Improving Governance in Pakistan: Changing Perspectives on Decentralisation (The Allama Iqbal Lecture)

Abstract

Allama Iqbal stressed the need for khudi in terms of national identity and focus on selfreliance, without which there would have been no chance to break colonial bounds. The message still resonates today, in a period of economic crisis and lack of national agreement on tax reforms. International experience with decentralisation also emphasises the importance of significant own-source revenues in generating accountability and effective service delivery at all levels of government. Although the 18th Amendment of Pakistan Constitution makes significant strides towards clarifying spending responsibilities, the issue of subsidiarity is not effectively addressed, nor is the issue of implementable own-source of revenues. This runs the risk of generating unfunded mandates, further pressures and weakening of public service delivery, leading possibly to strengthening of ethnic and parochial divisions and centrifugal forces. Iqbal’s message is as important now as it was in the last century. JEL classification: H 77 Keywords: Intergovernmental Fiscal Relations