Michael E. Bell

Local Self-Government in Central and Eastern Europe: Decentralization or Deconcentration?

The development of autonomous local self-governments is a critical, albeit often over-looked, element of the long-term transition to democracy in Central and Eastern Europe and the newly independent states of the former Soviet Union. All countries in the region have taken clear steps to pass legislation creating new local government institutions. Such institutional reform is necessary, but not sufficient, for the development of autonomous local self-government. In this paper we present several fundamental criteria which must be satisfied in order to establish and nurture autonomous local self-government. We test these criteria against institutional reforms in Central and Eastern Europe and the newly independent states to gauge the extent to which there has been actual devolution of governmental responsibility from central to local governments. We conclude that, although some individual strands of these fundamental reforms may have received some attention in the current transition process, such attention is more ad hoc than strategic. As a result, the goal of creating autonomous local self-governments has not been achieved. Donor nations and reform elements in each country must think strategically about all dimensions of this local government transition if these changes are to be institutionalized and the transition is to be successful in the long term.

Local Property Taxation in South Africa: Current Performance and Challenges for the Post-Apartheid Era

As part of the many changes in post-apartheid South Africa, few large non-racial local governments replace relatively small, racially defined ones. The new constitution reserves property taxation for local governments, making it the only major tax available to localities. Property taxation is being extended into previously untaxed areas, principally those of the former black local authorities. It is expected that pressures on this tax will increase as it is called upon to finance services for the larger population Preliminary assessment-sales ratio studies for a handful of localities indicate a wide range of assessment levels. Such circumstances could undermine the acceptance and legitimacy of the tax and, perhaps, of local government. More frequent valuation might raise both assessment levels and uniformity. Systematic, widespread ratio studies and a closer look at the manner in which values are estimated are needed.

A Reconnaissance of Alternative Measures of Effective Property Tax Rates

Informed policy discussions on local property tax reform initiatives require accurate and reliable information about the taxs current use. This paper reviews two popular measures of property tax burden and their limitations. The paper then reports the results of a reconnaissance of measures of effective property tax rates and how they vary across the 50 states. The paper also reports the findings of a 50-state survey that indicates how states calculated and reported effective property tax rates. These comparisons lead to a suggested framework for certain methodologies for calculating effective property tax rates.

Financing the Post-apartheid City in South Africa

The recent dramatic changes in South Africa have created new opportunities for altering the countrys basic political and economic institutions. Whilst much attention has been focused on the national level, another crucial strand in the reform movement has been efforts to foster truly effective non-racial local self-government which in turn need adequate own-source revenues. With the predicted increase in the urban black populations, the Black Local Authorities, which are supposed to be financially self-sufficient, will come under increasing pressure. A discriminatory electricity price system and boycotts in response to rapidly rising rents further reduce BLA income. Increasingly, BLAs are coming to rely upon user fees and charges to provide services, but unless the fee structures are carefully designed they become regressive. What is required is a single-tax-base including the local property tax and a local income or value-added tax.

Federal Infrastructure Grants-In-Aid: An Ad Hoc Infrastructure Strategy

This article analyzes the trends and implications of recent federal aid to state and local government for infrastructure purposes. The first section describes general trends for federal infrastructure and the second section examines identified characteristics in the context of fiscal federalism theory. The authors identify an ad hoc trend in the federal infrastructure grant policy and a trend focusing on maximizing the efficiency of infrastructure grants

Financing urban government in transition countries: assessment uniformity and the property tax

The area-based property tax has been gaining influence in developing and transitional countries around the world. While an area-based property tax is advocated for its simplicity and transparency, it is often criticized as being unfair because assessed values upon which property tax liabilities are based are not related to market values. We present a case study in Lithuania that explores the uniformity of assessments, and thus the implications for fairness of the distribution of property tax liabilities across properties, for an area-based tax as opposed to an ad valorem property tax. The findings suggest that, in Lithuania, assessments are more uniform, and the distribution of property tax liabilities across properties are more fair, for detached housing under the area-based assessment than under the market-based assessment; alternatively, uniformity and fairness of the distribution of tax liabilities for flats are better under market-based than area-based assessment.