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

Bob Searle, Jun Ma, Stefano Piperno and Ehtisham Ahmad

No 2002/128, IMF Working Papers from International Monetary Fund

Abstract: 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.

Keywords: WP; tax rate; Indonesia; Fiscal Decentralization; Equalization Grants; revenue capacity; government administration; recipient government; expenditure need; governance law; Total expenditures; Africa (search for similar items in EconPapers)
Pages: 33
Date: 2002-08-01
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Citations: View citations in EconPapers (3)

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