A Critical Examination of Fiscal Autonomy of Addis Ababa City Administration
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Date
2010-12
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Addis Ababa University
Abstract
This thesis paper describes the fiscal autonomy of Addis Ababa City Government using
primary and secondary sources of data. The constitutional and legislative frameworks
have been critically examined in order to determine whether they would create conducive
environment within which Addis Ababa would be able to exercise optimum degree of
autonomy in its local government. The study also incorporates close analysis of the
revenue sources and the degree of control the City has over these sources; spending
autonomy and fiscal importance as well as transfers and borrowing frameworks of the
City.
The findings of the study indicate existence of enabling environment in which Addis
Ababa City Government can enjoy better degree of fiscal autonomy. With substantial
expenditure responsibilities and productive revenue sources, Addis Ababa City
government has the opportunity to strengthen its fiscal position. However, the increasing
trend of its actual expenditure, Addis Ababa City Government is required to take
appropriate actions to increase its revenue and involve the community in service
provision process. It is also found in practice that except differences in their
constitutional statues, Addis Ababa and Regions tend to have similar expenditure
responsibilities and revenue powers. The major difference in their IGFRs goes to the size
and system of Federal government transfers. While Regional governments are found
highly dependent on block grant transfers, Addis Ababa is found relatively deprived of
the transfer system. The study concludes that Addis Ababa City Government has better
comparative and competitive advantages to exploit the geographic, economic and
administrative opportunities to enhance its fiscal autonomy. Finally, the paper forwards
important recommendations to policy makers and government officials as well as to
prospective researchers
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Administration