IDEAS home Printed from
   My bibliography  Save this paper

Intergovernmental finance in South Africa: Some observations


  • M. Govinda Rao

    () (National Institute of Public Finance and Policy)


This paper examines the evolution and functioning of fiscal decentralisation process and intergovernmental finance in the Republic of South Africa (RSA). It analyses the system of dividing revenues among the three spheres of government. The paper highlights the challenges of designing and implementing intergovernmental fiscal policies and institutions in the post-apartheid era. The paper argues that the costed norms approach developed by the Financial and Fiscal Commission (FFC) has tremendous potential in evolving a simple, objective, and fair system of transfers. However, significant additional work in terms of research, its meaningful dissemination to various governmental units, and building the information system undertake the task is necessary to make it operational. The absence of revenue equalisation in the transfer system is an important weakness of the transfer design. However, provinces do not have much revenue powers. Revenue equalisation in the transfer formula is meaningful only when some broad-based tax handles are assigned to provinces. It is also an important moral and a policy question as to whether there should be incentive to raise revenues from sources such as, gambling taxes and hospital services.

Suggested Citation

  • M. Govinda Rao, 2003. "Intergovernmental finance in South Africa: Some observations," Working Papers 03/1, National Institute of Public Finance and Policy.
  • Handle: RePEc:npf:wpaper:03/1
    Note: Working Paper 1, 2003

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Paul Cashin & Ratna Sahay, 1996. "Internal Migration, Center-State Grants, and Economic Growth in the States of India," IMF Staff Papers, Palgrave Macmillan, vol. 43(1), pages 123-171, March.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Margaret Chitiga-Mabugu & Nara Monkam, 2013. "Assessing Fiscal Capacity at the Local Government Level in South Africa," Working Papers 201376, University of Pretoria, Department of Economics.

    More about this item


    Intergovernmental fiscal relations ; South Africa;

    JEL classification:

    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:npf:wpaper:03/1. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (S.Siva Chidambaram). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.