Glossary

The glossary will help you familiarise yourself with the basic concepts of local self-government, multi-level governance, and decentralisation.

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Word	Explanation
Federal country	A federal state is a country where political power is structurally (e.g., constitutionally) divided between two or more autonomous levels of government—typically the national government and subnational governing units at one or more subnational levels—where each level derives its authority and power directly from the people. In federal states, the distribution of powers is usually defined by the constitution.
Fiscal Decentralisation	Fiscal decentralisation is the reform of multi-level public finance systems, involving the transfer of fiscal resources, as well as powers and responsibilities over financial resource decision-making and management, from the central government to subordinate or nearly independent organizations. • Improved service delivery – By giving local governments more control over finances, fiscal decentralisation allows for a more tailored approach to public service delivery, addressing the unique needs of local communities. • Enhanced local accountability – Local governments become more accountable to their citizens when they control both revenues and expenditures related to public services, leading to better governance and increased public trust. • Economic growth – With greater control over local resources and decision-making, municipalities (communities) and districts can focus on development policies that promote local economic growth, reduce regional disparities, and create jobs. • Better governance – Fiscal decentralisation can reduce the centralisation of power, leading to more democratic, fair, and participatory governance.
Functional assignment	The assignment of functional powers and responsibilities (or “functional assignment” for short) is the delineation of roles and functional responsibility among levels (or units) of government for different aspects of public sector functions, including the regulation, financing, oversight, provision, and/or production of public infrastructure and services.