Democratic Decentralisation, Clientelism and Local Taxation in Ghana

Abstract

It is generally assumed by advocates of democratic decentralisation that maximising locally-raised revenue sources will help to enhance accountability through a closer and more legitimate relationship betweenthe local government authority and citizens. Research on Ghana and other African countries shows, however, that the dominance of clientelist forms of politics undermines the legitimacy of local taxation; where voters expect their representatives to provide specific pay-backs to themselves or their communities in return for support and payment of tax, it is extremely difficult to establish a ‘collective interest’ for the local government area. Citizens tend to interpret allocation decisions over expenditure of revenues as products of patronage relations rather than as a collective public good. This problem is especially acute where resources are very scarce and the revenue base limited. Central government transfers are, therefore, likely to remain the fairest and most effective way of financing local government in such contexts.