A fierce debate is raging in the halls of power over whether to reverse the 18th Constitutional Amendment, with passionate arguments presented on both sides. Lost in this political tug-of-war is a fundamental fact: sixteen years after Parliament approved this landmark reform, its promise of devolution remains only partially fulfilled. Instead, Pakistan’s federal arrangement remains trapped in a deep structural contradiction. In Islamabad, the federal government routinely invokes the national interest to justify its continued involvement in sectors constitutionally devolved to the provinces, while resisting the downsizing of its own bureaucratic machinery.
Conversely, provincial administrations have enjoyed expanded fiscal resources and legislative authority since 2010, yet have failed to convert these gains into meaningful service delivery or human development. Caught between an overextended centre, underperforming provincial governments, and politically sidelined local governments, Pakistani citizens remain the ultimate victims of this institutional misalignment. The unfinished agenda of devolution has once again come under intense parliamentary scrutiny. On October 14, the Senate Functional Committee on Devolution examined federal expenditure in devolved sectors. Citing public expenditure records, the committee questioned the constitutional validity of approximately Rs 2.6 trillion spent by the federal government on health and education ministries over the preceding sixteen years.
By seeking formal verification from the Auditor General of Pakistan, the committee aimed to establish the legal basis for these expenditures and the mechanisms through which they were authorized and accounted for. Its inquiry has also reopened a broader question: why do federal structures persist in areas constitutionally assigned to provincial jurisdiction? The expenditure figure is striking, but it requires careful interpretation. The Senate committee’s inquiry does not, in itself, constitute definitive proof that these expenditures were wholly unlawful or redundant. Such a determination requires a detailed, function-by-function examination of statutory mandates, administrative costs, and the actual purposes served by federal institutions.
Nevertheless, the ongoing debate illuminates a fundamental question that the federal government can no longer afford to evade: if the Constitution transferred primary responsibility for social sectors to the provinces, why has the federal centre failed to adjust its administrative footprint and fiscal priorities accordingly? This is not merely a question of bureaucratic redundancy or fiscal inefficiency; it strikes at the core of constitutional governance, fiscal federalism, and political accountability.
To understand why this friction persists sixteen years later, one must return to the original promise and architecture of the 2010 reform. Passed unanimously by Parliament, the 18th Amendment represented an ambitious effort to address long-standing regional grievances and reverse administrative centralization. By abolishing the Concurrent Legislative List, the amendment devolved substantial legislative and executive authority over key domains, including basic education, public health, labour, social welfare, and environmental protection, to the provinces.
This structural shift was complemented by the 7th National Finance Commission (NFC) Award, which significantly increased the provincial share of the federal divisible pool. The underlying objective was to bring decision-making closer to the electorate, accommodate the country’s socio-cultural diversity, and reduce the concentration of authority in Islamabad. The democratic logic was clear: governments should possess the institutional resources to match their constitutional responsibilities, and citizens should be empowered to hold each tier of government accountable for its performance. However, constitutional reforms cannot transform public administration through legislation alone; they require institutional adaptation, political will, and aligned fiscal incentives. It is precisely in this transition from constitutional reform to administrative practice that Pakistan’s federal experiment remains incomplete.
Realizing the promise of the 18th Amendment demands administrative restraint in Islamabad, fiscal responsibility and genuine local-level devolution in provincial capitals, and rigorous parliamentary oversight of every government action and every rupee spent.
A World Bank report published in July 2026, titled Strengthening Fiscal Federalism in Pakistan, illustrates this structural mismatch. While provincial tax revenues increased from less than 4 per cent of GDP to an average of 6.5 per cent between 2010 and 2024, federal operational expenditures in devolved subjects failed to decrease proportionately. Furthermore, the report indicates that over 80 per cent of provincial expenditure in fiscal year 2023 was absorbed by recurrent expenditures, primarily public-sector wages and administrative overheads, rather than capital investment in service delivery. Crucially, the share of total public spending allocated to local governments reportedly fell from nearly 10 per cent in 2005 to under 5 per cent by 2024.
These figures point to a dual policy failure. On the one hand, Islamabad has resisted the administrative contraction that the constitutional settlement demands. On the other, provincial capitals have centralized fiscal resources at the subnational level, failing to build effective service delivery mechanisms or extend democratic decentralization to local governments. This institutional friction has aggravated Pakistan’s macro-fiscal vulnerabilities. The expansion of provincial fiscal transfers, without a corresponding reduction in federal administrative expenditure and amid persistently weak overall revenue collection, has intensified pressure on public finances.
Resolving Pakistan’s fiscal crisis, therefore, cannot be achieved by arbitrarily stripping provinces of their constitutionally mandated resource allocations. It requires a rational division of state functions, a broader tax base, and greater fiscal discipline at every level of government. This is where the Council of Common Interests (CCI) becomes particularly important. Under Articles 153 and 154 of the Constitution, the CCI provides the principal institutional mechanism for collective decision-making and policy coordination between the federation and its constituent units on matters falling within Part II of the Federal Legislative List. The Council must function as a genuine forum for cooperative federalism, rather than a mechanism activated only when disputes arise or an arena for partisan confrontation. Decisions concerning public-sector enterprises, energy regulation, and shared economic assets must be addressed through this constitutional forum, supported by systematic consultation, transparent documentation, and effective implementation of agreed decisions.
The need to rationalize federal institutions is not simply a matter of reducing expenditure; it is also essential for restoring accountability. The federal government’s reluctance to downsize its apparatus directly undermines its own stated commitments to fiscal austerity. Retaining institutions without a clear and distinct federal mandate creates administrative overlap, inflates public expenditure, and obscures democratic accountability. Similarly, a rigorous defence of federalism must include holding provincial governments accountable. Autonomy cannot serve as a constitutional shield against administrative incompetence or the centralization of power within provincial capitals. The persistent failure of provincial governments to empower elected local governments under Article 140-A mirrors the very centralizing tendencies they criticize in Islamabad. By failing to transfer meaningful political, administrative, and financial authority to municipal and district councils, provincial governments have created an incomplete model of devolution that stops at the provincial capital.
Pakistan must now move beyond the false dichotomy between central authority and provincial autonomy. A functional state requires both an effective central government, capable of managing national defence, foreign affairs, macroeconomic policy, and interprovincial coordination, and empowered subnational governments accountable to their local electorates. Realizing the promise of the 18th Amendment demands administrative restraint in Islamabad, fiscal responsibility and genuine local-level devolution in provincial capitals, and rigorous parliamentary oversight of every government action and every rupee spent. Federalism is not a zero-sum conflict over state resources, but a shared constitutional compact designed to make governance more responsive, efficient, and accountable to citizens.