently, contingent on their dependence on state services, individuals in medium-quality neighborhoods report higher trust in others. At higher levels of dependence on state services, trust in representatives declines for the medium-quality category; conversely, it tends to be much higher for very low quality private service areas that remain dependent on state services. To interpret this substantively, individuals with medium to low service delivery in electricity, who depend on politically-driven sources of domestic water provision, seem to report lower levels of trust in representatives, even though they may continue to trust their friends and neighbors. Voters with very poor quality private service delivery, but who continue to be dependent on the state for water, are likely to exhibit loyalty by voting, and report higher levels of trust in elected leaders. The next section discusses these ﬁndings.

3.6 Discussion

The provision of high-quality, privatized services is largely determined by a household’s ability to pay for them, and their geographic location among neighbors who are similarly able to pay for services. The utility company has some incentive to reward payers and punish non-payers, and survey data from 2018 in Karachi demonstrates that electricity payments have increased considerably post-privatization. However, the private ﬁrm has limited incentives to improve its ability to discriminate between payers and non-payers, particularly since there is little regulatory or political pressure to do so.

98 Qualitative evidence suggests that the window of opportunity for holding the private company accountable is narrow: in order to get the vast majority of citizens in Karachi on a schedule of regular payments, the utility company circumvented many of the mechanisms that citizens normally use to register protest. Among these are working with local leadership, such as Mr. Hassan and Mr. Raees, to deter political leaders from joining citizens in their protest against the company. Other methods include putting pressure on the federal government to curtail the jurisdiction of institutions like the Ombudsman’s office. This quality of privatized service delivery in weak institutional contexts reflects findings in anthropology and urban sociology (Cooper, 2011; Holzner, 2010; Von Schnitzler, 2008); this is the first attempt to measure its impact with regards to political behavior.

The findings confirm H1, that the privatization of electricity has diminished the role of patronage in enabling citizens to not pay for public goods. It has additionally reduced their ability to demand better provision, even when they are paying for the service. Table 3.5 sums up these findings. For Type 1b neighborhoods, middle-income individuals continue to have high expectations of the private utility firm, similar to their Type 1a peers in higher quality service delivery areas. However, they tend to be resigned to poor service delivery, suggesting a diminished sense of entitlement, and weakened expectations of political leaders. Figure 3.7 confirms these findings: individuals in higher outage areas tend to have lower rates of reported voting and membership, and have lower reported trust in others. Conversely, individuals in very high outage, or low quality areas, who continue to be dependent on state-provided services, tend to participate in voting as well as be relatively trusting of their elected representatives (Figure 3.7). The residents of the Type 2a neighborhood therefore represent the classic patronage bind, where few alternative options exists, both politically but also with regards to their service

99 Table 3.5: Mechanisms summary

Type 1a Type 1b Type 2a Type 2b Private Services Quality High-Medium Low V. Low V. Low State Services Embedded? Yes Yes Yes No Expectations of private ﬁrms + + − − Expectations of govt. eﬃcacy − − + − Entitlement + − − − Outcome - Participation ↑ ↓ ↑ ↓

delivery providers. The utility company writes off these households as ‘low recovery’ consumers and therefore severely de-prioritizes electricity to their neighborhood. Simultaneously, parties have little incentive to improve service delivery to this largely captive vote bank. Indeed, where individuals in very low quality service delivery areas are also paying for private water, there is evidence of disengagement with politics altogether. Fourteen years after the largest centralized public utility in Pakistan was privatized, the city of Karachi has seen an appreciable decrease in spheres of influence for its local political leadership. While electricity was never subject to local oversight, the public management of KESC meant that local politicians exercised considerable control over its implementation, protecting constituencies from payment and disconnection, and ensuring the shortfall of a highly inefficient grid were felt equally, regardless of payment. Post-privatization, service delivery has rationalized to the extent that payers living in mostly-paying neighborhoods suffer virtually no outages, while those living in communities where their neighbors fall short on bills will be subject to a form of collective punishment. Simultaneously, citizens continue to remain dependent on other publicly provided goods, such as

100 sewage management, and the provision of domestic water. For political leadership, this ensures some form of control over poorer and some middle-income constituents. Vice-Chairman Hassan’s expertise at ‘fixing’ sewage and water far exceed his ability to promise his constituents electricity. Cooper (2011) observes that in Mumbai, councilors have extensive knowledge of municipal pipes that deliver water to their area. This ‘expert’ knowledge is not just limited to their ability to negotiate with the bureaucracy to get water delivered to the area, but also how to hack and pirate existing water supplies Von Schnitzler (2008); Winther (2008). While expertise to hack electricity provision may continue to exist,36 opportunities for doing so have been severely circumscribed. In comparison, it is apparent that in spite of the fact that most parts of the city are critically under-served by state services, political parties continue to integrate it into the promises they make to voters, as well as their day-to-day interactions with them. Voters frequently cite water and sanitation as a reason to support a party, even if that support has been in the past. It is likely that neighborhoods that receive piped water and enjoy relatively good quality electricity attribute water-related uncertainties to political failings or effectiveness. It follows then that the uncertainty of whom to blame for privatized electricity also impacts the willingness to hold parties accountable for other services, such as water, as shown in Figure 6. It is noteworthy that households in very high loss neighborhoods are no less likely to vote (Figure 3.7), adding some evidence to the scholarship on patronage that suggests that the very poor treat voting as either an election-time transaction (Syal, 2012), or as an article of faith (Ahuja and Chhibber, 2012). The findings presented suggests that individuals who are relatively better-off,

36My friend and informant from District South, A.B, put it succinctly: ‘You know how it is. Before the company can even introduce these new technologies to stop hackers, someone’s already found a jugaad (hack).’

101 but ‘stuck’ in the liminal space of a poor service provision neighborhood are particularly unlikely to participate in associational life, and less likely to trust their neighbors as well. Taken together, these data enable a better understanding of partially privatized or hybrid public goods regimes, and the policy stasis that may surround them. As voters frustrated with low-quality service provision disengage from the electoral space, parties may re-focus efforts on loyal vote banks, typified by those in very low quality electricity neighborhoods that continue to depend on state services. Political parties continue to make marginal improvements in services that they do have control over - Mr. Hassan’s constituents in Singholane seem particularly dependent on his ability to provide water and get sewage lines cleaned out, and are wholly unable to improve their circumstances with regards to electricity. Alternately, Mr. Hassan may find himself in a similar situation to Fuqraj Bibi in District West: facing a fully commodified landscape of low-quality, low-cost privately provided public goods, where citizens have little incentive to participate, or make claims to local leadership. This substantively impacts the quality of these services: in spite of its deep unpopularity among low-income groups in Karachi, there is virtually no attempt to roll back the privatization of electricity or to make the utility a state-owned enterprise again. Finally, it is apparent that voters who have benefited from improved service provision under privatization are motivated to vote, and may even vote for the incumbents if they are sufficiently convinced of their ability to target other, non-privatized public goods. Like the residents of Gazdarabad they have high expectations of private firms and a strong sense of entitlement to service delivery. There is some evidence, therefore, that improved service delivery under privatization can create a virtuous cycle of accountability and expectation for other, non-privatized public goods.

102 3.7 Conclusion

The expansion of public-private partnerships in the delivery of goods and services is a mainstay of governments in the developing and in the developed world. Understanding the political impact of these policies is therefore of utmost importance. I develop and test the theory that privatization diminishes the ability of citizens to use political representatives to lobby for better provision, and that this learned behavior of political expectation and eﬃcacy ‘spills over’ into non-privatized public goods. I do so primarily by collecting granular service-delivery data across one of the largest cities in the world, utilizing geo-located service delivery clusters to describe geographic variation in the quality of privatized service delivery, and its impact on political outcomes. One of the many unintended consequences of privatization in the developing world is the introduction of new technology to map and document infrastructure, enabling richly detailed ways to examine political phenomenon. This study has used a novel dataset to demonstrate gaps in knowledge on part of the state and its private subsidiary in Karachi, and the subsequent shifts in expectations and entitlements for citizens seeking to improve access to privatized utilities. I ﬁnd that privatization has achieved its intended consequence of inducing individuals to pay their bills, and prioritizing resources to payers over non-payers. I demonstrate, using geo-located service delivery clusters and ethnographic data, that many individuals are excluded from service delivery, even if they are able and willing to pay their bills. Being excluded by virtue of being economically unable to access services is compounded by weakened political (‘patronage’) linkages in a post-privatized world. I contrast this to the provision of state services for water and sanitation, where citizens make active demands of their representatives for public

103 goods, and punish and reward political leaders accordingly. Using ethnographic data, I show variation in claim-making between neighborhoods that vary in the quality of service delivery. I demonstrate that other public goods, such as water, are also unevenly provided by the state and private services, creating layered incentives to seek redressal from political representatives. These findings confirm the core argument - that claim-making of political representatives declines for public services that are privatized. I suggest that this feeds into learned practices of petitioning and entreating the state to act on behalf of citizens. There is a marked absence of oversight from courts and consumer rights groups, and the nature of privatization in weakly democratized contexts seeks to curtail the role of oversight bodies. Taken together, these add up to a lived experience of frustration and helplessness when dealing with privatized public goods. The second part of the argument suggest that exposure to these institutional practices by the state and its private subsidiaries with regards to private public goods spills over into public service delivery. At best, it can improve incentives to hold local leadership accountable, by voting and participating in local associations, as demonstrated by the case of Gazdarabad. At worst, it can cause further entrenchment of patronage politics, or the exit of middle-income groups from participation altogether. For other groups, such as the very poor, electoral participation may not affected by low-quality service delivery, but they are much less likely to have expectations of their elected leaders to improve service delivery, and may exit where a range of services are privatized. This study has shown that under certain circumstances, a combination of private and publicly-provided services could improve incentives to participate for voters, leading them to punish incumbents and reward competitors. However, particularly in low-regulatory contexts, private providers have few incentives to improve their

104 ability to diﬀerentiate between payers and defaulters, and face very little push back from the state’s legal and legislative bodies. Political parties, at least for the time being, continue to enjoy considerable kickbacks without seriously risking their largely captive constituencies. This study contributes by suggesting we pay closer attention to the political eﬀects of economic reforms such as privatization.

Electricity

Water

Employment

Garbage

Education

Sanitation

Gas

Roads/Transport

Health

Security

0 .5 1 1.5 Mean Rank (0−3)

Figure 3.2: Ranked means of service delivery priorities

105 Percent HH Water Supply Percent Houses 0 20 40 60 80 100 0 .2 .4 .6 .8 1 iue3.3: Figure eta atKrniMlrSuhWest South Malir Korangi East Central (a) DC et M aah ot DMCKarachiCentral DMCKarachiSouth DMCWest (b) 98Cnu ie ae n electriﬁcation and water Piped - Census 1998 08Sre oetcwtrb source by water Domestic - Survey 2018 evc eieyi aah,1998-2018 Karachi, in delivery Service ie ae Electrification Piped Water ie ae Tanker Tube Well Piped Water 106 Figure 3.4: Electricity transformers in District South, Karachi

107 Received bill amount in PKR. (PKR140~$1) Bill Amount (PKR) 0 10000 20000 30000 40000 0 10000 20000 30000 40000 10000 n=231 (N=1025) N=281 0 (b) iue3.5: Figure (a) urn s eevdbl,uigosre tlt bills utility observed using bill, received vs. Current lcrct ilaon n oshl income household and amount bill Electricity 20000 200 lcrct ilaon Fittedvalues Electricity Billamount lcrct il n oshl income household and bills Electricity Reported Income(PKR) Estimated bill,basedonofficialtariff Received bill−Fittedvalues,95%CI 30000 400 Received billunits 108 40000 600 50000 800 60000 1000 Whom did you contact regarding issues with Sewage?

Private Contractor 281

Municipal Services 138

Mosque 13

Political Leader 20

Did Not Contact 143

n=595 (N=1019)

Whom do you most frequently report Electricity problems to?

K−Electric 473

Federal Ombudsman 21

Political leader 47

Did Not Contact 54

n=595 (N=1019)

Figure 3.6: Complaint and claim-making

109 Table 3.6: Service delivery and political participation

(1) (2) (3) (4) VARIABLES Voting Membership Trust Others Trust Reps

Quality of Private Services - Baseline: High Quality Medium Quality -0.013 -0.606*** -2.348*** 0.318 (0.267) (0.185) (0.486) (0.202) Low Quality 1.009*** 1.267** 1.692 0.498 (0.351) (0.490) (1.004) (0.668) V. Low Quality -0.317 0.137 -0.081 -0.722*** (0.286) (0.166) (0.596) (0.208) % State Embeddedness 0.360*** 0.184 0.013 -0.019 (0.091) (0.109) (0.219) (0.101) Quality of Private Services *State Embeddedness Medium Quality*State Emb. 0.023 0.681*** 2.424*** -0.307 (0.183) (0.194) (0.492) (0.191) Low Quality*State Emb. -0.880** -1.223** -1.670 -0.569 (0.343) (0.488) (0.984) (0.656) V. Low Quality*State Emb. 0.020 -0.233 -0.201 0.427*** (0.196) (0.135) (0.486) (0.145) PTI Voter -0.168*** -0.131*** 0.104 -0.008 (0.048) (0.035) (0.091) (0.049) Female -0.158*** -0.080** 0.099 -0.077 (0.054) (0.030) (0.117) (0.081) Urdu 0.079** -0.034 0.006 0.003 (0.036) (0.052) (0.090) (0.050) Age 0.001 -0.000 -0.000 -0.002* (0.001) (0.001) (0.003) (0.001) Educ 0.011 -0.012 0.044 -0.016 (0.023) (0.015) (0.051) (0.024) Income (logged) 0.030 0.063** 0.060 0.027 (0.023) (0.030) (0.047) (0.030) Home Owner 0.053 0.061 0.111 0.008 (0.044) (0.048) (0.081) (0.030) HH Size 0.002 0.001 -0.006 -0.010*** (0.003) (0.003) (0.008) (0.002) Post-elec 0.361*** 0.026 0.007 0.127 (0.085) (0.072) (0.322) (0.107) Version FE Y Y Union Council FE Y Y Y Y Constant 0.178 -0.175 1.455 0.530 (0.451) (0.329) (0.864) (0.378) Observations 939 991 991 803 R-squared 0.315 0.169 0.372 0.369 Robust standard errors in parentheses. *** p<0.01, ** p<0.05, * p<0.1 110 iue3.7: Figure

Reported Trust in Others Voting −4 −2 0 2 4 −1 −.5 0 .5 1 High High (b) oiia meddesadsrtfiain agnleffects Marginal stratification: and embeddedness Political Avg. MarginalEffectofStateEmbeddedness−90%CIs Avg. MarginalEffectofStateEmbeddedness−90%CIs Medium Medium Quality ofPrivatizedServiceatNeighborhoodLevel Quality ofPrivatizedServiceatNeighborhoodLevel ffc ntutn egbr n reprentatives and neighbors trusting on Effect (a) ffc nvtn n membership and voting on Effect Low Low V. Low V. Low 111

Reported Trust in Representatives Membership −1.5 −1 −.5 0 .5 −2 −1 0 1 High High Medium Medium Low Low V. Low V. Low Chapter 4

Disempowered: Political trust and service delivery

4.1 ‘Paying Bacha’ for the bills

The inhabitants of Muslimabad and Muzzafarabad in Karachi’s Landhi Town are migrant workers from Khyber-Pakhtunkhwa (KP) in Pakistan’s northwest, a region that has been marked by decades of conflict. In the 1970s, waves of economic migrants from the region settled in Karachi, encouraged by relatives and provided protection by the People’s National Party (ANP). The party itself dates back to the colonial period, and was founded by the Ghandian figure of Abdul Ghaffar Khan, called Bacha or ‘king’ by his followers. The ostensibly progressive, secular party dominated the provincial assembly of KP; outside of the province, the party gained most traction in Karachi (Siddiqui, 2017). Local leaders formed a distinctly ethno-nationalist flavor of the parent organization, providing physical protection from police and law enforcement, but also from rival ethno-nationalist groups such as the MQM. During the Cold War and into the early 1990s, Karachi was established as an important trading route for arms to be transported to the Mujahideen in Pakistan’s training camps, and for an illegal trade of contraband (Gayer, 2014). The War on Terror in the early 2000s led to another wave of mass migration into Karachi, this time, with militant groups such as the Pakistan Taliban using Pashtun communities to escape law enforcement. Pashtuns historically face marginalization

112 by the state and other ethnic groups in Karachi, who associate them with militants. And peaceful, democratic Pashtuns directly threaten the authority of the Taliban. The violence that communities such as the Pashtun in Karachi face by the state and non-state actors stands in contrast to an everyday form of bureaucratic violence: securing access to services such as water and electricity. Wide-scale violence by the Taliban against local communities has abated, particularly after Karachi’s law enforcement’s brutal and sometimes indiscriminate crackdown against armed groups (Kaker, 2014; Rehman, 2013; Yusuf, 2012). But the absence of local entrepreneurs who can secure access to basic services is deeply felt across classes. In Muslimabad, a man named Afroz was responsible for providing electricity to the neighborhood. He collected about $20 each from 120 houses that had 50 meters between them, and paid off the electricity bills. Now, the community has to deal directly with the privatized utility company. ‘Some parts of this neighborhood are all kunda. K-Electric knows this. We put in an affidavit for a new PMT (to upgrade the area).’ I asked whether K-Electric came to check the meters, since it was clearly distributing bills in the area. I was told that ‘No meter reader has come here in years, they think we are terrorists.’1 Muzzafarabad, less than a mile away, is marked by regularized roads. The concrete houses are modest but considerably larger, the streets are paved, and every house is connected to a single meter. The residents of this neighborhood are also Pashtun, but moved to Karachi in the 1970s. They, too, used to give a local ANP worker the equivalent of $30 a month, ‘to get their bills sorted.’ They recall a time when parties were in fierce competition to provide services in the neighborhood: ‘PPP got transformers installed here (in the 90s). They fixed the roads, they get water supplied. MQM would get some work done, and ANP would put their flags

1Author interview, Muslimabad, Korangi. June 12th 2017.

113 over the development to claim it.’ Parties would compete, they explained, because they knew the residents were educated and organized voters. ‘We used to pay Bacha for the bills,’ I am told. ‘Now, we are just individuals... and they (K-Electric) assume we’re like those Waziris (in Muslimabad).’2 Conflict diminishes trust between groups (Brass, 1997), and between citizens and the state (Berman et al., 2011; Shapiro and Fair, 2010). Ethnic conflict in Karachi is one of the key dimensions of political life, and tends to dominate the understanding of politics in the city. However, as previous chapters have shown, communities are deeply concerned with issues beyond personal security - economic security drives migration to and within the city, and has frequently caused individuals to switch allegiances between parties. Yet few studies capture the impact of economic marginalization on the ability of individuals to trust political institutions, and each other. In the vignette presented here, two communities that are relatively dissimilar in income and political affiliation are grouped together for service delivery purposes. This points to a theme in this study - the loss of information at the local level, as private institutions imperfectly stratify, group and flatten highly complex and multi-dimensional neighborhoods. In the previous chapter, I suggest that the conundrum of being ‘stuck’ in bad neighborhoods has political outcomes. In this chapter, I explore a potential mechanism for why being treated unfairly is made acceptable: citizens internalize the blame for low quality services by blaming neighbors for ‘theft.’ Privatization provides a unique opportunity to examine the impact of stratification across neighborhoods - the previous chapter described how being located in high and low quality service neighborhoods, and confronting varying degrees of political embeddedness, might impact political behavior. This chapter focuses more explicitly on the messages

2Korangi focus group, June 2017. Author interview.

114 individuals receive from the state, or from private subsidiaries. It examines the ability of communities to participate and collaborate with each other, and the impact of messages on individual trust in neighbors and institutions.

4.1.1 Participatory politics and trust

Once considered a primarily American political phenomenon, the global mistrust of government has received considerable attention in recent years. Political trust is frequently viewed as both a cause for and a result of low levels of support for political leadership (Hetherington, 1998). The causes of low trust and belief in conspiracies are expected to be driven primarily by political parties, media and other forms of explicitly ‘political’ messaging (Siddiqui, 2017). The study of lived experiences resulting in low and declining trust in authority figures is considerably under-theorized. In general, the poor are expected to be less trusting overall (Siddiqui, 2020), as are individuals living in rural areas (Krishna and Schober, 2014) and minorities (Charnysh et al., 2015). However, studies have repeatedly demonstrated that surveys and survey experiments can induce individuals to report higher trust if primed differently (Hetherington and Rudolph, 2008). Experimental evidence demonstrates that individuals report greater satisfaction with their lived experience of governance when institutions are made more participatory, regardless of actual improvements in service delivery (Olken, 2010). Indeed, as the landmark review of political trust in American political science stated, ‘(w)hether citizens express trust or distrust is primarily a reflection of their political lives, not their personalities nor even their social characteristics’ (Levi and Stoker, 2000, pg. 481). Political trust matters for political outcomes, not least of all the ability of citizens to work together (Ostrom, 1990; Putnam et al., 2000), and to participate in the process of governance and political decision-making (Diamond, 1994; Leonardi

115 et al., 2001). Only more recently have the degenerative effects of low institutional trust, particularly among poorer and middle-income individuals, been a subject of scholarly debate. The lack of trust in service delivery institutions directly impacts the quality of lived democracy - in Latin America, poorer individuals frequently withdraw from political life (Holzner, 2007); in Africa, the lack of credible political alternatives similarly leads to low levels of political participation (Resnick, 2014). Trust plays an important part of solidarity networks that resist privatization (Simmons, 2016) and enable community solidarity to hold elected leaders accountable (Paller, 2019). Without explicitly examining underlying conditions for low political trust, we understand that weak social ties are frequently exploited by political and ethno-nationalist elite to induce rioting, lynchings and violence (Brass, 1997; Charnysh et al., 2015; Siddiqui, 2020). However, few attempts have been made to understand the link between chronically poor governance and weak political trust. This study examines political trust in the context of poor service delivery in a developing, semi-autocratic state. The hybrid service delivery regime of electricity in Karachi, Pakistan, make this an exceptionally good test case. Previous studies have established the link between low levels of trust and weak institutional development, particularly in the Pakistani context (Siddiqui, 2020; Tudor, 2013). Using the variation in service delivery between geographically proximate neighborhoods, I suggest a causal link between poor governance outcomes and low levels of institutional and inter-personal trust. I find that trust effects are not homogenous - in particular, richer individuals are more trusting of institutions, and less trusting of neighbors. On the other hand, poorer individuals tend to be more trusting of others, but less trusting of institutions in particular. Finally, I find evidence that varying the source of information on service delivery has strong effects among middle-income individuals.

116 I suggest that this has important implication for these group of citizens when holding institutions accountable. Part of the challenge with measuring trust is that it is highly susceptible to question wording, interviewer dynamics (Berinsky, 2002), and even the presence of other individuals at the time of the interview (Chauchard, 2014). ‘Trust’ questions can be highly sensitive to current political and news climate - phenomena as diverse as a foreign policy crisis (Hetherington, 1998), an upcoming election or a football game (Busby et al., 2017) can move the needle on political approval and trust. In order to capture meaningful variation trust I examine several measures of stated trust, and test the robustness of these findings by testing a measure of performed trust - that is, sharing certain types of information with survey enumerators. In this study, I examine the particular effect of variation in the provision of electricity in Karachi, which is distributed by a highly centralized private utility firm, with some weak regulatory capacity vested in the government. The most common complaint with this service is very high utility bills and frequent outages or ‘loadshedding,’ the latter which are determined by localities that the utility company designates as having a higher percentage of defaulters. The survey conducted for this study took place over three time periods between June 2018 and April 2019 (N=1019), and included an embedded survey experiment. Respondents were also asked to share a recent utility bill, allowing enumerators to document over 300 bills from individuals across Karachi. Questions related to trust are a mainstay of the American National Election Survey; questions regarding a citizen’s ability to ‘trust the government to do what’s right’ date to the original battery of questions included in the ANES in 1958 (Gershtenson and Plane, 2007). Some version this institutional trust question have been adapted to national surveys in Latin America (Latinobarometer, 1998), South

117 Asia (Indian NES, 1996) and in Africa since the Afrobarometer’s initial roll-out in 2001. In Pakistan, confidence in legislature has been historically low (Gallup, 2014), and trust in neighbors has typically been studied in the context of out-group individuals (Kalin and Siddiqui, 2017). This is the first attempt to measure trust in the specific context of service delivery, particularly within an urban setting. I focus on two measures of inter-personal and institutional trust to establish the potency of both on democratic participation, even in low-democracy contexts. Using the case of privatized electricity provision in Pakistan presents several key advantages. Unlike cities in Latin America and India where the state is often deeply embedded in service delivery, Pakistan typifies semi-autocratic and highly liberalized regimes in the developing world that are marked by a proliferation of formal and informal private service delivery, which I discuss in detail shortly. Secondly, the weakly institutionalized democracy in Pakistan mirrors low-regulatory environments in much of the developing world (Blaydes, 2010; Gandhi, 2004). We know relatively little of how privatization - another key phenomenon in the developing world - impacts the already fragile processes of accountability and participation in these contexts. Much of patronage literature has developed in regions where states are relatively embedded in service delivery, where electoral cycles form a clear and relatively unchallenged path to distributive power. Very little patronage scholarship has paid attention to the phenomenon of private and commercial actors providing public goods (Post et al., 2017). Therefore while it is widely acknowledged that there are differences between campaign promises and efficacy, with parties using information asymmetries to reward and punish voters (Stokes, 2005), urban scholars note important demand-side challenges when voters struggle to ascertain whom to reward and punish for poor service delivery (Resnick, 2014). I suggest that the

118 dilemma of ‘who’s to blame’ is exacerbated when private service delivery is responsible for at least some public goods. This study addresses in particular the impact on political trust when voters are faced with ‘hybrid’ public goods regime (MacLean and Brass, 2015; Post et al., 2017), one that is highly stratiﬁed, unevenly distributed and unpredictable.

4.2 Stealing from your brother: The invention of ‘theft’

In Karachi, many people don’t pay their electricity bills. In the survey conducted for this study between June 2018 and April 2019, over twenty percent reported skipping at least one month of payment in the last year. When asked if there was ‘ever’ a time when individuals in their neighborhood relied on pirated3 connections, 27% confirmed the historic existence of such connections; they were understandably much more reluctant to admit that such connections are currently being used. In 2009, Karachi’s colonial-era Electric Supply Corporation, KESC, ran a deficit of $134 million. Outstanding dues from domestic users were dwarfed by those from industries, commercial areas and state-owned enterprises themselves.4 In 2009, a Dubai-based private equity firm purchased majority shares in the company and re-branded the company ‘K-Electric;’ by 2016 K-Electric reported a profit of $261 million. Under the Electricity Act 1997 KESC has exclusive rights to the sale of electricity in Pakistan’s largest city.5 The turnaround in revenue has been attributed 3In Karachi, pirated connections refer to ‘kundas,’ which are typically metal hooks slung on to unsheathed overhead electricity cables. They can also include more sophisticated clamps that can be used to tap newer, rubber-sheathed cables. 4The Karachi Water and Sewage Board, for example, continues to owe over $120 billion in electricity dues from previous years (Daily Times, May 5th 2019. https://bit.ly/2vPCJHp). Other defaulters have included the Governor House, which is the seat of the provincial government. 5The company claims an installed generation capacity of 2,267 MW, and receives over $100 million in mostly fuel-based subsidies from the Government of Pakistan (Express Tri- bune, https://bit.ly/2JwPUVN). It purchases 512 MW from independent power producers

119 to improved collections from industrial users, new digital meters and sheathed overhead cables that are less susceptible to tampering; it has also been attributed in no small part to a regimen of ‘recovery-based load-shedding.’ K-Electric imposes over 10 hours of load-shedding throughout the year to neighborhoods that are ‘low recovery.’ It prioritizes supply to neighborhoods which it designates are ‘high recovery,’ which include large industries and high-income domestic users. In reality, because the utility company does not have the infrastructural capacity to target power outages to individual consumers, many of whom live in densely crowded areas, it subjects catchment areas consisting of several dozen step-down transformers,6 and hundreds of houses and shops connected to each of them, to scheduled outages. This is in contrast to other cities in the country, such as Faisalabad, where outages are more evenly distributed across consumers, regardless of bill recovery. This study is based in part on the utility company’s proprietary dataset of over 25,000 transformers, designated ‘very high,’ ‘high,’ ‘low’ and ‘medium’ loss, that it uses to designate priority areas in this city of 14.9 million individuals. The first part of this argument suggests that individuals in low-quality provision neighborhoods are less likely to have trust in institutions, regardless of individual income. The vignette at the beginning of this chapter demonstrates how two relatively different communities have similar experiences of a private utility firm, by virtue of being assigned to the same catchment area. Alternately, I suggest that individuals in relatively high-quality provision areas will have more trust in elected officials and the utility firm (see 4.1). and receives 650 MW from the national grid. In 2017, the energy shortfall in Karachi was estimated at 400 MW (Daily Times, August 2017 https://bit.ly/2vN8cdo) 6These are colloquially called ‘PMTs’ - pole mounted transformers. A transformer will convert energy from high-voltage transmission lines, called ‘feeders’, to 11kV which can be used for domestic and commercial purposes. To get a PMT on a better outage schedule, it is switched to a low outage feeder.

120 The stratification created by the utility company is a result of its desire to rationalize consumption in the city, and maximize its revenue. As the utility company attempts to improve the accuracy with which it discriminates between payers and non-payers, there are a non-trivial number of individuals who get caught in the liminal space of being individually capable of paying for goods and services, but lack collective power to either enforce compliance among their neighbors, or bargain better provision with the utility company. This is not an isolated phenomenon. Electricity reform in India was unevenly experienced by smaller firms, primarily because of varying access to political capital (Szakonyi and Urpelainen, 2013). Infrastructure is more likely to be privatized in ways that would reduce incentives to provide services to the poor where electoral ties are weak (Kale, 2014b). Frequently, the state’s attempt to rollback its support for service delivery, particularly of infrastructure-dependent goods such as water and electricity, is inscribed with a language of ‘modernity’, one that equates good citizens with responsible consumers (Anand, 2017; Björkman, 2015). Under privatization, Von Schnitzler (2008) suggests that the process of ‘credit metering technologies’ - where consumers are billed for the electricity they consume - continue to invest some level of trust in citizens. In an extreme version of corporatization of water in South Africa, citizens top-up pre-paid meters and are automatically cut off once their credit runs out (ibid.). Political anthropologists acknowledge that ‘infrastructure ambitions of the state have shifted’7, but the effect on participatory democracy are considerably under-theorized in political science. The second part of this argument therefore is that the imperfect stratification requires the construction of a narrative of theft. This results in the decline of trust within groups, regardless of actual quality of service. Subjecting households to

7Interview with Joanne Nucho, jadaliyya.com May 6th, 2019, see also Larkin (2013)

121 collective punishment would not be possible without narrative shifts in how resources such as electricity are conceptualized. In Karachi, post-liberalization, the electricity distribution company hired a local marketing firm to come up with a campaign that linked the communal use of electricity to theft. According to an employee of the marketing wing of KESC at the time ‘we were told that our biggest enemy was kunda - the pirated connections.’8 The campaign, rolled out in 2009, reads ‘when they steal your electricity, they steal your life’ (Figure 4.3). Ten years later, the narrative of theft has permeated the way in which individuals at every tier of citizenship and consumption speak about electricity - a substantial feat, given the very communal nature of the resource before privatization. There is considerable evidence that individuals who regularly engage in pirating connections don’t see it as theft. The anecdote at the beginning of this chapter demonstrates the most basic form of this phenomenon - new settlements use pirated connections, or kundas as a stop-gap for getting electricity while they apply for formal connections. Often, they are told to use these methods by junior officers in the K-Electric hierarchy. Before privatization, a more formal system of payments existed, where political entrepreneurs ensured squatter settlements had access to a range of pirated connections to water, gas and electricity lines. After the privatization of electricity, at least one of these has come under scrutiny from the company, but evidence suggests makeshift connections are still in use. A woman in Singholane, District South, reported taking a ‘line’ from her brother who lives next door. After living with her brother and his family for many years, she acquired the means to partition the building into a separate flat for herself. ‘I continued to use

8Interview with Sami Shah, former creative director for KESC, May 31st 2019.

122 their electricity connection, it’s expensive to apply for a new one. But now they are telling me that this is stealing. Tell me, how can I steal from my brother?’9

4.2.1 Alternate hypotheses

An important competing hypothesis is the impact of violence on long-term trust in institutions and other people(Nunn and Wantchekon, 2011). Indeed, in the years leading up to the 2015 Local Government Election, Karachi experienced extremely high levels of violence, including inter-ethnic violence, with 1,723 murders reported in 2012 (Hashim, 2012). Operations against the two major political parties by local law enforcement affected most of the city, but parts of District South and Central were particularly affected. District South and Central are also strongholds of the Pakistan People’s Party (PPP) and the MQM, respectively. It is likely that Karachi’s long history of violence has resulted in low institutional and inter-personal trust in general, but these effects should be uniform for the neighborhoods under consideration, particularly since proximate neighborhood clusters are compared. Tellingly, in 2018-19 when this survey took place, individuals ranked security the least important of their concerns (Figure 3.2) - suggesting both that violence in the city is on the decline, and that service delivery challenges such as electricity, water and garbage collection (ranked 1st, 2nd and 4th, respectively), are far more salient. The decline in trust due to commodification and the increased costs of participation (Holzner, 2010) are not competing hypotheses. Indeed, in a city that is primarily known for ethnic violence, the day to day violence of bureaucracy (Arendt, 1970) is often overlooked. The mistrust within the Pashtun community in Korangi is particularly high among the middle class community, and suggests that they have low expectations of the others’ responsibility as citizens.

9Author interview, Singholane, January 2018.

123 4.3 Priming on theft: A survey experiment

The qualitative work conducted in Karachi enables the development of several hypotheses. Primarily, I expect that by informing respondents that electricity is linked to theft, I expect trust in other individuals to go down. I expect trust in elected representatives to be generally low, but particularly when reminded of service delivery shortfalls. This follows the expectations stated in the the Introduction, reproduced here (Table 4.1).

Table 4.1: Privatization, stratiﬁcation and political outcomes

Neighborhood income Private Service Delivery Institutional Trust High High Quality High Mostly high/medium Medium Quality Mostly medium/low Low Quality Low Low/very low Very Low Quality

I use an embedded survey experiment in the 2018 survey conducted in Karachi, I provide individuals information on non-payments and outages. I then attributed a statement linking theft and outage to K-Electric (Treatment 1), the District Government (Treatment 2), or other people (Control). The survey then asks individuals to rank their endorsement of the statement, their trust in elected government and in each other. I find, first, that regardless of attribution, endorsement of the statement and trust in representatives is worse in high outage areas. Using a spatially clustered model where I compare high and low outage neighborhood less than half a mile apart, I find that these results are highly significant, even when controlling for household income and defaulter (non-payment of at least one bill in the last twelve months) status. Next, I find that messaging in Treatment 1 and Treatment 2 causally impact trust in others, but particularly among middle income households. Taken together, these findings suggest that

124 priming on theft causes individuals to be less trusting. The eﬀects on political behavior are more ambiguous, since trust in institutions and in other people may impact behavior diﬀerently. In general, I expect groups with poor service delivery provision to exit electoral politics by not turning out to vote. To state this hypothesis formally,

H1a: Individuals in low-quality service delivery areas will report lower trust in elected and private institutions

H1b: Individuals in low-quality service delivery areas will report lower trust in other people

H1c: Individuals in low-quality service delivery areas will be less likely to report voting In the absence of being able to randomly assign households to good and bad service provision neighborhoods, a quasi-random design is to pick neighborhoods (i.e. catchment areas) that are geographically proximate to each other. Out of the 47 clusters selected by stratified random sampling, 18 clusters were selected using the following criteria: they are no more than a mile away, and they have contrasting outage assignments. Nine pairs are selected and coded such that a neighborhood is coded ‘1’ if it is in either a ‘high’ or ‘very high’ loss area, and a 0 otherwise. A series of balance tests suggests that high and very high loss neighborhoods tend to be poorer, the respondents were less likely to be women and were more likely to be of a different language or ethnic background than the better provisioned areas. Interestingly, just about as many ‘poor’ neighborhoods tended to belong to the dominant ethnic category, the Muhajir (Urdu speaking), as not. I therefore use a fixed-effects linear model as follows:

Yi = β0a + β1X1 + β2X2 + β3XFE +

125 Where X1 is the independent variable ‘high loss,’ taking a value of 1 if the

neighborhood is subjected to high or intense outages, and 0 if not. X2 is a matrix of controls that include income and asset score, gender and a language dummy variable (these are described in detail below). Since voting is highly contingent on the strong anti-incumbent wave that swept the Pakistan Movement for Justice (PTI) to power in 2018, I include a dummy variable if the respondent reports voting for the PTI. A dichotomous variable for each version of the questionnaire is included. XFE describes fixed effects at the smallest administrative unit for which data is available, the Union Council.10 Standard errors are clustered at the Union Council level. To briefly preview the findings, I find that households located in low-provision areas have less trust overall in institutions. This finding holds when comparing proximate (< 1mi) catchment areas, suggesting low quality service delivery has a causal effect on institutional trust, but does not affect inter-personal trust. Using participants willingness to show their recent utility bills as a more strict ‘behavior’ version of the trust question, I find that higher outage areas are mistrustful of the survey process in general, echoing Min and Golden (2014). The next part of this analysis examines what effect the source of information has on trust. As explained in the previous section, the privatization of electricity in Karachi has played an important role in both improvements in service delivery to high-provision areas, and increased utility costs across the city. Are certain groups more likely to trust private providers over government institutions? The survey includes an embedded experiment that randomly varies the source of information on outages and theft: in the first (control) condition, respondents are told ‘most people’

10The Union Council is the penultimate administrative unit, and one step above the smallest elected unit, which is the Ward. Each Union Council in Karachi consists of four Wards, with directly elected representatives from each. The UC electorate also elects a Chairman and a Vice Chairman to the Council.

126 think outages are linked to theft. In the second (treatment) condition, the statement is attributed to the elected local government, and in the third (treatment) condition the statement is attributed to the private utility ﬁrm. Overall, I expect this statement to receive the most endorsement when provided by the private utility company and the least when provided by the government. I also expect middle income groups to be more trusting of institutions and less trusting of their neighbors, since they are most likely to suﬀer collective punishment because of the inability of their lower-income neighbors to pay their bills. To state these expectations formally,

H2a: Individuals will be more likely to endorse the statement when attributed to the private ﬁrm, and less when it is attributed to the government

H2b: Individuals will be more likely to trust representatives when the statement is attributed to the private ﬁrm, and less when it is attributed to the government

H2c: Individuals will be more likely to trust others when the statement when attributed to the private ﬁrm, and less when it is attributed to the government. I ﬁnd that trust for other individuals does go down when primed by government and private utility company sources. This is particularly true among middle-income individuals. Both very low and very high income individuals seem less susceptible to messaging by institutions.

4.4 Survey and service delivery data

The data for this study comes from two sources: the ﬁrst is an original face-to-face, 35-minute survey conducted in Karachi, Pakistan between June 2018 and April 2019. The second is a dataset of over 25,000 geo-coded step-down transformers.11

11While the latter were used as a sampling frame for the survey, this paper focuses primarily on the survey results and not the transformer data.

127 For the survey, over 1000 participants across 3 Districts in the city were selected using stratiﬁed random sampling. Within each District, 5-8 Union Councils12 were randomly selected based on population; within each Union Council, 2-3 points were selected from the dataset of electricity transformer geo-locations. These data were provided by the utility company, K-Electric, for two time periods: August 2017 and January 2018. Each location point corresponds to a step-down transformer, and is tagged with a ‘Low’, ‘Medium’, ‘High’ or ‘Very High’ loss status. For the utility company, the ‘loss status’ is a measure of bill recovery,13 and therefore the regularity of supply at that transformer. ‘Low loss’ PMTs experience less than two hours of outages, even during peak summer months. At the other end of the spectrum, ‘Very High loss’ PMTs experience a minimum of 4-5 hours of outages in the winter and upto 12 hours in the peak months. Geo-locating survey sample clusters at the PMT level presents two advantages: it enables unique information on service delivery at each data point. It also enables the inclusion of only those households connected on the electricity grid, although the overwhelming majority of households in Karachi are served by (legal and illegal) connections to the grid. Households are therefore assigned a corresponding outage variable Loss Category, which runs from 1-4, where 1 is Low loss and 4 is Very High loss. In addition to reported outages in the survey, there is a measure of expected outages given the location of the household and its proximate electricity supply point, the PMT.

12As mentioned earlier, the Union Council is the lowest level of elected government in Pakistan, consisting of directly-elected representatives from four Wards. In municipalities such as Karachi, Union Councils within each District elect a District government, known as the District Council. 13It is likely that many transformers are tagged based on ‘best guesses,’ reinforcing Anand (2017) observation that infrastructure is seldom ontologically prior to politics. For the purposes of this study, the utility company data serves simply as a measure of electricity provision and outage.

128 The survey includes a survey experiment (described below). Additionally, modules on electricity consumption and cost, household demographics and political participation and opinion are included. For the purposes of this paper, two major sets of dependent variables are used: endorsement and trust questions (part of the survey experiment) and voting and participation data (part of the larger survey). The survey took place during the summer of the 2018 General Elections in Pakistan, with a follow-up survey taking place in April 2019. This provides a unique opportunity to measure political association and participation. A total of 1,019

households were polled across three Districts. The variable Vote Likely combines individuals who reported they were likely to vote pre-election, and the ones who

reported voting post-election. The participation variable Membership is an aggregated index from 0-3 and includes political, religious and ‘other’ forms of membership. All models that use the full sample include a dummy variable

election for any survey that took place immediately after the elections to control for potential post-election eﬀects. Asset information was collected for all respondents, including household markers of wealth such as the number of rooms, electronics and bicycles/rickshaws etc. The

variable score is a simple aggregate of household assets and is used instead of typical ‘income’ controls.14 The mean asset score corresponds to a reported monthly income of about Rs. 35,000 (USD 260) which is just about the national mean for Pakistan and well below ‘high’ income categories. The the most asset-rich households in the sample (score=9) have an average income of Rs.54,000 (USD 402), and can be at best described as ‘high-mid’ income. This enables the study to examine the particular eﬀect on upwardly-mobile middle income households in

14Such asset scores are common where reliable income information is not available to respondents, particularly in informal and seasonal labor economies (Besley et al., 2005).

129 low-service delivery neighborhoods. Controls are also included for gender, age,

language (a dummy variable is included for the largest language category, URDU), home ownership, respondent education and household size. Union Council and District ﬁxed eﬀects are used where appropriate.

4.4.1 Findings

The first model, described in the previous section, is run simply comparing high and low loss areas. A full set of controls are included as described. Results indicate that households in high loss, high outage areas are much less likely to endorse the statement that outages are linked to theft. They are much less likely to trust elected representatives. Crucially, low provision neighborhoods are no less likely to report voting than their better-provisioned neighbors. This indicates that trust and voting outcomes are not perfectly aligned (Figure 4.1, coefficients reported in Table 4.2). It may be likely that individuals voted for the anti-incumbent party, the PTI, in large numbers due to the party’s strong anti-corruption messaging. However, including controls for self-reported PTI support does not change these results. Some of these effects may derive from neighborhood-level differences between high and low provision neighborhoods, which are difficult to measure because of the lack of available data. The next set of results therefore constrains the sample to matched pairs of clusters that are no more than a mile apart, so that houses are quasi-randomly placed in either ‘high’ or ‘low’ catchment areas. I find that the results from the previous model hold: low provision areas, with high outages, are much less likely to endorse statements linking theft and outage. They are also less likely to trust elected representatives. The effect on voting is null, suggesting service delivery is not captured by voter turnout or eagerness to participate (Figure 4.2, coefficients reported in Table 4.3.

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131 Vote Trust Others Adj. PredictionsofOutageAreawith90%CIs Medium 0 .2 .4 .6 .8 1 1.4 1.6 1.8 2 2.2 Low− aa Digital Samaa 08.Smlry K- Similarly, 2018). , V. High High− eo) hnigol hmtesaeeti trbtdto. attributed is statement (see the statement whom generic only a changing present below), enumerators political firm, either utility private for the support or offer institutions openly Keeping not (2013). may al. individuals et that Lyall mind by first in used the experiment For endorsement it? the delivers adapt that I entity statement, the of trusting make less delivery or service more of quality individuals the about information general receiving Does trust Institutional matters: message The 4.4.2

Trust Reps Endorse Adjusted Predictionsofcluster2with90%CIs LL−ML 1-‘oiia’tetet(0 fsample) of (40% treatment ‘Political’ - T1 0 .2 .4 .6 .8 1 0 .2 .4 .6 .8 1 iue4.2: Figure Outage areas−clustered rs n evc eiey rxmt neighborhoods Proximate delivery: service and Trust HL−VHL

132 Vote Trust Others Adjusted Predictionsofcluster2with90%CIs

LL−ML 0 .2 .4 .6 .8 1 1 1.5 2 2.5 Outage areas−clustered HL−VHL According to available data, about 80% of people in Karachi pay their bills on time, and there is an average of 8 hours of load-shedding across 40% of the city. In your neighborhood, for example, about 40% of the people said they don?t pay their bills every month. The District Council recently issued a statement saying that there should be no loadshedding where electricity theft is zero. T2 - ‘Private’ treatment (40% of sample) According to available data... K-Electric recently issued a statement saying that there should be no loadshedding where electricity theft is zero. Placebo (20% of sample) According to available data... Many people think that there should be no loadshedding where electricity theft is zero.

1. ENDORSE Do you agree or disagree with this statement, that there should be no load-shedding where electricity theft is zero? (Endorsement experiment, see Lyall et al. (2013))

2. TRUST1 Do you think most people can be trusted, or that you cant be too careful in dealing with people? (NORC GSS 1998)

3. TRUST2 Would you say that most of the time people try to be helpful, or that they are mostly looking out for themselves? (NORC GSS 1998). The variable

Trust Others, combines responses from TRUST1 and TRUST2.

4. TRUST REPS Would you say that most elected representatives can be trusted to do what is best for the city? (adapted from Afrobarometer 2016)

133 5. State v. Market Some people think that the state should reduce diﬀerences between the rich and the poor, whether by increasing electricity tariﬀ on the richest families or by giving free electricity to the extremely poor. Others think that the state should not intervene and that the free market is the best mechanism for reducing poverty. On a scale of 1 to 5, with 1 being that the state should intervene, to 5 being that the market is the best solution, which statement is closer to your opinion? (adapted from Feierherd et al. (2017)).

In the baseline results from the experiment which are run using the full sample, being primed by the elected government reduces endorsement of the statement (Table 4.4). To interpret this following Lyall et al. (2013), it is likely that the elected government in Karachi simply enjoys very little trust overall - statements that are endorsed when coming from ‘most people’ are less likely to be endorsed when attributed to the local government. Surprisingly, attributing the statement to the private utility company does not improve endorsement. This is surpring given the lack of faith in the state, particularly when it comes to service delivery. The alternative, which is the private service delivery firm, does not fare much better. Equally surprising are the null results with respect to State versus Market options and trusting representatives. Perhaps the most interesting part of these results is the causal impact of trusting other people. Two questions on ‘trusting others’ were asked and pooled into a single index. The impact on these statements when priming from a government source or a private company source are strongly negative. This suggests that the general statement linking load-shedding to theft does not reduce trust in others, but that attributing this statement to an authority figure - either the government or the private utility firm - does.

134 The results of these set of findings do not fit neatly with the idea that simply bad service delivery leads to low trust - it is likely that institutional and inter-personal trust are not affected by the same mechanisms. Indeed it is possible that different groups of individuals within the city respond differently to being primed by sources of authority. The most likely candidate for this is class, both because household ability to pay for electricity, as well as geographic selection of residence, is highly contingent on household income. Secondly, it is likely that middle income groups are particularly susceptible to issues of low trust, as suggested by similar studies in Africa (Nathan, 2019a; Resnick, 2014). In the second stage of examining the experiment results, the treatment for ‘private’ and ‘public’ are pooled, and interacted with class fixed effects. The class dummy midinc is created using logged income. Households falling one standard deviation above and below the mean are categorized as ‘middle income’, while those either above or below that threshold (ie. the very rich or the very poor) are coded as ‘0.’ This has the advantage of comparing the middle income group to both those having somewhat more and somewhat less wealth than them. The model including the interaction effect takes the following form:

Yi = β0 a + β1 Pooled Treatment + β2 Middle income + β3 (Pooled T x

Middle income) + β4 Post-election +

The results indicate that middle income groups are indeed more susceptible to messaging by the elected government and the private utility ﬁrm, particularly with regards to trust in others (Table 4.5). Being told by either elected representatives or the electricity company that load-shedding is linked to theft has strong, negative and causal eﬀects on reported trust in others. Middle income groups are also more strongly in favor of market solutions to governance if primed by either the utility

135 company or the political government. I hesitate to interpret these results too strongly, given the inconsistency with which individuals respond to the statement on its own. It was particularly diﬃcult to word this statement. It is suﬃcient to say that consistent with other studies on service delivery, middle income groups report higher preference for ‘market solutions’ (Feierherd et al., 2017). In this particular case, the utility company does not appear to be part of the market solution, given its low endorsement in previous models. Consist with the hypotheses, it appears that middle-income households are particularly susceptible to messaging by the utility company and the government. Frequently-repeated statements about theft and service delivery have causally negative impact on inter-personal trust.

4.5 Institutional and inter-personal trust

Given the divergent impact of lived experience with service delivery and priming, is it possible to disentangle the results of these ﬁndings? In particular, what impact does institutional and inter-personal trust have on forms of political participation such as voting and membership? I expect individuals who have higher levels of endorsement for the statement linking outages and theft are more likely to report forms of participation such as voting. Alternately, those who are more trusting of others are likely to participate in everyday forms of politics such as party membership and associational life. I include controls for support for the incoming national party, the PTI. I also include controls for whether the individual reports not paying one or more month of bills. To interpret these results meaningfully, it is worth laying out the diﬀerence between voting, membership and trust. Scholarship has suggested that voting, and

136 to a lesser extent, membership, has both instrumental value for voters, in as much as voting is an ends to receiving selective benefits, as well as being an end in itself. In the context of a face-to-face survey, voting is also expected to have a performative aspect - Hanmer et al. (2014) suggest strong social desirability biases linked to voting. Ahuja and Chhibber (2012)’s seminal work finds that voting is an ‘article of faith’ for communities, especially the poor, who have an opportunity to literally ‘be counted.’ When considering a face-to-face survey, institutional and inter-personal trust are both important latent considerations for respondents, from the moment they consent to being interviewed and admit a stranger with a clipboard or a survey tablet into their home. It is likely that inter-personal trust leads to more ‘honest’ racial responses to a same-race interviewer (Hatchett and Schuman, 1975; Kim et al., 2019). In other work, I suggest that the presence of other individuals in the household at the time of the interview varies outcomes (Haider and Nooruddin, n.d). It is therefore likely that individuals with higher levels of trust in institutions are more likely to participate in performative forms of political life, or at least to feel the need to report that they do so. Similarly, those with more trust in others are likely to be involved in forms of participation that require regular interaction with neighbors and communities, which is captured by the ‘membership’ index. All models therefore also include controls for observer fixed effects, varying by the kind of observer (spouse, children, other adult family members - see Indian NES). It is worth nothing that although multiple questions were asked regarding membership and participation, reported participation was exceptionally low.16

16Compared to 14.8% in the Indian NES 2014 who reported participating in at least one form of pre-election rallies, meetings and canvassing, only 6% in the survey in Karachi reported doing the same. Membership rates are much closer; 10% in INES 2014 said they are part of a political party, 13% in Karachi. Surveys on association and participation beyond

137 Chhibber and Shastri (2014) note that religious associational life is on the rise, indeed a full 27% of the survey respondents reported belonging to religious organizations. Endorsement of statements that link outages to theft are strongly correlated with higher reported voting rates (Table 4.6) but not with increased participation in associations. Trusting others is strongly correlated with higher membership in a range of associations. Consistent with the central hypothesis of this study, it is evident that voting and trust are not always linked, and that certain types of trust (i.e. institutional trust) are more predictive of electoral participation. Similarly, inter-personal trust is highly predictive of membership in political, religious and other forms of associational life. I discuss the implications of these findings in the next section. As noted before, however, reporting membership and participation has important performative value, especially in a survey context. One way to overcome this is by examining within-survey response rates for things which might be politically or socially sensitive - opinion question non-response rates have been fruitfully exploited to this end. One particular question, that of showing the most recent electricity bill, stood out. In addition to being highly socially sensitive, this action involves considerable ‘risk’ if individuals perceive the survey process to be linked to the government, or even the utility company. Respondents were asked if they has their ‘most recent’ utility bill, followed by whether they had ‘any other recent’ utility bill. Positive responses to either of these questions is pooled into a single dependent variable, showbill. Predictably, the response rate for showing utility bills was low; just under 30% agreed to show enumerators their bills. Using the same model as for trust and voting, I find that voting have a much longer history in India, to the best of my knowledge this is the first large-N survey in Pakistan that measures any form of participation outside of elections. Happy to be corrected on this.

138 being in low-provision neighborhoods significantly reduces the likelihood of showing any recent utility bill. This finding holds even when I control for bill defaulters, who I would imagine would be reluctant to show their utility bills (Tabel 4.7). Endorsement and trusting others does not impact trust in survey enumerators. Trust in elected representatives somewhat increases the likelihood of trusting enumerators. Taken together, these confirm that low service delivery drives down trust, but particularly in institutions. So while people may open the door to strangers, they will be suspicious of activity that could be used against them in an ‘official’ capacity, such as utility bill.

4.6 Discussion

I have shown that service delivery has a causal impact on institutional trust in low-provision neighborhoods, but that it does not impact inter-personal trust. In particular, low-provision neighborhoods are much less likely to endorse statements linking outages and theft; they are also less likely to report trust in elected representatives. Next, I show that priming individuals using statements attributed to elected officials causes decrease in endorsement. Attributing statements linking outages and theft to elected officials or to the private utility firm reduces trust in others. This is particularly true for middle income groups. Finally, I find that institutional trust is highly predictive of certain kinds of political behavior, such as voting, while inter-personal trust is predictive of other forms of political behavior, such as associational life. Understanding the differences between these forms of participation, and the difference between trusting neighbors, and trusting authority figures, is crucial to understanding why some people vote even when very little seems to change, while others tend to trust neighbors in spite of being told not to.

139 This study demonstrates first that the quality of service delivery has appreciable effects on institutional trust. Technocrats have long argued that utilities such as electricity, that are neither non-excludable nor non-rivalrous, are ripe for privatization. Indeed to a large extent the transformation of electricity from a right to a commodity has succeeded in its task of making households individually accountable for their usage. However, this model assumes perfect knowledge of household-level consumption. More accurately, it inscribes infrastructure with meaning - that of perfect information and rationality. In reality, Karachi’s electricity infrastructure is collectively experienced - not just for the poor, but for the very rich as well. Wealthy households don’t simply receive better service delivery because they can afford it, they also happen to reside in neighborhoods where other wealthy individuals reside. These neighborhoods are additionally known to be ‘good neighborhoods.’ Whatever initial shortfalls in bill recovery might have been during the period of liberalization, these areas were consistently prioritized over ‘bad’ neighborhoods by the utility company, creating an information loop where households receive high-quality service delivery, are billed what they believe to be a fair amount, and comply by paying bills on time. What economists might call a ‘virtuous cycle’ is in fact a ritualized creation of meaning, one that inscribes the electricity grid with entirely subjective qualities of ‘fairness’ and ‘rationality.’ Finally, it alters the language around citizenship where neighbors are not simply ‘defaulters’ or low income, but marked as criminals for their inability to pay their bills. The opposite is true in low-provision neighborhoods. Where bills are capricious and difficult to understand, and where neighborhoods are subject to prolonged scheduled outages, trust in institutions is likely to decline. The Gazdarabad example is telling in this case - in 2017, when the neighborhood negotiated better service

140 provision, their mechanism for doing so was a mistrust in institutions, but high levels of inter-personal trust. Having received a one-time ‘upgrade’ from the utility company, the area has since been unable to demand redressal to many of the same issues their peers in Ganchipara face - capriciously high bills. Persistent messaging by the utility company that outages are in fact linked to theft may erode individual incentive to collectively bargain for better provision. Crucially, as suggested by the final set of regressions, these neighborhoods might continue to vote, but meaningful participation - including associational membership is likely to decline. There is reason to believe that this outcome is beneficial to political parties, and by extension, to the service provider. Unlike studies that suggest dissatisfaction with the lack of credible policy alternatives is causally linked to middle-income individuals exit from electoral politics, the results presented here show steady levels of electoral participation across service delivery clusters. This may explain why parties in Karachi have done little to make electricity part of their electoral platform: outages are a function of criminality, and not bad governance. It may be that groups of voters are turning to parties with anti-corruption platforms such as the PTI; it may also be that the problem of ‘who’s to blame,’ particularly in the context of hybrid public goods regimes, includes the dilemma of whether the government or private utility firm is to be blamed at all. The survey experiment consistently demonstrates that messaging by public figures - both the government and the private utility firm - causes individuals to be much less trusting of each other. The constituency that would typically demand governance reforms - the middle class - is shown to be particularly susceptible to this messaging. This presents an important moral dilemma: while some households have benefited from tough messaging of the utility firm that urged their neighbors to pay their share of utility bills, linking outages to theft has had the unintended

141 consequence of atomizing voters. To put this another way, for the purposes of a privatized utility ﬁrm, it is necessary that households be held individually accountable for their actions. However, for participatory democracy, an atomized middle class struggles to work collectively to hold institutions accountable, and ﬁnds itself increasingly less trusting of others.

4.7 Conclusion

Political trust is central to understanding the quality of lived, participatory democracy. A deterioration of trust in institutions can be beneficial to holding governments accountable, it can also lead to voters exiting the electoral arena. This study demonstrates that the phenomenon of voting without accountability exists where voters continue to turnout in high numbers, but often struggle to hold governments accountable. I find that the drivers of institutional and inter-personal trust are not the same: low quality service delivery, where individuals pay high amounts and receive intermittent and poor access to a utility, cause institutional trust to deteriorate, but not trust in others or voting. Second, I find that low inter-personal trust is driven by messaging that links theft to outages, particularly among middle-income voters. The corporatization, liberalization and privatization of public goods is ubiquitous in the developing and the developed world, yet the impact on citizenship is severely under-theorized. In the particular context of semi-authoritarian, low-democracy states such as Pakistan, I find that costly and unevenly distributed utilities have unintended consequences. As political governments debate their role in service provision, it is worthwhile thinking through the long-term implications of hybrid goods regimes on citizenship and democracy.

142 Table 4.2: Trust, voting and participation

(1) (2) (3) (4) (5) VARIABLES Endorse Trust Trust Market Voted in Reps Others v. State GE ’18 High Outage Area -0.280** -0.217* 0.164 0.026 -0.010 (0.130) (0.118) (0.323) (0.040) (0.102) PTI dummy -0.057 -0.025 0.206 0.042 -0.190*** (0.034) (0.048) (0.128) (0.051) (0.046) Defaulter -0.071 0.000 0.228** -0.061 -0.055 (0.041) (0.053) (0.099) (0.046) (0.044) Score 0.019** 0.029*** 0.045* 0.010 0.020** (0.007) (0.010) (0.024) (0.014) (0.008) Income (log) 0.016 -0.006 0.049 0.070 0.048 (0.040) (0.042) (0.076) (0.044) (0.043) Urdu -0.015 -0.023 0.146 -0.050 0.087* (0.073) (0.065) (0.144) (0.063) (0.044) Female 0.029 -0.053 0.078 -0.049 -0.186*** (0.056) (0.087) (0.101) (0.076) (0.054) Version 1 -0.026 0.057 -0.037 -0.038 -0.045 (0.040) (0.039) (0.099) (0.040) (0.032) Version 2 0.007 0.041 -0.098 -0.016 -0.055 (0.030) (0.024) (0.083) (0.041) (0.046) Constant 0.590 0.651 0.451 0.167 0.445 (0.401) (0.432) (0.921) (0.422) (0.446)

Observations 842 822 992 950 940 R-squared 0.374 0.312 0.347 0.184 0.258 Robust standard errors in parentheses *** p<0.01, ** p<0.05, * p<0.1

143 Table 4.3: Trust, voting and participation: Spatially clustered

(1) (2) (3) (4) (5) VARIABLES Endorse Trust Trust Market Voted in Reps Others v. State GE ’18 High Outage -0.575*** -0.483*** -0.121 -0.204 -0.135 (0.157) (0.093) (0.563) (0.140) (0.168) PTI dummy -0.115** -0.119** 0.603** 0.089 -0.211*** (0.037) (0.051) (0.238) (0.055) (0.056) Defaulter -0.063 -0.020 0.111 -0.112 -0.042 (0.071) (0.075) (0.209) (0.098) (0.038) Asset score -0.005 0.011 0.061* -0.008 0.000 (0.008) (0.009) (0.032) (0.011) (0.009) Income (log) -0.007 -0.045 -0.011 0.007 -0.056*** (0.045) (0.031) (0.120) (0.050) (0.015) Urdu -0.146 -0.084 0.422 0.078 0.148** (0.114) (0.099) (0.331) (0.068) (0.061) Female 0.026 0.023 -0.088 0.085 -0.155** (0.119) (0.081) (0.200) (0.093) (0.057) Version 1 -0.118 -0.107 0.153 0.006 -0.058 (0.088) (0.075) (0.145) (0.091) (0.048) Version 2 -0.044 -0.018 0.007 0.062 -0.060 (0.073) (0.031) (0.150) (0.099) (0.052) Constant 1.176** 1.420*** 0.722 0.860 1.660*** (0.454) (0.300) (1.641) (0.537) (0.192)

Observations 293 293 351 328 326 R-squared 0.397 0.470 0.339 0.201 0.322 Robust standard errors in parentheses *** p<0.01, ** p<0.05, * p<0.1

144 Table 4.4: Experiment results

(1) (2) (3) (4) VARIABLES Endorse Trust Reps State v. Market Trust Others

Political Treatment -0.091** 0.022 -0.055 -0.216** (0.043) (0.044) (0.038) (0.092) Private Treatment -0.053 -0.005 -0.052 -0.216** (0.043) (0.043) (0.038) (0.092) Post-Election 0.058 0.237*** 0.384*** 0.289*** (0.041) (0.042) (0.026) (0.080) Constant 0.642*** 0.325*** 0.570*** 1.885*** (0.034) (0.035) (0.031) (0.075)

Observations 841 826 964 1,019 R-squared 0.007 0.040 0.109 0.017 Robust standard errors in parentheses *** p<0.01, ** p<0.05, * p<0.1

Table 4.5: Experiment results, class eﬀects

(1) (2) (3) (4) VARIABLES Endorse Trust Reps Market v State Trust Others

Pooled treatment 0.027 -0.024 0.084 0.054 (0.089) (0.067) (0.076) (0.166) Middle-income 0.060 0.116 0.147** 0.502*** (0.088) (0.072) (0.074) (0.168) Pooled T*Mid income -0.122 0.060 -0.180** -0.334* (0.099) (0.081) (0.084) (0.190) Post-election 0.062 0.215*** 0.389*** 0.259*** (0.041) (0.043) (0.027) (0.082) Constant 0.574*** 0.225*** 0.450*** 1.495*** (0.080) (0.060) (0.067) (0.146)

Observations 865 844 977 1,019 R-squared 0.009 0.059 0.117 0.029 β1 + β3 -0.094** -0.093** -0.280*** (0.042) (0.037) (0.094) Robust standard errors in parentheses *** p<0.01, ** p<0.05, * p<0.1

145 Table 4.6: Institutional and interpersonal trust: Behavioral results

(1) (2) (3) (4) VARIABLES Voted in ’18 Membership Voted in ’18 Membership

Endorse 0.161*** -0.048 (0.056) (0.062) Trust Others 0.002 0.060** (0.020) (0.022) PTI voter -0.161*** -0.104* -0.173*** -0.140** (0.054) (0.059) (0.049) (0.050) Defaulter -0.040 0.028 -0.055 -0.001 (0.053) (0.050) (0.042) (0.042) Post-election 0.273*** -0.948*** 0.288*** -0.894*** (0.076) (0.071) (0.080) (0.066) Age 0.001 -0.000 0.001 0.000 (0.001) (0.001) (0.001) (0.001) Education 0.006 -0.019 0.006 -0.020 (0.024) (0.018) (0.023) (0.016) Income (log) 0.000 0.059 0.023 0.060 (0.035) (0.041) (0.038) (0.040) Asset Score 0.020** 0.008 0.018** 0.003 (0.009) (0.008) (0.008) (0.007) Urdu 0.124** 0.029 0.106** 0.044 (0.048) (0.068) (0.046) (0.061) Female -0.198*** -0.118*** -0.153** -0.103*** (0.051) (0.041) (0.059) (0.036) Version 1 -0.068** -0.064 -0.042 -0.055 (0.031) (0.047) (0.033) (0.035) Version 2 -0.063 -0.042 -0.058 -0.012 (0.043) (0.042) (0.049) (0.033) Observer FEs Y Y Y Y UC FEs Y Y Y Y Constant 0.479 0.793** 0.278 0.712* (0.437) (0.353) (0.441) (0.371)

Observations 802 842 940 992 R-squared 0.281 0.384 0.289 0.361 Robust standard errors in parentheses *** p<0.01, ** p<0.05, * p<0.1

146 Table 4.7: Sharing recent bills and trust

(1) (2) (3) VARIABLES Showed Bill Showed Bill Showed Bill

Endorse 0.015 (0.074) Trust Others 0.017 (0.028) High outage neighborhood -0.380*** (0.097) PTI voter -0.074 -0.075 (0.054) (0.050) Defaulter -0.081** -0.080** -0.125* (0.038) (0.033) (0.056) Post-election -0.235*** -0.258*** -0.463*** (0.071) (0.070) (0.129) Age -0.000 0.000 (0.001) (0.001) Education -0.005 -0.004 (0.013) (0.012) Income (log) -0.021 -0.011 -0.029* (0.029) (0.024) (0.014) Asset Score 0.021*** 0.018* -0.011 (0.007) (0.009) (0.008) Urdu 0.028 0.000 -0.130** (0.050) (0.048) (0.052) Female 0.037 0.041 -0.156** (0.064) (0.059) (0.066) Version 1 0.024 0.024 (0.045) (0.043) Version 2 0.044 0.037 (0.037) (0.034) UC FEs Y Y Y Observer FEs Y Y Y Paired clusters N N Y Constant 0.885*** 0.738*** 1.568*** (0.250) (0.233) (0.288)

Observations 842 992 351 R-squared 0.302 0.269 0.408 Robust standard errors in parentheses *** p<0.01, ** p<0.05, * p<0.1

147 Figure 4.3: Advertisement campaign for Karachi Electric Supply Corp., c. 2009

148 Chapter 5

Conclusion

5.1 ‘Nothing gets fixed if you don’t go in a group’

In Amr Sidhu, a low-middle income neighborhood in Lahore, two women consider it their business to mobilize their neighbors. Currently, Azra and Seema are involved in getting health insurance and employment cards made for the dozens of women in their neighborhood who are employed as domestic workers. Their ability to navigate the bureaucracy can be attributed in part to their employment with a local non-governmental organization (NGO) that works closely with the Punjab government to implement legislation, such as the Domestic Workers Act (2019). But they are also deeply embedded in the political and social relations of their neighborhoods, making linkages with political parties, NGOs, and local administrators. When I enquire about whom I can talk to about electricity-related issues, Azra pulls up a number on her phone: ‘talk to Mr. Bhatti. Tell him Azra sent you.’1 I ask whether the women have ever needed to contact their Member of National Assembly, who happens to be Mr. Bhatti’s uncle, directly. ‘Yes, of course. And his nephew gets us an audience... we all go. Nothing gets ﬁxed if you don’t go in a group.’ Lahore, Pakistan is the country’s second most populous city, after Karachi, with a population of about 11 million. As the political capital of Punjab, Lahore’s urban

1Interview with Ms. Azra, Amr Sidhu, February 20th 2020

149 politics are intimately tied to the political competition in the province. In recent decades, ethnicity and language have lost salience in the province, in contrast to Karachi, where identity politics plays a major role in determining electoral outcomes. Instead, electoral politics have organized around a range of policy, class and ideology-based issues (Waseem 1993, Mufti 2018, Javed 2017), as well as intersecting kinship (jaati) based identities (Mohmand 2019). Prior to the general elections in 2018, the incumbent party, the Pakistan Muslim League-Nawaz (PML-N) allocated considerable spending to stability in one key sector - electricity. In January 2020, individuals in Amr Sidhu recall facing ‘zero outages’ the summer before the 2018 election. Ironically, however, many of them still voted for the Pakistan Movement for Justice (PTI), citing expectations of better governance and service delivery. Electricity in Punjab, and in Lahore, has considerable political salience (Cheema and Liaqat 2017). The state-run utility LESCO has faced the threat of privatization for decades2 and is under considerable pressure to improve bill payments from the national regulator and international lenders. In spite of this, the province’s dominant party, the PML-N, has resisted. Over 642 incidences of protests around fuel and energy were documented in Pakistan between 2007 and 2017 (Hossain et al. 2018), with a majority of the events taking place in Punjab among traders and business owners. Several such protests even took place in Amr Sidhu, most recently in 2017, when Azra, Seema and their neighbors blocked a major artery in Lahore after their transformer blew out, and wasn’t repaired for days. Party oﬃcials were engaged, the police and LESCO employees were reportedly sympathetic to the protesters. Ultimately, a PML-N politician elected to the Provincial Assembly,

2Reuters, October 9th 2019. https://reut.rs/3a7sKzV

150 Naseer Ahmed, resolved the issue by funding a new PMT for the neighborhood - ‘he paid for it out of his own pocket.’3 PML-N successfully capitalized on the salience of electricity and energy in rising to power in 2013, but was unable to fulfill those promises in 2018. Prominently, the politicization of energy in Punjab has not guaranteed success for the PML-N, but continues to be an important provincial and local issue. Lahore enables us to approach the puzzle of Karachi from another perspective: in the absence of clear lines of patronage that can be attributed to a particular party, why do parties hold on to state enterprises? Part of the reason may be parallel to the Karachi model: utility companies, whether state- or privately-run, are lucrative opportunities for influence and appointment. In Lahore, mid-level bureaucracies have expanded in the last decade, and postings are important sources of power and leverage for parties (Ali 2018). Parties stand to gain electoral benefits by increasing employment for special interest groups, particularly where margins for victory are narrow (Nooruddin and Simmons 2017). However, there are instances of non-partisan gains, where parties stand to benefit by simply ‘being useful,’ regardless of whether it is to their own voters, or non-loyalists. Indeed, while some scholarship on the latter is emerging (Bussell, forthcoming, Auerbach 2019, Kruks-Wisner 2019), this is an entirely under-theorized space. It is in many ways a phenomenon of parties coordinating over the rules of engagement in a policy space, since neither the incumbent nor the rival party stand to benefit if electricity is privatized in Punjab. Yet the idea that patronage can enable non-partisan benefits to parties is in principal different to the claim that patronage diminishes voters’ ability to hold leadership accountable.

3Interview with political activist, Amr Sidhu, February 20th 2020

151 Throughout this study, I have demonstrated that channels for political negotiation, claim-making and complaint-making diminish when state-provided services are privatized. I have shown that this has broad-reaching political and psychic effects. In particular, it changes what individuals think they can expect of the state and their elected leaders. In theory, as real income increases and states become wealthier, the expansion of middle class creates demands for programmatic politics (Huntington 1968). In reality, stagnant economies and exacerbating inequality has led to voters seeking influence at the margins, by having individual access to local elected leadership. Scholars on claim-making argue that in this scenario, politics is no longer a one-time game of patronage and vote-seeking, but a series of everyday relationships, some of which can empower otherwise disenfranchised individuals (Auerbach 2019, Kruks-Wisner 2019). I suggest that when low and medium-low income countries outsource provision to private firms, this channel of influence is also lost.

5.2 Summary of findings

The conception of electricity as a right or an article of citizenship determines the political willingness to invest in generation and distribution (Gore et al. 2018, MacLean et al. 2016). In semi-autocracies such as Pakistan, the provision of certain goods and services has frequently switched from being deﬁned in a rights framework, typically by populist governments, to being considered a commodity, typically driven by bureaucrats and city planners. Evidence suggests that populism struggles to fulﬁll its promise of a welfare state, even under the best of circumstances (Heller 2000). However, in the case of Karachi, expectation of populist provision are generally low. Many public goods, including water and health,

152 are provided by a combination of state and private actors, however, competition between private providers has led to a proliferation of low-cost services. The provision of electricity by a privatized, centralized monopoly creates particular challenges for access, even among relatively prosperous households. Ultimately, the inability to accurately target (or reward) consumers creates a perverse hybrid where recovery is demanded individually, in the form of bills, but punishments are dealt collectively, by subjecting entire neighborhoods to outages. The logic of collective punishment has adverse impacts on middle-income groups. As demonstrated by the survey experiment, individuals lack clear information on whom to hold accountable for poor service delivery. For the urban poor and middle-income groups, the ability to live in neighborhoods with adequate access to water, electricity and other goods and services drives intra-city migration, and inter-generational economic mobility. As service delivery becomes increasingly stratiﬁed, and the gap between rich and poor neighborhoods increases, a major casualty appears to be trust in institutions, creating apathy towards participating in mechanisms that could lead to their accountability. Scholarship on welfare and liberalization is marked by two stylized facts: one, that middle-income groups form the constituency for liberalization, anti-corruption and rule of law. Second, the literature expects the poor, and therefore populist parties, to be particularly invested in state-driven solutions to poverty. I ﬁnd that in the context of a weakly institutionalized regulatory framework, and a semi-autocratic political regime, economically mobile groups and the poor both view privatization as an extension of, and not an alternate to, state power. This undercuts the ability of both, in separate ways, to form constituencies for better governance or more equitable service delivery.

153 5.3 Theoretical contributions and policy implications

The expansion of public-private partnerships in the delivery of goods and services is a mainstay of governments in the developing and in the developed world. Understanding the political impact of these policies is therefore of utmost importance, this study contributes fundamentally by examining the micro-political consequences of macro policy agendas. First and most significantly, it aims to provide empirical evidence that the relationship between citizens and the state changes when service delivery is privatized; in the case of weakly democratic contexts such as Pakistan, this can debilitate crucial participatory institutions such as voting, membership and trust. This study also suggests that improvements in service delivery can motivate individuals to hold representatives accountable in other spheres of local public goods. A virtuous cycle of trust between private institutions and consumers can create efficiencies in the consumption of scarce resources, and provide important psychic benefits; on the other hand, a cycle of mistrust can create uncertainty that spills over into the political sphere. Consumers who don’t think they can seek redressal for privately provided goods are likely to lose faith in their ability to affect change in public goods. The broader impact of this is political exit by middle-income groups, and further entrenchment of cronyism and corruption by political parties who are under no pressure to improve. This study therefore has important lessons for decision-making by both governments and non-government institutions hoping to enter the service delivery sector. The results of this study have far-reaching impacts for decision making in donor and lending agencies that increasingly struggle with channels of voice and responsiveness; it suggest political distributive effects are at least as important as economic distributive effects of liberalization.

154 Finally, this study is central to the understanding of associational life and trust. It examines the circumstances under which citizens are motivated to act collectively, and why the existence of these forums is crucial to both political accountability and economic expansion. It joins emergent scholarship that suggests that patronage in hyper-local contexts, far from being a one-way relationship between powerful state actors and powerless clients, is an important feedback loop for citizens to express priorities, preferences and satisfaction within and beyond the electoral cycle.

155 Bibliography

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Long-awaited KESC privatization. Dawn Online, February(22), 2005d.

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So what did KESC spent its billions on? Daily Times, November(11), 2007.

KESC hits City with massive loadshedding. The News, November(23), 2007.

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156 KESC wants substantial tariﬀ increase. Dawn, August(23), 2008.

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