The Impact of Fiscal Decentralization on Urban Public Service Delivery in Oromia: Comparative Study on Chiro and Sebeta Towns
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Date
2014
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Addis Ababa, Ethiopia
Abstract
The main objective of the study is to investigate the capability of Chiro and Sebeta urban
administrations to provide their re~pective residents with preference based services, to identifY
the possible problems constraining their efforts with this regard and to propose appropriate
solutions to the problems.
The study employed more of qualitative method. Accordingly, the fiscal powers andfill1ct ions as
well as the fiscal autonomy of the ULGs in ORS in general and that of the study areas in
particular are looked into thoroughly. The investigation started with the scrutiny made on legal
frameworks in place for local governments including ULGs both at the federal and regional
level.
Primary and secondary data are collected and analyzed accordingly. Structured and
unstructured interviews are carried out with pertinent officials and experts Fom the
municipalities and sector offices of the study areas as well as Fom the federal and regional
government offices. Group discussions of stakeholders and field observations that focused on
selected services are also part of the study process.
The introduction of legal Fame works that weakened the autonomy of the urban administrations,
inappropriate interferences Fom the regional government, the mismatch between the taxation
powers and expenditure responsibilities of the urban administrations and lack of capacity to
administer taxes and to carry out expenditure responsibilities are among the findings of the
study.
As a result, it is concluded that the urban administrations under consideration are not in a
position to render appropriate level and mix of local public goods and services.
In light of the findings, it is recommended that there is a need to enhance the autonomy of the
urban administrations in a manner it tackles the multi faceted inte!ference fi-om the regional
government. Boosting the taxation power of the ULGs and allowing them to access additional
financial sources so as to help them match their .financial capacity with their expenditure
responsibilities is found to be equally important. Redesigning the grant transfer arrangement in
a manner it takes the economic disparities along jurisdictions into consideration is also part of
the recommendation.