The pros and cons of decentralization in Pakistan 1

by Ghazia Aslam

A news report dated August 26 about the reversal of devolution in Punjab came as a bit of a disappointment. Ansar Abbasi, who wrote the story, correctly said that the Punjab chief minister had been “tricked by the DMG” into taking this decision. Devolution or decentralisation is advocated as a beneficial form of government in political science and economics literature but it has never been seen as the right structure in Pakistan and has been tossed aside with the arrival of every democratic government. Since it has always been initiated within a non-representative centre, it has been viewed as a dictatorial tactic to consolidate power. Consequently, it has never been debated reasonably in public sphere. Its do’s and don’ts, goods and bads have never become the topic of discussion in the national debate. There is a great need to analyse the decentralisation reforms out of the context of dictatorial regimes and to impartially debate if it is the right structure for us. The purpose of this article is to analyse decentralisation objectively, generally and in the context of Pakistan, in the hope of starting a constructive public debate on this topic.

The first and foremost benefit of decentralisation is the ability of the local governments to divide goods according to the geographical location of its beneficiaries. Different public goods can be consumed by different geographically dispersed groups – national defence by the entire nation, fire protection only by those within a small radius of fire station, bridge by the population of certain locality. Therefore, it makes sense to divide the government into different sets that are charged with the responsibility for dealing with different sets of public goods. National defence and monetary policy should be the business of the federal government and so should be the higher education. But where construction of sewerage lines, a basic health unit (BHU) or primary school is concerned, a government that is closer to the people of that community would have more information about the needs of the community and can therefore better direct the resources. Local government is also expected to increase the efficiency of provision due to better local control or accountability. More importantly, charging the citizens with the responsibility of gathering and providing information of where in the village the construction of water course should be most efficient will also encourage political participation at the local level. This will undoubtedly improve the quality of politics even at the national level.

Another argument in favour of decentralised government is that it increases competition amongst different localities. The argument is that people will migrate to the communities that suit their preferences best. For example, citizens will migrate to a village which has access to a lady health worker or a primary school. In other words, people will vote for certain communities with their feet and consequently different communities in an effort to widen their resource base by attracting more residents will make an effort by providing more services. Competition will also encourage the successful innovation to solve certain problems, for example, how to irrigate large land area in the least cost or how to improve performance of teachers and doctors in schools and BHUs respectively. Citizens of one community will observe the policies of neighbouring communities and demand similar policies from their elected representatives.

However, for decentralisation to perform these functions it has to fulfil certain conditions. Most importantly, each public expenditure should be coupled with a tax to finance it. In other words, there should be a perfect coupling of taxes and expenditure so that each level of government has the fiscal capacity to finance all of its expenditure obligations. Only this coupling will allow the decentralised government at each level to respond to the local needs and allow voters to assess the performance of their elected representatives with respect to the amounts and qualities of government services they are getting for the taxes that they are paying. If a union council has jurisdiction only over births and deaths and the only service that it can provide is building of walls around the graveyard, it does not promote the information and the accountability function very well. At the same time, if a local government is dependent on the provincial and the federal government for funds to do anything in their region, there is not much use of electoral devolution. Discretionary transfers that are not part of grants to the local government from provincial government exacerbate the problem many folds. Therefore, localities should be given more responsibilities and should be able to raise their own taxes. If they cannot finance all of their expenditure from their own taxes, transfers from the provincial to the local government should be strictly rule-based. No discretion should be allowed and the rules for the transfers should be as least manipulatable as possible.

No local government structure in Pakistan has ever fulfilled any of the above conditions. Electoral devolution has never been coupled with the fiscal devolution. There are deficiencies even in the electoral devolution in the 2001 local governance reforms as the district nazim is indirectly elected by the councillors. This increases political manipulation of the system. It has been argued, and rightly so, that the 2001 local governance reforms have created a new class of collaborative politicians that has provided support to the dictatorial regime in the centre. The informal power structures, especially in the rural parts of the country, were formalised by giving them electoral power. Patronage and “elite capture” of the resources, therefore, reached an unprecedented level without any benefit of the decentralisation. These are legitimate charges. 2001 local governance reforms have indeed created all of the above problems. But does that warrant us to pack the whole system altogether and then hail it as a ‘democratic’ step just because a relic of the dictatorial regime has been purged?

I think not. It is unfortunate that decentralisation reforms have always been initiated in a dictatorial regime for its own purposes and as a result we have never taken the system itself seriously. Other than this association, there is also a question of interest. Bureaucracy is, of course, the direct beneficiary of abolishment of this system. But so is the class of democratically elected politicians since it creates another class of politicians who become claimant to the public funds. Where the public funds were available strictly to the MPAs and MNAs before the devolution, now they have to be shared with local politicians.

The argument is that we need to leave room for debate. The system in the current form has certainly not helped with improving accountability or allocative efficiency in any significant way. But this does not mean that it cannot. The problem of patronage and elite capture, for example, arises due to our social and economic structure, due to patterns of land distribution. This is a problem at the provincial and federal levels of government as well. But with the right changes these issues can be ameliorated if not completely alleviated. Or maybe the right devolution system could reduce the effect of patronage on politics by increasing political participation at the grass roots level. The argument that democracy should be given a chance by letting it run its course can also be applied to the devolution reforms.

The writer is a doctoral student of constitutional economics at George Mason University in Washington DC. Email:

Source: The News, 1/9/2008


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