FISCAL DECENTRALIZATION

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FISCAL DECENTRALIZATION

• CAMBODIA AND ELSEWHERE

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

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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

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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
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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
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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
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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
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TALK POINTS

• Budgets
• Political parties
• Legislation
• Execution
• Accounting records
• Bank accounts
• Cash disbursements

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• 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

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SAMPLE SNA
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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

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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

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Decentralization Example

• Local revenue decision
• Local disbursement decision

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The Decentralized Profile

• Local source revenue 30
• Government transfers 70
• 100
• Unconditional income
• Local source revenues 30
• Government transfers 35
• 
  65
• Conditional from govt 35
• 
  100