Pakistan's oversized provinces face a governance test

The country's administrative maps dictate how governments raise revenue, allocate public funds, plan infrastructure, respond to shocks, and measure performance. When these maps fail to reflect demographic and economic realities, governance challenges intensify.

While consecutive governments have taken major steps—such as the 18th Constitutional Amendment and the 7th National Finance Commission Award devolving major responsibilities for health and education while increasing the provincial share of federal taxes from 47.5% to 57.5%—many decisions remain far from affected communities.

For example, Lahore district has around 13 million people, while Harnai district in Balochistan has just 128,000, forcing policies designed in provincial capitals to serve vastly different realities.

The Planning Commission's District Education Performance Index found that none of the 134 assessed districts reached the "very high" performance category, underlining the distance between policymakers and districts, budgets and outcomes, and authority and accountability. Other large, diverse countries have repeatedly adjusted their administrative geography as their populations and economies evolved.

Nigeria expanded from a three-region structure to 36 states by 1996; Indonesia grew from 27 provinces to 38 today; and Kenya replaced its eight provinces with 47 elected county governments in 2013 equipped with a formula-based share of national revenue weighted for population and poverty.

In Indonesia, Nigeria, and Brazil, average first-tier populations sit around 6 to 8 million—far below Pakistan's current average of 60 million. For Pakistan, experts suggest the debate involves distinct governance scenarios, calling for dividing each existing province into four to create 16 first-tier governments, lowering average population per unit from 60 million to roughly 15 million.

It also calls for creating 23 to 25 units based on population balance or geographic coherence, or building on existing civil divisions to form more than 30 units with average populations closer to other large federations.

Fewer, larger units may be easier to legislate and finance, whereas more numerous units bring capitals and political authority closer to citizens but raise transition costs and require stronger administrative capacity. Furthermore, cautionary examples like Lebanon demonstrate that fragmentation without fiscal and institutional capacity—such as municipalities too small and financially weak to deliver services—can be as debilitating as over-centralisation.

The analysis stresses that boundaries, funding, and mandates must move together. Smaller units without predictable transfers, credible taxing powers, and clear service responsibilities simply reproduce centralisation at a lower level. In 2024–2025, provincial taxes brought in Rs983 billion, equating to less than 0.9% of GDP.

Meanwhile, although agriculture accounts for 24% of value added, agricultural income taxation has historically yielded very little relative to the sector's size, with the International Monetary Fund estimating agriculture's effective tax rate at just 0.3%. Provincial tax authorities have long struggled with limited administrative capacity, weak enforcement, and inadequate information.

Ultimately, the goal is not to multiply administrative units for its own sake, but to align scale, authority, resources, and accountability so that when populations grow faster than institutions, governments can redesign those institutions to bring decisions and resources close enough to the people who live with the consequences.(WITH INPUTS FROM APP)