Intergovernmental Grants Systems and Management: Applications of a General Framework to Indonesia

ByBob Searle, Jun Ma, Stefano Piperno, Ehtisham Ahmad

August 1, 2002

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Intergovernmental equalization grants have been described as “the glue that holds a nation together.” Getting the grants system right is critical to countries as they decentralize. This paper illustrates general principles with an example based on Indonesia in 2000. A general grant should be used to supplement own revenues and to finance local service provision where there are no central mandates. The special needs of backward regions would be better provided for by specific grants. Specific grants need to be taken into account in the general grants scheme.

Subject: Education, Expenditure, Health, Population and demographics, Total expenditures

Keywords: Africa, Equalization Grants, expenditure need, Fiscal Decentralization, governance law, government administration, Indonesia, recipient government, revenue capacity, tax rate, Total expenditures, WP

Pages:
33
Volume:
2002
DOI:
https://doi.org/10.5089/9781451855067.001
Issue:
128
Series:
Working Paper No. 2002/128
Stock No:
WPIEA1282002
ISBN:
9781451855067
ISSN:
1018-5941

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