Intergovermental fiscal relations in South Africa: A study of the effectiveness and efficiency of the emerging intergovermental fiscal system

Abstract

The study is based on intergovernmental fiscal relations in South Africa. The focus area is on the current fiscal arrangements. The equitable sharing of nationally collected revenue - the manner in which finances are transferred from central to sub-national governments; vertical and horizontal division, conditional grants are explored. Sub­ national governments' fiscal capacity; their tax base and borrowing powers are also examined. Various legislation, institutions and structures as well as practices in the intergovernmental fiscal system are explored in order to evaluate the effectiveness and efficacy of the emerging fiscal system. Historical developments of intergovernmental financial relations in South Africa are explored in order to explain why certain things in the current fiscal system are done and others not; where other practices originated and what prompted the current system. Cooperative governance is discussed, as fiscal arrangements are impossible if the three spheres of government do not co-ordinate their functions and Legislation. The study employs both the qualitative and quantitative method of data collection, including secondary sources, which comprise library books, journal articles, policy documents and newspapers and news bulletins. Primary sources used, are interviews with personnel from the Financial and Fiscal Commission, provincial and local governments as well as members of the general public. The study concludes th.at the emerging intergovernmental fiscal system in South Africa is still in a state of flux, in the light of enabling legislation still outstanding and some institutions and structures. of promoting cooperative government lacking teeth, it will take a while for the system to reach a state where it could be declared effective and efficient