While measuring decentralization is equally complex, the fiscal flows to, from and among different levels of government can be used assess some aspects of fiscal decentralization. While we note the relations between fiscal, administrative, and political decentralization, this subject is not discuss ed. When a part of the work is entrusted to others, it is known as delegation. Meaning, advantages and disadvantages of decentralisation. Political decentralization refers to the decentralization of. Abebe boke assessment of decentralized local governance performance for service delivery in ethiopia. Fiscal federalism constitutes the core and difficult area of federalism which measures the degree of division of powers among the constituent units of federations for the financial power is an engine of every activity. Achievements and challenges, public policy and administration research.
The states have also access to a range of tax bases, except the custom duties related taxes. An explicit goal of the new constitution is to bring government closer to the. Decentralization is a complex and multifaceted concept that spans fiscal, political, and administrative dimensions. On the other hand, fiscal decentralization, or the transfer of fiscal power from the central government to local governments, is seen as part of a reform package to all developed and developing countries to improve efficiency in the public sector, to increase competition among. Generally speaking, the two decades of fiscal decentralization practices. Comparative assessment of decentralization in africa. Fiscal decentralization indicators this note contains the documentation on the database of fiscal decentralization indicators that are derived from imfs government finance statistics gfs. The process of decentralisation in ethiopia since 1991 7 southern ethiopian peoples democratic front sepdf, to a more cohesive political force in which the major regions are now governed by eprdfallied parties.
A separate memo, decentralization without disintegration, deals with provisional government in png from 1972 to 1985. Decentralisation, fiscal federalism, woreda, capacity building. Decentralization and governance jeanpaul faguet london school of economics and political science, uk summary. In fulfilment of the requirements for the degree of. Although decentralization in ethiopia has attracted some research, less attention is given to decentralized environmental governance tegegne, 2007. Recognizing that with any large region and, in the case of the african continent. Ethnicity, democratisation and decentralization in. Ethiopia is a remarkable case in which war, famine and chaos in the 1970s1980s were followed by federalization, decentralization, rapid growth and dramatic. Issues of vertical imbalances in ethiopia s emerging system of fiscal. Ethiopias fiscal decentralization characterized with a vertical fiscal.
Fiscal decentralization in ethiopia ethiopian economic. At the other extreme, if administrative decentralization takes place first and is followed by fiscal decentralization and then. Selected issues and statistical appendix this selected issues and statistical appendix paper for the federal democratic republic of ethiopia was prepared by a staff team of the international monetary fund as background documentation for the periodic consultation with the member country. The main purpose of this study is to undertake an academic assessment on the practice of prevailing decentralization in ensuring good governance at local government in ethiopia. Subsequently, since 20012, the second wave of decentralization that is dldp has been implementing. This book documents mexicos decentralization experience as well as conceptualizing its main trends, policies, and options, and brings them into the light of international comparison. Fiscal policy in ethiopia ethiopian economic association.
Economic development mofed and world bank wb documents and reports were used. The views expressed in this publication are those of the authors and do not necessarily reflect the views and policies. The process of decentralisation in ethiopia since 1991 korea. Presented to the faculty of economics and social science. Fiscal decentralization in ethiopia the movement for. Generally speaking, the two decades fiscal of decentralization practices. Fiscal decentralization in developing countries edited by richard m. Ethiopia decentralization fiscal support for local infrastructure grant dfslig project english. This volume brings together studies by the forum for social studies and others, with the aim of identifying knowledge gaps for further research and to generate debate on the issues in ethiopia. We find that fiscal decentralization may have significant effects on poverty and inequality. As one of the major dimensions of decentralization reform program, fiscal decentralization has been a worldwide phenomenon since the 1980s and since 1991 in ethiopia. Fiscal imbalances in fdre contd vertical imbalance for example for instance, the revenue generated by the regions accounts for only a maximum of 9.
The study of water supply in chalia, oromia, ethiopia. Introduction fiscal federalism, under which provision of public goods is decentralized to subnational governments, allows public consumption levels to be tailored to suit the preferences of a heterogeneous population. Decentralisation extends to the lowest level of the organisation. Kibe moges, the conceptual frame work for fiscal decentralization. Intergovernmental fiscal transfers were on the basis of block grants, not earmarked programs. Eshetu chole, issues of vertical imbalances in ethiopias emerging system of fiscal decentralization. Fiscal decentralization in ethiopia semantic scholar. Subnational governments at the subnational level, concerns about ethiopias dominantparty state are therefore replicated. Fiscal decentralization in developing countries the web site. M fiscal federalism and its discontents 4 autonomy is devolved to independentlyelected and locally accountable autonomous subnational governments. United nations economic commission for africa fiscal policy for financing sustainable development in africa d ordering information to order copies of this report, please contact. This study explores and assesses the democratization and decentralization experiment in ethiopia.
Introduction on a balmy september evening in 1994, five men sat under a mango tree in the port town of kimbe in west new britain province of papua new guinea. Decentralization of power and local autonomy in ethiopian. The process of decentralisation in ethiopia since 1991. Decentralization is used to denote the transfer of responsibility from central government bodies and its agencies to field units of the central government, and semiautonomous private or voluntary organizations. In terms of health and education services, for example, ethiopias decentralized levels of government have nearly 80 per cent responsibility. M an economic analysis of fiscal federalism in ethiopia 2 system of economic and political administration is one of the forces behind the temptation of a number of countries to experiment with the decentralization of both political and fiscal power tanzi, 1996. This sequence of reforms leads to a higher degree of autonomy for governors and mayors. In particular, fiscal decentralization appears to lead to increases in the poverty measures we use, but it also appears to reduce income inequality if the general government represents a significant share of the economy 20% or more. Challenges and some options a comparative study a thesis submitted to the law school of addis ababa university for the partial fulfillment of masters degree ll. It focuses on the oromia region, which is the countrys largest region as well as housing its single largest ethnic group.
Further powers were devolved in 2001 through the district level decentralization program and urban management profram. Achievements and challenges of fiscal decentralization. Fiscal federalism and national unity urban institute. Ethiopia, international studies program working paper 0838, andrew young school of policy studies alefe abeje belay 2014, system of division of revenue in ethiopia, european scientific journal d. The study assesses the efficacy and role of various initiatives of the district level decentralization program of the amhara region, such as the fiscal empowerment of woredas. Sep 03, 2016 in ethiopia, as a policy making, to link decentralization with good governance is a very recent phenomenon. He held interviews with key informants, as well as conducted focus group discussions in ambo, waliso, gerar jarso, north shewa, walenchiti, east shewa, arsi and jimma. The most important theoretical argument concerning decentralization is that it can make government more accountable and responsive to the governed. Befekadu degefe, the legal framework for fiscal decentralization in ethiopian during the transition period. Government privatizes or deregulates private functions. Eshetu chole, issues of vertical imbalances in ethiopia s emerging system of fiscal decentralization. Wogene yirko, history of the post war ethiopian fiscal system.
The ethnic diversity of ethiopia was made part of the decentralization design with. Fiscal decentralisation overseas development institute. The practice of fiscal federalism in ethiopia rero doc. The decentralization drive in ethiopia has proceeded in two phases. Ethiopia attempted to introduce federalism in general, and fiscal decentralization in particular back as far as the transition period 1991994. Ethiopia decentralization fiscal support for local. Ethiopia put its foot when the current government comes in to. Dec 28, 2007 further powers were devolved in 2001 through the district level decentralization program and urban management profram.
The authors explore the effects of decentralization on education and health in ethiopia using an original database covering all of the countrys regions and woredas local governments. Decentralization in government developing countries. Thus, in ethiopia, two waves of fiscal decentralization have been in place, one from the federal government to regional states and the other reform regional states to woredas with the view of revitalizing the regional constitutional mandate for woredas 3. Fiscal decentralization and how it is practiced also affects the other objectives of public finance, namely income distribution and macroeconomic stabilization. Trade and development isbn 0 521 64143 8 hardbound 1. Fiscal decentralization revenues this paper attempts to evaluate the recent moves to decentralize fiscal powers to the regions to see to what extent they can affect the conditions for macroeconomic management in the country, given the ongoing economic reform programme that emphasises the correction of past macroeconomic mismanagement as the. Decentralization is the assignment of fiscal, political, and administrative responsibilities to lower levels of government bird and vaillancourt 1998. Ethnicity, democratisation and decentralization in ethiopia 83 the researcher made several field trips to several woredas districts of the oromia region for data collection. Decentralisation refers to tire systematic effort to delegate. It is intended primarily for policymakers, in this case meaning civil servants and their. Fiscal decentralization and macroeconomic management in. Oct 10, 2018 however, fiscal decentralization also affects other while fiscal federalism constitutes a set of guiding principles, federaliism guiding concept that helps in designing financial relations between the national and subnational levels of the federalksm, fiscal decentralization on the other hand is a process of fiscal federalism in ethiopia such. Decentralization is a complex phenomenon involving many geographic entities, societal actors and social sectors. Fiscal decentralization is seen as part of a reform agenda in developing countries to strengthen regional and local governments.
Although politics is the driving force behind devolution in most countries, fortunately, decentralization may be one of those instances where good politics and economics may serve. However, fiscal decentralization also affects other while fiscal federalism constitutes a set of guiding principles, federaliism guiding concept that helps in designing financial relations between the national and subnational levels of the federalksm, fiscal decentralization on the other hand is a process of fiscal federalism in ethiopia such. The consequences of fiscal decentralization on poverty and. In this case, previously concentrated powers to tax and generate revenues are dispersed to other levels of government, e. While we note the relations between fiscal, administrative, and political decentralization, this subject is not discuss ed in detail here. Decentralisation can be viewed as an extension of delegation. A rapid assessment the 1995 constitution of ethiopia instituted radical reform of governance structures, including devolution of significant resources and responsibilities from central agencies to nine regional administrations. Decentralization and governance initiative for policy. The 1991 government change in ethiopia ushered in a centralised system of governance, aimed to bring about harmony and cooperation between different groups and to promote local selfrule. In this case, fiscal decentralization is likely to follow, with administrative decentralization occurring last. Ethiopia has been following federal system of government and decentralization policy of regional and local governance and democratization process immediately after the downfall of the military regime the dergue in 1991. Later, a clearer federal system was established with the adoption of the 1995 constitution of the federal democratic republic of ethiopia.
I address the economic prudence of pursuing fiscal decentralization in a poor country fiscal federalism in ethiopia the ways in which such a policy affects fiscal discipline, resource allocation, and efficiency of fiscal federalism in ethiopia utilization as well as the growth performance of sectors in the economy. It describes the demand of the oromo people for selfrule and. Linking fiscal decentralization and local financial. Distribution of conditional transfers contents acknowledgements 3 1. Subnational governments at the subnational level, concerns about ethiopia s dominantparty state are therefore replicated. An economic analysis of fiscal federalism in ethiopia. Included are the types of indicators included as well as some guidance on how to use and how not to use the indicators as well as where to find the information.