Abstract:
Fiscal devolution is a major aspect of devolving power.
Distribution of public expenditure, spending discretion and modalities for
equalization of fiscal capacities were being debated and still being so. Fiscal
decentralization has been adopted by both developing as well as developed
countries under various circumstances all of which aims to accelerate
economic growth effectuating a more balanced development especially at
regional/provincial level. However, one of the most controversial debates has
been on the fact of evaluating or measuring as to how far devolution has
occurred. Unlike in Sri Lanka many other countries which have devolved
power have invented few tools on this measuring aspect. Sri Lanka
implemented fiscal decentralization through the 13th amendment to the
Constitution during 1987/88 and with the establishment of the Provincial
Council System. There is a strong argument that such devolution sought to
facilitate ethnic cooperation by equally distributing resources from the
center to the periphery. Nevertheless, seldom there have been comprehensive
studies as to whether fiscal decentralization has resulted in the expected
outcomes or rather a waste of physical resources in computable terms. The
present study aims to mathematically measure to what extent fiscal
decentralization has been implemented in Sri Lanka and identify the issues
faced by the present sub-national government system. The results reveal that
the degree of decentralization has been poor in many respects. In other
words the de facto system of fiscal decentralization in Sri Lanka is still a
resemblance of centralization than decentralization. As Sri Lanka is
emanating from the debris of a 30 year conflict situation time has now
arrived to evaluate the success or failure of the power devolution that was
implemented more than two decades ago. Identifying such weakness and
challenges would be essential to ensure a more balanced and even growth in
the country as intended constitutionally.
