Publication

This paper examines the origins, conceptual foundations and practice of fiscal decentralization in developing countries. First, it considers why fiscal centralization has been so prominent historically in developing countries and why this trend has been reversing. Second, it summarizes conventional fiscal decentralization theory and considers its relevance for developing countries. Third, it reviews some popular claims made for and against fiscal decentralization and considers the available empirical evidence. Fourth, it outlines some key elements of fiscal decentralization as it is being promoted in selected countries.