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Show 152 government (307 Birr). There appears per capita transferred to perverse incentive is population on given a the place. It is raising raising capacity revenue capita better than develop this other regions. long-term stability can have regional governments. Although formula, it does not seem to objective reason that This will even they of the system of the formula in the first if it can means raise their definitely as well that as have some own serious regions revenue adverse long-term development. further in the next section. hypothesis 4.4 potentially transfers. The transfer formula may lack in-built incentive designed to promote equitable development consequences for the I of which - in the grant revenue, but that is not the own between the money negative relationship states and own-revenue will receive less money for the very relatively a higher weight (33 percent) be reflected in the per structure for regional to be Implication of the Fiscal Relationship to Resource Distribution As discussed in Section 4.2, decentralization and federalism often result in fiscal relation between the federal government and the asymmetric national governments. Subnational governments often lack the ownrevenue to pay for their established has through a a built-in transfer of (rising) expenditure needs. to raise enough result, the fiscal relation thus from the federal/central government to governments. Although there is no 'objective' criterion of how imbalance ought to be for the federal system to function from different country a ability sub- to create vertical fiscal imbalance. The gap is filled tendency revenue As constituting experiences smoothly, regional/local 'big' the vertical it has been shown that local governments should have as much own |
