Author
Noor ALAM*
RESEARCH NOTES
This study critically evaluates ‘Pakistan’s Fiscal Responsibility and Debt Limitation Act (FRDLA)’ by benchmarking its legal and institutional architecture against international best practices, particularly those adopted by OECD member countries. The FRDLA intended to impose fiscal discipline through a 60 per cent public debt limit, but debt exceeding 74 per cent of GDP by 2023 reveals profound execution flaws. Employing a mixed mode of qualitative and quantitative methodology through a comparative descriptive approach, this research uncovers key gaps, including weak enforcement mechanisms, limited subnational integration, inadequate fiscal transparency, and the absence of independent oversight bodies. Drawing on OECD practices such as medium-term fiscal frameworks, debt brakes, and the role of ‘autonomous fiscal institutions’, the study underscores the need for Pakistan to overhaul its fiscal governance model. It proposes a series of legal and institutional reforms, including the establishment of an ‘autonomous fiscal council’, binding fiscal targets, enhanced transparency measures, and intergovernmental fiscal coordination. This research note analyses the broader discourse on fiscal federalism and public debt sustainability in emerging economies, offering a practical roadmap to align Pakistan’s fiscal framework with international norms and enhance macroeconomic stability.
