Expression of Interest are invited for Provincial Public Expenditure Analysis (PEA) in Sindh, Khyber Pakhtunkhwa and Punjab. Publication Date: 02/12/2026 12:00 AM EST EOI Deadline: 03/05/2026 11:59 PM EST Description Background and Rationale Pakistans fiscal federalism framework shapes how public resources are allocated and used across federal, provincial, and local levels. Since independence, the country has struggled to balance a strong central state with demands for regional autonomy, often generating inefficiencies and disparities in spending. Since the 18th Constitutional Amendment and the 7th National Finance Commission (NFC) Award, provinces have assumed expanded responsibilities for service delivery and a larger share of consolidated public spending (i.e., 29 percent in FY24), particularly in health, education, social protection, and local infrastructure. In practice, however, the benefits of devolution have been constrained by uneven provincial capacity, weak accountability, and inconsistent use of Provincial Finance Commissions to distribute resources within provinces. These gaps risk undermining the efficiency and equity of subnational spending and limit the potential of fiscal federalism to improve socio-economic outcomes and reduce spatial inequalities. Strengthening the quality and composition of provincial spending, while enhancing own-source revenues and clarifying intergovernmental fiscal relations, is therefore critical to improving development outcomes and supporting Pakistans broader fiscal and debt-sustainability agenda, including under ongoing reform programs supported by development partners. Against this backdrop, the World Bank intends to commission a Provincial Public Expenditure Analysis (PEA) focusing on subnational revenue and expenditure in Sindh, Khyber Pakhtunkhwa (KP), and Punjab, to inform federal and provincial policy dialogue, future lending operations, and complementary analytical and advisory work. Objectives of the Assignment The overall objective of the PEA is to support the Governments of Sindh, KP, and Punjab in strengthening the sustainability, efficiency, equity, and resilience of provincial public finances. Specific objectives are to: Analyze recent trends in provincial revenue and expenditure in Sindh, KP, and Punjab, and assess their implications for macro-fiscal sustainability and service delivery. Assess the composition, adequacy, and equity of provincial expenditureparticularly in key social sectors. Examine the adequacy and equity of vertical and horizontal resource allocations between provincial and local governments (transfers, shared taxes, and conditional grants) and their alignment with expenditure responsibilities. Provide actionable policy recommendations for each province, highlighting quick wins and medium-term structural reforms. Scope of Work and Key Questions The tentative scope of the assignment is described below but may be revised during the inception stage. The scope of analysis for each province will be tailored according to the availability of relevant data and the outcomes of initial consultations with the respective provincial governments. This flexible approach will ensure that the review remains responsive to each provinces unique fiscal context and administrative priorities. The expected coverage period is FY09FY24 building on a comprehensive provincial fiscal dataset compiled by the World Bank. Upon commencement of the assignment, this dataset will be made available to the contracted Firm, subject to the applicable confidentiality and non-disclosure regulations. The final scope and methodology will be refined and agreed between the World Bank and the Firm and formalized in the final inception report. Component 1: Provincial Fiscal Trends and Sustainability Compile and analyze fiscal outturns for Sindh, KP, and Punjab, including revenues (federal transfers, shared taxes, grants, own-source revenues), recurrent and capital expenditures. Assess trends in key fiscal indicators (e.g., fiscal balances, primary balances), at provincial level. Analyze trends and composition of provincial debt, guarantees, on-lending and acquisition of financial assets. Key questions: How have provincial fiscal balances evolved and what are the main drivers of deficits or surpluses? To what extent do provincial fiscal policies support or undermine national fiscal and debt-sustainability objectives? To what extent is net lending to extra budgetary units and provincial State-Owned Enterprises affecting the sustainability of provincial finances? To what extent did provincial spending and revenue patterns change post 18th Constitutional Amendment and the 7th National Finance Commission (NFC) Award? Where are the main fiscal risks concentrated, and what mechanisms exist to monitor and manage them? Component 2: Revenue Mobilization at Provincial and Local Levels Analyze provincial revenue performance by instrument including buoyancy and productivity. Review tax exemptions for key provincial taxes across the three provinces. Drawing on a targeted sample of urban and rural local governments, assess revenue performance by instrument for local-government revenue collection. Key questions: Which revenue instruments have the highest potential for additional, sustainable provincial revenue? What reforms in tax policy and administration could broaden the base, reduce distortions, and improve fairness? Was there any noticeable change in provincial revenue performance post 18th Constitutional Amendment and the 7th National Finance Commission (NFC) Award? Component 3: Intra-provincial Fiscal Transfers Review the structure and de jure/de facto functional assignments to local governments in each province. Review the design and implementation of intra-provincial fiscal transfers, including: o Composition of the provincial divisible pools of resources and proportion of provincial consolidated funds in each province. o De jure and de facto vertical allocation formulae between provincial and district/local governments. o De jure and de facto horizontal allocation formulae across districts/local governments. o Assess adequacy and equity of fiscal transfers to local governments in each province. Key questions: Do intergovernmental fiscal arrangements provide adequate, predictable, and equitable resources for provinces and local governments? · Was there any noticeable change in the share of resources transferred to district/local level (including devolved and deconcentrated topics) post 18th Constitutional Amendment and the 7th National Finance Commission (NFC) Award? Component 4: Expenditure Composition, Adequacy, and Equity Analyze the functional and economic composition of provincial expenditures. Analyze the composition and trends in provincial spending by administrative level (i.e., provincial, district/local including devolved and deconcentrated topics). Analyze the sectoral, economic, and geographical composition (i.e., by district) of provincial development spending. o To the extent possible, develop a consolidated view of provincial capital spending including investment conducted via provincial SOEs and extra budgetary units (via guarantees, on-lending and acquisition of financial assets). Analyze budget execution performance for recurrent and capital spending at provincial and district/local level. Analyze the adequacy, and equity of spending on core social sectors (i.e., education and health), including: o Benchmarking of provincial per capita spending on core social sectors against international benchmarks. o Spatial analysis of sub-provincial spending on core social sectors across districts, including variation in wage, operational (non-wage recurrent) and development per capita spending on education and health at district level. Mapping of major funding and resource flows from provincial/district level to schools and health facilities in each province. Develop an inventory of complementary data sources pertaining to service delivery inputs, outputs, and outcomes in each province to support future analysis of public spending efficiency and effectiveness. Key questions: To what extent does provincial expenditure prioritize administrative functions over service delivery? To what extent is provincial expenditure predominantly allocated at the provincial level, as opposed to district and frontline spending units? What is the sectoral composition of public investment and what proportion of it is conducted via SOEs and extra budgetary units? How does budget execution performance vary between recurrent and capital spending and across districts? Is provincial spending on core social sectors (i.e., education and health) adequate and equitable? Was there any noticeable change in the level of spending on core social sectors post 18th Constitutional Amendment and the 7th National Finance Commission (NFC) Award? Methodology and Approach The firm is expected to employ a combination of quantitative and qualitative methods, including but not limited to: Desk review of federal and provincial budget documents, medium-term fiscal frameworks, PFM laws and regulations, previous PERs/PFRs, PEFA assessments, IMF program documents, and other relevant analytical work. Data analysis using fiscal data from federal and provincial finance departments. Diagnostic tools such as buoyancy and elasticity analysis for revenue, Stakeholder consultations with federal and provincial authorities (finance, planning, line ministries), and local governments. The Firm should propose a detailed methodology in the Inception Report, including data requirements, analytical tools, and any sampling strategies for more detailed sectoral or district-level analysis. Deliverables (Indicative) The Firm will produce the following outputs (all in English, using World Bank templates wh Tender Link : https://wbgeprocure-rfxnow.worldbank.org/rfxnow/public/advertisement/6426/view.html
