Pakistan's uneven development deepens as World Bank flags massive provincial spending gaps
Islamabad, July 5
A new World Bank assessment has highlighted stark inequalities in provincial public spending across Pakistan, revealing that provincial capitals continue to receive significantly higher per capita funding than other districts despite years of fiscal decentralisation, as reported by The Express Tribune.
According to The Express Tribune, the lender's Strengthening Fiscal Federalism report depicted that Quetta recorded the widest spending disparity, with per capita provincial expenditure reaching Rs 57,000 compared with only Rs 12,000 in the rest of Balochistan, a difference of about 475%. Lahore followed with per capita spending of Rs 31,000 against Rs 7,000 in other Punjab districts, while Peshawar received around Rs 35,000 per person compared with Rs 10,000 elsewhere in Khyber Pakhtunkhwa.
Karachi showed the smallest gap, but still received 178% higher per capita spending than other districts. The report said that although spending differences have narrowed since 2009, provincial capitals continue to command a disproportionate share of development resources. It also found that wealthier districts regularly receive larger budget allocations, while poorer regions remain trapped in a cycle of underinvestment. The World Bank noted that district funding does not appear to be linked to poverty levels or social indicators such as education, healthcare, or infrastructure needs.
The findings were particularly significant for Balochistan, where persistent underdevelopment and limited employment opportunities have long been cited as contributing factors behind unrest. Despite the province maintaining budget surpluses, Quetta continues to receive substantially higher spending than the rest of the province.
The report further criticised weak local governance, noting that provincial finance commissions remain largely inactive and local governments receive only a small share of provincial resources. The proportion of total government spending managed by local governments has fallen from around 10% in 2005 to just 4.7% in 2024 despite constitutional provisions supporting decentralisation, as cited by The Express Tribune.
The World Bank also questioned the effectiveness of increased education and health spending. While provinces such as Punjab, Sindh and Balochistan significantly raised education budgets between FY09 and FY23, school enrolment and literacy indicators either stagnated or declined in some regions, as reported by The Express Tribune.
— ANI
Reader Comments
"Interesting how the World Bank points out that even after 15 years of fiscal decentralisation, local governments get even LESS money now. Only 4.7% of spending is local? In the US, local governments handle education, police, roads—way more than that. Pakistan needs to actually empower local bodies, not just in name."
"Education spending up but literacy down? That's a classic case of money not reaching the ground. In India too, we see budgets increase but school quality remains bad because of corruption and poor implementation. Pakistan needs to fix governance first before pouring more money into leaky buckets."
"The Karachi gap is 'only' 178%? That's still huge. But it makes sense—Karachi generates most of Pakistan's revenue, so they spend more there. The real problem is districts near the border or in remote areas getting nothing. Balochistan having budget surpluses but Quetta hogging it all is peak mismanagement."
"Respectfully, this is a lesson for India too. We talk about cooperative federalism, but look at our own states—Bihar, UP, Rajasthan get less per capita than Delhi or Maharashtra? Same story. But at least we don't have 475% gaps. Pakistan needs to learn from its own provinces before pointing fingers."
"World Bank report is blunt. 'Spending not linked to poverty or social indicators'—ouch. That means the people who need the most get the least. Pakistan's provincial finance commissions should be ashamed. And the fact that local governments got weaker
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