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| Social Development in Pakistan (Sdip) 2006-07 |
Press Release.
Karachi: January 26, 2008
Implementation of the Devolution Plan in 2001 represents a big move towards the decentralization of the provision of basic services in Pakistan. There has been faster expansion in local expenditures since 2003-04 due more to larger transfers arising from the faster economic growth and improvement in macroeconomic conditions rather than because of any enhanced priority to local allocations. The resulting expansion in outlays on basic services is beginning to contribute to improvement in some social indicators. However, inequality among districts in access to basic services has increased, especially in Punjab and Sindh. Also the efficiency gains from decentralization have been limited by the absence of delegation of authority and lack of coordination between provincial and local governments and limited institutional capacity at the local level. Although wider representation has been given to the under-privileged groups like women, real empowerment has been frustrated by election malpractices and elite capture at the local level. These are the key findings highlighted in the Annual Review of Social Policy and Development Centre on “Devolution and Human Development in Pakistan”.
The basic question raised in the report is whether decentralization has contributed to human development through improvement in efficiency, promotion of equity, enhancement in peoples’ participation and thereby, promoted peoples involvement in matters affecting the quality of their lives.
While some local governments have initiated innovative approaches to improve efficiency in local service provision, they continue to be faced with issues of local Institutional capacity, absence of mechanisms for improved accountability and transparency, difficulties in inter-governmental coordination and mechanisms of public safety. Key issues relate to the "mind-set," lack of political will and reluctance of the provincial governments to implement the Devolution Plan in letter and spirit.
A number of significant processes have been put in motion including greater representation for the marginalized groups, especially women. However, ‘state capture’ by local elites remains an important and persistent challenge. Analysis of the characteristics of District Nazims demonstrates the overwhelming influence of family, Zaat/Biradari/tribal ties and of political affiliation. Also, the indirect choice of District Nazim and Naib Nazim provides an opening for political maneuvering. Overall, it appears that the devolution process has not yet led to significant empowerment of the people.
The report highlights that the devolution process has led to the transfer of a large number of functions from provincial to local governments. However, the lack of enhancement in local fiscal powers is a major weakness in the process of fiscal decentralization. Analysis of the budgets of a sample of local governments reveals that over 90 percent of expenditure is financed by transfers.
The share of local governments in the provincial allocable pool of resources has fluctuated between 37 percent and 39 percent. It appears that the priority attached by provincial governments for allocations to local governments has declined somewhat during the last five years. It is also significant that although provincial governments have handed over a number of major services to local governments, their share in public expenditure has remained unchanged at about 23 percent. Overall, Pakistan has achieved a higher level of decentralization.
As far as the pattern of sectoral allocations in local budgets in concerned, within current expenditure, the largest share is accounted for by primary and secondary education, in excess of 60 percent. On the development side, it is observed that many of the district governments are devoting a significant part of their expenditure to the construction of roads, implying the same higher priority given to economic infrastructure. The most neglected sector appears to be health which receives less than 10 percent of the development allocation in most cases.
On the whole, as far as fiscal decentralization is concerned, the report concludes that the process of devolution has been facilitated more by the improvement in the macroeconomic environment in recent years which has led to larger transfers to local governments than by any conscious effort on the part of provincial governments to support the process of decentralization.
The report also analyses the trends in regional disparities, gender equality and poverty in Pakistan. At the most aggregative level for the country as a whole, the trends in key outcome indicators of social development show that, in particular, the rate of enhancement in literacy of the population and access to water supply and sanitation has increased perceptibly in the post-devolution period. However, there are no indications yet of any impact of devolution on the rate of improvement in health indicators. In fact, Pakistan remains largely off-track in the attainment of the health related MDGs.
The level of disparity in the provision of different local services among districts within a particular province has been quantified in the report. It is surprising that the inequality in access even to a basic service like primary education remains so large throughout Pakistan. Inequality in access to basic health services like immunization also appears to be quite pronounced, especially in NWFP and Balochistan. Similarly, differentials in access to water supply and sanitation are unacceptably high. As far as gender equality is concerned, the largest gap continues to be in NWFP and Balochistan. In the period after devolution, up to 2005-06, there is very little change in the trend of gender parity in education observed prior to devolution.
In order to realize the full potential of decentralization in bringing more benefits to the people, a 'second generation' of reforms is required to address the problems that have arisen. The report identifies a number of reforms related to the allocation of functions, intergovernmental relations, process of election, local institutional capacity, fiscal decentralization and some supporting measures. Many of the reforms are doable and can have a significant impact on improving efficiency and equity in the delivery of local services. They will contribute to deepening the process of democracy, raising the level of human development and improving the quality of life of the people. The authors of the report strongly reiterate their commitment to more effective decentralization in Pakistan. |
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