World Economic Forum presents case for ‘administrative redesign’ in Pakistan

As Pakistan’s population nears an estimated 265 million by 2030, the World Economic Forum highlights the need for a "administrative redesign" to decentralize power and enhance governance. The WEF's Centre for Regions, Trade and Geopolitics argues that creating additional administrative units can improve decision-making, resource allocation, and accountability to citizens.

However, the centre acknowledges that there is no one-size-fits-all solution, as the ideal number of administrative divisions depends on various factors like population density and geographical coherence.

The centre suggests several scenarios, ranging from 16 to 25 units, depending on how population balance and geographical considerations are weighted. Each scenario presents trade-offs, with fewer units potentially simplifying administration, while more units could bring services closer to the people while requiring stronger administrative capacity.

Evidence from other countries suggests that administrative reform alone is insufficient for improved governance, and must be accompanied by capable institutions, transparent fiscal transfers, and incentives for local revenue mobilization.

Pakistan's provinces currently shoulder service-delivery responsibilities, yet their own-source revenue remains limited, amounting to only Rs983 billion in 2024-25, or less than 0.9% of GDP. Agriculture, which accounts for 24% of value added in Pakistan, is poorly taxed, with an effective tax rate of just 0.3%. Weak local revenue systems contribute to a disconnect between citizens' contributions and the services they receive, undermining accountability.

Despite taking steps towards decentralization through the 18th Constitutional Amendment and the seventh National Finance Commission award, Pakistan faces disparities in service delivery and educational outcomes across its vast and diverse regions. For instance, Lahore's population exceeds 13 million, while Harnai in Balochistan has just 128,000 inhabitants.

Education performance is severely lacking across most districts, with 28% of children aged 5-16 out of school nationally, with rates ranging from 21% in Punjab to 45% in Balochistan.

The WEF argues that administrative redesign is essential for resilience in Pakistan, given challenges like frequent floods, water stress, rapid urbanization, and youth employment pressures. Proximity is crucial for effective governance, as it strengthens the link between citizens and the services they receive. However, the centre warns against pursuing administrative redesign solely to create more units, as this can result in fragmented and ineffective governance if the underlying institutions lack capacity. The goal should be to align the scale of governance with the realities of the population it serves.