Corruption in Pakistan involves fraudulent practices carried out by officials and institutions, ranging from petty bribery to high-profile scandals.

Corruption distorts economic decision-making, deters investment, undermines competitiveness and, ultimately, hinders economic growth in the country. The problems are deeply entrenched, spanning back decades, and despite ongoing calls for reform, and many attempts to improve the situation, there is little evidence of progress.

"Corruption is a curse in India and amongst Muslims, especially the so-called educated and intelligentsia. Unfortunately, it is this class that is selfish and morally and intellectually corrupt. No doubt this disease is common, but amongst this particular class of Muslims it is rampant."

The Dominion of Pakistan was created as a result of the Pakistan Movement in 1947. Upon gaining independence, Pakistan inherited a strong bureaucracy and army from the British Raj. There has since been no major change in this bureaucratic set-up since it was first implemented by the British, although reforms were proposed by the Musharraf regime in 2007. This has led many to speculate that "corruption has seeped into the higher echelons of bureaucracy" where "corruption cases are [mostly] reported against irregular and ex-cadre appointments". It was by the late 1960s that the bureaucracy started being portrayed as an "instrument of oppression". In multiple reports published by the World Bank, the Pakistani bureaucracy was seen as being rife with corruption, inefficient and bloated in size with an absence of accountability and resistance to change.

The bureaucratic influence was strong in the western provinces of Pakistan while the eastern province retained a majority of the population. On 22 November 1954, bureaucratic administrators moved a resolution to merge the four western provinces into a single unit called West Pakistan. This led to public outcry in East Pakistan who felt that they were being misrepresented and systematically marginalised by the land-owning Punjabi Muslim elites who enjoyed higher bureaucratic positions at the time. This led to the secession of East Pakistan into the separate nation-state of Bangladesh and lay witness to the corrupt malpractices of the Punjabi elite in West Pakistan. Punjabis argued that East Pakistan's majority was a consequence of the high percentage of Bengali Hindus in the province who were not involved in the state's decision-making processes. Thus, the Punjabi landowners remained largely unrepentant of their desires to "[secure] their own hegemony" leading to the loss of the eastern province in 1971.

After Zulfikar Ali Bhutto came into power in 1973, he introduced a planned economic system to revitalise the stagnant economy. This led to the introduction of the nationalisation programme bringing entire private industrial corporations under government ownership. In 1974, Bhutto cancelled the fourth five-year plans bypassing the recommendations of the Planning Commission, focusing entirely on broadening government control over private business enterprises. In doing so, Bhutto's government began the politicisation of economic planning.

Political interference opened doors for corrupt political practices to seep into the nation's economic planning processes. The nationalisation programme badly affected the reputation of the Pakistan Peoples Party. Accumulated losses of up to Rs 254 million were reported with several instances of over-staffing and inefficient productivity in heavy mechanical industries. By 1976, the state had been hijacked by groups and individuals trying to accumulate wealth by redistributing resources from public enterprises to private individuals. Public enterprises "became a device to extend political patronage to those that the regime favoured, to pay political debts, or to accumulate power".

Bhutto's nationalisation programme lost its appeal towards the end of his government's term and the demand for denationalisation gained more currency. The successive government of military chief and president Muhammad Zia-ul-Haq released a whitepaper that led to the creation of a commission under Pakistan Industrial Credit and Investment Corporation (PICIC) to reverse earlier nationalisation efforts. Not much was achieved in this regard and only three industries, including future Prime Minister Nawaz Sharif's conglomerate Ittefaq Group of Industries, were ever denationalised and returned to their owners. Many argued that Sharif was favoured in this process because he was a political protégé of the military dictator at the helm.