The Economics of Institutional Care in Pakistan: Poverty, Protection Risks, and Family-based Reform

This article examines the residential childcare system in Pakistan, with a focus on the unintended risks associated with institutional care, commonly framed as a charitable intervention. Evidence suggests that a substantial proportion of children in such institutions are not orphans, but rather originate from families experiencing severe socio-economic deprivation (UNICEF Pakistan, 2022, Children in alternative care in Pakistan: A situational analysis ). The study conceptualises this dynamic as an ‘economy of care’, where institutional sustainability is influenced by funding structures that may inadvertently incentivise child placement in residential facilities. The analysis draws on 5 years of practitioner-based field engagement within the child protection sector, combined with a review of relevant academic literature and legal and policy frameworks. Using a qualitative and triangulated approach, the study explores how poverty, weak gatekeeping mechanisms, and limited regulatory enforcement contribute to patterns of unnecessary family separation. It further highlights systemic risks associated with unregulated or poorly monitored institutional placements, including weakened family reintegration processes. The findings indicate a misalignment between existing child protection frameworks and their implementation, where institutional care may become a default response to economic vulnerability rather than a last resort. The study concludes that strengthening family-based care systems and improving preventive social protection mechanisms are critical to reducing reliance on institutionalisation in Pakistan.