In 2001 the Government of Pakistan introduced devolution through its National Reconstruction Bureau (NRB). The fundamentals of the new local government system were: devolution of political power, decentralisation of administrative authority, deconcentration of management functions, diffusion of the power-authority nexus, and distribution of resources to the district level.

The devolution reform was intended to improve access to public sector services, encourage sustainability of local development initiatives and add to public sector resources through community mobilization, increased transparency and reduced leakages of resources out of the system. The new system included elected governments at district, tehsil (sub-district) and union (the lowest administrative unit) levels. Among other things, it provided for the establishment of Citizen Community Boards (CCBs), set up by members of the public with a remit to monitor service provision, and to undertake their own projects with a 20% contribution from the public and 80% from the relevant local government.

The devolution reforms were intended to improve delivery of public services and increase citizen satisfaction with services, as well to increase engagement of the public in bodies such as CCBs. The social audit, to be repeated regularly, was set up as an important way of checking the effects of the reforms, providing guidance about problem areas, and indicating ways to fine-tune the process to increase its effectiveness.

A ten-district pilot in 2001 was expanded into the baseline social audit in 2002. This led on to a multi-cycle social audit process beginning in 2004: the social audit of governance and delivery of public services. Activities to disseminate the social audit findings and encourage their use in planning improved services are described in the section on Socialising Evidence for Participatory Action (SEPA) in Pakistan.