Fiscal Decentralisation in Developing Countries: Lessons for Bangladesh

There is an ongoing debate in Bangladesh in civil society and among policymakers, whether the country should move from a highly centralised unitary state to a more devolved entity. Demand for more decentralisation of government derives from a combination of citizens’ wanting to get more involved in the process of government and dissatisfaction with the results of centralised economic planning. To strengthen local governments can bring the state closer to people and force the state to be more accountable to its citizens. During the past two decades, many developing countries have implemented decentralisation reforms. Fiscal decentralisation, the devolution of taxing and spending powers to lower levels of government, has become important to governance in many countries. This brief examines fiscal decentralisation experiences in developing countries and explores factors affecting the reform process that could inform future policy and research on fiscal decentralisation in Bangladesh.