Much has been made of Imran Khan’s vision to transform Pakistan into a welfare state modeled along the city state of Medina. For most Pakistanis, the dream peddled has currency for obvious religious and sentimental reasons. However, welfare states models that ensure successful delivery of basic social services also exist aplenty in 21st century.

What makes for a successful welfare state? Let’s start with the Scandinavian model, cited ad nauseam in both literature and media. While the interplay of several variables from low population to high per capita income seem to have played a role, the existence of a strong system of local governance appears to be a constant.

In Sweden, for example, local governments account for 38 percent of total public sector expenses and 28 percent of total employment. According to a 2012 comparative study, education and public healthcare constitute close to 60 percent of expenditures made by the municipalities.

Similarly, in Denmark, local governments are the largest arm of government for social delivery. Tertiary level of government is responsible for broad based services from fire, policing, waste treatment, primary and secondary education, public transport, water, healthcare and hospitals, and even in certain large metropolitans, planning and economic development.

In contrast, developed countries where role of local government tier has contracted over the past two decades, have simultaneously seen a decline in quality of social service delivery. In UK for example, the “course correction” made by the neo liberals under the Thatcher government saw the central government emphasize fiscal restraint for all public services. Tertiary government spending as a proportion of total government spending fell in the UK from the peak of 42 percent in 1979 to under 30 percent in early 2000s.

So, what sets successful local governments apart from the weaker models? Foremost is their capacity to generate revenue and mobilize resources independent of state and national governments. In Sweden, for example, local government’s source up to 67 percent of their total revenue from taxes imposed at local level, whereas only 20 percent comes from grants and transfers from central government.

In Denmark too, tertiary governments possess broad based taxation powers that include property taxes as well as local income taxes. It is worthwhile to note that in both countries, user fee for services provided by the municipal authorities only account for a marginal share in revenue: for Sweden, this stands at 7 percent, with Denmark at 17 percent. Pontificating experts should take note: parking and waste collection fee do not make a successful city government.

Local governments in developed countries also possess borrowing powers through soft budget constraints and municipal bonds. While the successful of this model is debatable, tertiary governments in Pakistan have a steep learning curve to cover before they are bequeathed with the power to borrow.

If a modern welfare city-state Medina what is sought, Naya Pakistan dreamers would do well to focus more on “city” as less on “state.