A framework for intergovernmental fiscal relations in South Africa

Abstract

South Africa is in the process of developing a new governmental structure. In this paper the principles governing intergovernmental fiscal relations are examined. The main types of government and the conditions for an efficient decentralized structure, as well as the assignment of expenditure functions and tax bases to the various levels of government, are discussed. The inevitable imbalance between expenditure and revenue requirements at subnational level and possible remedies are noted. General guidelines for the design of intergovernmental fiscal relations in a revised governmental structure are presented in conclusion.

Notes

Professor, Department of Economics, Unisa, and Departmental Manager, Centre for Financial Specialists, Development Bank of Southern Africa, respectively.