Fiscal Decentralization: Lessons From the Asian Experience

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The objective of this report is to describe the process of fiscal decentralization in a number of Asian countries. It covers areas of expenditure and service responsibility allocations, tax assignments, transfers to and access to borrowings by subnational governments. Best practices observed in these countries are highlighted alongwith any practices to avoid. The paper draws lessons regarding the consequences of fiscal decentralization on overall level of public expenditure, size of the fiscal deficit and effectiveness of service delivery.