Conference Devolution of Power to Local Governments:

Challenges and Reforms

www.ipripak.org /conference-devolution-of-power-to-local-governments-challenges-and-reforms/

Amna Ejaz Rafi

Amna Ejaz Rafi

December 2, 2015
Conferences & Seminars
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General

A one-day conference titled Devolution of Power to Local Governments: Challenges and Reforms was organized
by Islamabad Policy Research Institute (IPRI) on September 30, 2015 at Islamabad Hotel, Islamabad. The
conference comprised of one working session, in addition to inaugural and concluding sessions. The speakers
made presentations on various aspects of devolution of power to local governments such as Democracy at the
Grass Roots Level, Fiscal Empowerment of Local Governments, and Balancing the Responsibilities of National,
Provincial and Local Governments. The conference also discussed the challenges in establishing the local
government (LG) system, the lack of coordination between the local governments and the provincial governments
and the measures/reforms, required to strengthen the foundations of democracy in Pakistan.

Lieutenant General (R) Abdul Qadir Baloch, Federal Minister for State and Frontier Regions, was the chief guest
while Mr. Daniyal Aziz, Member of National Assembly, Chairman Boards of Directors, Devolution Trust for
Community Empowerment (DTCE) and Ex-Chairman National Reconstruction Bureau (NRB), chaired the academic
session of the conference. Following three speakers were invited in the conference:

Professor Dr. Ishtiaq Ahmad Choudhry, Head Department of Peace and Conflict Studies, National Defence
University (NDU), Islamabad.
Azhar Bashir Malik, Chief Operating Officer, Devolution Trust for Community Empowerment (DTCE).
Muhammad Ejaz Chaudhary, Federal Secretary, Ministry of Inter-Provincial Coordination, Government of
Pakistan.

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Concept Note

Local Government (LG) is the basic building block for democracy. The Local Government System aims to empower
the people at the grass roots level, allows public participation in decision-making and ensures the provision of
speedy justice. The LG enables the proactive elements of society to participate in community work, development
related activities and bridge the rural-urban divide. The structure of governance in Pakistan is primarily two-tiered:
the Federal and Provincial. The third tier of governance the Local Governments have not been able to make
significant impact in the political realm of the country. The political history of Pakistan reveals that the first attempt to
introduce local body system was made during General Ayub Khans era. Ayubs Basic Democracy had some
semblance with a third tier of governance. Sequel to this, in 1979, General Zia-ul-Haq introduced a Local Body
System.

In 2000, the Local Government Plan was introduced. The Devolution Agenda under the plan comprised of District
Government, Tehsil Government and the Union Government. All the services that people needed were provided at
the local level. Masses easy access to Nazims made the system conducive. Afterwards, the 18th Constitutional
Amendment (2010) was introduced. The 18th Amendment and the devolution of power that it embodied aimed at
decentralizing political power and authority to lower tiers. As enunciated in Article 140A, every province shall
establish a local government system. This LG will have elected officials through elections held by the Election
Commission of Pakistan. Political, administrative and financial responsibility and authority will then be devolved by
the provinces to local government officials. Article 140A gives constitutional protection to local governments. The
setting up of local governments is a constitutional requirement. Local body elections have already been conducted
in Balochistan and Khyber Pakhtunkhwa (KP) while Punjab and Sindh are still to hold local body elections.

Constitutionally, the provincial assemblies are free to enact their own local governance systems. The 18 th
amendment does not describe the type of local government that needs to be set up; that is left to the provinces.
There is, therefore, a likelihood of four different systems of local government emerging in Pakistan.

A major challenge in three-tiered governance is the division of responsibility and authority between different tiers. To
make the three-tiered governance fully functional, the principle of subsidiary function with a genuine
decentralization of power, whereby political and financial powers are distributed among different tiers based on their
capacity to deliver is required. The devolution of power should be from lower to upper tier or vice versa. According to
the Devolution Plan of 2000, the power distribution was from bottom to top. Under the 2001 local government
system, local bodies were autonomous even in terms of revenue collection/generation and expenditure. The local
governments were equipped first for service delivery, whatever they could not deliver became the purview of the
provincial government, and then provincial governments inability to handle a task was left to the federal
government. For example, local government in semi-developed urban areas is important for maintaining law and
order. But, it is not possible for local government to manage a road system that runs through five districts. Such a
subject is for the provincial government. Meanwhile, the province cannot defend the countrys territory, nor can it run
foreign and economic affairs. Therefore, these matters fall within the purview of the federal government.

Another question that needs to be addressed, is the local governments ability to adjust itself into the system of
political representation and its interaction with the higher tiers? Central to this, is the equation between political
representation at the local level and the representation through political parties at the provincial level. At the
provincial and federal levels in Pakistan, it is the political parties, which determine as to how the political
representation is organized. The challenge is the organization of political representation at the local level. Letting
local councils at each level elect their own executive mayor or Nazim would give effective responsibility for local
governance to a broadly representative group of local leaders, which would be consistent with the system of
parliamentary responsibility that is already constitutionally mandated in governments at the provincial and national
levels in Pakistan.

The importance of local government institutions cannot be under-estimated for a developing country like Pakistan.
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The local bodies are essential grass roots organizations that perform the necessary administrative functions at the
municipal level, devolving power and authority to the district, sub-district and community level. Besides, for a
successful democracy, there has to be a balance of power between democratic politics at the local and national
levels. In other words, the local government system must engage the mainstream political parties and give them a
stake in supporting local democracy.

Conference Proceedings

Ambassador Sohail Amin , President, IPRI, in his welcome address said that the subject is important as devolution
of power brings democracy to the grass roots level and the local governments become financially resourceful. Its
fine tuning is to be done by creating equilibrium between the responsibilities of the federation, the provinces and the
local governments.

Ambassador Amin remarked that the concept of establishing local governments in Pakistan is not new. We have
experienced different shades of such governments since the 1960s. Initiatives taken during different governments
did contribute towards devolving power to grass roots level but did not really create a third tier of governance at that
level. There also have been painful gaps at different times when the local governments ceased to exist and
governance was restricted to the federal and provincial governments. As such, the structure of governance in
Pakistan for most of the time has been two-tiered. The present government is once again trying to evolve a viable
local government system.

It is a constitutional requirement that every province should establish a system of local government within its
jurisdiction. Once the representatives of the people are elected, several responsibilities of the province get devolved
to local governments. Local bodies elections in Balochistan and KP have already been held and the Punjab and
Sindh are gearing up to hold these elections.

He said that the empirical evidence from our experience of local governments suggested that division of
responsibilities between the three tiers of government somehow became controversial. Central to any efficient local
government is its harmonious relationship with the provincial and the federal government. Barring few exceptions,
such relationship in Pakistan gradually turns acrimonious. Genuine decentralization of power, therefore, does not
take place and people at the grass roots level remain deprived of essential service delivery system.

Lieutenant General (R) Abdul Qadir Baloch , in his inaugural address, said that the local government (LG) is the
third tier of the government in any country and all around the world it is functional. But unfortunately, there were
interruptions in our democratic system so the democracy has not taken the roots the way it should have. Past sixty
years of Pakistans history could not guarantee the true and viable form of local government and we are still
struggling to achieve that goal.

He said that we as a nation are shy of local government. The problem started when the elected representatives in
local governments started meddling in the affairs of district management group (DMG) and the police service of
Pakistan (PSP). But the rules were very clear about the separation of powers between the government institutions
and the elected representatives. So there comes the problem and it is ingrained in our minds. Elected
representatives have nothing to do with the powers of the institutions of the state. He suggested that the elected
representatives should let the government functionaries do their jobs in accordance with the rules and regulations.
The elected people should only deal with the policies and provide guidance to state functionaries. The running of the
government should be left to the bureaucrats and law making should be the first and foremost priority of the elected
representatives, i.e. MNAs, MPAs and locally elected representatives.

He remarked that the municipal/village level activity is the main domain of the local government and we must
understand this to avoid overlapping of the powers and mandate among the state institutions. He opined that the
Constitution of Pakistan only says that local government system should be evolved in the country but it does not talk
about the modalities as to how and what type of system has to be there. So, the task of the legislators is to make
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rules and regulations for the local government system.

In the end, he said that the problem with the former local government system of President Musharraf was that
overnight a young person having matriculation, after becoming District Nazim, was entrusted with the powers of the
Deputy Commissioner (DC) and Superintendent of Police (SP). Therefore that system did not give desired results.
So, the country has to bring in that system, which suits the society and culture keeping in view the level of
education.

Dr. Ishtiaq Ahmad spoke on Democracy at the Grass Roots Level and said that proper functioning of political
system and political parties depended on the establishment of meaningful local government system as it was the
first tier of democracy. He highlighted the reasons for failure of local government system in Pakistan. He recognized
a continuous blame game on the part of politicians and bureaucracy who blamed each other for failure of local
government system. He also talked about colonial legacy and said that in the United India, British government tried
to establish viable local government system and the system functioned well. Although, he said it was an attempt to
divert the attention of masses from freedom. He identified lack of political will as an important reason for not
establishing local government system and quoted the example of unanimous resolution passed by assembly to
postpone local bodies elections. He said that President Ayub Khans Basic Democracy system was the best
system as it minimized the role of bureaucracy and continued to work for ten years but after that it was abolished.
He also touched upon the other two local government systems and said that President Zias local government
system was a refined form of Ayubs system as objectionable things were reduced but after some time it was also
discontinued. He highlighted that President Musharrafs local government system was even further refined from the
previous two systems and was a real plan to devolve powers at district level. He said that there was a tendency of
centralization of power in every sphere and political forces found it difficult to devolve their own power.

Mr. Azhar Bashir Malik spoke on Fiscal Empowerment of Local Government. He defined fiscal decentralization as
an inter-governmental system where the balance of power moved towards the sub-national government sector. He
highlighted advantages of decentralization as moving government closer to the people, broadening the tax base and
allowing alternative service delivery in social services sector. Fiscal decentralization bridges the gap between
revenues raised from local taxation and non-taxation sources and non-development and development expenditure.
He highlighted fiscal decentralization and Local Government Act 2013 and gave example of the Punjab and the KP.
He first mentioned Punjab and said that major tax bases under Section 115 of the LGAs were to be devolved and
included tax on urban immoveable property, tax on professions, trade, callings and employment, tax on
advertisement and billboards, rates on water conservancy and drainage and fees on land use. He also highlighted
major taxes assigned to District Councils. These included tax on transfer of immoveable property, tax on
advertisement and billboards and tax on the construction of maintenance of work of public utility. He also touched
upon the budget making powers of local government and said that government had the power to review budget of
the local government and could ask for rectification, if found contradictory to governments budgetary rules. He also
talked about fiscal devolution in the KP and recognized the major tax bases under Section 42 of the LGA that have
been entrusted to the District Government included tax on education and health, fees for educational and health
facilities, licenses, industrial exhibitions, rent for buildings, equipment, machinery and vehicles, and toll on roads,
bridges and ferries. He highlighted that Tehsil Municipal Administration was vested with some major taxation bases
including local tax on services, tax on immovable property including its transfer, tax on vehicles, fee on sale of
animals, advertisement and billboards, licenses, development, improvement and betterment charges. He discussed
the composition of Provincial Finance Commission (PFC) of Punjab and KP and argued that no representative of
local government was its member. He further added that PFC was recommendatory body and provinces were not
bound to follow its decisions and recommended that it needed to be reviewed and decisions should be made with
mutual consultation.

Mr. Muhammad Ejaz Chaudhry presented his views on Balancing the Responsibilities of National, Provincial and
Local Governments. He highlighted that local governments are not embedded in the constitution. The rich and
mighty and the political elite dominated local governments of Ayub Khan and Zia-ul-Haq. The local governments
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system introduced by Gen Pervaiz Musharraf appeared very good but it could not take off. It is rather unfortunate
that not a single political party in the country has stressed on the need for a local government system or made
efforts to empower them. He said that local governments system is a necessity now and the decision to take the
responsibility of strengthening local governments lies with the political government. He said that society is not ripe
for the complete devolution because people dont trust the politicians so the process has to evolve gradually.

He said that the 18 th amendment to the Constitution of Pakistan made a major contribution in decentralizing political
powers and it dealt with all the issues except the local governments. The political leadership has to decide to
implement the local government through political consensus. The 18th amendment provides a good enabling
environment for the complete devolution. He further said that the third tier of the government has been neglected in
the past and the will of the political governments was quite strange regarding local governments. He emphasized
that it is necessary to devolve power to people.

Mr. Daniyal Aziz , in his remarks as a Chair of the session, said that Pakistan has millions of organizations,
departments and ministries, but the basic issues are still unaddressed. There are currently pointless ministries and
Pakistan cannot afford such ministries. He further said that powers should be devolved from federal to provincial
and provincial to local level. The administrative, financial and political powers should be transferred to the elected
members as mentioned in article 140-A of the Constitution, which says that Each Province shall, by law, establish a
local government system and devolve political, administrative and financial responsibility and authority to the elected
representatives of the local governments. He also gave the example that the budget implementation before the
induction of local governments was 30% and after 2001 it goes up to 90% and currently it is again going down.

Mr. Daniyal Aziz said that the main hurdle in holding local government elections is the power of bureaucracy and
local governments should be people centred. Bureaucracy bars the way of effective devolution of power because
the structure of the bureaucracy is unitary and graded in the form of a hierarchy; whereas the nature of the
constitution is federal. When the powers are devolved to the grass roots level, the bureaucracy just cannot handle it
as people with lower grades are given the fiscal and financial authorities. The bureaucracys desire to control
everything is the problem. On the other hand, politicians have always been in support of devolution. The legislators
should amend the statutes to provide citizens rights as envisaged. He said that democracy is incomplete without
local governments. Mr. Aziz also explained the reasons for lack of political and administrative will to devolve powers
at all levels. He concluded by saying that it is important to separate reality from perception and decentralization of
power should be the ultimate solution to uphold democracy.

Recommendations

The participants unanimously agreed that the Local Government (LG) system has an important role in
strengthening the democratic society, ensuring speedy justice and creating a civic sense at grass roots level.
Further, the future of democracy is tied up with the future of the LGs. Therefore, provincial governments
should not delay the elections of LG. In this context, free, fair and regular elections should be ensured without
any political considerations. The devolution within the party is necessary for smooth functioning of
democracy.
There was a consensus among participants that the third tier of government has been neglected. There have
been painful gaps at times when local governments ceased to exist and governance was restricted to federal
and provincial governments. It was recommended that concrete reforms to overcome the challenges of
proper functioning in LG system are required to strengthen the foundations of democracy in Pakistan.
The LG is the third tier of the federation and provincial government, therefore, the devolution of power to
grass roots level should be given a constitutional protection that is only possible through a strong political will
by the government and the political parties. There is also a need to set an educational criterion for all the
category of members of LG system.
The important factors responsible for repeated failure of local governments in Pakistan since its
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independence include: historical legacies of the colonial period, apprehensions of the top political leadership
towards the local councils and psychological issue of hatred of the governments with the institution
established by their predecessor regimes. Therefore, there is a need to change the attitudes of political
parties towards LGs. The continuity of policies would help in addressing the root causes for the failure of LG
system.
The LG provincial acts passed by the four provinces to provide empowerment and political ownership to local
bodies are limited in scope and excessively deferential to Provincial Governments. These laws do not provide
any meaningful devolution of financial, political and administrative powers. Provinces enjoy arbitrary powers
through discretionary removal of elected LG representatives; also they have arbitrary powers of inspection, to
leave affairs of District Councils to bureaucracy and to exclude areas from LG jurisdiction. In this regard, the
decentralization of administrative and financial responsibilities to the grass roots level is crucial for the
smooth functioning of democratic system.
The LG Acts for each province, in their current form, provide limited autonomy to the local councils in terms of
fiscal management and control over service delivery, revenue, tax and police departments. If the local
elections are to have any real meaning, provincial governments will have to ensure decentralization of
political, administrative and fiscal power, so that, newly elected local councils have sufficient resources and
authority to address service delivery and development challenges in local communities.
The fully functional and self-independent LG could be ensued if the Provincial Local Government
Commission works effectively to monitor the LG affairs without any interference by the provincial government.
In the composition of provincial finance commission, there is no representative of LG as a member. Their
representation in the provincial finance commission must be ensured.
The criteria for allocation of financial resources from the federal government to the provincial government is
on the principle of poverty and underdevelopment. Similar formula should be applied while allocating the
financial resources from the provinces to the district governments. This pattern of allocation of financial
resources will be helpful in uplifting those underdeveloped districts, which were unable to generate their own
recourse due to underdevelopment and lack of opportunities in their respective areas.
To dispel the impression that MNAs and MPAs are involved in the development projects rather than law
making, which is their primary duty, there is a need that development funds given to MNAs and MPAs should
be allocated through the LG.
The corresponding weakness to the administrative part is of a fiscal nature. The local governments have no
source of revenue barring what is allocated to them by the provincial government. The downward fiscal
decentralization is the first step to attain the goal but the true success will depend in a large part upon the
execution of projects and functions of local bodies.
For KP Fiscal Decentralization (FD), the performance of functions related to financial transactions requires
resources at local level. Provincial Finance Commission (PFC) is a recommendatory body to provincial
governments and province is not bound to follow its decisions so that should be reviewed and financial
decisions should be made with mutual consultation of both. There is also no participation of community in
development function so their role must be encouraged. The administrative control of local governments is
under local council board and provincial government, which needs to be addressed.
For Punjab Fiscal Decentralization (FD), under the new law it is very difficult to generate revenue at the local
levels so district governments would heavily depend on provincial governments for funds that should be
reviewed. In composition of PFC no representative of local government is included as member, so their
proper representation must be ensured. The district government would perform development functions
exclusively under the Provincial government. Therefore, the local needs of the community should be given
priority in the development functions.
A major challenge in three-tiered governance is the division of responsibility and authority between different
tiers. To make the three-tiered governance fully functional, the principle of subsidiary function with a
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 genuine decentralization of power, whereby political and financial powers are distributed among different tiers
based on their capacity to deliver is required. The devolution of power should be from upper to lower tiers of
local government. The authority of the elected local government representatives should be enhanced. A
balance should be created where bureaucracy and elected local representatives can work in harmony.
Other challenges facing devolution include: lack of awareness about LG, inadequate resources to support the
effective implementation of devolution, lack of accountability and lack of political will to strengthen the grass
roots level of democracy and lack of a common understanding of the roles of the different institutions involved
in the implementation. All these challenges can be resolved by bringing the required reforms in the system.
There are some gaps in the proper functioning of LG system such as an undue interference in the functioning
of LG institutions by political elites, bureaucracy, influential people and press, non-merit based staff induction
at all tiers and poor managerial qualities of the departmental heads of LG institutions and poor coordination
among them. Immediate remedial measures are required to improve the efficiency and functioning of LG
system through institutional reforms.
An institutional mechanism may be evolved in the form of political and administrative divisions at district level.
This District Political Division should comprise of members of Union Council/Tehsil Council headed by District
Chairman. This will certainly help to promote democratic culture and can also help to address the financial
corruption.
The development activities being undertaken by the LG should be monitored by the civil societys
representatives to ensure transparency and improvement.
To ensure and promote democratic culture at the grass roots level and to make them directly responsible to
the people; the capacity building of the local government representatives at District, Tehsil and
Town/Municipal levels would be necessary. It would help them in providing better socio-economic
development and effective law and order at low tiers.
There is overlapping in duties and responsibilities in local and provincial government. There is a dire need to
clearly define the responsibilities and duties of LG. The LG should be made executor of policies made by the
province and the federal government. LG and provincial government relations should be improved.
The departments which are working at federal, provincial and local level such as social welfare departments
are not working at functional lines. Therefore, smooth functioning of departments and well co-ordination
among three tiers of government is immediately needed to work at functional lines.
The local government system of the political governments needs to open up participatory spaces for the
citizens, and to increase their access to social and political rights. Furthermore, its fine tuning can be done by
creating equilibrium between the responsibilities of federation, provinces and the local government.
There is a need for properly implementing and improving the local government system, which is the base and
backbone of true democracy at grass roots level. Development should be directed at district level according to
the requirement of the general public, which is only possible through local government representatives at
district level.

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Tags: 18th Constitutional Amendment 2001 Local Government System Balochistan Co-ordination
Decentralization Devolution Federal government Fiscal Empowerment Local Body Masses
Nazims Provincial government tiers of government

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