Fiscal Equalisation Mechanism

This book offers a unique study of public
finances in a big country with the population of more than
205 million and consisting of about 500 autonomous
localities. Indonesia has embarked on a dramatic change
toward democratisation as well as decentralisation since
the fall of an authoritarian regime in 1998. Many experts
believe that the decentralisation has the potential to
produce greater inequality among communities and regions.
Therefore, a study that explores the disparities between
localities and the fiscal equalisation mechanism to address
such inequality is certainly important. Despite an
Indonesia's study, it also provides a thorough theoretical
review about fiscal equalisation from economics, equity and
political point of views. Moreover, for those who are
interested in learning the system and the process of
decentralisation in developing countries, this book
provides an insight experience about a 'big bang' approach
of decentralisation. Most of all, an example of
intergovernmental financial relations in a unitary country
is explored here.