Empowering the Local Governments: A Practical Framework for Local Government

September 11, 2026 (MLN): Citizens experience government through the services and conditions that shape daily life—roads, drainage, water, sanitation, waste collection, schools, healthcare, public spaces, personal security and the enforcement of basic laws and rights. In Sindh, as in other provinces, these responsibilities are spread across provincial departments, local governments, development authorities and other agencies. The result is often unclear responsibility and weak accountability.

A better system requires a clear division of responsibilities and local governments that have the authority and resources to deliver the services assigned to them.

A clear division of responsibilities

This raises the basic question of where responsibilities should actually lie. The province should retain functions that require province-wide planning, regulation or substantial resources, while local governments should take responsibility for matters that are primarily local and directly affect everyday life.

The guiding principle should be that responsibility rests at the lowest level of government capable of delivering it effectively.

Devolution, however, cannot mean transferring responsibilities without the means to fulfil them. Functions, staff, assets and funding must move together with the necessary decision-making authority. Otherwise, local governments will remain dependent on the province despite being formally responsible for a service.

Large metropolitan cities such as Karachi also require a coherent metropolitan governance framework because their infrastructure, economy and public services extend beyond existing administrative boundaries.

The aim should be to end the present situation in which several agencies operate in the same city while citizens cannot easily determine who is responsible when something goes wrong.

Protecting Local Autonomy, Safeguarding the Public Interest

Devolution is meaningful only when local governments have real discretion. But that discretion also needs safeguards where decisions can affect the long-term public interest. Local authorities should have the freedom to respond to the needs of their communities, while certain assets and decisions need protection from short-term political or financial pressures.

Land-use planning illustrates this well. Local governments should have authority over zoning, density, building controls and development approvals. But land reserved for essential public purposes—such as parks, schools, hospitals, drainage, flood protection, public transport, filtration plants and roads—should not be treated as an ordinary revenue-generating asset. Any change in such designations should require transparency, independent review and, where appropriate, equivalent replacement.

The aim is therefore to give local governments genuine autonomy without allowing that autonomy to undermine the long-term public interest.

Money must follow functions

Local governments cannot be effective without predictable finances. Their revenues should come from their own sources, a defined share of provincial revenues, and equalization or other grants. A 60:40 division between provincial and local revenues could be a starting point, but the final allocation should reflect the actual cost of the functions devolved, not a result of a political bargain: money must follow functions.

Transfers should be determined through a transparent Provincial Finance Commission formula, covering both the vertical distribution between the province and local governments and the horizontal distribution among local governments. The latter should not be based on population alone. It should also take account of poverty and deprivation, infrastructure gaps, geographic remoteness, climate and disaster vulnerability, population density and the differing costs of delivering services. Transfers should be announced on a multi-year basis and released regularly, preferably monthly, so that local governments can plan and budget with confidence.

There is, however, a constitutional gap in the framework for fiscal devolution. Unlike the NFC, which is expressly provided for under Article 160, Article 140A does not explicitly establish Provincial Finance Commissions or require periodic PFC Awards. The Supreme Court’s 2022 judgment nevertheless held that PFC Awards were necessary to give meaningful effect to the financial devolution mandated by Article 140A. While there is room to question whether the Court stretched the constitutional text beyond its ordinary meaning, its approach does provide a practical route to make fiscal devolution meaningful—and, more importantly, predictable in the absence of a more explicit constitutional framework.

Accountability should be based on outcomes

Devolution should ultimately be judged by what it delivers, not simply by the transfer of functions. Local governments should publish clear annual targets and report publicly on their performance in municipal services and, where devolved, areas such as education and primary healthcare. Performance should be assessed against service quality, expenditure and outcomes, with incentives for sustained improvement.

Devolution should be phased and orderly rather than treated as a single administrative transfer. Functions should move when the receiving local government has the institutional capacity to assume them, with clear timelines for each stage. This would allow the system to be tested, weaknesses to be addressed and capacity to be built before more complex responsibilities are transferred.

The objective is not to devolve everything, but to devolve what can be governed better at the local level.

Disclaimer: The views expressed in this article are solely those of Fahim Ahmed, a former Investment Banker, and do not constitute investment advice.