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FISCAL DECENTRALIZATION

FISCAL DECENTRALIZATION. CAMBODIA AND ELSEWHERE. SUB-NATIONAL REFORM AND PUBLIC FINANCIAL MANAGEMENT. FOUR MAIN THEMES Sub-national administration (SNA) geography SNA governance at a glance SNA finances Receipts Disbursements SNA concepts of decentralization.

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FISCAL DECENTRALIZATION

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  1. FISCAL DECENTRALIZATION CAMBODIA AND ELSEWHERE

  2. SUB-NATIONAL REFORM AND PUBLIC FINANCIAL MANAGEMENT FOUR MAIN THEMES • Sub-national administration (SNA) geography • SNA governance at a glance • SNA finances Receipts Disbursements • SNA concepts of decentralization

  3. The geography of SNA • World look • Brazil • State of Parana • Paraguay • Neighbors Malaysia Thailand

  4. A QUICK WORLD LOOK • World population about 6.6 billion • Population lives in small cities • Here are some questions o How many cities over 10 million population? o Including how many over 1 million? o What number is Phnom Penh? o What is population of city number 1,000 o What is population of city number 2,000 o What is population of city number 3,000

  5. ANSWERS TO QUESTIONS No. Over 10 million 8 Over 1 million 311 Phnom Penh 505 Population City no. 1,000 357,000 City no. 2,000 176,000 City no. 3,000 118,000 77% of population lives in cities of less than 120,000 23% live in 3,000 cities with population greater than 120,000

  6. BRAZIL Population (million) 190 States 26 BRAZIL--PARANA STATE Population (million) 10.5 Cities 400 Pop. avg. per city (000) 26.2 Per capita income (US$) 13,867

  7. PARAGUAY Population (million) 6.8 Provinces 17 Cities 236 Pop. avg. per city (000) 28.9 Per capita income (US$) 1,982 CAMBODIA Population (million) 14.2 Provinces 24 Districts 185 Cities 1,621 Pop. avg. per city (000) 8.7 Per capita income (US$) 540

  8. OBSERVATIONS Brazil and Paraguay have states and cities or TWO levels of sub-national administrations Cambodia has provinces, districts and communes or THREE levels of sub-national administrations. The average size of Cambodian communes at 8.7 thousand is considerable less than average size in most of the world

  9. SNA GOVERNANCE AT A GLANCE North and South America State/province- Governors elected, Board of Governors elected Cities- Governing board elected which elects a president of the board

  10. TALK POINTS • Budgets • Political parties • Legislation • Execution • Accounting records • Bank accounts • Cash disbursements

  11. SNA FINANCIAL MANAGEMENT • Each SNA is a legal entity • It has a budget • Revenues • Expenditures • Balanced • To understand decentralization • Understand cash flow • Understand types of revenues • Understand types of expenditures • Understand current operations • Understand capital operations

  12. SAMPLE SNA

  13. QUICK REVIEW • 11 large cities, thousands of smaller • Average population less than 30,000 • All SNAs operate with a budget • Understand money in money out • Ordinary • Capital • Decentralization concepts next section COFFEE BREAK

  14. Centralization Example • The Cambodian provincial government • The budget • Line department at province • Negotiated with MEF • Source of funds • Transfers from National Treasury • Treasury account for each line department • Deposits of local revenues • Centralized with some delegation

  15. Decentralization Example • Local revenue decision • Local disbursement decision

  16. The Decentralized Profile • Local source revenue 30% • Government transfers 70% 100% • Unconditional income • Local source revenues 30% • Government transfers 35% 65% • Conditional from gov’t 35% 100%

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