Social and Behavioral Sciences Commons^™

Fiscal Federalism And Its Discontents: Theory And Policy, Abu Girma Moges

International Conference on African Development Archives

A number of countries have pursued fiscal decentralization within a broad context of political and economic reforms to improve the performance of their public sector. Fiscal decentralization can potentially improve the allocation efficiency of the public sector and increase the capacity of a nation to address its pressing economic, social and political problems. The sustainability of such an approach is conditioned by the existence of effective democratic institutions and implementation capabilities. When political imperatives dictate the adoption of fiscal decentralization, however, the process would confront problems of the commons, capacity constraints and externalities that would limit the potential efficiency gains …