Project Case Study
Assessing public finance risks in northwest Pakistan
Conducting public finance assessments in northwest Pakistan to help DFID effectively plan its future development programmes
Pakistan’s Khyber Pakhtunkhwa province is one of the most dangerous regions of the country, with widespread insurgent activity and fighting between the Taliban and Pakistani forces in the tribal areas in the northwest, near the Afghan border. The area has some of the lowest levels of female education and healthcare provision in the world, with an average female literacy rate of 28%, only 162 chronically underprovided hospitals and an average of 1654 people per hospital bed.
As such, the region is in desperate need of foreign aid to construct improved facilities and help alleviate poverty.
In late 2010 we were asked by the UK’s Department for International Development (DFID) to assess public financial management, domestic financial accountability and the risk of corruption in the region, with a view to improving and strengthening all of these. Our experts conducted rigorous on-the-ground research in a particularly dangerous environment, visiting a range of government offices and public health clinics to collect evidence.
This research was used to construct a detailed Public Expenditure and Financial Accountability assessment for the province, the first since 2007, and two DFID Fiduciary Risk Assessment reports, one covering the provincial government as a whole and the other focusing on the health sector. As well as looking at different aspects of the provincial government’s financial management system (such as the credibility of their budget, comprehensiveness and transparency, budget control, accounting and external scrutiny and audit) the team also assessed the levels of corruption present in the system.
The project culminated in a series of high-level workshops in which the donor community and the Provincial Government, represented by the Minister of Finance, discussed the findings. This project, and others of a similar nature carried out by Adam Smith International, provide DFID with a detailed understanding of the public finance risk landscape within a particular sub-national region or country. This preliminary information is then used to inform the design of subsequent development initiatives, and enable future investment and aid involvement in the region.