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Social Compact: Urban Services and Taxes

Project Overview 

The social compact between citizen and state – whereby a citizen pays taxes and receives (public) goods and services – is a critical link in the development process. This link is especially salient in the context of local governments and a significant metric on which they are judged. However, if citizens perceive little benefit from their tax payments, or local services are disconnected from local decision-making, this link can be broken. This can create a vicious cycle where citizens do not receive high quality services because resources are limited by low levels of local tax revenue, and the low quality of services leads to a low willingness to pay taxes, as well as a broader lack of trust in the state. 

This study seeks to examine these issues by introducing a menu of reforms that strengthen the link between the provision of local urban services and local property tax collection in urban Pakistan. The three main interventions are: 

  1. Demand. In this intervention, tax staff inform citizens of the link between taxes and services by showing a short video on how local taxes.  Tax staff then solicit citizens’ preferences on which type of local goods should be prioritized in their neighborhood. The results of this preference elicitation are then shared with the local government in an effort to improve the allocation of services. 
  2. Delivery. In the status quo, revenue is collected from administrative tax units and transferred to local governments that allocate these to city-level services. To strengthen the link between taxes paid and services provided, this intervention requires local governments to allocate a portion of property tax collected from a neighborhood (tentatively 35%) to that same neighborhood.  As in the Demand intervention, tax staff inform citizens of the link between taxes and services and convey details about the intervention.

  3. Demand and Delivery. This intervention combines the previous two. By both eliciting citizen preferences (#1) and requiring local governments to allocate funds to the neighborhood (#2) in accordance with these preferences, it seeks to make the tax-services link even more salient and credible. As in the Demand intervention, tax staff solicit citizens’ preferences on which type of local goods should be prioritized in their neighborhood.  Citizens are then informed that 35% of their neighborhood’s property tax revenue will be earmarked for their preferred service. 

 

In addition to these main treatments, we will implement a variant of the Demand and Delivery intervention where local leaders will mobilize the community to help enhance the tax-service link. 

Finally, we will randomize the content of the information and preference elicitation at the property level to help understand how to make the information credible and how to best get citizen voice. In particular, we will vary who will deliver the information in the video (a high ranking politician or bureaucrat), whether taxpayers rate the quality of existing services in addition to providing preferences on new services, and whether taxpayers are given the opportunity to provide unstructured feedback to the government.

The sample consists of approximately 500 neighborhoods in two of the largest cities of Punjab, Lahore and Faisalabad.

Current Status 

In the last year, we introduced the interventions to all intervention neighborhoods in the sample. Tax staff have surveyed nearly all of approximately 60,000 total properties in the sample.  

In Demand and Demand and Delivery neighborhoods, we surveyed taxpayers for their preferences over a variety of local services including sanitation, street repair, and street lighting.  We have aggregated these preferences and transferred them to the relevant Local Government departments.  We are now working with the Local Government to begin service implementation using earmarked property tax funds and preparing for the second year of the study.  

Policy Relevance 

Re-engaging with urban areas is a key priority for Pakistan in general, and the Punjab government in particular. The country is in the midst of revitalizing local governments, and enabling citizens’ voice within this context could significantly impact the success of these local governments. The demand for this study came from a combination of the Punjab Local Government Department – which provides services – and the Punjab Excise and Taxation (E&T) Department – which collects the property taxes that fund these services. The project is strongly supported by both Departments and backed by the Chief Minister and is anticipated to be a key pillar in the reform agenda of the government. 

Links

http://southasiainstitute.harvard.edu/2016/06/faculty-voices-rebuilding-the-social-compact-in-pakistan/

http://harvardmagazine.com/2017/01/tax-collection-and-civil-society

 

 

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Jamshed Ahmed

Jamshed Ahmed

Title Research Associate 
Project  Political Connections 
Duration  June 2017- Present 
Degree  Masters in Economics  
University/Organization   Lahore University of Management Sciences entral European University

Jamshed Ahmed is Research Associate at the Center for Economic Research in Pakistan. He has previously worked on two projects as a Research Associate on "Dynastic Politics and Under-development" and "Local Government Elections, Sargodha" at Institute of Development and Economic Alternatives (IDEAS). He has also served as a Research Assistant at the Consortium for Development Policy Research (CDPR), aiding research on the Teacher Cadre Incentives and Improved Learning Outcomes in KP, Pakistan. Jamshed holds a Bachelor’s degree in Economics Forman Christian College (a chartered university) (FCC), and a Master’s degree in Economics from Lahore University of Management Sciences (LUMS)

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EdNovate Pakistan 2017

EdNovate Pakistan 2017

Experts Come Together to Discuss Innovation in Education at EdNovate Pakistan 2017

Pakistan’s education ecosystem represents a diverse set of actors and approaches with the same goal: improving education outcomes for students. On 11 July 2017, the Center for Economic Research in Pakistan (CERP) and the LUMS School of Education,) jointly hosted EdNovate Pakistan, a dialogue to foster evidence driven innovation in education. The event, intended to be the first in a series of annual conferences, brought together leaders in research, decision makers in public and private education, innovators, practitioners and media personnel, to discuss Innovation to improve education quality in Pakistan. 

Tahir Andrabi, co-founder of CERP, Dean of the new LUMS School of Education and Professor at Pomona College, began the day by asking the question: how can we make the Pakistani Education ecosystem cohesive around improving education quality, particularly through data-driven innovation? He noted changes in the education landscape over the fifteen year course of the LEAPS program (Learning and Education Achievement in Pakistan Schools) led by Andrabi, Jishnu Das of the World Bank and Asim Khwaja of Harvard University.

The conference also included a discussion with Nadeem Hussain, founder and coach of Planet N Group of Companies and former President of Tameer Bank, regarding innovations in financing available to low cost schools. An active discussion followed, and Hussain noted that “Typically the loan acceptance rate in small and medium enterprises (SME) is 5 to 10%. The percentage of small private schools accepting loans increased to 25% owing to interventions led by the LEAPS team.”

 

"Every actor that we come across, be it a child, a school, a parent, is an actor who really wants to act. Our job is to simply empower them to change," Asim Khwaja.

A discussion with Ameena Saiyid, Managing Director of Oxford University Press (OUP) Pakistan, centered on innovations in education support services, particularly textbooks and teacher training specifically catering to the large low cost private school sector in Pakistan.  

Kasim Kasuri, CEO of Beaconhouse School System, discussed the use of data in building more robust teacher evaluation systems. Salima Hashmi, Founding Dean of Beaconhouse National University, shared her experience as an arts educationist in the role of the arts in improving education quality and shifting to a“child-centered approach to education.” The conversation tied together how personal narratives of bringing change can be supported by data, and how this synthesis can lead to innovations in education. 

“If art is integrated into the classroom” Hashmi added, “it creates spaces of empathy, brings a sense of diversity, introduces an interdisciplinary approach, and leaves lots of room for exploration.”

Ali Cheema of LUMS moderated a panel discussion on “Catalyzing Innovation in the Public Sector,” which included Tahir Rauf of the Programme Monitoring and Implementation Unit (PMIU), Seema Aziz of Care Foundation and Helen Kamal of Ilm Ideas. Each spoke about the role of their organizations in spurring innovation in public schools, as well as achievements and challenges faced. Audience members asked questions surrounding public-private partnerships, teacher motivation and access to technology.

“The only thing that brings a child to school is quality education, provided with love and respect,” Seema Aziz

Baela Raza Jamil of ITA and ASER, Ali Khizar of the Business Recorder and Mahboob Mehmood of Knowledge Platform spoke on the panel “Reconciling Education Narratives and Policies with Evidence,” moderated by Faisal Bari of LUMS. The topic provoked debate around the challenges of increasing the use of data in Education and the extent to which evidence is driving the narrative surrounding issues in Education today. 


The day ended with a closing statement by Jishnu Das on the puzzle emerging from the Pakistani education system: at a systems level, countless reforms have been initiated and implemented without corresponding gains in learning achievement. He emphasized that this is not a problem unique to Pakistan, but can be seen the world over – both in developing and developed countries. The “wicked hard” question of how to provide quality education at scale for all will require a diverse set of stakeholders to come together, collaborate and innovate to find solutions that work.

EdNovate 2017 concluded with an open invitation to join the working group to further discuss the ideas generated at the event, and to join the team to organize future EdNovate events.

Please contact us at if you would like to join the working, or to share other thoughts and ideas.

 

Picture Gallery EdNovate 2017

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Anam Tariq

Anam Tariq

Title Research Associate 
Project  Female participation in the medical workforce 
Duration  July 2017- Present 
Degree  Masters in Sociology 
University/Organization   Central European University

 

 

Anam Tariq is a Research Associate on the Female Participation in the Medical Workforce Project at the Center for Economic Research in Pakistan. She has previously worked as a Research Assistant at the Sociology Department at the Lahore University of Management Sciences (LUMS). Anam holds a Bachelor’s degree in Sociology and Anthropology from LUMS, and a Master’s degree in Sociology and Social Anthropology from the Central European University.

 

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