Pakistan’s expenditure on service delivery investments are not only insufficient, they are also inefficient. Reasons are attributed to over spending on defence, industrial subsidies and the overall high domestic debt to which money is diverted towards. Additionally, the channels to finance investments in public goods are few. Ideally, financing such investments should be done through the revenues generated through prior development projects, but recovery of costs is slow. A reduction in completion time of development projects must be aimed to finance further investments and the need to improve fiscal management under devolution is required, with the urgent aim to increase property tax collections. Seeking increased foreign assistance to finance development projects is another viable option.
This study has been funded by Adam Smith International (ASI) (2015).
Report: Pakistan’s Public Expenditure