Managing Fiscal Decentralization

Managing Fiscal Decentralization

Managing Fiscal Decentralization

Managing Fiscal Decentralization


The growth of interest in fiscal decentralization has meant that there has been something of a rush to enshrine this in policy - The World Bank has reported that about 70 countries see this as a major part of their development strategy. This book critically examines the case for decentralization.


The issue of fiscal decentralization has begun to feature significantly in many countries around the globe. Members of the Executive Board of the imf asked the Fiscal Affairs Department to organize a conference to inform them about the latest methodological developments, and to draw lessons from experiences of different countries and regions. a conference was held in Washington in November 2000, bringing together leading academics and “practitioners” from various countries. This volume is largely, but not exclusively, based on the conference.

The Managing Director of the imf, Mr Horst Kohler, in his opening remarks at the conference, mentioned that the imf has no preconceived notion as to the level of administrative or political decentralization that countries should choose - this is largely an accident of history and political decisions. However, the Fund is concerned that macroeconomic stability and effective service delivery should not be endangered by the decentralization process. This volume thus seeks to identify how “fiscal decentralization” might be sequenced in order to ensure that these key objectives are met.

Given space constraints in this volume, we have not been able to include chair persons' and discussants' remarks, as well as some excellent papers presented at the conference. * However, we are most grateful to our academic and other colleagues, including Teresa Ter-Minassian, Ke-young Chu, Michael Keen, John Norregard, Era Dabla-Norris (all from the IMF), Nicholas Ster n and Bob Ebel (from the World Bank); Christine Wallich (Asian Development Bank and World Bank) and Er nesto Rezk (Córdoba), Pierre Pestieu (Liege), Paul Smoke (NYU), Daniel Triesman (UCLA) and Martinez-Vasquez (Georgia) for their very helpful contributions or papers. **

In addition to the general papers, which present sharply contrasting views of the world, our focus has been to present country experiences from the perspective of “practitioners.” Many of the practitioners who presented papers at the conference hold or have held senior positions in their own countries (Lavrov, Russia; Li, China; Rao, India; Afonso, Brazil; Tanzi and Giarda, Italy; Vinuela, Spain; Jimenez and Devoto, Argentina; and Momoniat, South Africa). Papers from staff from the inter national agencies include those by Litwack and Sutherland (OECD), Ahmad, Davies, de Mello, Mansoor, Richardson and Tanzi (IMF), and Dethier and Shah (World Bank).

In addition to papers presented at the conference, we have added commissioned papers on Argentina, by Juan-Pablo Jimenez and Florencia Devoto (then Advisors in

* the conference presentations are available on the imf website.

** the work by Norregard, Dabla-Norris and Martinez-Vasquez will be published separately as an imf monograph.

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