Overview

Original Research

ASSESSMENT OF THE PRACTICES OF FISCAL FEDERALISM IN ETHIOPIA

SAMSON MESFIN 1, and TEGEGNE TEKA 2.

Vol 18, No 08 ( 2023 )   |  DOI: 10.5281/zenodo.8317926   |   Author Affiliation: Department of Public Administration and Management, College of Business and Economics, Wolaita Sodo University, Wolaita Sodo 138, Ethiopia 1; Department of Public Administration and Management, College of Business and Economics, Addis Ababa University, Addis Ababa 1176, Ethiopia 2.   |   Licensing: CC 4.0   |   Pg no: 1551-1576   |   Published on: 31-08-2023

Abstract

The main objective of this study is to assess the practices of fiscal federalism in Ethiopia since 1995 by focusing on parameters like power and public functions devolution, financial capacity, and fiscal autonomy. The study used both primary and secondary data to achieve the objective of the study. The findings of the study indicates that there is lack of clarity on the assignment of expenditure and taxing responsibilities between the federal government and Regional States, which creates duplication of responsibility and conflict between both levels government. the study also find that the devolution of expenditure responsibility to regional states is not accompanied by adequate financial resources, which in turn creates high vertical fiscal imbalances and limits the regions’ fiscal autonomy. The study recommends that the federal government need to enhance the revenue raising capacity of regional states, so as to reap the benefits of an effective fiscal federalism in Ethiopia.

Keywords

Fiscal Federalism, Revenue assignment, Expenditure assignment, vertical fiscal imbalance, fiscal autonomy