Centralization, Decentralization and Recentralization in Pakistan: A Case Study of the Rise and Ultimate Demise of Devolution Plan 2000

Despite the nearly universal acceptance of the maxim “institutions matter”, disagreements prevail with respect not only to which sorts of institutional arrangements are most conducive to fostering growth and effective government and what countries can or should do in order to get “the right institutions” in place, but also to the origins and determinants of institutional change per se. This article seeks to contribute to the debates concerning institutions, institutional change and development through a case study of the introduction, implementation and ultimate defeat of the World Bank-supported decentralization reforms in Khyber Pakhtunkhwa province of Pakistan. Promulgated under the rubric of Devolution Plan, the decentralization reforms culminated in subverting provincial government’s autonomy in Khyber Pakhtunkhwa province over key political and administrative issues at the grassroots. However, intent on regaining its devolved powers in anticipation to come to grips with its dwindling political clout at grassroots levels, the provincial government pursued an organized and sustained campaign of introducing a raft of amendments to the North West Frontier Province Local Government Ordinance 2001. Many of these contentious amendments proved so insidious that they not only gradually undermined the newly established system of local self-governance but ultimately precipitated its dismantlement altogether. The findings offer implications for the New Institutional Economics’ conception of institutional change upon which contemporary development policy and praxis hinge.