Discrepancies in Fiscal Architecture: Context and Causes of Devolution Reforms’ Outcomes in Khyber Pakhtunkhwa, Pakistan

Abstract

Based on qualitative empirical evidence from four diverse districts of Khyber Pakhtunkhwa province, this case study examines the limitations in fiscal policy of local governance reforms in Pakistan. Keeping in view the constrained redistributive system that is rooted in the governance setup at provincial and local level, fiscal architecture is analysed. The impact of abolishment of rural urban administrative divide on tax redistribution, complications in revenue generation, matters related with jurisdictional transgression in revenue collection and development expenditure, and inadequate amount of public funds for development are analysed as key factors that are presumably responsible for the defective fiscal management.