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Restructuring Local Government Finance in Developing Countries

Lessons from South Africa
Studies in Fiscal Federalism and State-local Finance series
Edited by Roy Bahl, Dean and Professor of Economics, Andrew Young School of Policy Studies, Georgia State University, Atlanta, Georgia, US and Paul Smoke, Professor and Director, International Programs, Robert F. Wagner Graduate School of Public Service, New York University, US
Examining cutting-edge issues of international relevance in the ongoing redesign of the South African local government fiscal system, the contributors to this volume analyze the major changes that have taken place since the demise of apartheid. The 1996 Constitution and subsequent legislation dramatically redefined the public sector, mandating the development of democratic local governments empowered to provide a wide variety of key public services. However, the definition and implementation of new local functions and the supporting democratic decision-making and managerial capabilities are emerging more slowly than expected. Some difficult choices and challenges commonly faced by developing countries must be dealt with before the system can evolve to more effectively meet the substantial role envisioned for local governments.
Extent: 328 pp
Hardback Price: £94.00 Online: £84.60
Publication Date: 2003
ISBN: 978 1 84376 204 1
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  • Development Studies
  • Development Economics
  • Development Studies
  • Economics and Finance
  • Development Economics
  • Public Finance
Examining cutting-edge issues of international relevance in the ongoing redesign of the South African local government fiscal system, the contributors to this volume analyze the major changes that have taken place since the demise of apartheid. The 1996 Constitution and subsequent legislation dramatically redefined the public sector, mandating the development of democratic local governments empowered to provide a wide variety of key public services. However, the definition and implementation of new local functions and the supporting democratic decision-making and managerial capabilities are emerging more slowly than expected. Some difficult choices and challenges commonly faced by developing countries must be dealt with before the system can evolve to more effectively meet the substantial role envisioned for local governments.

The contributors outline these choices and challenges, consider options for meeting them, and review the implications of different decisions. Their analyses also highlight the interrelationships among the elements of the local fiscal structure, and emphasize the often-ignored challenge of how to define an appropriate fiscal decentralization implementation strategy in an environment where local governments are extremely diverse in terms of needs, resources and capacities. Though the research, much of it based on newly collected data, is specific to South Africa, the approach provides a model for other countries facing similar fiscal decentralization policy challenges.

Applied public finance and policy academics, policymakers in developing countries, researchers and program managers in international development organizations, and students interested in local government finance in developing countries will find this timely and comprehensive volume a valuable addition to their libraries.
Contributors: R. Bahl, A. Reschovsky, L. Schroeder, P. Smoke, D. Solomon, P. Vaz
Contents: Preface 1. Overview of Fiscal Decentralization in South Africa 2. Municipal Powers and Functions: The Assignment Question 3. Overview of the Local Government Revenue System 4. Property Taxation 5. The Regional Service Council Levy 6. Intergovernmental Transfers: The Equitable Share 7. Integrating Fiscal Decentralization Reforms and the Challenges of Implementation Annexes Index