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The term decentralization refers to the process of shifting political and fiscal responsibility from central government to local authorities. Fiscal decentralization is one of the models of economic planning, which involves transferring responsibility for the planning, administration, and financing of public services and goods to the local level. This includes, for example, granting local authorities the power to levy taxes, allocate budgetary resources, and make decisions on expenditures. The aim of fiscal decentralization is most commonly to increase the efficiency of public services and enable better adaptation to the local needs and preferences of the population.[1]
References edit
- ^ Bardhan, Pranab (2 Dec 1999). "Fiscal Decentralization and the Challenge of Hard Budget Constraints". Journal of Development Economics.