This study examines Pakistan's energy policy since the mid-1980s when the government decided to pursue the path of deregulation and privatization of the energy sector. It identifies and analyses the underlying factors and mechanisms that were responsible for the re-orientation of energy sector policies from the state to the market. Though there are important differences between the previous statist and the present market approaches, there are also fundamental structural commonalities between them. These commonalities revolve around the key points of capital and technology dependence of the energy sector development on sources outside the national economy. It is argued that both of these approaches are in fact variations of dependent development. The influx of foreign investments which the new policies are designed to attract, will create new claims on the country's foreign earnings in the form of private debt service and repatriation of profits, etc. As energy so produced will not be exported and therefore not directly generate any hard currency, these claims can only be satisfied through either a major expansion in exports or by additional foreign borrowing. This study reveals inveterate structural limitations to major expansion in export sector earnings. Further, recourse to the enhancement of traditional exports will only serve to intensify dependency. As, the national economy does not have the capacity to sustain the new hard currency claims, Pakistan will be compelled to borrow externally and thus sink deeper into the debt trap. In contradistinction to dependent development strategies for enhancing energy production, are alternative strategies that mainly rely on mobilization of domestic revenue and technical resources along with a selective utilization of external inputs. To solve Pakistan's energy crisis in the strategic sense, this study recommends the creation of an indigenous capacity to develop energy resources. Policies are suggested that would mitigate and eventually break the vicious cycle of dependency. But to do this, the state will have to play a new type of a role, different from that of the past as well as the one suggested by current policies. The real challenge is to bring about major organizational innovations in the public sector, rather than the current emphasis on dismantling it. / Ph. D.