HIGHER EDUCATION REFORM AND MARKET DISASTER IN PAKISTAN: A POLICY STUDY OF PUBLIC SECTOR UNIVERSITIES IN KHYBER PAKHTUNKHWA, PAKISTAN

Abstract

Public sector universities in Pakistan have increasingly been subjected to market-oriented reforms framed around efficiency, accountability, and financial sustainability. Despite these reforms, public universities particularly in Khyber Pakhtunkhwa continue to experience chronic financial crises, governance failures, declining academic quality, and weakened institutional legitimacy. This paper argues that these outcomes cannot be adequately explained through managerial inefficiency or incomplete reform implementation alone. Instead, it conceptualizes the crisis of public sector universities as a policy-induced outcome rooted in structural misalignment between higher education reform agendas and the broader governance architecture of the state. Drawing on political economy, organizational ecosystem analysis, and debates surrounding New Public Management, Weberian bureaucracy, the tragedy of the commons, and the free-rider problem, the study develops an integrated analytical framework to explain why neoliberal reforms have generated destabilizing consequences. Using a qualitative comparative case study of the University of Peshawar and the Institute of Management Sciences (IMSciences), the paper shows that while higher education is rhetorically framed as a public good, it increasingly operates as a depleted common-pool resource. Open access, weak contribution mechanisms, and limited self-governance have institutionalized free-riding at the University of Peshawar, accelerating organizational decline, while IMSciences’ bounded governance ecosystem enables conditional resilience. The paper concludes that imposing market logic on unregulated public universities constitutes a market disaster rather than meaningful reform and calls for higher education governance grounded in predictable public investment, enforceable institutional boundaries, and alignment between organizational reform and state governance structures.