The Production of Terrorism in Pakistan: A Religious Market Explanation

Faiz Ur Rehman


Does intervention in religious market produce negative
externalities? To explore this question, firstly, I market for religious
products secondly, I provide a chronological discussion on the
consequences of government interventions in the market of religion in
Pakistan. It is argued that an oligopolistic market for religion exists
in Pakistan, thus, it is regulated over time by both democratic and
non-democratic regimes. Furthermore, it is discussed that the main
intent of regulations in the religious market of Pakistan was the
appropriation of rent by three players, that is, religious sect(s),
incumbent governments, and cold war allies of Pakistan. However, these
interventions produced negative externalities over space and time while
polarising religious sects and sub-sects. Over the years, these
spillovers are realised in the form of sectarian violence which slowly
and gradually transformed into an extreme form of conflict, i.e.,
terrorism. JEL Classification: L51, K42, Z12 Keywords: Regulations,
Religious Market, Violence, Terrorism

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