24 research outputs found
Devolution and Fiscal Decentralisation
Fiscal decentralisation represents the transfer of resources from higher to lower levels of government usually accompanied by an enhancement in responsibilities and functions of sub- national governments and greater autonomy in their budget making and financial decisions. The rising demand generally for decentralisation in developing countries in recent years is a consequence of the broader processes of globalisation, liberalisation and deregulation. Political imperatives for decentralisation have been created by the urge for more effective democratisation and the need to bring governments closer to the people for greater accountability and better articulation of their needs and preferences. In a number of countries, including Pakistan, the failure of central or state/provincial governments to adequately capture local preferences and provide basic services have strengthened the case for use of local governments as delivery agents, such that the production and distribution of services is carried down to the lowest unit of government capable of capturing the associated costs and benefits.
Pakistan’s Ranking in Social Development: Have We Always Been Backward?
Consensus is emerging between development thinkers and practitioners that social progress is a necessary pre-condition for sustained economic growth. Social development leads to higher levels of literacy, better health standards and overall improvement in the society’s living conditions. In fact, empirical evidence suggests that there is a two-way relationship between economic growth and social development [Ghaus-Pasha et al. (1998)]. Economic growth leads to higher revenues for government and higher per capita income, encouraging both public and private spendings on human development. Improvements in social indicators feedback as higher economic growth through enhanced productivity for labour and capital. In other words, well-developed human capital makes a significant contribution to economic growth which, in turn, offers improved welfare and better living conditions. However, if there is a breakdown in this chain and economic development is not translated into social development, then the pace of economic development eventually suffers. Pakistan is an example of a country where this chain has broken. Despite moderate economic growth of about 5 percent during the last decade or so, the state of social indicators leaves a lot to be desired. Currently, the female literacy rate is 33 percent, being somewhat higher for males at 56 percent; primary school enrolment for females is 55 percent, for males 78 percent; and infant mortality rate is 105 out of 1000. Today, Pakistan is ranked 138 in the human development index by the UNDP (1999) among 174 countries. The purpose of this paper is to see the state of social development in Pakistan in the international context.
Hidden Subsidies
Many governments use price subsidisation (total costs less total revenues from user charges) to meet social protection objectives in lieu of, or in addition to, direct income transfers. Such subsidies may be perceived as influencing behaviour to further other socially desirable policies. For example, the price response induced by lowering the price of schooling will both lower the cost of living for the beneficiaries and also increase the investment in education more than a similar income transfer would achieve. The incidences of benefits from a general price subsidy are proportional to purchases and can be deduced from the pattern of expenditures. Some goods are inappropriate vehicles for redistribution since subsidies on them will not only accrue mainly to the rich they will actually increase inequality in welfare. It is therefore important to ensure that commodities chosen for price subsidisation are largely consumed by the lower income groups. Also, detailed data on such commodities should be made public to make the extent of subsidy easily tractable. In the case of Pakistan, the problem of lack of transparency of federal and provincial budgets is vividly demonstrated by the inability of such budgets to readily highlight the subsidy on the various economic and social services, which are essentially in the nature of ‘private’ goods, provided by such governments. This is not only a reflection of the problem of the nature of budgeting practices whereby, first, revenues and expenditures on different heads are shown separately and no account is made either of depreciation of assets or the costs of capital used to finance the acquisition of assets which yield a stream of services. Second, to the extent that the subsidies largely benefit the upper income groups, political compulsions dictate that such subsidies largely remain hidden.
Devolution and Fiscal Decentralisation
Fiscal decentralisation represents the transfer of resources
from higher to lower levels of government usually accompanied by an
enhancement in responsibilities and functions of sub- national
governments and greater autonomy in their budget making and financial
decisions. The rising demand generally for decentralisation in
developing countries in recent years is a consequence of the broader
processes of globalisation, liberalisation and deregulation. Political
imperatives for decentralisation have been created by the urge for more
effective democratisation and the need to bring governments closer to
the people for greater accountability and better articulation of their
needs and preferences. In a number of countries, including Pakistan, the
failure of central or state/provincial governments to adequately capture
local preferences and provide basic services have strengthened the case
for use of local governments as delivery agents, such that the
production and distribution of services is carried down to the lowest
unit of government capable of capturing the associated costs and
benefits
Non-profit Sector in Pakistan: Government Policy and Future Issues
The non-profit sector remains relatively small and underdeveloped in Pakistan. During the decade of the 1990s, it has demonstrated some nascent growth resulting from a number of favourable factors like the return to democracy, the growing push towards deregulation and privatisation, the process of globalisation and the emergence of international coalitions of civil society and the deterioration in the financial position of governments which has limited the public provision of social services. The objective of this paper is to examine the role played by government policy in fostering this process of growth of the non-profit sector of Pakistan and to review the key issues faced by the sector at this time. Of particular concern are, first, the overall posture of the government towards the non-profit sector, the types of policies in place, and the underlying philosophy or principles that guide policy-making. Second, the forms of support to the non-profit sector by different levels of government. Third, the posture of international organisations and supranational governments towards local non-profit organisations and, forth, the major issues facing the non-profit sector at the present time. The objective of this paper is to analyse government policy towards the nonprofit sector in Pakistan over the last two decades and review some major issues facing the sector at the present time. It is important to note that analysis presented here does not cover the period of current government.
Pakistan’s Ranking in Social Development: Have We Always Been Backward?
Consensus is emerging between development thinkers and
practitioners that social progress is a necessary pre-condition for
sustained economic growth. Social development leads to higher levels of
literacy, better health standards and overall improvement in the
society’s living conditions. In fact, empirical evidence suggests that
there is a two-way relationship between economic growth and social
development [Ghaus-Pasha et al. (1998)]. Economic growth leads to higher
revenues for government and higher per capita income, encouraging both
public and private spendings on human development. Improvements in
social indicators feedback as higher economic growth through enhanced
productivity for labour and capital. In other words, well-developed
human capital makes a significant contribution to economic growth which,
in turn, offers improved welfare and better living
conditions
Hidden Subsidies
Many governments use price subsidisation (total costs less
total revenues from user charges) to meet social protection objectives
in lieu of, or in addition to, direct income transfers. Such subsidies
may be perceived as influencing behaviour to further other socially
desirable policies. For example, the price response induced by lowering
the price of schooling will both lower the cost of living for the
beneficiaries and also increase the investment in education more than a
similar income transfer would achieve. The incidences of benefits from a
general price subsidy are proportional to purchases and can be deduced
from the pattern of expenditures. Some goods are inappropriate vehicles
for redistribution since subsidies on them will not only accrue mainly
to the rich they will actually increase inequality in welfare. It is
therefore important to ensure that commodities chosen for price
subsidisation are largely consumed by the lower income groups. Also,
detailed data on such commodities should be made public to make the
extent of subsidy easily tractable
Fiscal Equalisation Among Provinces in the NFC Awards
Fiscal equalisation refers to attempts within a federal system
of government to reduce fiscal disparities among jurisdictions, which
emerge due to variation in sub-national jurisdictions ability to raise
revenues to meet the public expenditure needs of their residents. This
is because of an imbalance in the assignment of revenue sources to
sub-national levels and their expenditure needs, given the allocation of
the inter-governmental fiscal powers and responsibilities. In the
Pakistani context, the need for transfers is highlighted by the fact
that while provincial governments generate only about 8 percent of total
national resources, their share in total public spending is 28 percent.
Also the fiscal capacity of the four provinces varies, with the
relatively more developed provinces being able to self-generate a higher
proportion of their resource requirements. As such, transfers take
place, according to the provisions of the National Finance Commission
(NFC) awards, with the objective of removing both vertical and
horizontal imbalances between own-revenues and expenditure
Non-profit Sector in Pakistan: Government Policy and Future Issues
The non-profit sector remains relatively small and
underdeveloped in Pakistan. During the decade of the 1990s, it has
demonstrated some nascent growth resulting from a number of favourable
factors like the return to democracy, the growing push towards
deregulation and privatisation, the process of globalisation and the
emergence of international coalitions of civil society and the
deterioration in the financial position of governments which has limited
the public provision of social services. The objective of this paper is
to examine the role played by government policy in fostering this
process of growth of the non-profit sector of Pakistan and to review the
key issues faced by the sector at this time. Of particular concern are,
first, the overall posture of the government towards the non-profit
sector, the types of policies in place, and the underlying philosophy or
principles that guide policy-making. Second, the forms of support to the
non-profit sector by different levels of government. Third, the posture
of international organisations and supranational governments towards
local non-profit organisations and, forth, the major issues facing the
non-profit sector at the present time
Integrated Social-sector Macroeconometric Model for Pakistan
While the traditional neoclassical production model postulates that it is the physical inputs such as private capital, labour, land, and technology that are the key determinants of output and economic development, in recent years, however, the social sector variables are also considered to be critical, particularly for the long-run sustainable growth of the economy. If fact, what has been argued in the form of “new growth theories” is that social variables (e.g., education, health, knowledge, etc.) generate “positive externalities” and, thus, may facilitate and foster the process of economic growth and development. Recently, the World Bank, based on a broad cross-country study, found some very interesting results in the above context. According to the World Development Report (1991): about fifty percent of the factor productivity contribution to output growth comes not from traditional physical inputs (capital, labour and land) but is a residual factor.