Skip Navigation LinksHome


Fiscal decentralisation

​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​

​​​​​​​​​​​​​​​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 learning journeys.



Key documents: SDC

click here for more

 Key Reading Documents (from SDC)

  • https://www.shareweb.ch/site/DDLGN/Thumbnails/Fiscal%20Transfer%20Burundi.PNG

    Fiscal Transfers Burundi

    Country Case Studies on Intergovernmental Transfer Schemes and SDC Support: Burundi

    Key Reading Document
    SDC
    2018
    Annonciata Ndikumasabo
    🇬🇧
  • https://www.shareweb.ch/site/DDLGN/Thumbnails/Fiscal%20Transfer%20Mongolia.PNG

    Fiscal Transfers Mongolia

    Country Case Studies on Intergovernmental Transfer Schemes and SDC support: Mongolia

    Key Reading Document
    SDC
    2018
    Jacques Mérat, Zolzaya Lkhagvasuren, Purevtogtokh Ganbold, Tsolmon Bold
    🇬🇧
  • https://www.shareweb.ch/site/DDLGN/Thumbnails/Fiscal%20Transfer%20Nepa.PNG

    Fiscal Transfers Nepal

    INTERGOVERNMENTAL FISCAL TRANSFERS IN NEPAL: AN OVERVIEW

    Key Reading Document
    SDC
    2018
    Prakash Regmi Senior Programme Officer Embassy of Switzerland in Nepal
    🇬🇧
  • https://www.shareweb.ch/site/DDLGN/Thumbnails/Fiscal%20Transfer%20B%C3%A9nin.PNG

    Fiscal Transfers Bénin

    Country Case Studies on SDC support to Transfers, Benin

    Key Reading Document
    SDC
    2018
    🇬🇧
  • https://www.shareweb.ch/site/DDLGN/Thumbnails/Fiscal%20Transfer%20Bangladesh.PNG

    Fiscal Transfers Bangladesh

    Country Case Studies on Intergovernmental Transfer Schemes and SDC support: Bangladesh Author: Melina Papageorgiou, Embassy of Switzerland in Bangladesh

    Key Reading Document
    SDC
    2018
    Melina Papageorgiou
    🇬🇧



Key documents: other

click here for more

 Key Reading Documents (not from SDC)

  • https://www.shareweb.ch/site/DDLGN/Thumbnails/Wp466.jpg

    IDS Working Paper, Vol. 2016 No. 466

    Is Fiscal Decentralisation Delivering on its Promises? A Review of the Theory and Practice in Developing Countries.

    Key Reading Document
    IDS, SDC
    2016
    Giulia Mascagni
    🇬🇧
  • https://www.shareweb.ch/site/DDLGN/Documents/WB_Subnational-credit-ratings-a-comparative-review.jpg

    Subnational credit ratings: A comparative review

    This policy research working paper surveys methodological issues in subnational credit ratings and highlights key challenges for developing countries.

    Key Reading Document
    World Bank
    2009
    Lili Liu, Kim Song Tan
    🇬🇧
  • https://www.shareweb.ch/site/DDLGN/Documents/WB_Shah_Public-Services-and-Expenditure-Need-Equalization.jpg

    Public services and expenditure need equalization

    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.

    Key Reading Document
    World bank
    2012
    Anwar Shah
    🇬🇧
  • https://www.shareweb.ch/site/DDLGN/Documents/WB_Managing-subnational-credit-and-default-risk.jpg

    Managing subnational credit and default risks

    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.

    Key Reading Document
    World Bank
    2010
    Lili Liu, Michael Waibel
    🇬🇧
  • https://www.shareweb.ch/site/DDLGN/Documents/WB_Macro-federalism-and-local-finance.jpg

    Macro federalism and local finance

    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.

    Key Reading Document
    World Bank
    2008
    Anwar Shah
    🇬🇧



Further reading documents

click here for more

 Further Reading Documents

  • https://www.shareweb.ch/site/DDLGN/Documents/Principles-for-Designing-Transfers_Bolivia_Jorge-Martinez_Vazquez.jpg

    Principles for designing transfers - The challenge of designing intergovernmental fiscal transfers in Bolivia

    This powerpoint presentation focusses on the issue of grants and transfer systems, based on Bolivia's experience.

    Further Reading Document
    World Bank Institute
    Jorge Martinez-Vasquez
    🇬🇧
  • https://www.shareweb.ch/site/DDLGN/Documents/general_grants_versus_earmarked_grants_theory_and_practice.jpg

    General grants versus earmarked grants: theory and practice

    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.

    Further Reading Document
    Korea Institute of Public Finance KIPF, Danish Ministry of Interior and Health
    2010
    Junghun Kim, Jørgen Lotz, Niels Jørgen Mau
    🇬🇧
  • https://www.shareweb.ch/site/DDLGN/Documents/fiscal-decentralisation-in-developing-countries_Bgldesh.jpg

    Fiscal decentralisation in developing countries: Lessons for Bangladesh

    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.

    Further Reading Document
    Chr. Michelsen Institute
    2014
    Odd-Helge Fjeldstad
    🇬🇧
  • https://www.shareweb.ch/site/DDLGN/Documents/Fiscal%20policy-and-tax-reform%2C-SDC%2C-2008.jpg

    Fiscal policy and tax reform

    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.

    Further Reading Document
    SDC
    2008
    🇬🇧
  • https://www.shareweb.ch/site/DDLGN/Documents/District-Development-Fund_Laos.jpg

    District development fund and strengthening local services delivery in Lao People Democratic Republic

    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.

    Further Reading Document
    Huazhong University of Science and Technology China
    Chantha Onxayvieng * Shukui Tan
    🇬🇧


Links

click here for more

 Links


Videos

click here for more

 Videos