This study aims at evaluating the fi scal equalization performance of the fed eral and, Oromia andrnSNNP regions block grant transfer. In order to achieve thi s, actual implementation of the blockrngrant allocation at the federal and in the two regions were first evaluated based on normativerntheory of fiscal transfer.rnThe review suggests that the federal government allocation mechanism has been evolved towardsrnequalizing both expenditure needs and revenue rai sing capacities of regional governments. whilernin the two regions, in spite of the effort to link the block grant transfer with expenditure needsrnand revenue raising capacities of local governments, the transfer mechanisms have suffered withrnseveral shortcoming in its actual implementation due to lack of appropriate data of expenditurernneeds and revenue raising capacities of their respective local governments.rnIn order to achieve the stated major obj ective, i.e. to evaluate the equalization performance of thernfederal and the two regions block grant transfer, the per capita before and after block grantrntransfer revenue variation and the relationship between per capita block grant with expenditurernneeds and revenue raising capacities has been analyzed using coefficient of variation andrnregression estimation techniques respective ly. Both analyses suggest, the block transfers havernbeen equalizing over the period. However, the result of regression analysis suggests, the federalrnblock grant allocation has been both revenue raising capacity and expenditure need equalizing,rnwhereas, the two regions block grant allocations have been reinforced the federal governmentrnequalization effort only in equalizing expenditure needs oflocal governments.