IMF Working Papers

The Challenge of Fiscal Decentralization in Transition Countries

ByEra Dabla-Norris, Paul R Wade

June 1, 2002

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Era Dabla-Norris, and Paul R Wade. "The Challenge of Fiscal Decentralization in Transition Countries", IMF Working Papers 2002, 103 (2002), accessed 12/6/2025, https://doi.org/10.5089/9781451852707.001

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper examines key aspects of the ongoing decentralization process in transition economies and identifies areas where the present systems can have potentially adverse impacts on both service delivery and macroeconomic performance. We discuss three critical principles of a sound and efficient decentralized fiscal system-and then show the contrasts between these and actual trends and policies in transition countries.

Subject: Budget planning and preparation, Expenditure, Expenditure assignments, Fiscal federalism, Fiscal policy, Public financial management (PFM), Revenue administration

Keywords: annual budget, Baltics, Budget planning and preparation, Central Asia, central government, Eastern Europe, equalization grant, Expenditure assignments, Fiscal decentralization, Fiscal federalism, fiscal reform, General government expenditure, government finance statistics, government finances, govt financing, IMF country economist, local government, national government, Tax authorities, tax revenue, tax sharing, transition, transition country, WP

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