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

Author

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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.

Suggested Citation

  • Usman Mustafa, 2011. "Fiscal Federalism in Pakistan: The 7th National Finance Commission Awardand Its Implications," PIDE-Working Papers 2011:73, Pakistan Institute of Development Economics.
  • Handle: RePEc:pid:wpaper:2011:73
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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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    References listed on IDEAS

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    1. Anwar Shah, 2006. "Fiscal decentralization and macroeconomic management," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 13(4), pages 437-462, August.
    2. 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 479-487, May.
    3. 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.
    4. Martinez-Vazquez, Jorge & McNab, Robert M., 2003. "Fiscal Decentralization and Economic Growth," World Development, Elsevier, vol. 31(9), pages 1597-1616, September.
    5. Zhang, Tao & Zou, Heng-fu, 1998. "Fiscal decentralization, public spending, and economic growth in China," Journal of Public Economics, Elsevier, vol. 67(2), pages 221-240, February.
    6. 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.
    7. Roy Bahl, 1999. "Implementation Rules For Fiscal Decentralization," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper9901, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    8. Thornton, John, 2007. "Fiscal decentralization and economic growth reconsidered," Journal of Urban Economics, Elsevier, vol. 61(1), pages 64-70, January.
    9. 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).
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    Cited by:

    1. Brosio, Giorgio, 2014. "Decentralization and Public Service Delivery in Asia," ADB Economics Working Paper Series 389, Asian Development Bank.
    2. repec:pid:journl:v:55:y:2016:i:4:p:743-760 is not listed on IDEAS

    More about this item

    Keywords

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

    JEL classification:

    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

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