Fiscal decentralization and citizen’s satisfaction from local public service delivery in Pakistan

Purpose: The main purpose of this study is to evaluate the performance of local governments in Pakistan through citizen’s satisfaction with local public service delivery in the context of the 2001 devolution plan. Design/methodology/approach: Multiple-choice models are used to identify various determinants of citizen satisfaction from local governments. Demographic and socio-economic characteristics of the citizens such as age, gender, profession, education level, social status, geographical location and devolution policy (absence or presence of local government) are possible determinants of the model. While, the dependent variable is a satisfaction index constructed through exploratory factor analysis, using information obtained through a questionnaire. Findings: The devolution policy variable is found to be statistically significant, indicating that people’s satisfaction level declined significantly when the devolution plan was rolled back. The impact of demographic and socio-economic variables on citizen satisfaction with local government is also found to be statistically significant in a majority of cases. Results indicate that people living in urban city districts are comparatively more satisfied than inhabitants of rural areas. Heterogeneity in satisfaction is found across different provinces, suggesting the need for institutional and political reforms. Moreover, people from a lower social status are more satisfied, indicating that the devolution process is in the right direction as far as reduction of income disparities is concerned. Practical implications: The results suggest that there should be more provincial autonomy and national cohesion that will result in better understanding of the needs of federating units keeping the regional affiliation aside. Financial autonomy will give more resources, generate confidence and make the federating unit accountable. A decentralized set up will reduce the dependence of provinces on the center, which will allow the center to concentrate more on the national issues. However, the problem is how to materialize this and execute an efficient decentralization process in Pakistan. Originality/value: This research is based on primary data collected by UNDP to conduct a social audit of local governments in Pakistan. No other research has been conducted in Pakistan to evaluate the performance of local governments using citizen satisfaction.