The Future of Federalism
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The Future of Federalism

Intergovernmental Financial Relations in an Age of Austerity

Edited by Richard Eccleston and Rick Krever

The crisis and its aftermath had a dramatic short-term effect on federal relations and, as the twelve case studies in this volume show, set in place a new set of socio-political factors that are shaping the longer-run process of institutional evolution and adaptation in federal systems. This illuminating book illustrates how an understanding of these complex dynamics is crucial to the development of policies needed for effective and sustainable federal governance in the twenty-first century.​
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Chapter 13: The impact of the financial crisis on intergovernmental financial relations in South Africa

Ramos Mabugu

Abstract

This chapter describes the transition of South Africa from the Union of 1910 to the post-apartheid unitary state of 1996, and the structure of the current intergovernmental fiscal relations system with strongly centralized control of broad-based taxes and provision for revenue sharing and redistribution among the provinces. The 2008–9 financial crisis has been only one factor in an emerging set of challenges relating to regional inequalities and the need for vast improvements in basic infrastructure and educational service delivery. A substantial youth profile in the country’s demographic profile provides the potential for economic growth but also the emergence of new forms of political activism. Federal fiscal reforms are aimed at improving efficiency and accountability in provincial service delivery. These reforms include development of mechanisms for performance-based funding in conditional grants, and the establishment of the Presidential Infrastructure Coordinating Committee to provide national infrastructure planning and oversight.

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