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Delegation of power can of political, social and fiscal authority and all the three has been considered an important policy reform to achieve high growth, better delivery of services and stabilize the macro uncertainties in economy. Among the three types of decentralization, this study was conducted to assess the fiscal aspect of decentralization and its impacts were analyzed on public services deliveries, which is one of the core objectives of power delegation. Pakistan was taken as a sample case. Annual time series data spanning from 1974 to 2021 were sourced from both the World Bank and the economic survey of Pakistan. Fiscal decentralization was measured through fiscal transfers and vertical balances while public services were proxy through health sector. In health sector this study took infant mortality rates because of the ways availability of data. Per capita GDP, Rural-Urban ratio and health expenditures were taken as a control variable. The results were extracted through ARDL and it was found that between the two proxies of fiscal decentralization, fiscal transfers is more effective than vertical balances and therefore it was suggested that government may increase the share of provinces to further improve the delivery of public services in Pakistan.
Riaz et al. (Tue,) studied this question.