Asymmetric Political-Fiscal Intergovernmental System In Pakistan:A Perspective From Neo-Public Finance Theory

The political and fiscal institutions are arguably the most significant factors that determine how society operates.We believe that political and fiscal structures are shaped by many factors,such as political,geographic,history,culture,religion,economics,etc Those factors are set-up the governmental arrangements to tailor the fiscal institutions that compatibly work with political institutions within the country.Therefore,some governments have decentralized political and fiscal institutions,and some have unitary,e.g.,the USA and China.In Pakistan's case,it is different,the political system is decentralized among federal,sub-national,and local governments.Simultaneously,the fiscal configuration is centralized from revenue,expenditure,and the tax legislative powers,In this study,we first explain that Pakistan has decentralized political and centralized fiscal institutions.We then describe how the government and stakeholders interact within such an asymmetric system.Finally,we explain why their interaction leads to corruption,centralization of the taxation system,and growing public debts.The fourth chapter's findings indicate that an irregular institutional arrangement yields various challenges for policymakers.Therefore,it is essential to measure the fiscal institution's degree of(de)centralization Pakistan's constitution evidences that country has decentralized political institutions(federal,provincial,and local).Thus,political decentralization is increasing the importance of fiscal institutions?Chapter four develops as mixed method approach such as theoretical and empirical for analyzing and measuring the degree of fiscal decentralization and centralization in Pakistan.We described the fiscal system's five main properties through theoretical investigation and employed the seven coding schemes to measure the degree of fiscal autonomy.Simultaneously,for empirical analysis we use ordinary least squares and auto-regressive distributed lag models to describe the relationship,auto-regression,and autocorrelation between the dependent and independent variables.Inconclusively,it has been identified that the fiscal system of Pakistan is highly centralized in the perspective of all concerned dimensions.Notably,the findings of the fifth chapter provide strong evidence of institutional asymmetry.According to the fiscal federalism theory,a country's financial system usually tailors by its political system;these systems could be unitary or decentralized.However,as a federalist country,Pakistan has decentralized political institutions,and its fiscal system is centralized from revenue and tax legislative sides.We measure the degree of fiscal institutions in the fourth chapter,and it reveals that the fiscal system is highly centralized;simultaneously,political institutions are decentralized by the constitution.For understanding the institutional asymmetry,we must answer.How does it work in Pakistan?How can we understand institutional asymmetry?In this study,we describe the asymmetric intergovernmental situation of political-fiscal institutions using the concept of the Fiscal Conventional Controller and Fiscal Residual Claimant(FCC&FRC)model.Model explains that cultural,political,religious and economic influences shape the political-fiscal institutions asymmetric.In contrast,fiscal federalism theoretical model widely ignores the political,religious,and cultural factors that are equally contribute in government functions.Lastly,another aspect of this study uncovers the meaningful impacts of asymmetric economies for future research.