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This paper reviews the literature on tax assignment in decentralized countries. Ideally, own-source revenues should be sufficient to enable at least the richest subnational governments to finance from their own resources all locally-provided services that primarily benefit local residents. Subnational taxes should also not unduly distort the allocation of resources. Most importantly, to the extent possible subnational governments should be accountable at the margin for financing the expenditures for which they are responsible. Although reality in most countries inevitably falls far short of these ideals, nonetheless there are several taxes that subnational governments in developing countries could use to help ensure that decentralization yields more of the benefits it appears to promise in theory. At the local level, such taxes include property taxes and, especially for larger cities, perhaps also a limited and well-designed local business tax. At the regional level, in addition to taxes on vehicles, governments in some countries may be able to utilize any or all of the following - a payroll tax; a simple surcharge on the central personal income tax; and a sales tax, in some cases perhaps taking the form of a well-designed regional value-added tax. The "best" package for any particular country or subnational government is likely to be not only context-specific and path-dependent, but also highly sensitive to the balance struck between different political and economic factors and interests.

Business tax --- Debt Markets --- Decentralization --- Developing Countries --- Expenditures --- Finance and Financial Sector Development --- Income Taxes --- Macroeconomics and Economic Growth --- Property tax --- Public & Municipal Finance --- Public Sector Development --- Public Sector Economics --- Subnational --- Subnational Economic Development --- Subnational government --- Tax --- Tax assignment --- Taxation & Subsidies

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This paper examines broadly the intergovernmental structure in the Middle East and North Africa region, which has one of the most centralized government structures in the world. The authors address the reasons behind this centralized structure by looking first at the history behind the tax systems of the region. They review the Ottoman taxation system, which has been predominantly influential as a model, and discuss its impact on current government structure. They also discuss the current intergovernmental structure by examining the type and degree of decentralization in five countries representative of the region: Egypt, Iran, West Bank/Gaza, Tunisia, and Yemen. Cross-country regression analysis using panel data for a broader set of countries leads to better understanding of the factors behind heavy centralization in the region. The findings show that external conflicts constitute a major roadblock to decentralization in the region.

Banks and Banking Reform --- Consolidation --- Debt Markets --- Decentralization --- Environment --- Environmental Economics and Policies --- Finance and Financial Sector Development --- Fiscal decentralization --- Inflation --- Intergovernmental Fiscal Relations and Local Finance Management --- Intergovernmental relations --- Municipal Financial Management --- Public Finance Decentralization and Poverty Reduction --- Public Sector Corruption and Anticorruption Measures --- Public Sector Economics and Finance --- Public Sector Expenditure Analysis and Management --- Public Sector Management and Reform --- Reorganization --- Tax administration --- Tax assignment --- Tax collection --- Taxation --- Urban Development