Contemporary perspectives on fiscal decentralisation and new local government in South Africa

Abstract

There are shared thoughts among scholars that fiscal decentralisation is a solution to the problems of poor public services in the local government. Fiscal decentralisation is the dispersal of financial responsibility to lower levels of government or other spheres of government. This study highlights various discourses on local self-government, especially fiscal decentralisation processes, local revenues, and the New Local Government philosophy of local government reform in South Africa. This research interrogates the importance of fiscal decentralisation as a tool to facilitate greater effectiveness and efficiency in local government. A qualitative research approach was used to obtain information. Through the review of the literature and selected official government reports, the study found that development in local government can be achieved through the effective decentralisation of responsibilities, fiscal policy management, fiscal decision-making authority and sufficient resources, including revenue collection authority to local authoritiesFiscal decentralisation requires a concerted effort in capacity-building and institutional fiscal reform and should, therefore, be associated with the strengthening of local authorities. Decentralisation can occur at the level of fiscal expenditures and revenues creation or sourcing. This paper

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“…South Africa is among the few nations to have successfully implemented comprehensive policy measures to decentralize its fiscal system by assigning and distributing functions to different layers of authority to improve service delivery and resource allocation efficiency (Gumede et al 2019 ; Amusa and Mabugu 2016 ). The country’s 1996 constitution divides the government into three tiers (layers) that are interconnected, interdependent, and distinct: national (central), nine province (regional), and 284 municipal administrations, each with its own set of tasks, functions, and authorities.…”

“…Few empirical research studied the impacts of fiscal decentralization on economic growth in South Africa. For example, Gumede et al ( 2019 ) investigated the role of fiscal decentralization in promoting local self-government. They found that effective fiscal decentralization is a tool that facilitates greater efficiency and effectiveness in the local government while promoting economic growth in South Africa.…”

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“…South Africa is among few nations to have successfully implemented comprehensive policy measures aimed at decentralizing her fiscal system by assigning and distributing functions to different layers of authorities to improve service delivery and resource allocation efficiency (Gumede et al 2019 ; Amusa and Mabugu 2016 ). The country’s 1996 constitution divides government into three tiers (layers) that are interconnected, interdependent, and distinct: national (central), nine province (regional), and 284 municipal administrations, each with its own set of tasks, functions, and authorities.…”

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“…Fiscal decentralization is the distribution of financial responsibility to lower levels of government or other areas of government. Local or regional governments can perform their decentralized tasks efficiently, effectively, productively, and competitively when they have sufficient revenues, raised locally or appropriately delegated by national government (Gumede, Byamukama, & Dakora, 2019).…”

“…In Europe or America they use the term fiscal federalism depending on their central local financial relationships (Gumede, Byamukama & Dakora, 2019). There are important issues that fiscal decentralization addresses, including collecting revenue and assigning responsibilities to municipal departments to think strategically about how to improve and maintain revenue, and how to use it to improve service delivery and development be used.…”