Navigating Fiscal Federalism in Pakistan: Balancing Decentralization and Economic Stability Post-18th Amendment
This paper critically examines Pakistan’s fiscal federalism and highlights the challenges posed by the 18th Constitutional Amendment 2010. The research is contextualized within the broader theoretical framework of fiscal federalism. Although intended to decentralize power and grant fiscal autonomy to provinces, the amendment has created structural fiscal issues, especially within the National Finance Commission. Locking of the provincial NFC share, lack of consensus building on the NFC Award since 2009, stagnant fiscal space and tax-to-GDP ratio, vertical fiscal imbalance, and absence of a joint fiscal responsibility mechanism have a negative bearing on the macroeconomic stability of Pakistan. Limited fiscal decentralization to local governments further restricts equitable development at the grassroots level. Key recommendations include operationalizing the NFC Secretariat, revising fiscal frameworks, incentivizing provincial tax efforts, and enhancing collaboration through the Council of Common Interest to strengthen fiscal management and cohesion.
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Fiscal Federalism, 18th Constitutional Amendment, Fiscal Decentralization, Fiscal Autonomy, Economic Instability, National Finance Commission Award
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(1) Muhammad Asif Raza
Public Policy Practitioner, Pakistan Administrative Service (PAS), Pakistan.
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Cite this article
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APA : Raza, M. A. (2024). Navigating Fiscal Federalism in Pakistan: Balancing Decentralization and Economic Stability Post-18th Amendment. Global Political Review, IX(IV), 80-91. https://doi.org/10.31703/gpr.2024(IX-IV).07
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CHICAGO : Raza, Muhammad Asif. 2024. "Navigating Fiscal Federalism in Pakistan: Balancing Decentralization and Economic Stability Post-18th Amendment." Global Political Review, IX (IV): 80-91 doi: 10.31703/gpr.2024(IX-IV).07
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HARVARD : RAZA, M. A. 2024. Navigating Fiscal Federalism in Pakistan: Balancing Decentralization and Economic Stability Post-18th Amendment. Global Political Review, IX, 80-91.
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MHRA : Raza, Muhammad Asif. 2024. "Navigating Fiscal Federalism in Pakistan: Balancing Decentralization and Economic Stability Post-18th Amendment." Global Political Review, IX: 80-91
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MLA : Raza, Muhammad Asif. "Navigating Fiscal Federalism in Pakistan: Balancing Decentralization and Economic Stability Post-18th Amendment." Global Political Review, IX.IV (2024): 80-91 Print.
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OXFORD : Raza, Muhammad Asif (2024), "Navigating Fiscal Federalism in Pakistan: Balancing Decentralization and Economic Stability Post-18th Amendment", Global Political Review, IX (IV), 80-91
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TURABIAN : Raza, Muhammad Asif. "Navigating Fiscal Federalism in Pakistan: Balancing Decentralization and Economic Stability Post-18th Amendment." Global Political Review IX, no. IV (2024): 80-91. https://doi.org/10.31703/gpr.2024(IX-IV).07