Fiscal centralisation in a federal state: the South African case

Abstract

The paper seeks to determine whether the observation from a constitutional law and public administration perspective, namely that a distinct centralist tendency has become evident in South Africa in recent years, in terms of legislation, policy and practice of government, is borne out by an empirical analysis of fiscal data. An overview of key legislative, policy and operational changes is combined with an investigation of trends of indicators pertaining to intergovernmental fiscal relations. It is established that the South African fi scal scene has, over many decades, been characterised by a steady and gradual reduction of the fiscal autonomy of sub-national governments. Fiscally, South Africa has become more centralised, thus strengthening the de facto erosion of the federal state.

Key words: structure of government, intergovernmental fiscal relations, fiscal centralisation, fiscal decentralisation, public economics, sub-national government, local government, local fiscal autonomy, intergovernmental fiscal relations in South Africa