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Impact of Fiscal Decentralisation on Human Development: A Case Study of Pakistan

Author

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  • Rashid Mehmood

    (Applied Economics Research Centre, Karachi)

  • Sara Sadiq

    (Applied Economics Research Centre, Karachi)

Abstract

It is often debated among economists whether the efficiency of sub-national governments is different and better for the provision of services than that of national governments. Most of the previous studies show that fiscal transfers increase the responsibilities of sub-national governments and enhance the ability for revenue generation. The main focus of this study is to analyse the relationship between human development and fiscal decentralisation; to find out the channels through which decentralisation stimulates the pace of economic growth and affects the provision of health and education facilities across the provinces. By using econometric time series techniques for empirical analysis, we find that there exists a long-run relationship between fiscal decentralisation and human development along with urbanisation. Results suggest that the effectiveness of fiscal decentralisation can increase human development; it also strengthens the federation by creating harmony among the provinces.

Suggested Citation

  • Rashid Mehmood & Sara Sadiq, 2010. "Impact of Fiscal Decentralisation on Human Development: A Case Study of Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 49(4), pages 513-530.
    • Handle: RePEc:pid:journl:v:49:y:2010:i:4:p:513-530
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    References listed on IDEAS

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    Cited by:

    1. Fisayo Fagbemi & Omowumi Grace Adeoye, 2019. "Africa's Human Capital Development: Is Public Finance Management an Effective Strategy?," Journal of Social Economics Research, Conscientia Beam, vol. 6(2), pages 61-73.
    2. Miranda-Lescano, Ronald & Muinelo-Gallo, Leonel & Roca-Sagales, Oriol, 2024. "Human development and inequalities: The importance of social public spending," Structural Change and Economic Dynamics, Elsevier, vol. 69(C), pages 363-377.
    3. Megbowon Ebenezer & Aderoju Samuel & Gbenga Peter Sanusi, 2021. "Effectiveness of fiscal federalism for poverty reduction in Nigeria: an analysis of federal and state governments’ expenditures," SN Business & Economics, Springer, vol. 1(9), pages 1-19, September.
    4. Cordelia Onyinyechi Omodero, 2019. "Fiscal Devolution and Human Capital Formation in Nigeria: Emphasis on Independent Generated Funds of the Three Tiers of Government," International Business Research, Canadian Center of Science and Education, vol. 12(4), pages 20-29, April.
    5. Ronald Miranda‐Lescano & Leonel Muinelo‐Gallo & Oriol Roca‐Sagalés, 2023. "Human development and decentralization: The importance of public health expenditure," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 94(1), pages 191-219, March.

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    More about this item

    Keywords

    Fiscal Decentralisation; Human Development;

    JEL classification:

    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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