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Paper

Pitfalls on the Road to Fiscal Decentralization

Recently, pressures for fiscal decentralization have increased in various parts of the world. When cultural, ethnic, or linguistic diversity characterizes a country's population, the justification for giving different regions more control over their political and economic decisions seems to acquire more legitimacy.

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By Vito Tanzi
Published on Apr 26, 2001

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Recently, pressures for fiscal decentralization have increased in various parts of the world. When cultural, ethnic, or linguistic diversity characterizes a country's population, the justification for giving different regions more control over their political and economic decisions seems to acquire more legitimacy.

In Pitfalls on the Road to Fiscal Decentralization, Vito Tanzi discusses issues relevant to the question of whether or not fiscal decentralization would generate the positive results that its supporters claim. Tanzi argues that if countries meet certain conditions before the process of decentralization begins, positive outcomes are more likely to occur because of decentralization. Likewise, Tanzi notes that there may be alternatives preferable to decentralization that countries should first carefully consider before making any final decisions.

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About the Author

Vito Tanzi

Former Senior Associate

Vito Tanzi
Former Senior Associate
EconomyTrade

Carnegie does not take institutional positions on public policy issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of Carnegie, its staff, or its trustees.

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