Intergovernmental fiscal relations: the paradox between the vertical fiscal imbalance and responsiveness and accountability in the Northern Cape provincial government

[摘要] English: This thesis explores South Africa's intergovernmental fiscal relations, and in particular the impact of a vertical fiscal imbalance on responsiveness and accountability in the Northern Cape Provincial Government. In South Africa the government is comprised of three spheres, namely the national, provincial and municipal spheres of government. Each of these spheres of government is responsible for performance of a number of functions that can either be exclusive, in other words performed by only one sphere of government, or concurrent, thus shared between different spheres of government. The provincial government sphere is responsible for providing certain services such as health, education and provincial roads, and promotes other services such as economic affairs, tourism, transport, sport, arts, culture, science and technology.In order to deliver its mandate, each of the three spheres of government needs financial resources to enable it to perform its functions. These functions are financed by means of different taxes, such as personal income tax, value added tax, customs tax and property taxes, to mention a few. In South Africa, the bulk of the revenue collected by means of the different taxes, is collected by the South African Revenue Services on behalf of the national government. Provincial governments collect as little as 3% of their total revenues. The reason for this is that the tax base for provincial governments is narrow, and limited to items such as motor vehicle licenses, gambling, gaming taxes and other revenue items such as patient fees.The gap that exists between own-revenue and revenue needed is known as the vertical fiscal imbalance, which is made up by various transfers from the national government to provincial governments. Although other countries in the world experience similar trends, the ratio of own-revenue collected by provinces in South Africa is unprecedentedly low. Transfers from the national government to the provincial governments therefore became the major source for financing the expenditure of provincial governments.Existing theory indicates that a vertical fiscal imbalance has two major implications for provincial governments. The first relates to the potential loss of responsiveness, and the second but not less important implication, is the loss of accountability. It is therefore important that measures which exist to promote responsiveness and accountability are applied effectively, economically and efficiently.Based on a literature study, as well as a survey and interviews conducted in the Northern Cape Provincial Government, this study concludes that the vertical fiscal imbalance has an impact on the responsiveness and accountability of the Northern Cape Provincial Government, and that existing measures to promote responsiveness and accountability can be applied more effectively, efficiently and economically. The thesis therefore provides a set of recommendations based on the empirical study and literature research on the issue, with the view to improving the status quo, not only in the Northern Cape, but in South Africa as a whole. This is relevant as responsiveness and accountability are two fundamental features of democratic governance, and both concepts form part of the values on which the Republic of South Africa is founded. The two concepts are also central elements in discussions concerning good governance.

[发布机构] University of the Free State