Reducing poverty through fiscal decentralization in ghana and beyond. Our central interest in this paper is to examine how fiscal decentralisation is articulated to address the leading social disparities in south africa. Fiscal decentralisation under the district assemblies common fund dacf in ghana is supposed to transfer more financial resources from the centre to the districts, and to provide fiscal autonomy. The impact of fiscal decentralisation on local economic. Government of ghana intergovernmental fiscal decentralisation framework. Aug 07, 2015 eu supports ghana s decentralisation process following the disbursement of 17,5 million euros to ghana last month by the european union to support the decentralisation process, the eu delegation to ghana yesterday 06 08 2015 opened discussions on modalities to measure the results of this active cooperation for the two coming years. Fiscal decentralisation and inclusive growth en oecd. Pdf the unfinished agenda in the theory and practice of fiscal decentralization is how fiscal decentralization. Practices and challenges of fiscal decentralisation in africa. Post independence era problems that developed as a result of this dual central and local administration included encroachment on. Government of ghana intergovernmental fiscal decentralisation framework english abstract.
Contextualizing fiscal decentralization fiscal decentralization defines how and in what way expenditures and revenues are organized between and across different levels of government in the national polity. However, some adjustments have to be made for optimal results. A multilevel approach is used to promote coordination mechanisms between regional, local and national stakeholders. Fiscal decentralisation and subnational government. Yet, a number of challenges emerge during implementation, including tradeoffs between country ownership and resultsorientation or increased transaction costs. This can be illustrated by considering the use of a head tax. First we will look at the main features of fiscal decentralisation in south africa and assess its impact on the major components of social expenditure. Introduction decentralization policies are part of vigorous initiatives to support rural development. It is structured into a number of parts as follows. Economic decentralisation participation of women and other disadvantaged groups in governance 1. Oecd ilibrary fiscal decentralisation and inclusive growth.
Accessible and easyto read chapters provide insight. For the problem of decentralizing government activities, mobility across regions is a critical factor. Pdf reducing poverty through fiscal decentralization in. At the heart of ghanas current decentralization are the metropolitan, municipal and district chief ex. Fiscal decentralisation and subnational government finance. Burkina faso, ghana, kenya, and senegal bernard dafflon and thierry madies. Focusing on developing economies especially ghana, and also employing. Fiscal decentralization and poverty reduction linkages. Fiscal decentralization has gained support by most of the worlds leading.
The first is the division of spending responsibilities and revenue sources between levels of government national, regional, local etc. In a unitary state, the head tax does not distort economic decisions. Observations from ghana and tanzania show that the modality holds great potential in incentivising better performance in fiscal decentralisation compared to traditional aid approaches. Visibly decentralisation has some virtues, which could justify its continued implementation. The ibrahim index of african governance iiag 2016 provides a comparative sense of. However, after repeated waves of decentralisation including quite recent reforms to strengthen and rewire the system in ghana, nigeria, kenya, uganda and ethiopia, the five countries studied in detail in this ids bulletin many of these problems remain. Pdf reducing poverty through fiscal decentralization in ghana. This thesis examined the impact of fiscal decentralisation on local economic development in ghana, evidence from the ketu south municipal assembly ksma. It is also about the extent to which local governments are empowered, about how much authority and. Fiscal decentralisation and inclusive growth in asia this report looks at the challenges faced by asian countries in addressing inclusive growth and fiscal decentralisation.
July 2005 understanding fiscal decentralisation in south africa. Decentralization, as a policy option, has been on ghanas political agenda since independence. Fiscal decentralisation overseas development institute. Post independence era problems that developed as a result of this dual central and local administration included encroachment on the rights and responsibilities of the weaker local. Fiscal decentralisation and subnational finance in. In its most basic definition, decentralization is the transfer of part of the powers of the central government to regional or local authorities. A series of studies examines how policies in the region have evolved in accordance with changes in demography and the economic environment, reflecting country. Decentralisation and local governance in the lilongwe. Decentralization and governance in ghana request pdf. Government of ghana public disclosure authorized fiscal. Fiscal decentralisation covers two interrelated issues. The case study research design was used and the qualitative research method was adopted to collect and analyze data from twentyfive 25 respondents. The global system of today also calls for increased decentralization as a guarantee of democratic governance. This study examined the impact of fiscal decentralization on quality financial reporting at local government level in ghana.
Executive summary 1 introduction 2 legal environment 3 decentralisation policy and goals 4 the intergovernmental fiscal decentralisation framework 5 o objectives and principles 5 o structure of framework 6 expenditure functional assignment and. Intergovernmental fiscal frameworks, as considered by the oecd network on fiscal relations across levels of government, are a core driver of inclusive growth. Various pfm reform initiatives have be implemented over the years and some are still ongoing to improve pfm in ghana this presentation provides overview of the pfm reforms in ghana and highlights of key related issues. This paper deals with ghana experience in fiscal decentralization. This paper examines the desirability, or otherwise, of fiscal decentralization in the context of funding arrangements. The study is important because it provides development partners with the assurance that metropolitan, municipal, and district assemblies mmdas funds are used for their intended purposes. The primary goal of this framework is to provide a comprehensive road map which has broad based support for the vision of fiscal decentralisation as well as the strategies to meet that vision. Contemporary perspectives on fiscal decentralisation and new. Ayee joseph appeah kwadwo baahwiredu richard martin jesper steffensen svend trollegaard main report a collaborative study between. The politics of fiscal decentralization in ghana canadian center.
To this effect, the study proposes various suggestions. More precisely, the system was based on several variants of hierarchical deconcentration, associated with an. Data and research on public governance including budgeting, public expenditure, publicprivate partnerships ppps, public sector innovation, public employment and public finances. Understanding the context of fiscal decentralisation. The decentralization policy envisages joint performance of certain functions by the assemblies and the private sector such as waste management, revenue mobilization and infrastructure management. Ashanti regional coordinating council 1997 manual for the utilisation of the. Fiscal decentralisation and subnational government finance in relation to infrastructure and service provision in ghana by francis appiah joseph a. Certain institutions and policies can contribute to a more equitable distribution of economic gains across jurisdictions and income groups, such as equalisation systems. It was prepared by management systems international. Effectiveness of decentralization in ghana their obligations and attract able and competent officers ministry of local government. Accelerating and sustaining decentralisation in ghana 1.
The programme has operated on four main, interrelated pillars, namely political decentralization, administrative decentralization, decentralized planning and fiscal decentralization. Ghana inherited the decentralization policy as a legacy of british policy of the indirect rule. Fiscal federalism 2016 surveys recent trends and policies in intergovernmental fiscal relations and subcentral government. The goal of pfm reform is to improve fiscal discipline and macroeconomic stability.
May 12, 2004 while ghana has achieved significant political and administrative decentralization as well as decentralized planning, fiscal decentralization has been the unyielding component of the process. Decentralisation in africa occurs on multiple levels. Government privatizes or deregulates private functions. In this case, previously concentrated powers to tax and generate revenues are dispersed to other levels of government, e. Fiscal decentralization can also obstruct the redistribution role of the central government. The support for decentralisation reforms sfdr project supports the implementation of decentralisation reforms in ghana in 60 municipalities nationwide. It becomes easier to understand the popularity of decentralization in africa when we return to the point of departure.
Decentralization in africa international monetary fund. In addition the 1992 constitution of ghana provides that power and decision making should devolve on the decentralized authorities. It is intended primarily for policymakers, in this case meaning civil servants and their. This research investigated the extent to which the decentralization policy of ghana which has been implemented since 1988 conforms to international best practice, the degree to which the policy lends itself to achieving its objectives and the extent to which the implementation has achieved policy objectives. The programme has operated on four main, interrelated pillars, namely political decentralization, administrative decentralization, decentralized. The second part of the morning will introduce fiscal decentralisation and own revenues as a way to strengthen.
To guarantee a minimum level of public service and basic needs or standard of living for the entire population regardless of their geographical location, the central government often. Impact of fiscal decentralization on quality financial. Since 1988 ghana has implemented comprehensive local government and decentralization reforms as an alternative development strategy. Reducing poverty through fiscal decentralization in ghana and.
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