Reigning in Provincial Fiscal 'Owners': Decentralization in Lao P.D.R
AbstractLao People’s Democratic Republic is a small single-party State with an already long but erratic history of decentralization. Political drives towards decentralization and re-centralization have alternated for more than thirty years. Today, provincial governments enjoy a great deal of autonomy and collect around the sixty percent of all government revenues from a wide array of sources including the import tariff. Most central finance functions (tax administration, customs, and treasury) are de facto controlled by the provinces. In this paper we argue that the Lao PDR system of inter-governmental fiscal relations is not really decentralized, and can better be described as a sui-generis form of de-concentration. Although provincial governors are appointed at the central level, they have a high degree of fiscal autonomy. In addition, the provincial governors appoint the heads of district offices. The system is thus absent of proper accountability mechanisms between the citizenry and its political representatives. In addition, the excessive de facto power at the provincial level implies the sub-national authorities are not accountable either to the central government. Somewhat paradoxically, the major constraint towards fiscal decentralization in Lao PDR is the absence of a strong central government with the capacity to efficiently collect revenues and be able to control and monitor expenditures at the sub-national level. Significant re-centralization will need to take place before decentralization reform can go forward.
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Bibliographic InfoPaper provided by International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University in its series International Center for Public Policy Working Paper Series, at AYSPS, GSU with number paper0830.
Length: 33 pages
Date of creation: 01 Dec 2008
Date of revision:
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Web page: http://aysps.gsu.edu/isp/index.html
Decentralization; Fiscal Decentralization; iscal Policy; Intergovernmental Fiscal Relations; Lao P.D.R.;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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