Fiscal Decentralization and Local Governance

Fiscal decentralization and subnational fiscal policy play an increasingly important role in sound public policy and democratic governance around the world. By yielding greater fiscal responsibilities to regional and local governments, the public sector can be more flexible in response to variations in regional and local needs and demands for public services. As a result, decentralization of the public sector also increases citizen participation in the governance process and enhances government accountability. The Andrew Young School’s faculty experts are at the forefront of the design and implementation of all aspects of decentralization reform, including issues surrounding local government structure, expenditure assignments, local revenue mobilization, intergovernmental grants, and local government borrowing.

 

Example Projects:

 

Mozambique: Technical Assistance for Fiscal Decentralization

Contracted by the Government of Mozambique to undertake a $1.2 million World Bank-funded project to comprehensively rethink fiscal decentralization in Mozambique.  As part of the project, the GSU team is responsible for nine deliverables, including making recommendations for expenditure and revenue assignment to each of the country’s sub-national tiers, proposing the vertical transfer formula, and rethinking the structure of the central institutions and legal framework that oversees the system.  The team, led by Charles Hankla, has completed two of the four country visits including a data gathering visit in three provinces.

 

Cambodia: Advisory Assistance for Fiscal Decentralization
Under a contract with the Royal Government of Cambodia, ICePP contributed to the country’s sub-national democratic development reforms. The project supported the Ministry of Economics and Finance (MEF) in reforming intergovernmental fiscal relations by providing technical advice and delivering key reports on:

• Sub-National Administrations’ (SNA) Own-Source Revenues,
• Restructuring Provincial Financial Arrangements,
• Enhancing the Design of the D/M Fund,
• Crafting Conditional Transfers for Delegated Functions,
• Building the Local Finance Department’s (LFD) capacity for fiscal decentralization policy analysis, and
• Developing a medium- and long-term strategic roadmap for fiscal decentralization in Cambodia.

 

Egypt: Fiscal Decentralization Initiative
As part of the USAID Egypt – Decentralization Initiative, ICePP collaborated with AECOM on a $1 million subcontract to enhance Egypt’s decentralization efforts. ICePP’s work focused on six critical areas:

• Assisting in the creation and implementation of a decentralization strategy,
• Strengthening policy modeling and analytical capacity through the new technical office,
• Supporting research to advance decentralization efforts,
• Designing and delivering training for central and local government officials,
• Developing a national curriculum on decentralization policy, and
• Facilitating coordination among donors to ensure alignment on decentralization objectives.