PIDE urges institutional clarity in regulatory governance

The Pakistan Institute of Development Economics (PIDE), pursuant to the Prime Minister’s directive, undertook a study titled “Improving Governance and Accountability: Mechanisms for Separating Regulatory Functions from Ministries.”
Following a review of the preliminary findings, Federal Minister for Planning, Development and Special Initiatives Ahsan Iqbal advised that a stakeholders’ consultation be convened to seek feedback and ensure collective ownership of the study, a news release said.
Accordingly, PIDE on Thursday organized a consultative roundtable that brought together senior representatives from regulatory authorities, federal ministries, the private sector and academic institutions.
In his opening remarks, PIDE professor and co-author of the report Dr Nasir Iqbal highlighted Pakistan’s persistently declining economic trajectory, noting that the country’s GDP growth rate had fallen from around five percent to three percent over the past three decades, barely keeping pace with population growth.
“It is not about closing these entities. It is about empowering them while ensuring that they play a facilitative rather than restrictive role in business activity,” he said, stressing that reforms must reduce the cost of doing business and eliminate regulatory sludge instead of creating new layers of regulation.
Director Economic Analysis at the Tax Policy Office, Ministry of Finance, and co-author of the report Dr Mahmood Khalid presented the study’s findings.
The research examined five major ministry-regulator pairs, including the Power Division and National Electric Power Regulatory Authority (NEPRA), the Petroleum Division and Oil and Gas Regulatory Authority (OGRA), the Ministry of Aviation and the Pakistan Civil Aviation Authority, the Ministry of Information and Broadcasting and Pakistan Electronic Media Regulatory Authority (PEMRA), and the Ministry of Education and ICT-PEIRA, to identify overlapping mandates and constraints on regulatory independence.
The study found that ministries retained pervasive de facto influence over their regulatory bodies through three primary channels: funding, appointments and the issuance of policy guidelines. Eligibility criteria for chief executives and board members were found to be vague, inconsistently applied or entirely absent in several cases, while renewable tenure provisions created structural conflicts of interest.
Beyond the five case studies, a broader survey of 31 federal regulatory bodies revealed five systemic failure patterns.
The most critical, it said, was a structural conflict of interest in which the regulator and operator were the same entity — a practice persisting in the cases of Pakistan Railways, the Special Technology Zones Authority and the country’s three major port trusts.
Other issues included policy duplication between ministries and attached departments, fragmentation of standards across multiple agencies without a unified hierarchy, fiscal overreach by non-revenue bodies such as Export Processing Zones Authority (EPZA), which collects a one percent presumptive tax on exports — a function constitutionally reserved for the Federal Board of Revenue (FBR) — and incomplete or misleading compliance in ministerial responses, with several departments claiming no overlap despite clear contradictions in their enabling legislation.
The roundtable generated extensive discussion among participants and was moderated by Saddam Hussein, Director of the Center for Governance, Markets and Regulatory Analysis (CGMRA) and Deputy Chief Policy at PIDE.
A representative of NEPRA advocated the introduction of Regulatory Impact Assessment guidelines across all regulatory bodies to make regulators accountable for the measurable impact of their decisions on investment and ease of doing business.
An official of ICT-PIERA, meanwhile, observed that the legal frameworks of most regulatory authorities were largely similar and had not been drafted in accordance with the respective authorities’ aims and objectives.
Hussein, while acknowledging the study’s findings on ministerial overreach, also cautioned against moving to the opposite extreme.
“If regulatory bodies are given complete independence, the question of accountability still remains,” he observed.
A representative of the Pakistan Business Council also lauded PIDE’s efforts in conducting research and consulting stakeholders on such an important issue.
The consolidated feedback and written recommendations gathered during the roundtable will be compiled by PIDE and submitted as a unified policy brief to the Prime Minister’s Office and the Ministry of Planning, Development and Special Initiatives.