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Universities in some developing countries are undergoing reforms over the recent decades so that they become research-based institutions. It has been stressed that research is of paramount importance for enhancing the economy of a country and for societies to become knowledge-based. However some of these concepts and challenges faced by these universities are hardly explored. Relying on the analysis of qualitative interviews and document analysis, this paper examines how the Higher Education Commission (HEC) has taken numerous initiatives to boost the research capacity of universities in Pakistan. Even then, numerous challenge remains in the attempt to enhance research quality. Funding and its effective use, academic freedom, and value of research in the society emerged as major impediments to research development at the universities. Critical voices from the university faculty are rarely taken into account by those responsible for higher education bodies, therefore many of such challenges persist till date. The article proposes solutions for overcoming some of these challenges and situates the experience of Pakistani universities within the broader experiences of universities world-wide.