Governance Challenges Affecting Psdp Projects Implementation In Pakistan

The Public Sector Development Programme (PSDP) is the main federal funding source for infrastructure and socio-economic development for Pakistan. Even though there is a detailed structure, the programme has been consistently underperforming and is plagued with delays, budget deficits and poor usage of available resources. In this paper, the governance challenges that hinder PSDP implementation are explored by a systematic review of institutional reports, audit findings and scientific literature. The analysis reveals five interconnected governance challenges: (1) political interference in project selection and allocation of funds, which avoids the merit-based appraisal process; (2) capacity deficiencies and procedural delays by the bureaucracy, which slows down project execution; (3) inadequate monitoring and evaluation mechanisms that further weaken accountability; (4) problems in procurement processes and with the competitive neutrality of the procurement framework; and (5) fiscal indiscipline in the form of the 'throw-forward' crisis. The paper raises that the largest governance gap is not designing the rules, but the general lack of compliance between rules and enforcement. The reform should therefore focus on implementation and institutional development and on a real parliamentary supervision, not on more laws. Keywords: PSDP, governance, public investment management, Pakistan, project implementation, corruption