Fiscal Responsibility, Sustainability, and Governance: Local Government Financing in South Africa

Abstract

Introduction A successful local government is vital for the stability and economic success of developing countries in Africa. South Africa illustrates the importance of governance. Post-1994 South Africa emerged from a highly fragmented intergovernmental fiscal Contents Introduction ......................................................................................................297 Fiscal Decentralization: The Role of National Substructures ............................. 300 Overarching Legislative and Policy Frameworks of the Fiscal System .................302 Legislative Basis for Financial Management .......................................................305 Assignment and Division of Revenue ............................................................... 306 How to Manage Vertical and Horizontal Imbalances ................................... 308 Conclusion ........................................................................................................309 References ......................................................................................................... 311 relations system based on the ethnic homelands and African townships but within a unitary and highly centralized local government system. The postapartheid government tried to move to a radically decentralized fiscal system. Given the historical and geographical diversities of 283 newly established local government structures, fiscal decentralization raised a new set of questions of how national government could achieve horizontal and vertical equity.