Fiscal Decentralization at Fifty: Achievements and Challenges

This paper focuses on the achievements of fiscal decentralization over the past decades and the remaining challenges and unfinished agenda, with emphasis on what we still do not know and where the theory and practice of fiscal decentralization would need to go in the coming decades. Going forward, there is a need for a “third generation” model that better integrates the insights of administrative and political decentralization with fiscal decentralization. Decentralized governance will continue to be challenged in the future by external shocks like climate change and information technology, but from the experience it should adapt and succeed.