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Fiscal Federalism in Pakistan: The 7th National Finance Commission Awardand Its Implications

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  • Usman Mustafa

    (Pakistan Institute of Development Economics, Islamabad.)

Abstract

Pakistan is a federal country. Distribution of resources has a profound impact on income, development, backwardness, and poverty. The paper briefly discusses the federation, its needs and importance in general. The National Finance Commission (NFC) award is considered as a step towards federalism. In the historical perspective of the NFC awards, the salient features of the recent 7th NFC award, the weightings, and the criteria adopted in the n ational as well as provincial Finance Commission award s are described. Major issues faced by the Provincial as well as Federal governments regarding the award and its implementation are discussed in detail. Good practice lessons to be derived from it are also pointed out. The conclusion includes recommendations for a strong federation and effective use of the NFC award.

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File URL: http://www.pide.org.pk/pdf/Working%20Paper/WorkingPaper-73.pdf
File Function: First Version, 2011
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Bibliographic Info

Paper provided by Pakistan Institute of Development Economics in its series PIDE-Working Papers with number 2011:73.

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Length: 16 pages
Date of creation: 2011
Date of revision:
Handle: RePEc:pid:wpaper:2011:73

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Keywords: Fiscal Federalism; NFC Award; Impact and Implications; Political Economy; Rule and Discretion; Pakistan;

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  1. Roy Bahl, 1999. "Implementation Rules For Fiscal Decentralization," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper9803, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
  2. Tao Zhang & Heng-fu Zou, 2001. "Fiscal decentralization, public spending, and economic growth in China," CEMA Working Papers 58, China Economics and Management Academy, Central University of Finance and Economics.
  3. Usman Mustafa, 2007. "Environmental Fiscal Reforms through Decentralisation for Sustainable Development and Poverty Eradication," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 46(4), pages 1087-1103.
  4. Olson, Mancur, Jr, 1969. "The Principle of "Fiscal Equivalence": The Division of Responsibilities among Different Levels of Government," American Economic Review, American Economic Association, vol. 59(2), pages 479-87, May.
  5. Iftikhar Ahmed & Usman Mustafa & Mahmood Khalid, 2007. "National Finance Commission Awards in Pakistan : A Historical Perspective," Finance Working Papers 22181, East Asian Bureau of Economic Research.
  6. Boadway,Robin & Shah,Anwar, 2009. "Fiscal Federalism," Cambridge Books, Cambridge University Press, number 9780521518215.
  7. Anwar Shah, 2006. "Fiscal decentralization and macroeconomic management," International Tax and Public Finance, Springer, vol. 13(4), pages 437-462, August.
  8. Akramov, Kamiljon T. & Qureshi, Sarfraz & Birner, Regina & Khan, Bilal Hasan, 2008. "Decentralization, local government elections and voter turnout in Pakistan:," IFPRI discussion papers 754, International Food Policy Research Institute (IFPRI).
  9. Jorge Martinez-Vazquez & Robert McNab, 2001. "Fiscal Decentralization and Economic Growth," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0101, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
  10. Thornton, John, 2007. "Fiscal decentralization and economic growth reconsidered," Journal of Urban Economics, Elsevier, vol. 61(1), pages 64-70, January.
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