World Bank report flags Pakistan's post-amendment spending on bureaucracy over services

A recent World Bank report scrutinizes the National Finance Commission (NFC) Award following Pakistan's 18th Amendment, revealing significant concerns about resource allocation and its impact on public services. The report suggests that a substantial portion of increased funding has been channeled into expanding local bureaucracies within the health and education sectors, rather than directly improving service delivery.

The analysis indicates that 80 percent of provincial spending is recurrent, primarily covering salaries and administrative costs. Despite this higher expenditure, the report notes a limited improvement in health and education indicators. This suggests a potential inefficiency in how funds are utilized at the provincial level.

Furthermore, the report points to a critical failure by the provinces in establishing fair and institutionalized rules for distributing funds to local governments. Even when formal rules exist, the actual distribution of funds remains inconsistent and heavily reliant on the provincial government's discretion. This lack of a standardized system has led to a decline in spending at the local government level, falling from 10 percent in 2005 to a stagnant 5 percent since 2011. In contrast, India allocates 12 percent of its spending at the local government level.