Disconnect Between Public Sector Management System and Decentralization Reforms: An Empirical Analysis of the Ethiopian Situation

Post-1991 Decentralization reform in Ethiopia reveals that regional governments have technically separate power to self administer their regions, formulate and implement their socio-economic policies and strategies, bear all financial expenditures, raise revenue from specified tax bases, get subsidies from the central government and borrow from internal sources. The implementation of the reform, however, shows sustained central government dominance on expenditure and revenue assignment, continued regional dependence on central subsidy, absence of borrowing, and sustained central government interference in the administrative affair of regions. By conducting detailed field research in three regional governments, this article exposes how public sector management system (public finance and human resource management system) determines decentralization outcomes. It contends that outcomes of decentralization reforms are shaped not only by political and economic factors, as suggested in the decentralization literature, but also by the de facto public sector management system.