Investigating the Impact of Fiscal Decentralisation on Health Sector: A Case of Pakistan


  • Iftikhar Ahmad Assistant Professor, Pakistan Institute of Development Economics, Islamabad, Pakistan
  • Miraj ul Haq Assistant Professor, IIIE, International Islamic University, Islamabad, Pakistan
  • Jangraiz Khan Visiting Faculty, Institute of Management Studies, University of Peshawar, Peshawar, Pakistan


An important determinant of improved quality of life is the
health sector. Pakistan, being a developing country, lags on
various health indicators and therefore, this study discusses the
health sector in Pakistan. As the health sector is a devolved
subject, therefore, the study explores the impact of fiscal
decentralization on important health sector indicators. National
data ranging from 1974-2009 was used to analyse the important
health indicators in Pakistan. Analysis indicates that the health
sector remained neglected over the period. To a surprise, a
negative long-run cointegrating relationship was found for
federal transfers on health expenditures at the national level.
Hence, provincial autonomy during the period of analysis could
not bring the desired improvement in the health sector.
Nevertheless, the study highlights that federal transfers to
provinces do have social implications.