Enhancing Public Sector Efficiency in Pakistan by Integration of Artificial Intelligence (AI): Insights from The Republic of Estonia

Abstract

The public sector of Pakistan has been facing problems that impact governance and the provision of public services, including administrative challenges, ineffective leadership, and a lack of transparency. This paper aims to determine how artificial intelligence (AI) can optimize policy formulation processes to improve transparency, speed, and outcomes in public institutions in Pakistan. The research is based on a global AI governance model analysis (Estonia’s digital services) and Pakistan’s emerging initiatives (AI use in NADRA, tax automation by FBR). The study explored the innovative possibilities offered by AI. The result shows that AI technologies, including AI-driven governance and data analysis, can improve policies. The paper suggests a step-by-step implementation framework that emphasizes localized pilot projects in essential areas such as the public sector. This study emphasizes the necessity of changes in institutions to effectively use of AI and it also provides helpful suggestions for technological innovations for the development of successful governance in developing nations, especially in Pakistan, in the digital age.