New Rules for Implementation of Fiscal Decentralization (original) (raw)
This paper reviews how well fiscal decentralization has been implemented and how successful these projects have been in achieving a new level of local government financial capacity and service delivery. It reviews the research literature that has assessed the success and failure rates of fiscal decentralization in a global context. Overall, the levels of success have not been encouraging with fiscal decentralization having a positive impact. A case study of how fiscal decentralization has been implemented in Albania provides insights into the common mistakes that have been made in implementing fiscal decentralization projects. Professor Roy Bahl in a 1999 paper titled " Implementation Rules for Fiscal Decentralization " defined the basic approach to implementing fiscal decentralization and many of these rules have been the guiding principles for implementing fiscal decentralization. This paper addresses the deficiencies in these rules based on the experiences over the past decades and formulates new rules for implementing fiscal decentralization. It then assesses the old and new rules against the case study of Albania as a means of predicting if the fiscal decentralization will succeed. The paper concludes that new and original thinking about the implementation rules need to be formulated and encourages more dialogue and discussion among researchers and practitioners engaged in implementing fiscal decentralization.
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