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Local Government Reform in Tanzania: Considerations for the Development of a System of Formula-Based Grants

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Abstract

Since 1999, Tanzania has been actively pursuing reforms of way in which the central government finances local government activities. Although local government authorities in Tanzania play a significant role in the delivery of key government services, the resources which the central government provides to the local level are tightly controlled by the central government. Based on the unique context of Tanzania’s local government reforms, the purpose of the current study is to propose a more efficient, equitable and transparent mechanism to allocate local government resources among the different local government authorities with the purpose of improving the delivery of local government services.Local government finance reform in Tanzania is garnering increasing interest in policy circles. Although Tanzania’s neighbor Uganda is often been considered one of the big reformer in local government finance in Africa, Tanzania is well-positioned to surpass Uganda in the depth of their reforms in the near future and become the next “success” in local government finance reform in Africa.This paper structured as follows. Section 1 provides a brief summary of local government finances in Tanzania and summarizes the policy-relevant findings and considerations which are the basis for our considerations. The first section further contains a general outline of a possible formula-based transfer system and considerations regarding the sequence of reforms. Section 2 considers issues related to the vertical allocation of resources in Tanzania. Section 3 presents considerations regarding the conceptual approach for the horizontal allocation of resources among LGAs in Tanzania. Sections 4 through 6 contain specific considerations for sectoral allocation formulas, including primary education (Section 4), primary health care (Section 5), and road maintenance, water, agricultural extension and local administration (Section 6). Finally, Section 7 contains considerations for the implementation of the new formula-based system of intergovernmental grants.

Suggested Citation

  • Jameson Boex & Jorge Martinez-Vazquez, 2003. "Local Government Reform in Tanzania: Considerations for the Development of a System of Formula-Based Grants," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0305, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    • Handle: RePEc:ays:ispwps:paper0305
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    1. Roy Bahl, 1999. "Implementation Rules For Fiscal Decentralization," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper9901, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
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    1. Nancy Thede, 2009. "Decentralization, Democracy and Human Rights: A Human Rights-based Analysis of the Impact of Local Democratic Reforms on Development," Journal of Human Development and Capabilities, Taylor & Francis Journals, vol. 10(1), pages 103-123.
    2. Serdar Yilmaz & Varsha Venugopal, 2011. "Obstacles to Decentralization in Ethiopia: Political Controls versus Discretion and Accountability," Chapters, in: Jorge Martinez-Vazquez & François Vaillancourt (ed.), Decentralization in Developing Countries, chapter 13, Edward Elgar Publishing.

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    Keywords

    Local Government Reform; System of Formula-Based Grants; Tanzania;
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