Why Theory and Practice are Different: The Gap Between Principles and Reality in Subnational Revenue Systems

Ensuring adequate subnational revenue is a core concern of fiscal decentralization. Public finance principles for selecting and designing subnational revenue sources have been widely used during the prominent wave of decentralization efforts in developing countries over the past three decades. Available empirical literature, however, suggests that subnational revenue generation often fails to meet needs and expectations, even where normative advice has been or seems to have been followed. Are the principles inappropriate, or are they just poorly applied? This paper argues that both factors are often at play. Basic principles are valuable, but they can be challenging to use and do not cover certain critical factors. Even if the principles are relevant and well applied, implementation commonly faces powerful constraints. Yet despite unsatisfying performance, revenue system design remains substantially based on a conceptually narrow normative framework that lacks a sense of pragmatic strategy and is often overwhelmed in practice by contextual factors it fails to or only weakly considers

Fiscal decentralisation frameworks for Agenda 2030: understanding key issues and crafting strategic reforms

Local and regional governments (LGS) will be important actors in ensuring that the UN’s Sustainable Development Goals (SDGs) are translated into action that is tailored to the most pressing needs of their communities. Despite broad recognition of the subnational dimension of the SDGs, the specific roles that LRGs can and should play and the capacities and resources they require have received insufficient official consideration to date. If LRGs are to maximise their developmental impact, countries require robust intergovernmental frameworks and policies that empower, finance, motivate and support local and regional governments and citizens. The paper examines the requirements and options for subnational government finance and provides suggestions for strategic implementation, concluding by linking fiscal decentralisation reforms to the SDGs

The Political Economy of Local Infrastructure Planning

Developing countries face considerable challenges in the design and operation of local infrastructure planning systems in decentralized or decentralizing countries. Many of these are well documented, but the complex political economy environment in which planning evolves has received insufficient attention. The forces driving decentralization and other public sector reforms shape how planning emerges, functions and performs. Local planning involves a range of differentially empowered and variously motivated actors at multiple levels and in diverse ways. The dynamics among them can support or undermine authentic local planning, with potentially significant implications for results. This paper reviews the evolution of local infrastructure planning with a focus on least developed countries, outlining the key expected and observed relationships among decentralization, planning systems and infrastructure development. The main goal is to create greater awareness of political economy issues that could inform the design and management of more effective and pragmatic local infrastructure planning systems

The fiscal role of local government in developing countries : lessons from Kenya

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Urban Studies and Planning, 1988.Bibliography: v.2, leaves 406-420.by Paul Joseph Smoke.Ph.D

Integrating Fiscal Decentralization Reforms and the Challenge of Implementation

South Africa\u27s struggles with an ambitious and complex fiscal decentralization program are presented in detail in the first six chapters of this book. In this chapter, we summarize our key findings and turn to a discussion of the way forward with the assignment of powers and functions, the development of local sources of revenue, and the redesign of the intergovernmental transfer system. We give special emphasis to the interrelationships among the pieces of the fiscal decentralization system. We also briefly consider two dimensions of the system - development transfers to support capital investment and municipal borrowing powers - that are not discussed at length in the previous chapters