Assessing the Effects of Fiscal Decentralization on the Efficiency of Education Sector: Analysis of Punjab, Pakistan

The present study investigates the impact of fiscal decentralization (FD) on the efficiency of public service delivery (PSD) in the education sector of Punjab, Pakistan, from the year1982 to 2017. Firstly, the efficiency coefficients for secondary school enrolment are estimated using Stochastic Frontier Analysis (SFA). Secondly, the impact of FD on PSD in the education sector of Punjab, Pakistan, is analyzed using the Auto-Regressive Distributed Lag (ARDL) method of estimation. The findings suggest that revenue decentralization positively enhances PSD efficiency in the education sector. In contrast, the effect of expenditure decentralization is negative on the efficiency of the education sector.