| OCR Text |
Show 142 increasingly (such as more expenditure responsibilities. agricultural income) The tax bases assigned not robust at the moment and are in the regional to are not states expected to generate significant revenue in the country. As result, the fiscal relationship between the federal government and the regional , as a states is characterized near future given the state of economic by significant imbalance. This development fiscal relation is referred to vertical imbalance in the fiscal federalism literature. Table 34 shows the vertical imbalance for the period 1993/94-1997/98. The vertical imbalance ratio is calculated as (World Bank 2000a): Vertical Imbalance Where RR = regional regional states, expenditure. RE With vertical imbalance a = 1- ( : )() states' revenue, TR = regional ratio of 0.56, = states' Ethiopia raising capacity. geographic size, impacts highly expenditure, among = of federal and total government a and economic average, for regional governments This reflects the difference among potential the tax bases available to on TE is among those countries with and administrative regional states. For concentrated in few states: four states account, and sum high level of (World Bank 2000a). Moreover, there is wide disparity revenue total government revenue, more regions in population infrastructure, example, revenue in terms of which in tum collections (Tigray, Amhara, Oromiya than 60 percent of total regional and revenue and are SNNP) in 1993/94- |
