Why growth fails to deliver sustainable development?

Pakistan’s development challenge is not the absence of growth or reform ideas but the weak capacity of institutions to translate them into public welfare. Sustainable progress requires stronger local governments, stable and specialized civil services, digital administration, transparent land and tax systems, accountable policing, accessible justice, and improved education and health services.

Governance is central to development because it determines how public authority is exercised, how institutions function, how policies are implemented, and how public goods are delivered. In a development context, governance reflects the state’s capacity to manage resources, regulate markets, protect rights, ensure accountability, control corruption, and provide equal access to opportunity.

Economic inputs such as capital, labour, skills, technology, investment, and entrepreneurship can generate growth, but institutions determine whether that growth becomes inclusive, sustained, and widely distributed. In Pakistan, governance is formally organized around the judiciary, legislature, and executive.

The judiciary protects rights and enforces contracts, the legislature provides laws and regulatory frameworks, and the executive formulates policy and delivers services. However, institutional evolution has remained uneven. At independence, Pakistan inherited a relatively functional civil service, judiciary, and military, but a weak legislature.

Over time, disruptions in democratic processes, political interference, outdated procedures, limited use of modern technology, weak institutional continuity, and insufficient sector-specific capacity weakened the state’s ability to respond effectively to development needs. These weaknesses made governance more vulnerable to patronage, discretion, corruption, and weak implementation.

Pakistan’s development experience shows that growth alone cannot produce broad-based welfare when institutions are unable to convert economic activity into public value. Between 1947 and 2007, the country recorded average annual growth of more than 5 percent, yet this did not translate into sustained human development. Almost one-quarter of the population remained below the poverty line, Pakistan ranked 134th out of 177 countries on the Human Development Index, and income inequality, regional disparities, and gender gaps continued to widen.

More recently, during 2000–2025, growth remained fragile despite workers’ remittances rising from around USD 1 billion to USD 38.3 billion in FY2024–25, a 26.6 percent increase. Remittances have provided important support to households and the external account, but they cannot substitute for domestic productivity, industrial upgrading, export competitiveness, formal employment, and stronger public institutions.

During the same period, Pakistan’s population increased by about 80 percent, compared with around 30 percent in selected regional countries, while its population growth rate remained above 2 percent. This demographic pressure has intensified demand for employment, education, health care, housing, infrastructure, social protection, and basic services, while the state’s ability to respond has remained constrained. The central weakness of Pakistan’s governance system lies in the gap between policy formulation and implementation.

Pakistan has repeatedly produced plans, strategies, reform agendas, and institutional prescriptions, but weak execution has prevented these ideas from producing durable outcomes. This has created a cycle in which economic and social policies are announced with ambition but implemented through institutions that often lack continuity, technical preparedness, and sustained capacity-building support. As a result, citizens experience the state mainly through delays, discretionary decisions, poor service delivery, unequal treatment, and limited access to justice. Businesses face uncertainty in approvals, land transactions, utility connections, inspections, financing, certificates, and regulatory clearances.

These problems increase transaction costs, discourage formalization, weaken productivity, restrict tax capacity, and limit job creation. More than 96 percent of businesses documented in the Economic Census of 2005 were in the informal sector, partly because small and medium enterprises avoided restrictive procedures, excessive regulation, and discretionary local controls. Furthermore, weak governance affects not only public administration but also investment, enterprise growth, employment, revenue collection, and citizens’ trust in the state. The bureaucratic challenge in Pakistan should be understood with greater balance. Civil servants are generally intelligent, disciplined, obedient to administrative authority, and capable of working under pressure. The main issue is not the absence of ability or commitment, but the institutional conditions under which they are expected to perform. Officers are frequently posted to departments that require specialized technical knowledge, while their own academic background, training, and previous experience may belong to a different field. A capable officer may be asked to manage taxation, education, health, land administration, public finance, local government, industry, or digital governance without sufficient department-specific preparation. Continuous reshuffling further weakens this process. When officers are transferred after short periods, they do not get enough time to understand the department’s internal systems, sectoral challenges, stakeholder networks, data needs, implementation gaps, and long-term reform priorities. This weakens institutional memory and prevents departments from building sustained capacity. In many cases, the problem is not that officers are unwilling to work but that they are not given the tenure, specialized exposure, technical training, and continuity required to improve departmental performance.

The way forward requires a shift from a centralized, discretionary, and patronage-based governance model to a decentralized, rules-based, digitally enabled, and citizen-oriented system. Pakistan needs empowered local governments with adequate authority, resources, and administrative capacity because most public services are delivered closest to citizens. When local institutions are weak or dependent on provincial and federal authorities, citizens remain distant from decision-making, and service delivery becomes slow and unresponsive. Strong local governments can improve access to education, health, sanitation, water, local roads, markets, dispute resolution, and municipal services, while also strengthening accountability because citizens can more directly observe and question local performance. Devolution should therefore not stop at the provincial level; it must reach districts, tehsils, municipalities, and communities where development needs are most visible. Civil service reform is equally important because the quality of governance depends heavily on the training, specialization, continuity, incentives, and accountability of public officials. Pakistan needs a professional bureaucracy recruited on merit, continuously trained, adequately compensated, promoted on performance, and protected from arbitrary political interference. However, reform should not be limited to recruitment and compensation alone. It should also ensure that officers receive relevant departmental knowledge, sector-specific training, longer tenures, clearer job descriptions, and structured opportunities to build expertise within the departments they serve. Frequent transfers should be reduced, especially in technical and service delivery departments, because short postings weaken ownership and prevent officers from seeing reforms through implementation. A more effective system would place officers based on relevant skills and experience, support them through continuous capacity-building, and evaluate them on practical outcomes rather than procedural compliance alone. Capable officers should be placed where citizens and businesses interact most with the state, especially at district and municipal levels, while secretariats should support policy direction, coordination, and monitoring.

Pakistan needs deeper reforms to its rules, procedures, and administrative processes because citizens and businesses suffer from unclear, overlapping, outdated, and unevenly applied regulations. Simplified rules, fewer approvals and inspections, published service standards, and time-bound decisions can reduce the cost of dealing with the state. Digital governance through online applications, digital payments, electronic records, integrated databases, one-window services, digitized land records, tax systems, and complaint tracking can reduce discretion and rent-seeking and improve transparency. Land administration should be modernized through updated records, digital registration, faster mutation, reliable dispute resolution, and less dependence on informal intermediaries to protect property rights and investor confidence. Tax reform should prioritize documentation, automation, data integration, and broadening the tax base, rather than burdening existing taxpayers, to help raise revenue, reduce informality, create fiscal space, and support formal business growth. Governance reform must also strengthen policing, justice, education, and health by reducing political interference, improving investigations, accountability, contract enforcement, access to justice, school management, teacher accountability, vocational pathways, hospital management, district service delivery, health management cadres, and citizen-focused facilities. Pakistan’s core challenge is to convert growth into development through empowered local governments, specialized civil services, longer tenures, continuous capacity building, and transparent institutions.

Copyright Business Recorder, 2026