Why is Ethiopia’s post-1991 decentralisation reform not succeeding? Why is it not creating accountable, responsive and autonomous local governments? This article from the Journal of Modern African Studies suggests that the implementation of the elements of the reform – expenditure assignment, revenue assignment, intergovernmental fiscal transfer and sub-national borrowing – is flawed. It argues that the clientelistic relationship between central and regional political parties has distorted intergovernmental fiscal relations.
Ethiopia’s decentralisation policy was created by the current ruling party, the Ethiopian Peoples’ Revolutionary Democratic Front (EPRDF) to devolve fiscal, political and administrative power to regional governments. Unlike the previous, centralised regimes, the EPRDF introduced an ethnically based federal arrangement and allowed different political parties to participate at central and regional government levels. The framework was intended to establish regional governments that would develop and implement their policies on the provision of public goods and finance these by mobilising their own resources.
However, the past decade has seen increased central control over revenue and expenditure and an increasing regional dependence on central transfers. The EPRDF, in which the Tigrayan People’s Liberation Front (TPLF) plays a dominant role, controls all the regional state governments. It does this either through its member parties or through affiliate parties. The relationship between the centre and the regional parties can thus be described as one between a patron and his clients.
The intra-party relationship between the central and regional ruling parties shows both classic and new features of patron–client mechanisms.
- Traditional clientelism between the TPLF and its constituency is maintained through different and unofficial patronage networks, including off-budget funds and non-transparent central government infrastructure allocations to regions.
- New forms of TPLF patronage networks include: TPLF-owned large businesses; biased assignment of donor-funded projects to regions; non-transparent distribution of centrally funded service provisions such as transport, communication and energy infrastructures.
The current situation in Ethiopia underlines the importance of analysing the relationship between the central and regional political parties, in order to reach an understanding intergovernmental fiscal relations reform. Central government dominance over subnational governments in expenditure and revenue assignment is sustained by exchange transactions, party discipline and the party evaluation mechanism.
- The TPLF makes sure that both the regional political leaders and the populace feel that there is no special treatment for any region.
- Whilst the regions vary in their socio-economic conditions, they have been subjected to one-size-fits-all policies. This has led to uniformity between regional governments in expenditure planning and revenue mobilisation as well as a dependence on central government subsidy.
- Regional political leaders cannot raise issues concerning patronage mechanisms, as this would endanger their political position.
