ABSTRACT
This chapter discusses critical features for the design of a system of local government. Six key features are identified as important for a successful decentralised system of government. These are: integrity of local government institutions; functional local government authority; adequate fiscal autonomy; administrative autonomy; equitable intergovernmental transfers; and sound intergovernmental relations. The chapter provides ‘hard edge’ refers to the supervision of local government. ‘Soft edge’ refers to co-operation between central government and local government. Decentralisation has the potential to promote efficiency and accountability in that local authorities’ delivery of goods and services match local preferences better than central government. A number of declarations relating to, or dealing with, decentralisation make a case for co-operation. Creating lower orders of government with no independent revenue-generating capacity and little or no discretion to spend revenue according to local priorities is antithetical to the theory of decentralisation.
