The study “Political Economy of Development; A case study of South Waziristan Agency (1972 to present” is based on historical politico-economic analysis of the development processes in SWA. SWA is the southern part of the region called Waziristan and the agency is the largest agency (area wise) among the seven political agencies and six frontier regions constituting federally administered tribal areas (FATA) of Pakistan. Century of neglect, exploitation and maneuvering with the internal dynamics of society by external actors and historical legacies has contributed to the below par socio-politico-economic development in the region. The political and economic choices available to the people of the area were constricted by the legal formulations of the FCR which has empowered a single authority, that is, the political Agent, to single-handedly determine the social, political and economic development of the area. During the last forty years various de facto and de jure measures have had tremendous impacts on the socio-politico-economic organization of the people in the area. This in return has opened up economic opportunities for the people in faraway lands. This has led to the change in saving and consumption pattern in SWA. The increase in income has also empowered other segments of population who now have started vying for the capture of the distribution of power and resources in SWA. The political arena was fragmented due to the increased contestation and bargaining between different actors for the capture of power and resources at societal level while at state level, the development needs were determined by the political agent without any input from the societal actors. The emergence of new groups and their accommodation within the system was dependent on state‘s ability to co-opt these people. The system responded to the demands of the emerging classes in recognizing their share in the distribution of power and resources. This way,IX the state‘s patronage was widened and it showed the resilience of the system by accommodating the interests of the new groups and developing their long-term interests in the system. The longterm interests of the dominant groups are in the continuation of the same ‗exclusive‘ system of governance. That‘s why there are stark differences in the views regarding policy change of those who are directly accruing the benefit of the system and those who are systematically excluded from having any say in the distribution of power and resources. Supervisor:- Dr. Karim Khan