Advanced Search
MyIDEAS: Login to save this article or follow this journal

Financial Implications of the 7th NFC Award and the Impact on Social Services


Author Info

  • Muhammad Sabir

    (Social Policy and Development Centre (SPDC), Karachi)


One of the major developments in 2009-10 was a successfully concluded 7th NFC Award [NFC Award (2009)], which has brought about some profound changes in the resource distribution formula. Since 1973, it is the first time when the distribution of resources among provinces is based not only on the population but also on other criteria such as backwardness, inverse population density, and revenue collection/generation. This Award has also helped resolve other issues such as GDS and Hydroelectricity Profit. This paper analyses the financial implications of the NFC Award 2009 and its impact on three major social services, namely, education, health, and water supply and sanitation. The result shows that as compared to the NFC Award 1997 and Presidential Distribution Order: Distribution of Revenues and Grants-in-Aid Order 2006, the changes made in vertical distribution of resources under the NFC Award 2009 favour the provincial governments (combined) rather than the federal government. An interesting finding is that while there is a decline in vertical share of the provinces under the NFC Award 2009 as compared to the NFC Award 1991, this decline is not evenly distributed among the provinces. In relative terms, the NFC Award 2009 benefits the two relatively more backward provinces, Khyber Pakhtunkhwa and Balochistan, as compared to Sindh and Punjab. Moreover, the projected values of social sector expenditures indicate that the NFC Award 2009 has a positive impact on social sector spending. Given that Pakistan has a comparatively low spending on social services, this award is a positive move

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL:
Download Restriction: no

Bibliographic Info

Article provided by Pakistan Institute of Development Economics in its journal The Pakistan Development Review.

Volume (Year): 49 (2010)
Issue (Month): 4 ()
Pages: 387–403

as in new window
Handle: RePEc:pid:journl:v:49:y:2010:i:4:p:387-403

Contact details of provider:
Postal: P.O.Box 1091, Islamabad-44000
Phone: (92)(51)9248051
Fax: (92)(51)9248065
Web page:
More information through EDIRC

Related research

Keywords: Intergovernmental Fiscal Relation; Provincial Expenditure on Social Services;

Find related papers by JEL classification:


References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Slack, N Enid, 1980. "Local Fiscal Response to Intergovernmental Transfers," The Review of Economics and Statistics, MIT Press, vol. 62(3), pages 364-70, August.
  2. Quigley, John M. & Rubinfeld, Daniel L., 1996. "Federalism and Reductions in the Federal Budget," Berkeley Program on Housing and Urban Policy, Working Paper Series qt28h7485r, Berkeley Program on Housing and Urban Policy.
  3. Yingyi Qian & Barry R. Weingast, 1997. "Federalism as a Commitment to Reserving Market Incentives," Journal of Economic Perspectives, American Economic Association, vol. 11(4), pages 83-92, Fall.
  4. Wallace E. Oates, 1999. "An Essay on Fiscal Federalism," Journal of Economic Literature, American Economic Association, vol. 37(3), pages 1120-1149, September.
  5. Richard A. Musgrave, 1997. "Devolution, Grants, and Fiscal Competition," Journal of Economic Perspectives, American Economic Association, vol. 11(4), pages 65-72, Fall.
  6. Muhammad Sabir, 2001. "Dynamic Consequences of the 1997 NFC Award: Provincial Social Sector Expenditures," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 40(4), pages 967-984.
Full references (including those not matched with items on IDEAS)



This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.


Access and download statistics


When requesting a correction, please mention this item's handle: RePEc:pid:journl:v:49:y:2010:i:4:p:387-403. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Khurram Iqbal).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.