Rebuilding the State Fiscal Federalism in Sudan

Nada Eissa (nada.eissa@georgetown.edu) and Hamid Ali
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Nada Eissa: Georgetown University
Hamid Ali: School of Economics, Administration and Public Policy

No 1596, Working Papers from Economic Research Forum

Abstract: It is fitting that the modern history of Sudan is tightly intertwined with the call for federalism, starting with the Southerners' push for regional autonomy since independence. In this paper, we examine the design and practice of one dimension of federalism – the ability of citizens to govern their fiscal affairs at the local level and how the central government designed and implemented fiscal relations with the states, focusing largely on intergovernmental transfers over the past decade. We documented the evolution of the institutional framework and fiscal trends over several decades. Severe fiscal fragility meant that transfers to states varied substantially over time and heavily oil exports facilitated higher transfers, the loss of the South sharply curtailed them. The study shows the underlying differences in standards of living across states to set the scene for understanding the distribution per-capita transfers. The results suggest that the current system in Sudan does little to offset existing inequities across states and may exacerbate them. If fiscal federalism is to support the rebuilding of the state in Sudan, it must address disparities and empower citizens to engage in determining their local public choice of taxing and spending.Length: 46

Date: 2022-11-20, Revised 2022-11-20
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