ISLAMABAD: As Pakistan’s population continues to grow, potentially reaching 265 million by 2030, the World Economic Forum (WEF) has emphasised the need to redesign the country’s administrative geography to promote decentralisation and improve governance.

The WEF’s Centre for Regions, Trade and Geopolitics argues that creating more administrative units can lead to better governance, but the broader principle is that institutional geography must evolve when the scale of governance no longer matches the scale of society. There is no universal answer or ideal number of provinces, states or counties, it maintains.

However, it adds that when populations grow faster than institutions, governments must be willing to redesign them so that decisions, resources and accountability are brought closer to the people affected by them.

A modest reform could divide each existing province into four, creating 16 first-tier governments and reducing the average population per unit from about 60m to roughly 15m, according to the centre.

Forum notes that new units can do better only with capable institutions, transparent fiscal transfers

The debate in Pakistan, however, should not be framed as a contest over one “correct” map, but as a choice among different governance scenarios.

More ambitious models could create 23 to 25 units based on population balance or geographical coherence. Another approach could build on existing administrative divisions, creating more than 30 units, with ave­rage populations closer to those of other large federations, the centre suggests.

The centre maintains that each scenario involves trade-offs. Fewer, larger units may be easier to legislate for and finance, whereas a greater number could bring provincial capitals, budgets and political authority closer to citizens though entailing higher transition costs and requiring stronger administrative capacity, it explains.

Evidence from other countries also cautions against treating boundary ref­orm as a cure-all. New administrative units can improve responsiveness only when accompanied by capable institutions, transparent fiscal transfers, comparable performance data and incentives for local revenue mobilisation.

Provincial revenue collection

The centre says Pakistan’s provinces now shoulder major service-delivery responsibilities, yet their own-source revenue remains limited. In 2024-25, provincial taxes generated just Rs983 billion, equivalent to less than 0.9pc of GDP.

Agriculture accounts for 24pc of value added, but taxation of agricultural income has historically yielded little revenue relative to the sector’s size.

The IMF estimates agriculture’s effective tax rate at just 0.3pc, while agricultural income tax revenues have remained below expectations even after rates were increased in 2025.

For decades, provincial tax authorities have struggled with limited administrative capacity, weak enforcement and inadequate information, making it difficult to identify and collect taxes on agricultural income.

Recent reforms seek to address some of these weaknesses, but their success will depend on improved data-sharing with the Federal Board of Revenue, greater automation and stronger provincial capacity to enforce the rules.

Weak local revenue systems also undermine accountability because citizens find it harder to connect what they pay with the services they receive. Greater fiscal proximity, if designed carefully, could strengthen that link.

“For a country exposed to floods, water stress, rapid urbanisation and youth employment pressures, proximity is not a luxury; it is part of resilience,” the centre says.

However, it cautions against pursuing administrative redesign merely to create more units. In some countries, too many weak local bodies, lacking adequate fiscal or institutional capacity, can leave governments fragmented but ineffective.

The goal is not simply to multiply administrative units, but to align scale, authority, resources and accountability. Pakistan thus raises a question that many fast-growing economies will increasingly face: when does administrative scale itself become a constraint on development?

Gaps, disparities

The centre notes that successive governments in Pakistan have taken major steps towards decentralisation in recent decades to keep pace with demographic change. These include the 18th Constitutional Amendment and the seventh National Finance Commission award. However, despite their promise, many decisions remain distant from the communities most affected by them.

Lahore district has a population of around 13m, while Harnai district in Balochistan has just 128,000. A policy designed in a provincial capital must therefore cater to vastly different local realities.

Disparities are also evident in education. The Planning Commission’s District Education Performance Index found that none of the 134 districts assessed reached the “very high” performance category. Recent household survey data also show that 28pc of children aged five to 16 are out of school nationally, with provincial rates ranging from 21pc in Punjab to 45pc in Balochistan.

These gaps reflect the distance between policymakers and districts, budgets and outcomes, and authority and accountability, the WEF centre observes.

Published in Dawn, October 10th, 2026