Intergovernmental Fiscal Relations (eBook)

Prof. Dr. Reza Ardakanian is the Founding Director of United Nations University Institute for Integrated Management of Material Fluxes and of Resources (UNU-FLORES). He served as Director of the UN-Water Decade Programme on Capacity Development hosted by UNU (2007–2015) and as Vice-Rector of UNU in Europe, ad interim (2009–2011). He sat on the Boards of various international programmes/organisations such as UNESCO-IHP, UNESCO-IHE, the International Hydropower Association, and UNU-EHS. Prof. Dr. Ardakanian holds a PhD in Water Resources Management from McMaster University (Canada) and is a faculty member of Sharif University of Technology in Tehran, Iran. He formerly held a number of national offices in Iran, including Deputy Minister for Water Affairs (2001–2005), Senior Vice-Minister (1998–2001) and Deputy Minister for Planning & Economic Affairs (1989–1991) with the Ministry of Energy, and Deputy Minister for Urban Development and Municipalities with the Ministry of Interior (1987–1989).Dr. Mathew Kurian is Academic Officer and leads the Capacity Development and Governance unit at United Nations University Institute for Integrated Management of Material Fluxes and of Resources (UNU-FLORES). Prior to joining UNU-FLORES, he served as Senior Water and Sanitation Specialist at Water and Sanitation Programme (WSP) of The World Bank where he led policy advocacy efforts related to rural water supply, wastewater reuse, and climate adaptation options in secondary towns. He began his career as a Robert McNamara Fellow at the World Bank where his work on land tenure reform was hosted by the Tata Energy Research Institute (TERI), New Delhi.   Upon completing his PhD in Development Studies from the Institute of Social Studies (ISS), Erasmus University, The Hague, Netherlands, Dr. Kurian was employed as Associate Expert (Dutch Ministry of Foreign Affairs) at International Water Management Institute (IWMI-CGIAR) where he undertook assessments of soil and water conservation interventions in the Mekong and Nile river basins. In 2009 as member of faculty at UNESCO-IHE, Delft, Dr. Kurian led the development of a policy note on urban sanitation and the Millennium Development Goals (MDGs) for the Directorate General of International Cooperation (DGIS) in the Netherlands. While still at UNESCO-IHE, Dr. Kurian developed an online e-learning course on governance of water and sanitation services in developing countries.   He has published in the area of water institutions and policy and has mentored students of the MSc programme in environment and development planning while on the faculty of University College London (UCL). His experience in the field of capacity development includes training civil servants and managers of water utilities in Iran and Tanzania, consulting assignments with the Asian Development Bank (ADB), Philippines and teaching undergraduate courses in human geography at the University of British Columbia (UBC) Vancouver, Canada. In his current function, he leads the design of public policy research, policy advocacy in support of evidence-based decision making and fund raising to support establishment of a nexus observatory network.

Acknowledgements 6
Contents 7
Figures 9
Tables 10
1 Trends in Financing of Public Services 11
Abstract 11
1emspGovernment Intervention in the Economy 12
1.1 Why Should the Government Intervene in the Economy? 12
1.2 The Size and Growth of Government 13
2emspMulti-level System of Government 16
2.1 Government Architectures 16
2.2 The Assignment of Functions Among Levels of Government 17
2.3 Efficiency and Equity Issues with Mobile Resources 18
2.4 Intergovernmental Fiscal Transfers 19
2.4.1 Purposes of Transfers 19
2.4.2 Types of Transfers 19
2.4.3 Transfer System Designs 20
2.4.4 Political Economy Issues 21
3emspWorldwide Trends in Decentralisation 23
3.1 Global Picture 23
3.1.1 Decentralisation Around the World 23
3.1.2 Decentralisation by Functions 24
3.2 Case Studies of the Impact of Decentralisation on the Quality of Service Delivery 27
3.2.1 Water and Sanitation 27
3.2.2 Education and Health 30
3.2.3 Poverty, Income Inequality and Regional Disparities 31
Keywords and Definitions 31
References 32
2 Public Budgets: Governance Structures, Norms, and Organizational Practices 35
Abstract 35
1emspBudget Basics 36
1.1 What Is a Budget? 36
1.2 Budget Cycle 38
1.3 Performance Budgets and Medium-Term Expenditure Frameworks 40
2emspExpenditure Responsibilities of Subnational Governments 40
2.1 Defining Expenditure Needs and Costs 41
2.2 Approaches to Estimating Costs 42
2.3 Zero-Based Budgeting and Participatory Budgeting 44
2.4 Private Participation in Service Delivery 45
3emspLocal Governments& #x2019
3.1 The Property Tax 48
3.2 Other Tax Revenue 49
3.3 User Fees 50
4emspDebt 51
4.1 The Common Pool Problem and Other Political Economy Issues 52
4.2 Balanced Budget Rules 53
Keywords and Definitions 53
References 54
3 Issues of Accountability and Policy Outcomes: Key Lessons from Recent International Experience 57
Abstract 57
1emspAccountability, Governance, and Public Expenditure Efficiency 58
2emspDecentralization and Local Accountability 59
2.1 Dimensions of Accountability 60
2.2 Strengthening Political, Administrative, and Financial Accountability 61
3emspDecentralization and Governance 62
3.1 Contextual Factors Influencing the Design and Outcomes of Decentralization 63
3.2 The Impact of Decentralization on Governance 66
3.2.1 Size of Government and Expenditure Composition 66
3.2.2 Democratization 67
3.2.3 Corruption 67
3.2.4 Political Instability 68
4emspRecent Experience in Service Delivery and Financing Models 68
4.1 Recent Trends in Service Delivery Models 69
4.2 Results-Based Financing 71
4.3 Budget Support and Sector-Wide Approach 73
4.4 The Role of Accountability, Governance, and Outcomes Indicators 74
5emspLessons from the Recent International Experience and Implications for the Nexus Approach to Management of Environmental Resources 75
Keywords and Definitions 77
References 77