SUMMARY of the Article “Victims of our own narrative,” by Zafar Masud, Dawn [Published on January 6th, 2024]

Zafar Masud explores the dynamics of market narratives and the role of regulators in shaping economic outcomes, challenging the notion that the market inherently knows best. He contrasts the Chicago School’s belief in market efficiency with the perspective of behavioral economists, emphasizing that human behaviors influence and sometimes distort markets. The author cites instances such as the Asian currency crises and the 2008 banking crisis, highlighting the need for government intervention. In the context of Pakistan, the Heritage Foundation’s Economic Freedom Index places the country 152nd out of 180, indicating a heavily regulated economy. Masud stresses the importance of balancing economic freedom with effective regulation, advocating for regulators to prevent consumer exploitation, ensure perfect competition, and maintain a level playing field. He calls for a comprehensive effort to address conflicts, establish missing regulators, and enhance expertise, making them independent and centers of excellence. The article emphasizes the necessity of a dynamic » Read More…