This study is an attempt to explore the impact of public debt on economic growth of Pakistan. To explore the relationship the study used augmented Solow growth Model. To test the model, Bound test for Cointegration is applied on time series data that cover the period from 1972 to 2013. The empirical results of the study suggest that public debt and economic growth has positive but statistically insignificant relationship. In addition, our control variables i.e., population growth enter in the model with expected negative sign while human capital and private investment bear their expected positive signs and are also statistically significant. This indicates that human capital and private investment play a vital role in the growth and development of an economy.

Fiscal Decentralization is the devolution of fiscal assignments to lower governments for high growth and better delivery of public services. The current study covering the period from 1972 to 2009 is an attempt to find out the impacts of fiscal decentralization on public services deliveries in Pakistan. Public services are proxy by Gross enrollment at primary school level while fiscal decentralization by fiscal transfer and expenditure sides of devolution. Using time series data, it is found that the individual impacts of fiscal transfer are although insignificant but still support the theoretical proposition regarding fiscal decentralization and public services relationship while delegation of expenditure responsibilities helps in improving the gross enrollment at primary school level. Furthermore the study evident that complete delegation of fiscal responsibilities to lower governments enhance enrollment ratio in Pakistan.

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