Transparency and accountability are the foundations of any credible public finance system. They determine not only whether government resources are used wisely, but also whether citizens trust their government to act in the public interest.
In countries where public money is treated as a public trust, economic performance tends to improve, corruption decreases and institutions operate with greater legitimacy. For Pakistan, a country struggling with fiscal pressures, increasing public demands and global economic scrutiny, transparency and accountability in public financial mechanisms (PFM) are not abstract ideals; they are indispensable tools for national stability.
Public finance shapes how a nation raises money, allocates it, and turns it into services. Pakistan’s fiscal footprint is massive: the federal budget exceeded Rs14.5 trillion in FY2023-2024, and provincial budgets collectively exceeded Rs10 trillion. Yet output often does not correspond to the amount of expenditure.
Estimates suggest that Pakistan loses 8-12% of public spending each year due to inefficiencies, leakages and weak controls, while development budgets routinely see 20-40% underspending.
These figures reflect a system where decisions are clouded by opacity and consequences for financial mismanagement are rare. Without transparency, citizens cannot see; without accountability, institutions need not act.
Recognizing these systemic gaps, Pakistan has become a focus area for global partners supporting PFM reforms. The European Union Support Program for Public Financial Management (PFM-SPP) is one of the most influential initiatives modernizing budget structures, improving data accuracy and improving fiscal transparency in Sindh and Balochistan.
EU support has helped provincial governments adopt IT-based budgeting, transparent grant structures and more citizen-accessible financial reporting. Such reforms provide a basis for long-term accountability.
The World Bank has also invested heavily in strengthening Pakistan’s financial governance. The Public Financial Management and Accountability Project to support service delivery improves internal controls, audit capabilities and reporting systems.
Meanwhile, the Punjab Resource Improvement and Digital Effectiveness (PRIDE) programme, worth over US$304 million, focuses on digitizing revenue systems, enhancing procurement transparency and reducing fiscal risks. Punjab’s shift towards digital payment systems and e-procurement has already begun to reduce manual interventions that have historically created opportunities for leakages.
Other international partners have played equally important roles. The Asian Development Bank (ADB) has been supporting Pakistan’s fiscal reforms for over a decade, particularly in public sector management, procurement modernization and revenue mobilization.
ADB’s technical support has helped develop medium-term budgetary frameworks and strengthen fiscal discipline at the federal and provincial levels. As Pakistan continues to face tight fiscal space, ADB’s policy-based lending linked to government reforms has become crucial.
The International Monetary Fund (IMF), although primarily known for macroeconomic stabilization, has increasingly emphasized transparency and accountability in fiscal governance as core conditions for support. Recent IMF programs require Pakistan to improve public disclosure of debt, state-owned enterprises (SOE) losses, procurement contracts and fiscal risks. The IMF’s push for better reporting of ‘circular debt’, pension liabilities and guarantee portfolios is forcing reforms that Pakistan can no longer delay.
The United States Agency for International Development (USAID) has long invested in financial and institutional strengthening, particularly through revenue administration reforms and support to provincial finance departments. USAID has helped digitize taxpayer services, improve audit training, and strengthen provincial budget systems, particularly in KP and Sindh, to promote more efficient public spending.
The Foreign, Commonwealth & Development Office (FCDO), formerly DfID (UK), has also been at the forefront of public finance reforms in Pakistan. Its governance programs have supported evidence-based budgeting, tracking public spending and strengthening accountability institutions such as public accounting committees. FCDO’s impact is visible in programs that improved budget transparency and improved financial reporting quality.
Germany’s GIZ has focused on capacity building, audit strengthening, tax administration and anti-corruption measures. GIZ-supported initiatives have helped train finance managers, standardize audit methods and develop fiscal reporting tools in line with global best practices. Japan’s JICA has contributed to system modernization, including financial compliance training and support for digital transformation in government agencies.
Overall, these reforms have already begun to reshape Pakistan’s PFM landscape. But the real test is whether this momentum will be institutionalized. With debt servicing consuming nearly 57% of federal revenues and development needs growing, Pakistan cannot afford structural inefficiency; every rupee saved through transparency becomes a rupee available for public welfare.
Digitized procurement alone can save up to 20 percent of procurement costs, a margin that translates into Rs400 billion annually — more than the federal education development budget.
Equally important is the credibility Pakistan gains internationally when PFM systems are robust. Investors and development partners prioritize transparency, audit quality, competitive procurement and rules-based budgeting.
Countries with strong PFM frameworks secure financing on better terms, attract private investment and maintain more stable macroeconomic conditions. In this sense, transparency is both a domestic reform and a global economic strategy.
To fully benefit from ongoing reforms, Pakistan must evolve from merely complying with technical requirements to embracing a cultural shift. Budgets must be published in formats that citizens understand. Real-time dashboards showing project spending and procurement contracts must be publicly available.
Audit reports must be made available without delay and acted upon. Procurement must be fully digitized and competitive. Results-based budgeting must replace historical allocation patterns. None of this requires new laws; it requires steadfast enforcement and political will.
Accountability must also be strengthened. Audit findings should lead to investigations, not shelved.
Performance gaps must trigger corrective action. Financial misconduct must have consequences, regardless of political affiliation. Oversight bodies, including public accounting committees, finance departments and auditors-general, must have powers. Whistleblower protection must protect those who expose corruption.
Ultimately, transparency and accountability extend beyond the public sector. The media must report economic conditions factually. Civil society must track budgets. The academic world must analyze fiscal trends. Trade unions must advocate for transparent taxation and procurement. Citizens must demand to know how their money is being spent.
If Pakistan succeeds in embedding transparency and accountability across public financial mechanisms, supported by the EU, World Bank, ADB, IMF, USAID, FCDO, GIZ, JICA and others, the transformation will be profound: reduced corruption, efficient spending, improved service delivery and renewed public trust.
A transparent system lets the public see; an accountable system ensures that the institutions act. Pakistan’s economic future depends on strengthening both, not episodically, but consistently and with unwavering commitment.
The author is an expert in public policy and heads the Country Partner Institute for the World Economic Forum in Pakistan. He posts @amirjahangir and can be contacted at: [email protected]
Disclaimer: The views expressed in this piece are the author’s own and do not necessarily reflect Pakinomist.tv’s editorial policy.
Originally published in The News
