Revenue sharing and decentralization

In this chapter, Cielo Magno talks about subnational revenue sharing in resource-rich countries. Examples of this are given, including from Niger and Peru. There are several reasons why governments share resources with local governments; property rights, to compensate local governments for the negative effects of extraction, to encourage socio-economic development, and to prevent conflict, among others which are explained using examples. Revenue sharing is related to redistributing authority and responsibility to subnational units. There are many challenges in the design of subnational sharing, including setting clear objectives, unclear and complicated sharing rules, and a lack of transparency, among others.

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