The existing literature in social sciences and humanities analyzing root causes of sectarian and religious conflicts focus mostly on micro-factors. The inability of market and state factors to control sectarian conflict for last seven decades remains understudied by the contemporary literature. This article aims at filling that gap and seeks to identify certain market and government failures that have implications on sectarian and religious conflicts. More specifically, it identifies four market failures namely asymmetries of information, externalities, equity and public goods and three government failures, which include democracy failure, bureaucratic failure and implementation failure. In contrast to the literature shedding light on the impact and gravity of sectarian and religious violence in the country, the purpose here remains to highlight important aspects of public policy reforms for peace making and peace building. This article, based on the aforementioned market and government failures, suggests a whole new set of policy reforms.

The Universal Declaration of Human Rights (UDHR) and other international legal instruments provide freedom of religion to individuals and communities globally. Therefore, all the nations of the world agree to allow and respect the relevant religious practices for the followers of any particular religion. By virtue of its teachings and values,Islam was found as a religion of peace and harmony. But unfortunately, since the last two decades, especially after 9/11, the sentiments of Islamophobia have been rising. The existing literature shows the emerging Islamophobia is causing victimization of Muslims all over the world and particularly in the west, which is escalating with the passage of time. This victimization has created feelings of hatred among the various communities and has an impact on global peace. This study analyses the factors that lead to Islamophobia and its implication on the harmonious co-existence of societies.

Pakistan is a country founded on Islamic identity, and it was established to safeguard Muslims' religious, cultural, and historical identities.Individuals and families can find spiritual, social, psychological, and often material support through religion. Pakistan's interest in building a righteous,organized, systematic, peaceable, and prosperous nation has indeed been paramount since time immemorial. Pakistan, since its inception inherited ethnically, sociologically, territorially, financially, and linguistically diverse social structure and population. Religion served as the foundation for the configuration of this nation. Specific structures of societal, economic and social deprivation altered this governmental ideology. Even though the country remains dominantly Muslim, demographically, it is relatively fragmented and disintegrated. This paper investigates the components of diversification that ultimately stymied Pakistan's nation-building process and will examine the process of Islamization, particularly during the Zia era, which assisted Pakistan in establishing a unified society based on Islamic principles of progressive political equality, and economic justice.