Beyond provincial monopolies

Professor Ahsan Iqbal's recent article, "Competitive Federalism or Centralised Provincial Monopolies?", has rekindled an important debate on federalism. governance in Pakistan. He rightly describes the 18th Constitutional Amendment as one of the most consequential democratic reforms in Pakistan's constitutional history. By devolving seventeen major subjects from the federation to the provinces, the amendment sought to correct decades of over-centralisation. strengthen the federation through the principle of subsidiarity - that governance should operate at the lowest effective level closest to citizens.

Professor Iqbal's central argument is that while provinces demanded decentralisation from Islamabad, they have themselves become centralised entities by failing to devolve authority. financial resources to local governments. He contends that this contradiction has weakened the true spirit of the 18th Amendment. suppressed the competitive dynamics that drive innovation, efficiency and responsiveness in modern states.

The concern regarding weak local governments is valid. Effective local governance remains one of Pakistan's most neglected areas. Yet the broader conclusion that provincial autonomy is primarily responsible for governance shortcomings requires a more careful assessment of constitutional history, fiscal realities. institutional performance.

The first point often overlooked is that fiscal federalism in Pakistan did not begin with the 18th Amendment. Article 160 of the Constitution, governing the NFC, was incorporated in the original Constitution of 1973 through national consensus. Likewise, the landmark 7th NFC Award was agreed before the passage of the 18th Amendment in 2010. The constitutional principle of provincial empowerment therefore predates the amendment itself.

Equally important is the fact that provinces were never merely passive administrative units waiting to receive powers from Islamabad. Since the inception of Pakistan, sectors such as education, health, agriculture, irrigation, roads, local infrastructure. numerous public services have largely been administered by provincial governments. The 18th Amendment primarily removed overlaps created by the Concurrent Legislative List. clarified provincial authority rather than creating an entirely new governance structure.

Khyber-Pakhtunkhwa offers a useful example. The province administers more than twenty-seven thousand public schools, hundreds of colleges, dozens of public universities, an extensive healthcare network, thousands of kilometres of roads, irrigation infrastructure, industrial development institutions. energy projects. Similar responsibilities are borne by the other provinces. These realities demonstrate that provinces are not merely intermediaries between the federation. local governments; they are the principal providers of public services to citizens.

The more fundamental question, therefore, is whether provinces possess adequate resources to discharge these responsibilities effectively. Despite the 18th Amendment, the major revenue-generating instruments remain concentrated at the federal level. Customs duties, corporate taxation and several other significant sources of revenue continue to be collected and controlled by the federation. Provinces remain heavily dependent on NFC transfers to finance education, healthcare, infrastructure, policing and development programmes.

Khyber-Pakhtunkhwa faces additional burdens arising from terrorism, climate-related disasters and the integration of the merged districts. These responsibilities place extraordinary pressure on provincial finances. Consequently, governance challenges cannot simply be attributed to provincial reluctance to devolve authority; they are also linked to structural fiscal constraints. the mismatch between responsibilities assigned and resources available.

There is another dimension of the debate that deserves equal attention. If the failure to devolve authority to local governments is the principal measure of governance. then the same standard should logically be applied to the federal government.

Islamabad, the federal capital, presents a revealing example. Despite being directly administered by the federation, local government institutions remain weak and largely peripheral. Most critical functions, including law. order, development planning, land administration, municipal regulation and public service delivery, continue to be controlled by federal ministries and attached departments, particularly the Ministry of Interior. In practical terms, the city government exercises limited authority over matters that directly affect citizens. If provinces are criticised for centralising authority, intellectual consistency requires that the federation also be subjected to the same scrutiny.

The same observation extends to federally administered institutions. Pakistan Railways has struggled for decades with operational inefficiencies, ageing infrastructure and recurring financial difficulties. PIA remained under federal control throughout its existence, yet became synonymous with chronic losses and managerial challenges. Pakistan Steel Mills, despite repeated federal interventions, ultimately suffered operational collapse.

Similarly, federal institutions responsible for research, innovation and economic management have not always delivered outcomes commensurate with expectations. The FBR provides perhaps the most compelling example. Year after year. revenue targets are revised, missed or achieved through extraordinary measures rather than through sustainable broadening of the tax base. So, if centralisation by itself guarantees efficiency, innovation. accountability, why has this highly centralised institution struggled to realise its full potential?

These examples do not establish that federal control is inherently ineffective, just as provincial control is not inherently inefficient. They do, however, demonstrate that governance failures cannot be simplistically attributed to the location of constitutional authority. Administrative competence, professional leadership, institutional continuity, accountability, merit-based appointments and sound policy implementation remain the decisive variables.

Indeed, several notable innovations in governance have emerged from provincial initiatives. From emergency response systems. health-sector reforms to digitisation projects and service-delivery innovations, provinces have often acted as laboratories for experimentation and reform. This demonstrates that innovation is not the monopoly of any particular tier of government. It flourishes where institutions are empowered, adequately resourced and professionally managed.

The issue is not provincial monopolies versus federal authority. Nor is it centralisation versus decentralisation. The real issue is the quality of governance. Pakistan's experience demonstrates that constitutional centralisation has not automatically produced efficiency at the federal level. just as devolution alone cannot guarantee success at the provincial level. Good governance depends not on where authority resides, but on how effectively that authority is exercised. Until that reality is recognised, the debate will remain focused on structures rather than outcomes. on symptoms rather than causes.

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