Fiscal federalism in South Africa

[摘要] ENGLISH ABSTRACT: This thesis captures the assignment of functions and resources to the national, provincialand local spheres of government in South Africa, and provides an assessment of thefunctionality of this assignment. The perspective of fiscal federalism is used as the analyticaltool for this assessment. The discussion, in the second chapter, of considerationsin the design of fiscal federalism generates the conceptual reference frameworks necessaryfor the assessment of the South African system. It also outlines the impact of constitutionalprovisions on fiscal arrangements in a country, an aspect that is further exploredin the third chapter. This chapter highlights some of the key choices, relating tofiscal design, that negotiators were faced with during the deliberations on the new SouthAfrican Constitution. A detailed analysis of fiscal federalism in South Africa follows inthe fourth chapter. The fifth chapter concludes that there is substantial congruence betweenthe expenditure assignment recommended by economic theory and that outlinedin the South African Constitution of 1996. Revenue assignment, on the other hand, remainscentralised although the theoretical framework indicates a number of sources suitablefor decentralisation. While the South African Constitution allows for provincialtaxation powers, these have yet to be implemented. The analysis indicates that furtherdevelopments of the system of intergovernmental transfers and grants should be concernedwith ensuring revenue adequacy for all spheres, providing incentives for soundfinancial management, and maximising predictability. The conclusion also argues in favourof activating the constitutional borrowing powers of provinces to enable a greaterfocus on developmental expenditures. Corruption and a lack of administrative capacity insome subnational authorities, national mandates imposed on provinces without detailedcosting and impact analysis, and rising provincial personnel costs all impede the smoothrunning of decentralised government in South Africa. Nevertheless, economic theoryindicates that the constitutional assignment of responsibilities and resources to the differentspheres in South Africa should not be adjusted for the sake of greater efficiency.Instead, the challenge remains to implement the system fully and to manage transitionaldifficulties proactively. Decentralisation includes a learning process, and newly createdstructures and institutions need to be developed and strengthened before they can deliverthe full benefits of decentralisation.

[发布机构] Stellenbosch University