Environmental Engineering Reference
In-Depth Information
Chapter 4
Intergovernmental Fiscal Relations:
Questions of Accountability
and Autonomy
Linda Gon
alves Veiga and Mathew Kurian
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1 Introduction
Decentralization, the transfer of power and resources from the central government
to subnational governments, is a complex concept involving
fiscal, political and
administrative dimensions. The topic is particularly relevant for developing and
emerging countries, where well-designed reforms have a higher potential to pro-
mote ef
ciency in the provision of public services and to enhance the development
of integrated and sustainable strategies for the use of water, soil and waste.
Additionally, it is important to ascertain the capacity of other alternatives to central
government provision, such as those involving the private sector and local com-
munities, to improve the quality of service delivery to citizens.
This chapter
1
starts with an overview of decentralization around the world and
over time (Sect.
2
). It then discusses the normative and political economy issues,
which should be considered to establish sound
fiscal relations across government
levels, namely the assignment of functions to different
levels of government
(Sect.
3
), intergovernmental
fiscal transfers (Sect.
4
), and subnational governments
'
fiscal autonomy (Sect.
5
). The importance of establishing good budgeting practices
1
This chapter is based on Veiga et al. (
2014
). The topic provides a more comprehensive dis-
cussion on intergovernmental fiscal relations in the context of the nexus approach to water, waste
and soil.
u
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