Pakistan: Governance and Corruption Diagnostic Report

This Governance and Corruption Diagnostic (GCD) was conducted at the request and with the support of the Government of Pakistan to identify and analyze governance weaknesses and corruption vulnerabilities that undermine economic performance and reform efforts. The diagnostic focused on federal-level governance in five core state functions: fiscal governance, market regulation, financial sector oversight, anti-money laundering and combating the financing of terrorism (AML/CFT), and rule of law, and also considered the strength and effectiveness of anticorruption institutions and approaches to address corruption risks. The findings reveal persistent and widespread corruption risks embedded in a heavily state-dominated economy that operates with complex regulatory environments, weak institutional capacities, fragmented oversight, with ineffective and inconsistent accountability and constrained rule of law. These factors collectively constrain private sector development and public sector effectiveness. The report provides an integrated set of recommendations aimed at achieving concrete and visible progress through strengthening institutional integrity, enhancing transparency, improving consistency and reliability of the enforcement of rules, and fostering coordination across agencies to support sustainable economic growth and public trust.