Article 160 of the Constitution sets a clock. At intervals not exceeding five years, the President must constitute a National Finance Commission, which must recommend how the federation’s funds are to be shared. Measured against that clock, the most uncomfortable thing about the World Bank’s new report on fiscal federalism is not what it recommends. It is that the ground it walks on has stood unattended, by our own choice, for the better part of two decades.

The report that was launched in Islamabad earlier this month under the title “Strengthening Fiscal Federalism in Pakistan”, proposes revising the NFC formula both vertically and horizontally: moving away from a distribution in which the population carries 82 percent of the weight towards fiscal equalisation based on expenditure needs and revenue capacity, reunifying the fragmented sales tax, and tying part of future transfers to measurable service delivery. The reaction has been swift and jurisdictional - a lender, however large its portfolio, has no business drafting the internal settlement of a sovereign federation. The objection deserves respect, not least because its underlying fear has already come true once.

In September 2024, the federal government and all four provinces signed a National Fiscal Pact to satisfy a structural benchmark under the IMF programme. Spending responsibilities were rebalanced and provincial........

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