This thesis explores the impacts of fiscal decentralization on woreda level spending and local health and education outcomes in the amhara region of ethiopia. Fiscal federalism and decentralization in selected igad member countries1 1. Causes and consequences of fiscal imbalance in tigray. The ethnic diversity of ethiopia was made part of the decentralization design with. Evidence from ethiopia qaiser khan1 jeanpaul faguet2 christopher gaukler3 wendmsyamregne mekasha4 15 june 2014 abstract decentralization is meant to improve public services, but relatively few studies examine this question empirically. Further powers were devolved in 2001 through the district level decentralization program and urban management profram. Comparative assessment of decentralization in africa. The constitution shared political power between federal and regional governments. Issues of vertical imbalance in ethiopias emerging system of. Fiscal decentralization, fiscal imbalance, fiscal autonomy, revenue and expenditure, sibu sire woreda, oromia. Until now, decentralization in ethiopia has attracted very little research. 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. It attempted to explore the objectives, legal and institutional frameworks and implementation status of the recently embarked dldp and fiscal decentralization in the gambella region.
Government privatizes or deregulates private functions. Jul 23, 20 ethnicity, democratisation and decentralization in ethiopia 83 the researcher made several field trips to several woredas districts of the oromia region for data collection. The major purpose of this paper is to examine the extent to which the problem of vertical imbalance arises in ethiopias newly emerging system of fiscal decentralization and to critically assess existing arrangements for resolving it. Fiscal decentralization can be achieved through user fees, user participation through monetary or labor contributions, expansion of local property or sales taxes, intergovernmental transfers of central government tax monies to local governments through transfer payments or grants, and authorization of municipal borrowing with national. 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 the same end. It concludes that the degree of vertical imbalance n regional budgets is rather pronounced and that there are a number of limitations in the mechanisms used in. Kibe moges, the conceptual frame work for fiscal decentralization. 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. Decentralization is a complex phenomenon involving many geographic entities, societal actors and social sectors. 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. Fiscal decentralization in addis ababa city administration, the case of bole subcity ethiopia. In another assessment of fiscal decentralization, wamai.
The process of decentralisation in ethiopia since 1991. In part ii, political decentralization, kassa teshager ecsc has looked at political decentralization and assesses how it has been legally designed, implemented and how successful it has been in achieving. Causes of vertical and horizontal fiscal imbalances 2. Chapter three fiscal decentralization in ethiopia 3. Intergovernmental fiscal transfers were on the basis of block grants, not earmarked programs. 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. 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 study mainly employed quantitative approach based on a panel data on revenue and expenditure assignments. Subsequently, since 20012, the second wave of decentralization that is dldp has been implementing. Fiscal decentralization in ethiopia book, 1994 worldcat.
Fiscal decentralization in developing countries the web site. Such transfer of power is believed to bring not only political. The major purpose of this study was to assess the achievements and challenges of fiscal decentralization in ethiopia. The most recent decentralization reforms in ethiopia began in the early 2000s at the woreda district level, focusing on strengthening local governments as institutions of democratic governance and efficient service delivery. 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. Decentralizations effects on education, health and agriculture outcomes, and on distribution. The effects of fiscal decentralization on health and.
Fiscal decentralization can take many forms, including a selffinancing or cost recovery through user charges, b cofinancing or coproduction arrangements through which the users participate in providing services and infrastructure through monetary or labor contributions. Dec 28, 2007 further powers were devolved in 2001 through the district level decentralization program and urban management profram. The study of water supply in chalia, oromia, ethiopia. Ethnicity, democratisation and decentralization in ethiopia. The states have also access to a range of tax bases, except the custom duties related taxes.
Achievements and challenges, public policy and administration research. Achieving better service delivery through decentralization in ethiopia 0 0. And in a paper especially relevant for this study, ishiyama 2012 finds that subnational fiscal grants in ethiopia were targeted not in terms of need or service provision, but rather to buy off woredas that had supported. The extent and impacts of decentralization reforms in ethiopia. Ethiopia attempted to introduce federalism in general, and fiscal decentralization in particular back as far as the transition. Decentralizations effects on education, health and. Fiscal policy in ethiopia ethiopian economic association. Decentralization, fiscal decentralization, revenue assignment, expenditure assignment, fiscal inequity. Achievements and challenges as one of the major dimensions of decentralization reform program, fiscal. The author concludes that fiscal decentralization is promising in ethiopia since it encourages subnational governments to assume additional responsibilities.
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. 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. It is intended primarily for policymakers, in this case meaning civil servants and their. Pdf fiscal decentralization in addis ababa city administration. We offer the database as an additional contribution. Ethiopia attempted to introduce federalism in general, and fiscal decentralization in particular back as far as the transition period 1991994. 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. Eshetu chole, issues of vertical imbalances in ethiopias emerging system of fiscal decentralization. Fiscal decentralisation overseas development institute. An economic analysis of fiscal federalism in ethiopia.
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. Abstract in order to effectively carry out decentralized functions and be able to efficiently discharge expenditure responsibilities, subnational governments need to have an adequate level of finance either raised local from their own source of. Befekadu degefe, the legal framework for fiscal decentralization in ethiopian during the transition period. Issues of vertical imbalance in ethiopias emerging system. Fiscal imbalances in fdre contd vertical imbalance for example for instance, the revenue generated by the regions accounts for only a maximum of 9. In fulfilment of the requirements for the degree of. Decentralization of power and local autonomy in ethiopian.
The process of decentralisation in ethiopia since 1991 korea. Clientelism and ethiopias post1991 decentralisation the. Presented to the faculty of economics and social science. In terms of health and education services, for example, ethiopias decentralized levels of government have nearly 80 per cent responsibility. Distribution of conditional transfers contents acknowledgements 3 1. Ethnicity, democratisation and decentralization in ethiopia 83 the researcher made several field trips to several woredas districts of the oromia region for data collection. Eshetu chole, issues of vertical imbalances in ethiopia s emerging system of fiscal decentralization. The major purpose of this paper is to examine the extent to which the problem of vertical imbalance arises in the ethiopian context and to critically assess existing arrangements for resolving it. 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. Even with the most efficient decentralization process, the level of service provision will remain very low for a number of years. Achievements and challenges deribe assefa lecturer, ethiopian civil service university abstract 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. 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. Achieving better service delivery through decentralization in ethiopia the world bank marito garcia.
The study mainly employed quantitative approach based on a panel data on revenue and. 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. Other studies in ethiopia find the level of local government control of resources much higher above 20% defega, 2003 and a much deepened administrative decentralization at regional and woreda district level eldon and waddington, 2007. Issues of vertical imbalance in ethiopias emerging system of fiscal decentralization, in eshetu, chole ed.
Fiscal decentralization in ethiopia ethiopian economic. Later, a clearer federal system was established with the adoption of the 1995 constitution of the federal democratic republic of ethiopia. 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. The scope of decentralization and intergovernmental fiscal transfers. However, special attention must be given to enhance the fiscal autonomy of subnational governments so as to realize the benefits of effective fiscal decentralization. The legal framework for fiscal decentralization in ethiopia during the transition period.
Fiscal federalism and decentralization in selected igad. If local governments and private organizations are to carry out decentralized functions effectively, they must have an adequate level of revenues either raised locally or transferred from the central government as well as the authority to make. Legal framework for fiscal decentralization in ethiopia 3. Expenditure and revenue assignments under the fdre constitution 3. Introduction tegegne gebreegziabher a brief overview of decentralization in ethiopia in the last quarter century, many countries have engaged in the process of decentralization by transferring responsibilities of the state to lower tiers of government. Ethnicity, democratisation and decentralization in. Financial responsibility is a core component of decentralization. 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 decentralization involves shifting some responsibilities for expenditures andor revenues to lower levels of government.
Achieving better service delivery through decentralization. An explicit goal of the new constitution is to bring government closer to the. Fiscal decentralization in ethiopia semantic scholar. The major purpose of this paper is to examine the extent to which the problem of vertical imbalance arises in ethiopia s newly emerging system of fiscal decentralization and to critically assess existing arrangements for resolving it. Pdf decentralization and service delivery in ethiopia. Wogene yirko, history of the post war ethiopian fiscal system. Introduction fiscal federalism the fiscal implications of a decentralized system of multilevel government is an important component of governance in a federal or a decentralized system. Decentralization or decentralisation see spelling differences is the process by which the activities of an organization, particularly those regarding planning and decision making, are distributed or delegated away from a central, authoritative location or group concepts of decentralization have been applied to group dynamics and management science in private businesses and organizations. Fiscal decentralization and macroeconomic management in ethiopia girma seyoum 20 p.
Sep 03, 2016 in ethiopia, as a policy making, to link decentralization with good governance is a very recent phenomenon. Issues of vertical imbalances in ethiopias emerging system of fiscal. Decentralisation, fiscal federalism, woreda, capacity building. In this case, previously concentrated powers to tax and generate revenues are dispersed to other levels of government, e. Since the country is just beginning to experiment with fiscal decentralization, and given its traditi. One important factor in determining the type of fiscal decentralization is the extent to which subnational entities are given autonomy to determine the allocation of their expenditures. Fiscal decentralization in ethiopia the movement for. Among the aspects of fiscal federalism to be assessed are the constitutional and. Clientelism and ethiopias post1991 decentralisation.