Digital tools for boosting the impact of fiscal decentralization in Africa's local economies

Abstract

BACKGROUND: Fiscal decentralization offers potential for stimulating local economic development in Africa, empowering subnational governments to control revenue and spending. However, challenges such as urbanization, poverty, inequality, insufficient infrastructure, and governance issues hinder the successful implementation of the core tenets of fiscal decentralization. This paper explores the role of digital technologies in promoting greater fiscal decentralization and revenue enhancement, as a strategic response to these local economic development challenges in Africa. METHOD: Through a systematic literature review, this study explores the role of fiscal decentralization in driving local economic development, with a focus on leveraging digital technologies to boost revenue generation and strengthen governance and institutional capacity at the subnational level. RESULTS: The research underscores the importance of investing in digital infrastructure, skill development, and regulatory frameworks, while addressing data privacy and security concerns. CONCLUSION: By emphasizing the transformative impact of digital technologies fiscal decentralization and property taxation, this paper contributes to the existing literature and highlights avenues for promoting local economic development across Africa.