Informality in Karachi’s Land, Manufacturing and Transport Sectors : Implications for Stability

Rapid population growth, ethnicization, and a policy shift toward deregulation and privatization have contributed to a rise in informality in almost all of Karachi’s economic sectors. These factors have also diminished the state’s capacity to regulate the economy and maintain a monopoly over violence. In examining Karachi’s sizable land, manufacturing, and transport sectors, it becomes clear that informality can directly or indirectly contribute to instability, but also that instability has an impact on informality and service delivery. Some formalization of the sectors could help create the conditions for improved economic growth and enduring stability. However, the process must be guided by an empowered local government and an inclusive master plan.