Template-type: ReDIF-Paper 1.0
Author-Name: Roy Bahl
Author-Email: rbahl@gsu.edu 
Author-Homepage: http://aysps.gsu.edu/BahlR.html
Author-Workplace-Name: Andrew Young School of Policy Studies, Georgia State University
Author-Workplace-Homepage: http://aysps.gsu.edu/index.html
Title:  Equitable Vertical Sharing And Decentralizing Government Finance In South Africa 
Abstract:South Africa is at a crossroads in its decentralization policy. On the one hand, 
it has declared its intention to strengthen the fiscal powers of local governments. 
On the other hand, the institutional arrangements to guarantee fiscal decentralization -- 
revenue powers and expenditure responsibility -- have not yet been fully defined. Nor has 
a target been set for the vertical division of resources between the central and 
lower levels of government. The revenue dimension of fiscal decentralization in South Africa, 
particularly the question of an equitable vertical share for local governments, is the subject 
of this paper.In the first section of the paper, we ask how South Africa fits the profile of 
countries that are “good” candidates for decentralization. We then turn to a description of 
vertical revenue sharing as it presently exists in South Africa. We also offer a proposal 
about how an equitable vertical share for South Africa should be determined. A final section 
summarizes the results. The policy question raised in this paper is straightforward: 
What percent of all tax and non-tax revenues should be assigned to the central government 
and what percent should be assigned to the local government? The implementation question 
is also straightforward: Once the assignment is decided, how do we structure each revenue 
instrument to guarantee the “desired” assignment of resources? 
Keywords: Equitable Vertical Sharing, Decentralizing Finance ,South Africa
Length: 40 pages
Creation-Date: 2001-05-01
File-URL:http://icepp.gsu.edu/files/2015/03/ispwp0106.pdf
File-Format:Application/PDF
Handle: RePEc:ays:ispwps:paper0106