Measuring Fiscal Decentralisation

Concepts and Policies

image of Measuring Fiscal Decentralisation

When trying to measure fiscal decentralisation, the OECD Network on Fiscal Relations Across Government Levels has made significant progress in the last years, especially on tax autonomy of sub-central governments. But in many respects, real-world fiscal decentralisation still escapes the measuring tools, especially when it comes to measure the spending power of sub-central governments or the various regulations attached to intergovernmental grants. This book deals with two interrelated issues. The first concerns  the various measurement of fiscal decentralization in general and their usefulness for policy analysis. The second and more specific issue concerns the taxonomy of intergovernmental grants and the  limits of the current classifications, and how policy changes to the intergovernmental grants framework may require that measurement devices be adapted.




The decentralisation of public services and their financing is high on the political agenda and has triggered a growing interest in measurement issues. Appropriate indicators can help governments compare, diagnose and reform intergovernmental fiscal frameworks as well as assess the outcome of past reforms. They can help assess whether and to what extent decentralisation fosters economic growth, raises efficiency of the public sector or contributes to macroeconomic stability. For that purpose, the OECD Network on Fiscal Relations Across Government Levels has, over the past decade, established a database of decentralisation indicators, extending beyond the traditional spending and revenue ratios. These include measures of tax autonomy, the spending power of sub-central governments, or the stringency of regulations attached to intergovernmental grants.


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