New Units

The debate over new provinces in Pakistan is being conducted on two separate levels: whether decentralisation can improve welfare and growth, and how constitutional and administrative reform works in a divided political system.

Research cited in the column points to a qualified relationship between decentralisation and human development. A 2016 review by Channa and Faguet found that decentralising health and education spending generally improves sectoral outcomes, although the evidence varies by case. Miranda-Lescano and colleagues, writing in 2023, found that decentralising subnational spending, especially on health, had a positive effect on human development across 57 countries between 2000 and 2018.

The form of decentralisation appears to matter most. Reviews of fiscal decentralisation suggest that giving local governments the ability to raise their own revenue, rather than relying mainly on central transfers, is more consistently linked to better development outcomes. Simply shifting expenditure responsibilities produces no clear pattern. In weakly governed settings, the creation of more administrative units can instead obstruct development and economic growth.

For Pakistan, the column argues, devolution would need to go beyond redrawing provincial boundaries or elevating divisions into administrative units. Local governments would also need fiscal powers, including the ability to raise revenue and control spending on staff and other public-sector workers. The unresolved question is what the reform is meant to deliver: better health and school outcomes, or a broader transfer of political and administrative power.