Decentralization In Ethiopia

Factors determine the impact of decentralization on poverty reduction

Decentralization as a policy option comes not in to being in a vacuum. Its foundation is largely conditioned by a specific country socio-economic and political context, and by the process of decentralization hence it varies from country to country as per their variation of their context (Jutting et al, 2004). The background of the country and its impact on poverty reduction is among others, dependent on: the density of country’s population, the level of infrastructure, the level of income, the degree of inequalities across sub units etc., can have their impact on poverty reduction. For instance, the population with low density leading to scale loss effects can make the provision

Accordingly, every nation, nationalities and people of Ethiopia have constitutionally granted rights of self determination up to secession. They have the freedom to established government institutions, speak and communicate with their language, and preserve their history and develop their culture (FDRE, 1995, Art. 39). Consequently, marginalized group in the hitherto regimes become equally recognized members and equally take part at national

Rather, many scholars seem to characterize Ethiopian decentralization as a “big brush” meaning identifying its achievements or failures from a national perspective. Hence, there is confusion whether local decentralization is in place at present or whether it is hindered by the current structure of politics in which the EPDRF regime has undertaken decentralization for partisan purpose. The other important divergent is that there is a conflicting evidence on the extent of the expenditure autonomy of the local units of government. In one hand, the transferred revenues are granted to regional government in the form of block grants and on the other hand, there is a high dependence upon these funds for recurrent expenditures. In terms of fiscal decentralization, there is devolution of tax authority as relative to the intergovernmental transfers. Again, here the paradox; Ethiopia is quite fiscally decentralized with high levels of government expenditures taking place at the sub-national level and intergovernmental transfers providing resources for this. However, the country’s fiscal decentralization is limited by low levels of own-source revenue at sub-national levels; hence, they rely on the federal government (Kssahun and Tegegne,