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

As Pakistan's population expands and could reach 265 million by 2030, the World Economic Forum (WEF) highlights the importance of redesigning the country's administrative geography. This redesign would promote decentralisation and enhance governance. The WEF's Centre for Regions, Trade and Geopolitics posits that instituional geography must adapt when the scale of governance no longer aligns with that of society.

There's no definitive answer on the ideal number of administrative units; however, when populations grow faster than institutions, governments must be ready to modify them to bring decisions, resources, and accountability closer to the affected citizens. The WEF suggests that provinces could be divided into four units, resulting in 16 first-tier governments and bringing the average population per unit down from 60 million to approximately 15 million.

In addition to capable institutions and transparent fiscal transfers, the reform's success hinges on having strong provincial capacity to enforce rules. The WEF stresses that the choice among different governance scenarios should not be framed as a competition for the "correct" map, but as an exploration of various options. Models could create between 23 and 25 units based on population balance or geographical coherence, or even exceed 30 units with populations closer to those of other large federations.

Each scenario presents trade-offs, such as easier legislation and finance for fewer, larger units, but higher transition costs and the need for stronger administrative capacity with more units. Pakistan's provinces are responsible for major service delivery, yet their own-source revenue remains limited. Provinces generated just Rs983 billion in 2024-25, representing less than 0.9% of GDP.

Agricultural income tax revenues have remained insufficient despite rate increases, and the effective tax rate in agriculture is a mere 0.3%. Weak local revenue systems also hinder accountability, making it difficult for citizens to see the connection between their taxes and the services they receive. While some reforms aim to address these weaknesses, success depends on improved data-sharing with the Federal Board of Revenue and enhanced provincial capacity.

The WEF cautions against pursuing administrative redesign merely to increase the number of units, as too many weak local bodies can lead to fragmentation without effectiveness. Ultimately, the goal is to align scale, authority, resources, and accountability.