Professor Ahsan Iqbal's recent article, "Competitive Federalism or Centralised Provincial Monopolies?", has sparked a renewed debate on federalism and governance in Pakistan. He rightly identifies the 18th Constitutional Amendment as one of the most consequential democratic reforms in Pakistan's constitutional history, devolving seventeen major subjects from the federation to the provinces to correct decades of over-centralisation and strengthen the federation through the principle of subsidiarity.
Fiscal Federalism Predates the 18th Amendment
The first point often overlooked is that fiscal federalism in Pakistan did not begin with the 18th Amendment. Article 160 of the Constitution, governing the National Finance Commission (NFC), was incorporated in the original Constitution of 1973 through national consensus. The landmark 7th NFC Award was also agreed before the passage of the 18th Amendment in 2010. Thus, the constitutional principle of provincial empowerment predates the amendment itself.
Equally important is that provinces were never merely passive administrative units waiting to receive powers from Islamabad. Since Pakistan's inception, sectors such as education, health, agriculture, irrigation, roads, local infrastructure, and numerous public services have largely been administered by provincial governments. The 18th Amendment primarily removed overlaps created by the Concurrent Legislative List and clarified provincial authority rather than creating an entirely new governance structure.
Provincial Responsibilities and Fiscal Constraints
Khyber-Pakhtunkhwa offers a useful example. The province administers more than twenty-seven thousand public schools, hundreds of colleges, dozens of public universities, an extensive healthcare network, thousands of kilometres of roads, irrigation infrastructure, industrial development institutions, and energy projects. Similar responsibilities are borne by other provinces. These realities demonstrate that provinces are the principal providers of public services to citizens.
Despite the 18th Amendment, major revenue-generating instruments remain concentrated at the federal level. Customs duties, corporate taxation, and several other significant revenue sources continue to be collected and controlled by the federation. Provinces remain heavily dependent on NFC transfers to finance education, healthcare, infrastructure, policing, and development programmes. Khyber-Pakhtunkhwa faces additional burdens from terrorism, climate-related disasters, and the integration of merged districts, placing extraordinary pressure on provincial finances.
Federal Centralisation and Inconsistency
If the failure to devolve authority to local governments is the principal measure of governance, then the same standard should logically apply to the federal government. Islamabad, the federal capital, presents a revealing example. Despite being directly administered by the federation, local government institutions remain weak and largely peripheral. Most critical functions, including law and order, development planning, land administration, municipal regulation, and public service delivery, continue to be controlled by federal ministries and attached departments, particularly the Ministry of Interior.
If provinces are criticised for centralising authority, intellectual consistency requires that the federation also be subjected to the same scrutiny. This observation extends to federally administered institutions. Pakistan Railways has struggled for decades with operational inefficiencies, ageing infrastructure, and recurring financial difficulties. PIA remained under federal control throughout its existence, yet became synonymous with chronic losses and managerial challenges. Pakistan Steel Mills, despite repeated federal interventions, ultimately suffered operational collapse. The Federal Board of Revenue (FBR) provides perhaps the most compelling example: year after year, revenue targets are revised, missed, or achieved through extraordinary measures rather than sustainable broadening of the tax base.
Governance Quality Over Structure
These examples do not establish that federal control is inherently ineffective, just as provincial control is not inherently inefficient. They demonstrate that governance failures cannot be simplistically attributed to the location of constitutional authority. Administrative competence, professional leadership, institutional continuity, accountability, merit-based appointments, and sound policy implementation remain the decisive variables.
Notable innovations in governance have emerged from provincial initiatives, from emergency response systems and health-sector reforms to digitisation projects and service-delivery innovations. Provinces have often acted as laboratories for experimentation and reform, showing that innovation is not the monopoly of any particular tier of government. It flourishes where institutions are empowered, adequately resourced, and professionally managed.
The real issue is not provincial monopolies versus federal authority, nor centralisation versus decentralisation. The real issue is the quality of governance. Pakistan's experience demonstrates that constitutional centralisation has not automatically produced efficiency at the federal level, just as devolution alone cannot guarantee success at the provincial level. Good governance depends not on where authority resides, but on how effectively that authority is exercised. Until that reality is recognised, the debate will remain focused on structures rather than outcomes and on symptoms rather than causes.
