Fiscal decentralisation is a critical element in any decentralised system of governance. Decisions on the allocation of resources and responsibilities have far-reaching consequences: they define to a large extent what type of public services are being delivered by subnational governments; how they are going to finance their expenditures; what level of equity should or could be established in the face of fiscal disparities; and how sustainable national public finances can be. Subnational revenues can include: fiscal transfers, taxes and revenue sharing, and government borrowing and debt.
For many subnational governments fiscal transfers from the central government are the most important source of revenue, particularly in poor and remote areas. Transfers can serve different purposes and they apply different design options. There is no magic formula for a transfer scheme but for subnational authorities they need to be predictable, reliable and adequate in relation to assigned tasks.
Tax revenues are at the core of sustainable development processes and democratic state building, both at the national and sub-national level. At the sub-national level, decentralisation has brought great opportunities (at least in theory) for increased fiscal autonomy and increased efficiency in service delivery Taxes are important to strengthen independence of subnational government units, and to foster accountability relations towards citizens. You can find resource documents below.
SDC is assisting the design of transfer schemes and sometimes co-financing them (in many cases via the instrument of local development funds). It supports subnational governments in raising taxes: improved tax administration and collection by the authorities, and improved tax compliance by the tax payers. But SDC also facilitates policy reforms and legislation for greater fiscal authority at subnational levels.
Fiscal decentralisation has been high on the ddlgn learning agenda over the past years, including several e-discussions, e-learning book and one learning event. You can find information under
Country Case Studies on Intergovernmental Transfer Schemes and SDC Support: Burundi
Country Case Studies on Intergovernmental Transfer Schemes and SDC support: Mongolia
INTERGOVERNMENTAL FISCAL TRANSFERS IN NEPAL: AN OVERVIEW
Country Case Studies on SDC support to Transfers, Benin
Country Case Studies on Intergovernmental Transfer Schemes and SDC support: Bangladesh Author: Melina Papageorgiou, Embassy of Switzerland in Bangladesh
Is Fiscal Decentralisation Delivering on its Promises?
A Review of the Theory and Practice in Developing Countries.
This policy research working paper surveys methodological issues in subnational credit ratings and highlights key challenges for developing countries.
This policy research working paper reviews the conceptual challenges as well as lessons from worldwide experiences in implementing public services and expenditure need compensation in fiscal equalization transfers with a view to developing guidance for practitioners.
This policy research working paper is part of a larger effort in the Word Bank's Economic Policy and Debt Department to develop knowledge products on subnational finance and fiscal reforms.
This report is part of the Public Sector Governance and Accountability Series. This series aims to advance the World Bank’s objective of poverty alleviation by disseminating conceptual guidance and lessons from practices that promote responsive, responsible and accountable public governance in developing countries.
This powerpoint presentation focusses on the issue of grants and transfer systems, based on Bolivia's experience.
In 2009, KIPF and the Danish Ministry of the Interior and Social Affairs held a biennial workshop in Copenhagen on the issue of choosing between general and earmarked grants. Participating academics and practitioners presented provocative views and interesting field experiences. This book is based on the papers presented at the 2009 workshop. Its intention is to offer policy guidelines for practitioners and stimulating research topics for academics.
Fiscal decentralisation, the devolution of taxing and spending powers to lower levels of government, has become important to governance in many countries. This brief examines fiscal decentralisation experiences in developing countries and explores factors affecting the reform process that could inform future policy and research on fiscal decentralisation in Bangladesh.
This study analyzes the extent to which the issues of fiscal policy and tax reform prevail in the policy dialogue between SDC and partner countries and to what extent they constitute priorities in partner countries.
This article looks at whether the District Development Fund program has positively affected the capacity of local authorities to deliver prioritized local public services in the Lao People Democratic Republic.
Organised together with the Gender Network.