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Submitted by Ashish on
Thanks for an interesting read. Two things struck me as I read this. (a) It is not clear to what extent counties will have revenue responsibilities. If they will be raising most of their revenues themselves, then the central transfer system will possibly need to be strengthened to include an explicit redistributive component. This is because otherwise inter-county imbalances in economic activities can become magnified over time by differences in the county's revenue base. On the other hand, if counties do not have revenue raising powers, this would break the implicit fiscal contract. In most cases this is associated with poor accountability and service delivery. Is the political system strong enough at the county level to counter this tendency? (b)Another question will be how ad-hoc or otherwise are transfers from the center? Are county revenues based on tax sources which are sufficiently buoyant and stable? Are the systems strong enough to prevent leakages? Decentralization is a tricky thing, one which needs to be managed well.