The consequences have been devastating, for reasons similar to those at work in the so-called natural-resource curse. Extensive research shows that when governments luck into unearned cash (which economists call ‘rents’) from oil or other resources, the healthy links that bind them to their citizens are often severed. Freed from relying much on taxes, governments spend the money arbitrarily. Citizens, left untaxed, feel less motivation to monitor things carefully. The result is corruption, misrule and a host of other ills.

Rents paid for natural resources are bad enough. But ‘strategic rents’ — earned by a country for its role in the foreign policies of other states — are even more damaging. Military aid by definition entrenches the militaries that get it, making them less responsive to civilian control. Pakistan’s military has grown enormously powerful over the years, resistant to democratic checks and highly entrenched in every aspect of the country’s commercial, civil and political life. From banking to insurance, cereals to cinnamon, the military’s presence and influence can be felt everywhere. Strategic rents have also helped radicalise Pakistan, since some of the Saudi aid money for jihad in Afghanistan has gone instead to fund extremist madrassas in Pakistan itself.

Strategic rents are also susceptible to manipulation. General Pervez Musharraf, for example, has consistently avoided foreign criticism and kept the money coming by arguing, essentially, that while he may be imperfect, the alternative — the Islamists — is far worse. To support this case, Pakistan’s leaders have resorted to trickery at times. For example, according to the Pakistani journalist Ahmed Rashid, prior to last year’s confrontation at the Islamabad Red Mosque, the government stood by idly as militants poured into the compound — though it could have easily flushed them out in the early days — in order to highlight the Islamic ‘threat’ Pakistan supposedly faced, and the need for more aid.

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