Measuring decentralisation of public sector activities

This chapter examines conceptual problems related to standard revenue and expenditure measures to assess government decentralisation. While the refinement of the revenue metric as proposed by the OECD comes close to expressing the degree of sub-central tax autonomy, there are still problems to be resolved for assessing tax sharing. Suitable expenditure-oriented decentralisation measures are more difficult to construct. Not only can central mandates or conditions imposed on funding limit the degree of fiscal autonomy of sub-central governments it is also relevant to evaluate to which extent such constraints are binding for sub-central governments. The problems related to fiscal decentralisation measures are then discussed by looking at the German federal arrangements, which have raised some controversies in the past. Fiscal measures alone may fall short in defining the degree of decentralisation in a country. A more comprehensive approach is needed. The chapter concludes with an outline of a more differentiated composite decentralisation index.

Measuring Fiscal Decentralisation: Concepts and Policies

Measuring decentralisation of public sector activities

Conceptual issues and the case of Germany