Intro to Public Administration

Week 11: Intergovernmental Administration

Sadaf Basharat

BS Economics
Spring 2019
 Federalism
• Federalism
• Type of government system that guarantees the constitutional division of
powers among the central government and its units in such a manner that
these two sets of government functions to achieve common goals.
• Characterized by significant diversities among their constituent units
in terms of
• Relative size • History
• Population • Ethnicity
• Income level

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 Federalism
• A federal form of government promotes decentralized decision-
making. Therefore, considered conducive to
• Greater freedom of choice • Innovation
• Diversity of preferences in • Accountability
public services
• Political participation

• Number of Federal Countries around the world?

• 28 countries, home to over 40 per cent of the world’s population

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 Federalism’s Variety
• Federations can have as few as 2 territorial units or more than 80.
• Highly centralized vs. highly decentralized, with extensive autonomy
and discretion allocated to constituent units.
• Parliamentary governments vs. Presidential system
• Two political parties vs. multi-party system
• Stable vs. unstable federations

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 Common Characteristics of Federal States
• At least two orders of government, one for the whole country and
the other for the regions.
• Common names of constituent units are states, provinces, Länder, cantons,
communities
• A written constitution some parts of which cannot be amended by
the federal government alone.
• Some special arrangements, usually in upper houses, for the
representation of the constituent units.
• A set of processes and institutions for facilitating or conducting
relations between governments.
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 Why choose Federalism?
• Diverse political units unify under one federal system because of
• Physical contiguity
• Perception of a common external threat
• Economic incentives of being part of a larger economic unit

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 Intergovernmental Relations
• Intergovernmental Relations
• The financial, legal, political, and administrative relationships established
among all units of government that possess varying degrees of authority and
jurisdictional autonomy.
• Intergovernmental Administration or Management
• The management and coordination of the relationships among governments
for the purpose of achieving specific policy goals.

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 How to assign legal powers?
Dualist/Classical Model Integrated Model
• Responsibilities of the federal and • Some subject matters are
state governments are separate and exclusively assigned to one order
distinct of government (e.g., defence to
• Each order of government normally the federal government)
delivers programs in its area of
responsibility, using its civil service and • However, most subject matters
departments are concurrent
• central government sets
• In all dualist constitutions, there are framework legislation that the
some shared or concurrent powers constituent units can complement
in which both orders of government (but not contravene) with their
can make laws. own legislation.
• Examples: Pakistan, USA, Canada, • Examples: Germany, Austria,
Brazil South Africa, and Spain

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 Fiscal Federalism
• Fiscal federalism is concerned with public finances of the various
tires of a government in a federal system.
• It deals with
1. How taxing, spending and regulatory functions are allocated
among different tiers of a government
2. How intergovernmental transfers are structured

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Federalism in Pakistan
 Federalism in Pakistan
• Pakistan has been a federation since independence because of
• the constitutional legacy of British India
• the result of necessity from 1947 to 1971 when it comprised two non-
contiguous territorial units
• the provinces had developed distinct ethnic and linguistic identities of
their own as sovereign states.

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 British Constitutional Legacy
Government of India Act 1935
• Main objective was to devolve revenue sources to the provincial governments to
maintain financial equilibrium
• Divided the legislative powers into three lists:
Legislative List Contained 59 items (like external affairs, currency and coinage, defense and
banking.)
Legislative powers reserved Contained 54 items. (local self-government, public health, law and order,
to the provinces police, development of certain specified industries, agriculture education
and subjects of relief for the poor and unemployment)
The concurrent list Matters on which both the central government and the provincial
governments could legislate (welfare, labor, criminal procedure code,
factories, trade unions and electricity)

• The residuary powers were retained by the Central Gov.

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 1973 constitution
• 1973 constitution names Pakistan as a Federal Republic
• Largely patterned on 1935 devolution with few differences.
• Provided only two lists: A Federal Legislative List + Concurrent List
• No Provincial Legislative List => All of the residuary functions were left to
the provinces.

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 18th Constitutional Amendment
• Landmark constitutional amendment passed in April 2010, which
restored Pakistan’s constitution to its original intent of a decentralized
federation of provinces
• Leadership: Chaiman Senator Raza Rabbani and 26 members of
Parliamentary Committee on Constitutional Reforms
• Some Features:
• Expanded the definition of High Treason
• Fundamental Rights increased to include the right of fair trial, right to
information and right to education
• Reduction in Powers of President: Can no longer dissolve NA or refer a question
to a Referendum
• Removal of bar on 3rd term of office of PM and CM
• Abolition of the concurrent list
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 • The federal govt can only
legislate on subjects in FLL
Part II after consultation
with provinces through CCI
• This list includes some of
the subjects that were
previously on the
concurrent list

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 Council of Common Interests (CCI)
• A constitutional body created for
• Formulation and updating policies in relation to matters in Part II of the
federal list (Such as railways, electricity, major ports, national planning, and
national economic coordination)
• Participatory Management by the Federation and provinces
• Inter-provincial coordination
• Dispute resolution between provinces
• Comprised of PM + CMs of provinces + 3 members from federal
government nominated by PM.
• Role of CCI increased after the passage of 18th amendment.

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 Interprovincial Coordination Committee
• Functioned as an ad hoc body (1974)
• Located in its own division called the Interprovincial Coordination
Division in 2007.
• The division was placed under a newly created Ministry of
Interprovincial Coordination in 2008.
• IPCC has assumed considerable importance after 18th
Constitutional Amendment 2010
• It has been designated as the secretariat of the CCI.

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 Interprovincial Coordination Committee
The tasks of the IPCC include:
• general coordination between the federal government and provinces in
economic, social, and administrative fields
• promoting uniformity of approach in formulation of policies and their
implementation by the provinces and the Federal Gov. in all fields of
national concern
• discussion of policy issues emanating from the provinces that have
economic, social, or administrative implications for the country as a
whole

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 Interprovincial Coordination Committee
• The IPCC comprises the following members:
• Minister for Inter Provincial Coordination (IPC; chairman) ?
• Provincial ministers for IPC (member)
• Chief secretaries of provinces (member)
• Federal ministers related to specific agenda items (member)

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Fiscal Federalism in Pakistan
 National Finance Commission (NFC)
• NFC => Constitutional obligation related to the distribution of
financial resources among the provinces of Pakistan by the federal
government on an annual basis.
• Certain types of taxes are collected in the provinces. They are pooled
together and then redistributed according to the NFC formula
• Subject to debate are
• What taxes to include in the distribution pool
• Distribution Formula
• Taxes currently included in the divisible pool
• Income taxes, GST, Wealth taxes etc.
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 1st NFC Award (1974)
• Population was the sole criteria.
• %age share worked out was:
• Punjab 60.25
• Sindh 22.5
• NWFP 13.39
• Balochistan 3.86

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 7th NFC Award (2009)
• Share of provinces: 57.5% • Allocation of shares
proceeds given to provinces
and 42.5% kept by government

• Allocation of shares to
Provincial Government
assessed on the following
criteria
• Population 82%
• Poverty or Backwardness 10.3%
• Revenue collection or generation
5.0%
• Inverse population density 2.7%

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 Effect of 18th Amendment
• Provinces given power to raise domestic or foreign loans with the
approval of National Economic Council
• Taxes collected by Federal Govt:
• Tax on income
• Wealth tax
• Capital value tax
• Tax on sale and purchase of goods
• Export duties on cotton
• Custom duties
• Tax on Services: a provincial subject
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