uch has been written and said about Pakistan’s many challenges. Its dependence on the International Monetary Fund aid and debt, low economic growth, poverty, disease, violence, religious extremism and intolerance, high child mortality and political instability have all been highlighted. Many analysts attribute Pakistan’s cycle of low growth and high debt to a powerful elite — spanning political, military and economic sectors — alleging that it prioritises short-term resource extraction for private gain over long-term investment in productive capacity, public goods, basic human rights and human capital.

As economist Atif Mian notes, the mere existence of self-serving elites is not the main problem. The real issue is that they derive private profits/ rents not from growth-oriented activities, as seen in countries like India and South Korea, but from unproductive sectors like land ownership and geopolitical aid. This consumption-based, rather than investment-driven, economy limits productivity and keeps Pakistan dependent on remittances and foreign debt. Political instability exacerbates these issues, as frequent power struggles between civilian and military leaders disrupt consistent policy and block essential sustainable reforms.

While these challenges are widely recognised, a more fundamental question remains: why do these problems persist despite widespread awareness of their existence and perceived causes? We know that physical capital, human capital, exports, strong institutions (e.g. good governance, property rights, a fair judicial system, law and order), and effective civilian control over military influence are essential for growth and productivity. But as economist Douglass North pointed out, we know that these are the things we need — what we don’t know is how to get what we need.

North, my teacher and a Nobel laureate, provided a thought-provoking framework for understanding these barriers. In some of his later writings and lectures, he argued that beliefs — normative (what ought to be) and positive (what is) — are at the root of institutional and organisational change. In other words, growth is not simply a result of better governance or education systems; it is rooted in the collective beliefs that shape informal norms, culture and formal institutions and their enforcement, which in turn influence organisations whose goals and actions are guided by the institutional structure and, ultimately, determine outcomes such as those mentioned above about Pakistan. For North, it’s these underlying beliefs, not merely policies or institutions, that create sustainable change.

North argues that beliefs underpin institutional development. Beliefs, in his view, act as the source of sources. They shape the fundamental assumptions a society has about itself, about what’s possible and about what ought to be and is necessary. Beliefs, then, set the framework within which decisions are made and institutions and organisations operate.

Once we see the world from this angle, the question becomes: which set of normative and positive beliefs held individually and collectively by Pakistanis and those outside Pakistan may be shaping the outcomes we observe in Pakistan?

For Pakistan, some of the most consequential beliefs may be about power and progress. Is it that military elites have developed beliefs that civilian politicians are inherently inefficient, corrupt and unable to govern, leading them to take charge of affairs they perceive as necessary? Or is it that the belief that Pakistanis view themselves as a nation that can only be tamed by force needing strong men with monopoly over violence to lead it? Or is it beliefs that family comes first, so that when we hire and choose to work, we prioritsze family and relatives over merit-based decisions?

Allama Muhammad Iqbal had insights that complement the broad concepts addressed by Douglass North. Iqbal, one of Pakistan’s foundational thinkers, recognised that the core challenges facing Muslims in pre-partition India were deeply rooted in their beliefs — both normative (what should be) and positive (what is). He sought to identify and challenge these limiting beliefs through his poetry and prose, encouraging a revaluation of thought to break free from colonial influence. Iqbal emphasised the concept of khudi (selfhood) to inspire individual and collective self-improvement, liberating Indian society from the chains of British colonialism. In many ways, this remains relevant today. The average Pakistani feels subjugated by exploitative elites, fostering a sense of weakness, powerlessness and fatalism.

Iqbal’s concept of khudi centres on cultivating a strong, empowered sense of self — a heightened awareness of both individual and collective identity. True progress, he argued, depends on aligning beliefs with an accurate understanding of one’s potential, both personally and as a society. This requires grounding oneself in truth: an honest assessment of current realities, scientific knowledge and the state of the world. Positive informed beliefs along with a clear vision of what ought to be, drives real transformation. As Iqbal states in Tulu’-i-Islam:

(Developing a clear vision of the world is a harder task than administering it; it requires a lot of emotional engagement [besides intellectual effort].)

Iqbal understood that deeply held beliefs about who they are and what they are capable of can either limit or liberate people. For him, outdated beliefs and restrictive social norms were fundamental obstacles to progress, stifling innovation and reform. He called for transformation rooted in self-awareness and self-reliance—a re-examination of khudi that could propel a subjugated people towards a more authentic and empowering self-concept.

Iqbal also critiqued how certain institutions among Muslims, such as Sufism, had stagnated. As Columbia University Professor Souleymane Bachir Diagne notes, Iqbal opposed a form of Sufism that encouraged escapism or self-negation. Instead, he held that an important task for Sufism was to continuously question anything institutionalised to reveal the life that lies behind the institutions with a view for reform that brings the institutions in line with what they ought to be. Iqbal insisted that a stagnation in institutionalised beliefs was preventing Muslims from inspiring and empowering themselves to be active agents in their destinies, rather than passive followers of self-serving authorities.

Together, North and Iqbal provide a framework for understanding why Pakistan struggles to achieve meaningful reform. If we accept that beliefs shape institutions and institutions shape society, then we must look at the beliefs that are holding our society in stasis. What beliefs do we hold about our role in shaping our destiny, our governance or politics? About the accessibility of power? About the potential for reform? Are these beliefs aligned with the kind of society we wish to create? Iqbal would say that there was a need to revisit our spiritual and moral-religious and social thought in a way that has a lasting effect on the hearts of contemporary Pakistanis and beyond in an inclusive manner that unites rather than divides us. This awakening and shift in self-awareness can help us realise our true worth and inspire us all to shed false beliefs about ourselves and the world, while also bringing clarity to our purpose.

Understanding what holds Pakistan back requires looking beyond surface-level challenges. Yes, improved governance, economic reforms and stronger institutions are necessary for growth. But achieving these goals depends on shifting the beliefs that guide our choices as a society. As long as deeply ingrained beliefs about power, identity and agency remain unexamined, real progress will remain elusive.

A profound transformation requires questioning not only what a society needs, but also why the shared knowledge of the needs has not resulted in appropriate action. By addressing the foundational beliefs, Pakistan can create a framework that aligns with the collective good — one that can evolve, adapt and respond to the changing demands of the modern world. Only through such alignment can we hope to build a society where institutions serve the public, organisations function efficiently and individuals feel empowered to participate in the nation’s growth.

The writer is a research affiliate at the University of Pennsylvania