Pakistan’s land market has prevented an inclusive and efficient process of urbanization, which has ultimately contributed to the spread of informality. Service provision in urban areas is closely linked to the capacity of municipalities to raise revenues, plan for cities’ development, and to secure budget allocations from provincial budgets. In all three aspects, insiders’ interest in maintaining their privileges, compounded by the weakness of the land management system, has contributed to the poor livability of Pakistani cities. It is estimated that the current housing shortage in Pakistan is about 10 million units, with about half in urban areas, where private sector developers, on average, supply only half of the formal housing units that would be required by population growth. This leaves the remaining half of housing demand to be produced through informal procedures without infrastructure, titling or planning. Over time, cities’ development has witnessed a proliferation of high-end (gated) communities catering to the needs of insiders islands of efficiency in which inhabitants pay private developers for service provision, rather than paying taxes to municipalities along with a proliferation of under-served and environmentally unsafe informal settlements, in which outsiders pay private providers or middlemen to access services not provided by public providers (water tankers, illegal electricity connections, etc.). This expansion of informality in housing has also given rise to informality in businesses.