Handouts

Course:
administration in Pakistan
Course code:
Instructor
Iftikhar ul Husnain

Public
MPA 401
Dr. Muhammad

Table of contents

Public Administration in Pakistan

1. Public Administration
1.1.

Meaning:

Public administration is a part of the wider term Administration. To

understand the meaning of public administration we must, therefore,
firstly try to understand what administration means.
1.2.
Administration: The word administer is derived from the Latin
words administrate, which means to care for or to look after people, to
manage affairs. According to this wide definition almost every human
activity involves some kind of administration. Even in primitive
societies, simple activities like hunting, food, gathering, etc., could not
be carried on without some form of organization. Somebody had to
determine as to who will do what. Certain norms of behavior had to be
laid down to decide the distribution of work among the members of the
primitive groups. Of course, the administration at that time was rather
simple because the tasks to be carried out were also simple. With the
growing complexity of modern life the administration of private as well
as public affairs has become more and more complex. We would now
consider some of the definitions of administration given by prominent
scholars.
Luther Gulick has said, Administration has to do with getting things
done; with the accomplishment of defined objectives.
James L. McCanny defined Administration in these words,
Administration is the organization and use of men and materials to
accomplish a purpose. It is the specialized vocation of managers who
have skills of organizing and directing men and materials just as
definitely as the engineer has the skill of building structure or a doctor
has the skill of understanding human ailments.
Pfiffner and Presthus have defined administration as Organization
and direction of human and material resources to achieve desired
ends.
1.3.

Scope of Public Administration:

The thrust of the various definitions of public administration is that it

pertains to the administrative activities of the government. As is well
known, the activities of the government are commonly divided into

three major branches, namely, Legislative, Executive and Judicial. The

question naturally arises as to which of the activities of the
government are included in the study of public administration. There
are two views on this subject. According to one point of view, public
administration is conceived in a comprehensive sense to include all the
activities of the government, whether falling in the sphere of
legislative, executive or judicial branch of the government. However,
according to the other point of view, `public administration is
concerned only with such activities of the government which pertain to
the executive branch. L.D. White takes the former broad view, while
Luther Gulick supports the latter narrow view. There is a further
narrowing down of the scope of public administration by restricting it to
these activities of the executive branch which are connected with the
execution of the policies. It means that the policy formulation has to be
separated from the execution of the policy. It is only the execution
which is supposed to form part of public administration according to
this narrow view.
1.4.
Significance of Public Administration:
1.4.1. Significance of Public Administration as
Governance;

an

Instrument

of

The most important function of the Government is to govern i.e. to

maintain peace and public order and to ensure the safety and security
of the life and property of the citizens. It has to ensure that the
contracts are honored by the citizens and their disputes settled. This
most significant role of the Government is to be fulfilled through the
instrument of public administration. In the beginning of the civilization
this was probably the only function performed by the public
administration. As the civilization has advanced, many very important
functions have been taken over by the Government, but, the
importance of this basic function should not be minimized. Worthwhile
progress or development is possible unless the citizens can live in
peace. The continuing performance of this function is like the presence
of oxygen in the air we breathe. It is hardly noticed so long as it exists.
However, in its absence civilized life is impossible.
1.4.2. Significance of Public Administration
Development and Change;

as

an

Instrument

of

The public administration has to play a very significant role as an

instrument of development and change. The administration of the

country reflects the genius of its people and embodies their qualities,
desires and aspirations. Whenever the people decide to proceed on the
road to development, their main instrument is the public
administration. They need trained manpower to run these schools,
colleges and the technical institutions. They need technical manpower
to build roads, bridges, buildings and to run the machines in the
industry. They need scientific manpower to undertake research and
development. It is the well-developed public administration which
makes all this possible. It is true that part of the effort comes in the
private sector, but it alone cannot complete the task.
1.4.3. Significance of Public Administration as an Instrument of Welfare
State;
In a modern democratic welfare State, the Government has to provide
many services for the welfare of its citizens. It includes the provision of
schooling, medical facilities and social security measures. With the
breakdown of joint families, the problem of looking after the old and
infants, orphans and widows comes up. With the slowing of economic
activity, the problem of unemployed youth crops up. The development
process brings up many new problems like those of urban slums and
juvenile delinquents. The welfare State has to identify these problems
and devise solutions for them. The formulation of these schemes and
their implementation is another significant function of public
administration.
1.5.

New Public Administration (NPA)

The emergence of New Public Administration (NPA) can be traced back to the
late 1960s. There were various reasons for the emergence of the NPA. The
world had witnessed two Great Wars by that time and after the wars a
number of agencies to alleviate the human sufferings had been formed e.g.
UNO, WHO, UNICEF, etc. However, these agencies found it difficult to
accomplish their tasks in the absence of effective and efficient administrative
systems in various countries. Unemployment, poverty, population, etc., were
increasing very rapidly and it was considered that these problems were due
to the inefficiency of the administrators and also due to the inadequacies in
the perception about the scope of Public Administration.
1.5.1. Features of NPA
NPA focuses chiefly on following things:

a. Change and Administrative Responsiveness i.e. operation flexibility and

organizational adaptability to meet the environmental changes should
be in-built in the administrative system.
b. NPA advocates emphasis on Management-worker relations. There
should be equal emphasis both on efficiency and human
considerations. The new approach has to satisfy both the efficiency
and the human relations criterion in order to achieve success.
c. NPA suggests that small decentralized and flexible hierarchies in
organizational structures are more suitable in view of the increasing
role of administration.
1.6.
Evolution of Public Administration as a Discipline:
It is interesting to note that while Public Administration as an activity is
as old as social life itself; its study as an academic discipline is rather
recent. Not that Public Administration received any thought from
earlier philosophers and thinkers. Several Indian and Western thinkers
have dealt with the subject in the past. But, the administrative thought
remained undifferentiated from disciplines like political science, law
and ethics for a long time.
1.6.1. Phase One (1887-1926) (Politics Administration Dichotomy).
It is well known that public administration was included in the
subject/discipline of political science and Woodrow Wilson first
emphasized the need to study it as a separate discipline. In an attempt
to carve out an independent place for the subject it is not unnatural
that an extreme stand was taken by scholars like Goodnow and L.D.
White. They emphasized that politics and administration were two
distinct activities and were to be studied separately. In his monumental
work Politics and Administration (1900), Goodnow contended that
there were two distinct functions of the Government Politics has to
do with policies or the expression of the State will, while
administration has to do with the execution of these policies. The
legislative branch of the Government, with the help of judicial
interpretations, provided the policy frame work. The executive branch
had to administer these policies impartially, politically and efficiently.
1.6.2. Phase Two (1927-1937) (The Principles of Administration)
Everything about Public Administration was thought to be factual or
Scientific. Search for scientific or universal principles of
administration was, therefore, only a step away. The process was

hastened by the Scientific Management Movement which proceeded

the era of Principles of Administration. The development of Scientific
Management in the Business schools focused mainly on the Assembly
Line, while the Principles of administration were developed under the
school of thought named Administrative Management. The latter
concerned itself with higher management. The Principles of
Management by F.W. Taylor (1911) and writings of other authors like
Frank and Lillian, Galibreth developed principles of efficient physical
movement for optimal assembly line efficiency. These writings and the
whole Scientific Management Movement concentrated on finding one
best way of doing and organizing things. They emphasized that in
terms of technical efficiency there could be only One best way of
doing things which had to be found in every work situation.
1.6.3. Phase Three (1938-1959) (Shadows of Doubt)
The age of certainty of principles did not last long. Voices of dissent
were heard from two directions. Firstly, serious objections were raised
against the politics administration dichotomy. It was contended that
politics and administration can never be separated as they were
organically linked with each other. Secondly, the principles of
administration were seriously challenged on the ground that they are
not logically consistent.
Although the dissent to politics administration dichotomy started in
the late thirties, F.M. Marxs edited volume Elements of Public
Administration (1946) made a major contribution to such dissent. All
the fourteen articles of the book, written by practitioners, pointed
towards an awareness of the fact that there was hardly any issue which
could be resolved by value-free administration. It is almost impossible
to separate it from the value laden politics.
1.6.4. Phase Four (1950-1970) (Search for Identity)
While demolishing the Principles of Administration, Herbert Simon
thought of a new paradigm of two mutually reinforcing components of
Public Administration; viz., a pure science of administration based on a
thorough grounding in social psychology and the other one concerned
with prescribing for public policy. And, the Public Administration did,
in fact start searching for its identity.

1.6.5. Phase Five (after

Administration).

1970)

(Pubic

Administration

as

Pubic

During the last three decades or so, the discipline of Pubic

Administration has made considerable progress in establishing its
identity. In this quest, it has taken two directions. Firstly, it has been
using the administrative science route to study how and why the
organizations work the way they do; how and why people in
organizations behave the way they do; how and why decisions etc. are
made. More and more refined management techniques have also been
taken from the management sciences and used. Secondly, an attempt
has been made to define public in public administration, with the
distinction between public and private being blurred, public
Administrationists are veering round the view that the public in public
administration means public interest. This new dimension is being
recognized as public affairs.

1.7.

Approaches to Public Administration:

1.7.1. The Managerial Approach

General Characteristics:
- Tends to minimize the distinction between public and private
administration.
- Public Administration is essentially the same as big business and ought
to be run according to the same managerial principles and values.
- rooted in the 19th century civil service reformers who complained at
'the spoils system' (corruption, inefficiency, and the emergence of a
class of politicians)
- appointment : based on 'merit' and 'fitness' rather than political
partisanship
- tenure : based on their efficiency and effectiveness
- Depend on the existence of politics and administration dichotomy.
- (values) PA is geared toward maximizing effectiveness, efficiency,
economy
- This approach became the orthodox or classical view of how the public
service should be run.
1.7.2. The Political Approach:
- Public administrators participate in public policy making in the sense of
practical reality.
- Stress the values of representativeness, political responsiveness, and
accountability.
- Values and political approaches conflict with each other.
- Sometimes, hard to measure effectiveness
1.7.3. The Legal Approach:

Views PA as applying and enforcing the law in concrete circumstances

The movement toward the judicialization of PA
Administrative processes increasingly to resemble courtroom
procedures.
derived from two main sources
substantive rights - equal protection of the laws - maximization of
individual rights and liberty as a positive good
equity - stands for the value of fairness

2. Devolution in Pakistan:
2.1.

The Pre-Independence period:

Before the advent of the British rule in India, there was no advanced
tradition of local self-government in the modern sense. However, a
rudimentary local government system did exist in the rural areas. This
was the system of village panchayats (literally council of five) which
performed administrative, judicial and sometimes developmental
functions (Metcalfe 1919).
However, in terms of geographical
coverage and history, Panchayats never existed over the whole of the
sub-continent and not in all periods in history, although some system
of village self-government more or less existed in the various ages of
Indian history. Moreover, in terms of representation, the Panchayat was
only rarely representative of the village as a whole, often representing
the founding-families, upper castes and large farmers. It is also worth
emphasizing that Panchayats were not the only form of village
government in pre-British India.
2.2.

Local Governments under the British:

In the areas that presently comprise Pakistan, local governments were

introduced by the British not by building on the village panchayats, but
instead from scratch, following the annexation of Sindh in 1843 and of
Punjab in 1849. After the War of Independence (or Indian Mutiny) of
1857, with the governance of India transferred from the hands of the
East India Company to the Crown, attempts were made to co-opt the
native elite by establishing representative local governments. These
local governments were formed in a top-down manner in urban and
rural areas, with extremely circumscribed functions and members who
were not locally elected but nominated by the British bureaucracy.
However, despite legislation for setting up district committees in
almost every province, The Committees were nothing more than a
convenience to the District Magistrate to supply him with information

or to carry out miscellaneous duties ... Village life was hardly touched
by the new District Committees. They were formed by the District
Magistrate from among his mulaqatis and other respectable citizens.
The official influence was almost over-powering (Tinker 1968).
2.3.

Post-Independence to Ayub:

Given that the independence movement was driven by political party

mobilizations at the provincial and higher levels, post-independence,
there was understandably little emphasis on local governments which
had played little role in the independence movement given their
stronger ties to the British. Thus by 1947 functional local governments
existed only in Punjab in the form of village panchayats and municipal
councils, although with mostly non-elected members.
The decade of the 1950s was in general marked by political instability
with increasing centralization and a center increasingly dominated by
the civil and armed. Unlike the Congress Party in India, the Muslim
League in Pakistan failed to organize as a political party and to utilize
local bodies for developing its political base, thus failing to replace the
district administration as a rival source of patronage.
2.4.

The Ayub Period:

Following the imposition of the first Martial Law in 1958, national and
provincial assemblies were disbanded and the military government
immediately set about purging the political system of politicians
through the promulgation of Public Offices (Disqualification) Order in
March 1959. Owing to the lengthy procedure and limited scope of
PODO, it was followed only a few months later by EBDO, Elective
Bodies (Disqualification) Order, which was applicable to any person
who had held any public office or position including membership of any
elective body in the country.
Thus about 6,000 politicians and officials were disqualified under EBDO
in the parlance of the time. Following this dissolution of the elected
government, General Ayub established local governments in the form
of Basic Democracies (BD). BDs were used by Ayub to legitimize his
essentially unitary new Presidential Constitution (1962), which gave
effective state power to the armed forces through the office of the
President. The 1962 constitution explicitly linked the office of the
President to the newly created local bodies by declaring the 80,000

Basic Democrats as the Electoral College for the election of the

President and national and provincial assemblies.
2.5.

The Zia and Post-Zia Period:

After a nascent period under Bhutto, local governments were revived

by General Zia ul Haq. Like Ayub, Zia combined political centralization
at the federal level with decentralization from the provincial to the
local level in order to legitimize his military regime. Political
centralization was achieved during the early years (1977-85) of the
regime through the imposition of Martial Law, which held the 1973
Constitution in abeyance, and was followed in 1985 by the 8 th
Constitutional Amendment that established indirect military rule
through a quasi-Presidential form of government. Decentralization was
achieved through the promulgation of Local government ordinances
(LGOs) and local bodies were elected in all four provinces during 1979
and 1980. In essence, the army sought to use its old strategy of divide
and rule by creating a new and competing class of collaborative
local-level politicians (Jalal 1995). Like Ayub, Zia also sought to
neutralize the influence of political parties by holding local elections on
a non-party basis. Moreover, electoral competition was significantly
weakened when the army disqualified a large number of candidates
with a PPP affiliation in 1979.
2.6.

Evolution of the Local Government Structure 1985-1999:

The revival of elected provincial and national governments in 1985

reinforced the localization of politics that had begun with the 1979
local bodys election. The dominance of these revived assemblies by
local bodies politicians helped transplant the culture of local body
politics to the provincial and national levels. This tendency was
reinforced by the non-party nature of the 1985 assemblies and
governments, which personalized patronage as elected government
ministers began to use development funds to increase their individual
chances of reelection. Moreover this personalization of politics did not
reverse despite the revival of party-based Federal and Provincial
Assemblies and governments in 1988. The persistence of this tendency
is partly an outcome of weakening party organizations, which is due to
adverse de jure and de facto measures instituted by the Bhutto and Zia
regimes. As a result the allocation of party tickets and ministries is
more an outcome of individual bargaining between powerful local

brokers and party leaders rather than being based on collective

decision making within the political party organizations as borne out by
the extensive switching of candidates between political parties that
has taken place since 1985.

3. The New Devolution of Power Plan:

This devolution process substantially restructured the sub-provincial
(district and below) government structure. Whereas previous locally
elected governments did exist at this level, their powers were fairly
limited and most of the functions were carried out by provincial line
departments, a deconcentrated bureaucratic tier that did not report
directly to provincial elected representatives. Under devolution, a new
elected government was created at the district level and linked
formally to local governments at the sub-district levels (Tehsil and
union council).
The district government is headed by an elected nazim (Mayor) and
the district administration head, the District Coordination Officer (DCO)
reports directly to the elected head of the government. This is a
significant deviation from the previous system where the de facto head
of the district administration, the Deputy Commissioner (DC), reported
to the non-elected provincial secretariat. Moreover, the office of the DC
has been abolished and the new head of district administration, the
DCO, is no longer the district magistrate or the district collector.
4.

The Political Economy of Decentralization:

The central tendency revealed by our historical analysis is that local
governments have been enacted by non-representative regimes to
legitimize their control over the state. Legitimacy has been sought by
creating a localized patronage structure that produces a class of
collaborative politicians who act as a conduit between local level
constituencies and the non-representative center. This is as true of the
British period as it is of the post-independence period. The difference
between these periods lies in the nature of the non-representative
institution that established its authority over the state. In the preindependence period it was the British imperial state that promulgated
local government reforms. In the post-independence period it has been
the Pakistani military. Musharrafs local government reforms represent
a continuity of this central historical tendency. Unlike attempts at

decentralization in some other countries, which appear to have been

motivated more by changes in state ideology or multilateral pressure,
in Pakistan, the militarys need for legitimization of state control
appears to be a prime reason behind the recurring attempts at local
government reform. Multilateral pressure for decentralization in
Pakistan had existed since the mid-nineties. However, no major
attempts at decentralization were initiated by the Pakistani state until
General Musharrafs takeover in 1999.
A corollary to this central tendency is that local government
empowerment has always been combined with centralization of
political power in the hands of the non-representative center. The
centralization of political power has undermined representative
institutions not only at the level of the center but also at the level of
the provinces. Each attempt at centralization of political power by the
military during the post-independence period has initially involved the
dissolution of elected provincial and federal assemblies and has
invariably been followed by the enactment of a presidential or a quasipresidential constitution, which preserves the non-representative
institutions role at the center even after the revival of representative
governments. Centralization of political power has also involved
selective disqualification of political party representatives and at times
outright bans on all or certain political parties. As a result, these
attempts at centralization of political power have considerably
weakened the organizational structure of political parties and have
distorted electoral competition at the provincial and central levels.
5.

The role of the Bureaucracy:

The historical analysis shows that there has been a change in the
tendency of non-representative centers to use the bureaucracy to
control local governments. Bureaucratic control over local governments
was most explicit during the British and Ayub periods. The Zia regime
loosened de jure bureaucratic control over local governments although
the deputy commissioner continued to retain significant de facto
control. The Musharraf regime has furthered this trend through two
means: First, it has considerably weakened the provincial bureaucracy
by reassigning a large proportion of their functions to elected local
governments and by abolishing the office of the deputy commissioner.
Second and more importantly, are the accountability changes brought
about by the present system whereby the provincial bureaucracy at

the local level has been made accountable to the elected heads of
district and Tehsil governments.
This weakening of bureaucratic control over local governments
represents a significant deviation from the earlier tradition where
political support for the center was harnessed through an alliance
between the bureaucracy and powerful rural notables at the local level
The continuity of this alliance was dependent on the bureaucracy
delivering patronage, administrative protection and protection of
property rights in favor of the dominant elites in village society who, in
turn, delivered political support and lack of political unrest for the
center. The ability of these elites to perform these functions depended
upon their control over land and was institutionalized by the colonial
and post-colonial state by according them a mediating role between
the state and the village in revenue, civil and criminal matters. Rapid
urbanization, green revolution, industrialization and the rise of mass
electoral politics during the sixties and seventies resulted in a
breakdown of this social and political tradition.
6.

Problem of Governance in Pakistan:

The available literature on the nature of state power in Pakistan has
essentially examined how the state apparatus came to predominate
over the political system. Within the state apparatus, the bureaucracy
and the military have so far been lumped as co-sharers of the piece of
the power cake that has accrued to the state apparatus as opposed to
the political elites in the civil society. The dynamics between the
bureaucracy and the arm, and the changing internal balance of power
within the state structure itself have hitherto not been analyzed. It
would be useful to examine these dynamics, since the bureaucracy and
the military are two quite different institutions. They not only relate in
differing ways to the civil society, but in fact, it can be argued, have
moved in opposing directions in terms of the nature of internal changes
within these two institutions of the state respectively.
The ruling elite at the dawn of independence consisted of an alliance
between landlords and the nascent industrial bourgeoisie, backed by
the military and the bureaucracy. The nature of the ruling elite
conditioned the nature of the economic growth process. However, the
latter, in turn, influenced the form in which state power was exercised.
Economic growth was of a kind that brought affluence to the few at the

expense of the many. The gradual erosion of social infrastructure,

endemic poverty and the growing inequality between the regions
undermined the civil society and accelerated the trend towards
militarization.
Each regime that came into power sought to legitimize itself through
an explicit ideology: The Ayub regime propounded the ideology of
modernization and economic development. The Bhutto regime sought
legitimacy in the ideology of redeeming the poor (Food, Clothing and
Shelter for all) through socialism. It is an index of Zias fear of popular
forces, that he initially sought justification of his government precisely
in its temporary character.
Between 1977 and 1987, with the steady inflow into Pakistan of Afghan
refugees and the use of Pakistan as a conduit for aims for the Afghan
war, two trends have emerged to fuel the crisis of civil society:
1. A large proportion of weapons meant for the Afghan guerrillas have
filtered into the illegal arms market.
2. There has been a rapid growth of the heroin trade. Powerful mafia
type syndicates have emerged which operate the production, domestic
transportation and export of heroin. Many Afghan refugees who now
have a significant share of inter-city overland cargo services have also
been integrated into the drug syndicates.
In recent years the polarization of society along religious, ethnic,
communal and regional lines has been accompanied by an under
mining of social values through which diverse communities had lived
together in a pluralistic society. The social polarization is now fuelled
by violence and various forms of banditry which have reached a scale
that threaten not only the credibility of political institutions, but raise
the question of whether governance based on a centralized state
structure is feasible at all. This is a question that confronts not just
Pakistan but a number of other South Asian countries.
After four decades of unequal development and in the absence of
visible opportunities of redress within existing institutions, the deprived
sections of society responded by asserting their ethnic, linguistic and
regional identities. Through such an assertion they could use an easily
accessible emotive charge to mobilize militancy and thereby exercise
political pressure.

Faced with this crisis the ruling elites over the years have been unable
to grasp the problem as essentially arising from a failure to either
deliver the goods to the poor, or to involve them in economic and
political decision making. Rather, the elites have understood the
assertion of sub-nationalism as a law and order problem located in the
colonial discourse, and have attempted to use selective coercive force
in attempting to quell it. Understandably, this response has not only
intensified the problem but has also allowed a growing importance to
the security agencies in the structure of state power itself.
7.

Corruption and Governance in Pakistan:

Corruption defined as misuse of entrusted power for private benefit is
unfortunately endemic in Pakistan. No structure, no tier and no office
of public sector is immune from it. Its spread is enormous. It has
reached every organ of state beyond executive it has put its claws
on judiciary and legislature even. It would be no exaggeration to say
that the whole body of the state of Pakistan is suffering from this
malaise and wailing under its dead weight.
Corruption manifests itself in various forms in Pakistan, including
widespread financial and political corruption, nepotism, and misuse of
power. Both petty and grand corruptions are prevalent in the country.
Corruption clouds almost all tiers of government; it is all pervasive and
deeply entrenched. The level of corruption in the society ultimately
depends on the values and morals of that society. Over the period
acceptability of corruption has rather increased in the society and
there is little evidence that people feel guilty about their own role in
corruption. The scale of corruption is highest in development projects
and procurement (including defense and public sector corporations)
and the bank loan write offs. Whereas mega corruption is mainly in
development projects, bank loans and procurements which rock the
foundation of the economy, the common man is more interested in the
petty and middle level corruption that he encounters in the daily
dealings in the government offices.
The roots of corruption in Pakistan date back to the colonial period
when the Britishers rewarded lands and titles to those who were their
loyalists leading to nepotism and corruption. Two major crises played a
fundamental role in the genesis of corruption in this part of the world;
the spiral in the defense related purchases during and after the World

War II and allotment of evacuee property after the partition of Indian

subcontinent (UNDP, 2002:11). This was followed by industrial and
trade licensing and patronage schemes like bonus voucher and route
permits in 1950s and 1960s. The nationalization policy of the 1970s
created new opportunities for corruption and gave birth to a new breed
of corrupt government officers. The decade of 1980s witnessed the
surge of corruption in religious and business circles.
The causes of this malady are to be found in the socio-cultural and
political matrix of the Pakistani society which presently is faced with a
gradual loss of value system and even identity.
Petty corruption is mainly for getting access to public services or to
bypass or twist the laws and the rules. Middle and grand corruption
pertain to public contracting and procurement.
In a pre-dominantly capitalist economic order and the increasing
adherence to principles of free market, rise in corruption and speed
money clearly makes an economic sense. Some of the so-called
economic reasons can be enumerated as under:
1. Bribe serves as an incentive for the government servants.
2. It is a kind of price that equates supply and demand in every
field and office.
3. Paradoxically in many cases it reduces transaction cost for the
petitioners/applicants by saving their time and miscellaneous
costs on frequent visits.
4. In case of getting contracts, certain concessions or exemptions
and buying shares and parcels of privatized firms the rate of
return on every unit of bribe is phenomenal.
5. Similarly net gains through bribing the voters score off the cost
of the venture.
6. Payments for getting favorable decisions in civil suits may be only
a fraction of the value of the suit. Similarly securing ones liberty in
criminal cases involving huge sums has a lot of intrinsic value.
7. High inequality can lead to greater incentives for corruption
7.1. Efforts to Curb Corruption:
Corruption can be curbed or limited through the presence of a
monitor or a monitoring process. Although provincial Anti-

Corruption Establishment was put in place in 1960s, and a

Federal Investigation Agency was constituted to fight corruption
in public sector, it turned out that anti- corruption arm of the
police is the most corrupt. Slowly and gradually the tendency for
corruption gained momentum and got the better of
governmental efforts.
The accountability effort was phenomenal with a thumping
response from the public and a loud and clear message for the
delinquents. But half of it evaporated due to political exigencies
of election 2002 and the remaining half became thin air with the
promulgation of National Reconciliation Order (NRO) in October
2007.
NRO was the worst law ever made in human history to formalize
and legalize mega corruption. There was a significant back
sliding in the accountability effort after the announcement of this
ordinance. Accountability efforts which had started at a very
promising note and with a telling effect especially with the
establishment of NAB received set back close to the general
election 2002 when the accountability structure was used for
arm twisting of the politicians to rope them in for a new Kings
Party. NRO was the last nail in coffin.
8.

Historical
Pakistan:

Look

at

parliament

Houses

in

The Parliament of Pakistan viz the Constituent Assembly of Pakistanmet on August 10, 1947 in the old Sindh Assembly Building at Karachi.
On August 11, 1947, Quaid-i-Azam Muhammad Ali Jinnah, the founder
of Pakistan, was elected unanimously as its first President. It was in this
venue that the Objectives Resolution, which now serves as the ground
norm of Pakistan, was passed. In 1956, the first Constitution of the
Islamic Republic of Pakistan was adopted in Karachi at the same Sindh
Assembly building. Sindh Assembly building in Karachi and Provincial
Assembly chamber in Dhaka were used for National Assembly sessions.
After the promulgation of the Second Constitution of 1962, National
Assembly sessions used to be held both at Dhaka and Rawalpindi. The
Parliament was unicameral. At the first session of the Parliament at the
Ayub Hall, Rawalpindi, the Martial Law, imposed in 1958, was revoked.

From 1972 to May, 1986 onwards, the State Bank Building in Islamabad
functioned as the National Assembly of Pakistan. The Interim
Constitution of Pakistan was adopted in April 1972. The first bicameral
legislature of Pakistan was born after the adoption of Constitution of
the Islamic Republic of Pakistan in 1973. It was again here that the
Martial Law, imposed in July 1977, was revoked on December 30, 1985.
The foundation stone of the Parliament House was laid on August 14,
1974 by Prime Minister Zulfikar Ali Bhutto and after its completion in
May, 1986 the Parliament- the National Assembly and the Senate- has
acquired a permanent abode in the present Parliament House,
Islamabad on May 29, 1986.
9.

Judiciary in Pakistan:
On the August 14, 1947, the Indo-Pakistan Sub-continent was
partitioned and an Independent Dominion of Pakistan came into being.
As provided in the Indian Independence Act, 1947, the new Dominion
was to be governed as nearly as possible in accordance with the
Government of India Act, 1935; where under administration of British
India was earlier being carried out. Of course, the laws of British India
existing immediately before the date of Independence continued with
necessary adaptations and modifications as the laws of Pakistan. In
this way no vacuum was created in the rule of law. Just as there
occurred no break in the drain of legal continuity, the pattern of judicial
authority too, remained the same, although developmental activities
on a large scale were undertaken in the first decade from 1947-1957
and thereafter.

9.1.

Hierarchy of Courts in Pakistan:

Pakistan has inherited the British-Indian Judicial structure. At the apex

of the pyramid of this judicial structure is the Supreme Court, which
acts as the final guardian of the Constitution. It is also the final Court of
Appeal in matters arising out of cases decided by the High Courts, and
in this capacity, it replaces the Judicial Committee of the Privy Council,
sitting in London. Next in the gradation are the four High Courts in the
Provinces, exercising general control over the administration of justice
in their respective territorial limits. Under the High Courts are the
District and Sessions Judges and Additional District and Sessions
Judges with jurisdiction in both civil and criminal matters. Below the

District and Sessions Judges, there are on the civil side, Civil Judges
and different grades. On the criminal side, there are District
Magistrates, Additional District Magistrates and other Magistrates
exercising various powers. In addition, there are several Special Judges
for trying specific types of cases and, likewise, there are Special Courts
and Tribunals with jurisdiction conferred on them in specified fields
only. The hierarchy of the Courts as explained above may be illustrated
by means of a diagram, as follows:

10.

Ombudsman:

Ombudsman is a Scandinavian institution, and Sweden was the first

country to adopt it in its present form in 1809. Finland adopted the
institution in 1919; Denmark had recourse to it in 1953 and Norway in
1963. New Zealand, a common law country with parliamentary form of
government, voted for it in 1962, and England has followed suit in
1966. The institution is known by different names in different countries
where it functions. Ombudsman is the Swedish term, which means
"representative, agent, attorney, solicitor, deputy, proxy, delegate",
and the official designation given to the institution varies from country
to country. But Ombudsman, being the most popular term in vogue, is
used for uniformity.
11.

Budget Process in Pakistan:

The Budget is an important policy document through which the

Government establishes its economic and social priorities and sets the
direction of the economy. It reflects the fundamental values underlying
the Government's economic policies and objectives. How government
policies affect the livelihood of a country's people depends on tax
levels, spending priorities, and the impact of policies on investment,
employment, and consequently national income. The Parliament is the
most appropriate place to examine the Government's budget proposals
and to ensure that these best match the nation's needs and people's
aspirations. It is therefore imperative for parliamentarians to play a
proactive role in the budget process. The preparation of the budget
draft is the task of the Government (i.e. the executive). However,
budgets are best formulated when approved through a consultative
process with parliamentarians (i.e. the legislature) and members of
civil society.
The fiscal year in Pakistan starts from July 1st. The Budget proposals,
made by the Finance Ministry and considered and approved by the
Cabinet, are presented in the Parliament. There is no formal provision
in the rules of procedure for a pre-budget discussion or consultation on
the part of the Ministry to engage the public or the Parliament on fiscal
matters and issues. When approved by the Cabinet, the Finance
Minister, on behalf of the Government, delivers his Budget speech in
the National Assembly. No other business is allowed in the House on
that day. The stages of the discussion of the Budget are as follows:
1) General Discussion on the Budget
2) Discussion on Appropriations
3) Discussion and voting on Demands for Grants
According to the Rules of Procedure of the National Assembly, the
Speaker allots days for the different stages of the Budget. It requires
two days to lapse between the days the Budget is presented and the
first day of the General Discussion. The Rules prescribe that not less
than four days should be allotted for the General Discussion.
Any member can move a cut-motion to reduce the amount of demand.
Each Demand for Grant is discussed and voted upon. Consequently, a
Vote of Account is taken and the Finance Bill is passed. The Budget is
submitted to the Senate for recommendations. The Senate can make

recommendations on the Budget to the National Assembly within

seven days. These recommendations are not binding on the National
Assembly.
Some of the areas in which the Parliamentary Budget Process in
Pakistan needs urgent improvement are as follows:
a. The period allowed between the presentation of Budget and its
passage is too short for any meaningful debate or input by
parliamentarians.
b. Individual parliamentarians and the Parliament as an institution,
lack the infrastructure to give research and analysis support for
an effective Budget debate in the Parliament.
c. The Budget relating to Defense services lacks details. Even the
distribution among the three services such as Army, Air Force
and Navy is not provided.
d. The Standing Committees both of National Assembly and Senate,
which are mostly formed in line with the Ministries and Divisions,
have not been assigned any role in the Budget process. Even the
Standing Committees on Finance do not play any role in the
Budget process.
e.

12.

National Finance Commission (NFC):

NFC Award is a constitutional obligation. It is clearly indicated in the

Article 160 of the Constitution of Islamic Republic of Pakistan, 1973
that it has been made mandatory for the government to compose NFC
Award at an interval extending not more than 5 years for the amicable
resource distribution among the federation and its respective units.
Provinces then also re-distribute revenues among lower tiers of the
government, through a revenue-sharing formula through PFC Awards.
And this way, the state functions. The central government collected
most of the revenues and then redistributed vertically between the
federal and the provincial governments, and horizontally among the
provinces.
Resource sharing between the federation and the federating units was
started since the creation of Pakistan. Prior to independence, Niemeyer

Award (under the 1935 Act) was adopted to allocate resources among
federal and provincial governments in the British India. After the
formation of Pakistan, same award was followed although with some
adjustment in railway budget, sharing of income and sales tax till
March 30, 1952 [Pakistan (1991)]. All provinces of West Pakistan were
declared one unit during 1955; these were considered as separate
identities as of East Pakistan. Therefore, after the one unit there were
only two units namely East and West Pakistan. Two awards were
announced during that period for year 1961 and 1964. Resources were
distributed only amongst these two units.
The first award which was presented by Mr ZA Bhutto government in
1974, under this award fewer taxes were included in the divisible pool
which consisted of income tax, sales tax and export duty while the
criterion used for resource redistribution was recommended to be
population. Resources were vertically distributed at a fixed ratio of
20:80 among federal and provincial governments. Punjabs share
increased from 56.50 percent (1970 Award) to 60.25 percent while the
three other provinces suffered, with Sindh suffering the most because
population being the sole criterion for distribution.
After almost 16 years of break, credit goes to the then government of
Prime Minister Nawaz Sharif for the fourth NFC Award, in declaring a
consensus NFC Award with some positive recommendations in April
1991. The 4th NFC Award significantly increased the volume of
provincial shares in the revenue collected by federal government by
around 18 percent as compared to 1974 Award. The 4th NFC Award
was a significant move forward towards fiscal decentralization by
extending more financial autonomy to the provinces. Besides these in
this award for the first time the provinces right on net hydel profit,
development surcharge on gas and excise duty on crude oil was
admitted and amounts were relocated in the shape of straight transfers
to the provinces.
One way of distributing the resources is formula-based which includes:
(i) NFC, (ii) PFC, (iii) Federal to local, and (iv) Local to local. The other
method is random transactions like development, special grants,
executive, discretionary and parliamentarians funds, etc. There are
already six NFC awards were implemented. The 7th NFC award of
Pakistan was agreed during the end of December 2009. It is imperative
to know the major features, implications and impacts of the 7th NFC

award under the federalism. Therefore, the paper will review the
overtime NFC awards in the country with special reference to the 7th
one. The paper consists of four parts including this introduction where
federalism and brief introduction of the NFC award was discussed. The
second part will discussed the salient features of the 7th NFC award
and the weightings or formula used in the present NFC award. The
steps taken for provincial equalization in this award are also discussed.
Although, the focus of the paper is NFC award but just to know how
provinces distributed their resources, the Provincial Finance
Commission (NFC) Awards formula and 5 Indian Finance Commission
are also discussed for comparison and better understanding of awards
in this section. The next section showed about major issues and
implications of 7th NFC award and 18th amendment of the constitution
of Pakistan. Before, describing the last and the final section which
highlights the conclusion and recommendations, for practices to
struggle some positive lessons are also described in the fourth section.
12.1.

The 7th NFC Award and its Salient Features:

The current 7th NFC Award has arrived after undergone different make
over. Over time fiscal federalism has remained a rough road to ride in
Pakistan. It is worth wise to note that out of a total of seven
Commissions including the recent 7th Award, constituted after the
1973 Constitution, only four have come up with additional parameters
to share out the resources with the federating units. The resource
transfer paradigm has always been the most important fillet of
controversy among the stakeholders. Financial resources are the major
ingredient for development. Judicial and equitable distribution of
resources is the fundamental to make up any beneath developed or
under privileged area and to win confidence of federating units.
A less systematic approach has been adopted to decentralize the
financial matters in Pakistan since the 6th NFC award. Over time, the
divisible pool has been expanded due to heavy reliance on indirect
taxes as well as improvement in the collection. Population is the sole
distribution criteria, adopted in all NFC awards from the divisible pool.
This has raised friction among the provinces, necessitating inclusion of
other potential variables evolved from international best practices. In
addition to that, absence of technical experts and permanency of the
NFC is another impediment. The NFC is supposed to provide the
framework for amicable distribution of resources between the federal

and the provincial governments for the joint goal of development and
prosperity.
Interestingly, if we look at the historic NFC award in the country, one
do start wondering as to why Population has only been kept as the
criteria for distribution of NFC award, while it was not consider among
the provinces i.e. East Pakistan and West Pakistan. East Pakistan before
1971 was more populous then West Pakistan but it was still
discriminated by the West Pakistan. At that time, the distribution of
resources based on population was not at all raised by anybody since it
would have resulted in larger share of East Pakistan from the Federal
Divisible Pool or in Federal Budget for East and West Pakistan. There
are many reasons that can be attributed to the 1971 incident of
Bangladesh creation but one of the major is the Distribution of
Resources. This infuriated the Bangladeshi people and contributed
towards their final revolt against the Government owned by West
Pakistan.
The demographic changes take place according to the economic
situation. People from around the world started moving towards Middle
East and Malaysia when it was economically developed. Even within a
country from underdeveloped to developed areas. Population migration
took place in China from less developed Western China towards more
Developed Eastern China. Therefore, the distribution of population can
never ever be the sole criteria of distribution of resources from the
central pool. However, in Pakistan, no government was able to change
it. That brings us towards the controversies facing the NFC Award and
again threatening the stake of federalism in Pakistan.
The NFC is believed to offer the structure for amicable allocation of
resources among all stakeholders i.e. the federal and the provincial
governments for the joint objective of development and prosperity.
There is a need for addition of other factors like infrastructure, poverty,
backwardness, revenue generation, environment, etc. to be taken into
description for equitable and judicial distribution of resource. Various
criteria are used for resource distribution from central to provincial
governments in India. Therefore, it is imperative to devise an NFC
award formula keeping into different aspects of development. The
matter of resource sharing among federal and provincial governments
never proved to be easy and is a much difficult issue. Historically, the
problem of resource distribution is never taken seriously and it is also

very difficult because consensus of all stakeholders is mandatory for

developing any new NFC awarding formula. That is why new award
cannot be announced because the four provinces have failed to
develop consent.
In the 7th NFC award reconciliation, Sindh, Balochistan and Khyber
Pakhtunkhwa (KKP) want multiple criteria, whereas, Punjab interest
was in the sole population criteria. Sindh also want substantial share
for revenue (sale tax, services collection). Most tax receipts are
collected from Punjab and Sindh. Almost all custom duties are collected
at the Port of Karachi. KPK also wants poverty, while Balochistan being
the largest and scattered populous province emphases the inverse
population density in the award.
In order to foster national unity and stabilise the democratic system of
government in Pakistan, a great and plausible decision was agreed
upon on 30th December 2009 at Gawadar, Balochistan by the
representatives of all provinces duly signed by Syed Yousal Raza
Gillani, the Prime Minister in regard to the 7th NFC award after 19
years of controversial. The NFC in a record period of four months
(August 2009 to December 2009) amicably solved long standing issues
and brought a mutually agreed award. No vote of dissident came at a
time of approval of the 7th award. Credit goes to democracy; new NFC
Award was a reflection of sacrifices and accommodation by big and
small provinces of the country. The new Award would come into effect
from the next financial year (2010-11), over the distribution of financial
resources, among the provinces of Pakistan, by the federal government
on annual basis.
In the 7th NFC award the demands of Balochistan, Sindh and KPK were
accepted. It is based on a multifactor formula beside population,
poverty, underdevelopment, and inverse population density criteria
were also considered. Federation sacrificed more than 10 percent of its
share to provinces. From Federation about Rs 225 billion more were
granted to provinces during 2010-11 budgets [Pakistan (2010)]. The
7th NFC award has introduced a significant new measurement for
resource sharing to the fulfillment of all units of a federation. All
stakeholders have also agreed to cut collection charges to just 1
percent from the existing level of 5 percent which will boost the real
transfers to the provinces from the divisible pool. The provincial share
of the divisible pool would increase from 47.5 percent to 56 percent in

the first year of NFC award FY 2010-10 and 57.5 percent in the
remaining years of the Award (Table 1). It is indeed the first NFC award
with a new national spirit to accommodate the demands of smaller
units of federation. Province wise distribution of population and inverse
population density is estimated on the base of data obtained Pakistan
Statistical Year Book 2008 published by Federal Bureau of Statistics,
Islamabad [Pakistan (2009)].
In the new NFC award formula, the Federation and the provinces of
Punjab, Sindh and Khyber Pakhtunkhwa have accepted the special
needs of Balochistan and agreed to provide Balochistan Rs 83 billion
(9.09 percent) of the provincial pool in the first year of the Award. The
7th NFC Award has given 82 percent weightage to population, poverty
10.3 percent, revenue collection 5 percent (2.5 percent revenue
generation, 2.5 percent revenue collection); while the area will get 2.7
percent share. It is a good omen that after considering special needs of
Balochistan and application of the multiple indicators, Punjab province
would get 51.74 percent, Sindh 24.55 percent, Khyber Pakhtunkhwa
14.62 percent and Balochistan 9.09 percent. In the new Award, Punjab
has given up 1.27 percent, Sindh 0.39 percent and Khyber
Pakhtunkhwa 0.26 percent; while the province of Balochistan has
gained 1.82 percent. Federation sacrificed more than 10 percent of its
share to provinces.
It is interested to know the formula adopted for PFC awards. There is
no similar formula adopted by provinces. The only weighting indicator
which is common among all provinces is population but its weight is
different. Punjab grants maximum weight of 75 percent to population
in its award while all other provinces give 50 percent to it.
Backwardness and poverty is not considered in Balochistan, whereas, it
is given 25, 17.5, and 10 percent weight by KPK, Sindh, and Punjab
provinces, respectively. Balochistan consider only population and area
and grant equal share in it award. Tax efforts by district are granted 7.5
and 5 percent share by Sindh and Punjab provinces. In order to develop
under developed districts KPK and Punjab grant 25 and 5 percent
share, respectively.
The criteria used for financial distribution varies from region to region
and country to country, it is not fixed and also varies over time.
Population remains as one of the major indicator for distribution.
Significant weight was given to income distribution in India but

population weight is also given in it. In 10th Indian Financial award (IFA)
fiscal disciple was not given any weight while it was equally considered
in their 11th and 12th awards. Similarly, index of infrastructure was
considered in 12th IFC award. Therefore, there is no fix formula or
indicators, the most importance thing is consensus among the states
or all stake holders and adopting the fundamental principle of equity
and equality.

Note: The above material has been taken from many online sources. Some
of them include;
1. Fiscal Federalism in Pakistan: The 7th National Finance Commission
Award and Its Implications, PIDE Working Papers 2011: 73 by Usman
Mustafa
2.

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