The paper deals with intergovernmental fiscal transfer in comparative analysis of Germany, Nigeria and Ethiopia federation. The first chapter concerns about the concept of intergovernmental fiscal transfer and the objective of having intergovernmental fiscal transfer. In chapter two the types of fiscal imbalances are discussed from the view of three federal countries arrangements. Types of intergovernmental fiscal transfer and institutions are examined in chapter three. In addition to that procedure for establishing and modifying intergovernmental transfers as well as the design of intergovernmental transfers are included in this chapter.
Chapter four is particularly concerned in reviewing the legal frame work and experience of three federal countries (Germany, Ethiopia, and Nigeria) on intergovernmental fiscal transfers. The chapter discusses in brief the intergovernmental fiscal transfers legal frame work and practice as well as challenges of each of the three federal countries and dispute resolution mechanism. Lastly the paper ends with a conclusion and the comparative lessons that Ethiopia could draw from the foreign experiences.
Federalism is alleged to serve various purposes that could not be effectively handled by other forms of state formation structures. It is a gain saying that the federal arrangement is chosen for driving a benefit from a strong union without compromising regional autonomy. In federal arrangements that are primarily concerned in devolving powers mainly from the central to the sub national governments. This may also involve assigning expenditure and revenue responsibilities between the federal and regional governments and the need to rectify the fiscal gaps arising there from. This is the subject matter of fiscal federalism. Fiscal federalism is in general dividing the fiscal aspects of the functions of government (expenditure and revenue assignments) and the subsequent need for intergovernmental fiscal transfer between the tiers of government. It is principally concerned in allocating expenditure responsibilities, the revenue raising power, and rectifying the fiscal imbalances between the central and sub national governments through intergovernmental fiscal transfers.
Table of Contents
Introduction
CHAPTER ONE
1. General overview of intergovernmental fiscal Transfer
1.1 Definition of intergovernmental fiscal transfer
1.2 Rationales and purpose for intergovernmental Fiscal Transfers
1.3 Objectives of intergovernmental fiscal transfers
CHAPTER TWO
2. Concept of Fiscal imbalance
2.1 Vertical fiscal imbalance
2.2 Horizontal fiscal imbalance
CHAPTER THREE
3. Intergovernmental fiscal transfer Types and Institutions
3.1 Types of Intergovernmental fiscal transfer
3.2 The Design of Intergovernmental Transfers: Types and Mechanisms
3.3 Procedures for Establishing and Modifying Intergovernmental Transfers
3.4 Institutions for Intergovernmental Fiscal Transfers
CHAPTER FOUR
4.1 Legal framework and practice of intergovernmental fiscal transfers
4.2 Dispute Resolution and Adjudication
4.3 Challenges of fiscal transfer
Research Objectives and Key Topics
This paper provides a comparative analysis of intergovernmental fiscal transfer systems, examining how federal governments in Germany, Nigeria, and Ethiopia address fiscal imbalances to support sub-national entities while maintaining national stability and service delivery.
- Mechanisms for rectifying vertical and horizontal fiscal imbalances
- Assignment of expenditure responsibilities and revenue-raising powers
- Design features and policy choices in intergovernmental grant systems
- Institutional frameworks for fiscal dispute resolution
- Legal architectures and constitutional provisions governing fiscal transfers
Excerpt from the Book
1.1 Definition of intergovernmental fiscal transfer
Intergovernmental fiscal transfer is meant to bridge the horizontal and vertical fiscal imbalances that are inevitable to exist between the federal and regional governments and among the regional governments. Once we have ascertained that the possibility of horizontal and vertical fiscal imbalance is inevitable, there has to be a mechanism devised to bridge the fiscal gaps that occur between the federal and state governments or among the latter. Such gaps can be mitigated through a transfer of a predetermined share of, in most cases, the revenues collected by the federal government. It is at this juncture that the issue of intergovernmental fiscal transfer is raised. Different scholars of fiscal federalism propagated that these fiscal imbalances have to be rectified by devising different means. Boadway and Shah contended that there are two broad ways through which fiscal gaps are rectified. The first is revenue sharing while the second falls under the general rubric of federal- state transfers. Revenue sharing and grants (transfers) are therefore the two main means through which fiscal imbalances are handled.
Summary of Chapters
CHAPTER ONE: Provides an overview of intergovernmental fiscal transfers, defining their purpose in addressing fiscal imbalances and establishing the primary objectives for state-level financial support.
CHAPTER TWO: Explores the concept of fiscal imbalance, differentiating between vertical imbalances (between levels of government) and horizontal imbalances (among regional units).
CHAPTER THREE: Details the various types of transfers—including revenue sharing and specific grant mechanisms—and examines the institutions responsible for establishing and modifying these systems.
CHAPTER FOUR: Reviews the legal frameworks and practical applications of fiscal transfers in Germany, Nigeria, and Ethiopia, including mechanisms for dispute resolution and the ongoing challenges of implementation.
Keywords
Fiscal Federalism, Intergovernmental Fiscal Transfer, Vertical Fiscal Imbalance, Horizontal Fiscal Imbalance, Revenue Sharing, Federal Grants, Sub-national Government, Fiscal Equalization, Expenditure Responsibility, Constitutional Law, Public Service Delivery, Ethiopia, Germany, Nigeria, Financial Autonomy.
Frequently Asked Questions
What is the fundamental purpose of this research paper?
The paper aims to analyze how intergovernmental fiscal transfer systems function as a tool to bridge fiscal gaps between federal, state, and local governments in a comparative context.
What are the primary thematic areas covered?
The research focuses on defining fiscal imbalances, exploring methods of revenue sharing and grants, and investigating the institutional and legal frameworks that govern these financial relationships.
What is the central research question?
The core inquiry concerns how federal countries manage the mismatch between expenditure responsibilities and revenue-raising powers to ensure equitable public service provision.
Which scientific methods are employed?
The paper utilizes a comparative qualitative analysis, reviewing legal frameworks, constitutional documents, and existing fiscal policies of Germany, Nigeria, and Ethiopia.
What is addressed in the main chapters?
The main sections cover the definition and rationale for transfers, the nature of fiscal imbalances, the design of grant mechanisms, and the institutional practices for dispute resolution and legal compliance.
Which keywords characterize this work?
Key concepts include fiscal federalism, intergovernmental transfers, fiscal imbalances, revenue sharing, and regional financial autonomy.
How does the paper differentiate between vertical and horizontal imbalances?
Vertical imbalance refers to the disparity between revenue and expenditure at different tiers of government, while horizontal imbalance refers to inconsistencies in revenue-raising capacity among units at the same government level.
What role does the House of Federation (HoF) play in Ethiopia's fiscal system?
The HoF is responsible for determining the formula for federal subsidies to states, aiming to balance regional development and rectify fiscal disparities based on constitutional mandates.
- Quote paper
- Thokhat Nhial Lual (Author), 2018, Intergovernmental fiscal transfer in Germany, Nigeria and Ethiopia, Munich, GRIN Verlag, https://www.hausarbeiten.de/document/464935
