Intergovernmental fiscal relations in South Africa and the role of the Financial and Fiscal Commission: A 20 year review

Abstract

The Finance and Fiscal Commission is government’s primary advisor with regard to intergovernmental fiscal relations. Its constitutional entrenchment and establishment in 1994 signalled that the post‐apartheid government took serious the commonly held wisdom that national decisions on intergovernmental fiscal matters must be discussed between governments, that they must be evidence‐based and that intergovernmental fiscal relations must be reasonably predictable. This paper reviews the history of the Commission to mark its 20th Anniversary. The paper combines a thematic and a chronological approach. It contains a narrative of the development of the Commission since its establishment, which traces the development of the Commission from its conceptualisation and inception to the most recent initiatives and policy debates. It rekindles some of the debates that surrounded the inclusion of the Commission in the Constitution and the policy process that underpinned the Financial and Fiscal Commission Act of 1997 and assesses how this role unfolded in the subsequent years. Throughout this narrative, three dimensions are addressed. The first relates to the location of the Commission in the intergovernmental system, in other words the relationships between the Commission and the various component parts of the South African multilevel government system. The second dimension is concerned with the impact that the Commission has made on decision making in the realm of intergovernmental fiscal relations. Was the Commission taken seriously? To what extend did its recommendations influence government policy? The third theme examines the Commission as an institution and assesses its governance and administrative performance, given the importance of these themes in asserting the Commission’s enduring relevance and impact. In examining these themes, comparisons with comparable multilevel government systems are made as and when relevant. The authors reviewed a range of current and historic document, including annual reports, submissions, discussion documents and selected academic literature. In addition, ten indepth interviews were conducted with current commissioners, past commissioners, Commission staff, officials representing (organised) local government, Parliament and provincial government.