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Fiscal Decentralization at Local Government of Ethiopia

In the last quarter century, many countries have engaged in the process of decentralization by transferring the responsibilities of the state to lower tiers of government. The major purpose of this study was to explore the practice of fiscal decentralization at the local government of governments of Ethiopia, with a special emphasis on the Awi Nationality Administration Zone in light of legal frameworks and some theories of fiscal decentralization. The study mainly employed a qualitative research approach to illustrate the theory and the practice of fiscal decentralization in the sub-regional level of governments in ANRS with special emphasis on the Awi Nationality Administration Zone. The finding showed that both the legal frameworks and practice indicate that the means of revenue-raising power is relatively decentralized in the city administration as well as woredas level. Another finding showed that aggregate revenue-raising capacity of different levels of government in the zone fails to match their expenditure responsibilities which result in vertical fiscal imbalance. Fiscal Decentralization at Local Government of Ethiopia: Theory vs Practices