the needs and demands (of the capitalist evolutionary society), this is not quite the case in peripheral capitalist societies." In the peripheral capitalist society the State structure and capitalism as an institution is in direct contradiction with the indigenous socio-economic milieu. This argument can be contextualized in the present scenario with the neo-colonialist capitalism that international monetary institutions "force" (in the name of "market forces") on the developing world. In Alvi's view the underdeveloped world has an "over developed state" with excessive enlargement of power; necessary for the effective colonial expropriation of indigenous capital.this perpetuates into the independent third world state. The central control and regulation in line with the colonial legacy gives excessive bargaining power to the dominant classes with the scope for progressive institutional change undermined to a great extent. Thus, the fault line between the formal (imposed) and informal (indigenous) constraints that bind institutions remains due to the lack of incremental change with centralised power structures and little scope for institutional change such that the widening gulf between the formal and informal institutional may be reconciled.
The military dictatorship that has plagued Pakistan may be seen as an example of coercive restriction against progressive institutional change towards a decentralised society where re-negotiation in line with the indigenous socio-economic realities could be undertaken. Thus, the distorted economic structure from colonial times introduces the contardiction between stability and equity. Stability requires a centralised State structure with arbitrary institutional change through imposing "other" systems without a consensus; the post-colonial nationalisation, State central of the means and modes of production, Islamization and the likes are examples of arbitrary institutional change that introduce new formal constraints that are inconsistent with the inertia of the indigenous formal institutions.
