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Alternative Simulations of Equalization Transfers in Sudan

Author

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  • NourEldin A. Maglad
  • Eisa A.M. Elshwin

    (Peace University, Sudan)

Abstract

Federal transfers in the Sudan are key to reducing regional disparities and addressing marginalization. While more resources have been directed to the sub-national levels since the adoption of the federal system in 1991, the lack of transparency and predictability surrounding these transfers has undermined the role of federal transfers to promote regional convergence and reduce financial inequality. The goal of this study is to suggest alternative simulations of equalization transfers using both fiscal needs and fiscal capacity to fill the fiscal gap so as to mitigate the disparities among states. Therefore, four intergovernmental equalization transfers scenarios were proposed using the fiscal gap approach. The results of the simulation and Lorenz curve ranking and Gini Coefficient index suggest that the government should base the transfer program on the fiscal gap measured by the difference between states fiscal needs, proxied by an augmented state needs index, and the state fiscal capacity, proxied by a poverty index. This recommended scenario would reduce the fiscal inequality among the state to its narrowest.

Suggested Citation

  • NourEldin A. Maglad & Eisa A.M. Elshwin, 2016. "Alternative Simulations of Equalization Transfers in Sudan," Working Papers 1029, Economic Research Forum, revised Jul 2016.
    • Handle: RePEc:erg:wpaper:1029
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    References listed on IDEAS

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    1. Chernick, Howard, 1998. "Fiscal Capacity in New York: The City Versus the Region," National Tax Journal, National Tax Association;National Tax Journal, vol. 51(3), pages 531-540, September.
    2. Chernick, Howard, 1998. "Fiscal Capacity in New York: The City Versus the Region," National Tax Journal, National Tax Association, vol. 51(n. 3), pages 531-40, September.
    3. Jorge Martinez-Vazquez & LF Jameson Boex, 1997. "Fiscal Capacity: An Overview of Concepts and Measurements Issues and Their Applicability in the Russian Federation," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper9703, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    4. World Bank, 2011. "Sudan - Public Expenditure Tracking Survey (PETS) : Case Study of the Health Sector," World Bank Publications - Reports 12265, The World Bank Group.
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    Cited by:

    1. Jieun Choi & Mark Dutz & Zainab Usman, 2020. "The Future of Work in Africa [L’avenir du travail en Afrique]," World Bank Publications - Books, The World Bank Group, number 32124, December.

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