The problem of inefficiency is key of course, but that is so for most third world nations (essentially why nations are ever poor in the first place). Where Pakistan compounds the problem and generally falls flat is in the generation of money; revenue generation has long been a massive disaster for governments, both democratic and military throughout Pakistani history. Ignoring the implementation of proper taxation greatly limits the available funds. On the other hand, the old British socialist economic system is still continued without the proper resources. The large number of crown corporations, nationalized mainly in the 70s, have absorbed the little money the government does have. If you are going to promise people health and education and then not deliver; not have money to properly equip and train your police; and cant afford basic infrastructure, the whole situation becomes exponentially worse. Now, not only do you have no money, you have an unhappy populous. A desperate and unhappy people are prime victims for those who prey on the needs of the public to further their own political and other other misguided aims, hence the growing extremist problem.
It is all interrelated, but as you rightly pointed out, we are not even remotely efficient with our funds, which we don't have enough of, to begin with. As pointed out by another member, the safety net that the international community provides to failing nations props up the completely failed system of government and economics of Pakistan. We cannot truly fail, because nations in the world will not let it happen to safeguard their own interests. By occupying the niche of complete basket case, we have invariably secured our own future in the global hierarchy...I know, we aren't exactly aiming high here.
Pakistan, today may be doing worse than it ever has, but the common man notices it only marginally; he was poor 10 years, he was poor 20 years; and he will be poor tomorrow. The suffering is almost intangible as after a while a little bit extra doesn't really add greatly to a doomed existence...a convoluted way of applying the law of diminishing returns to suffering. So if the people aren't willing to do anything; the government is content with incoming aid dollars; and our taxpayer-run organizations continue to throw money down a black hole: we will never succeed and never fail at the same time. Consider it a state of constant or perpetual misery, the consistency of which is quite incredible.