Governance Arrangement And Inter Governmental Fiscal Relations Of Capital Cities With Their National Governments The Case Study Of Addis Ababa City Administration

Governance arrangement of capital cities and their inter-governmental fiscal relations withrnnational governments, particularly in federal countries, has started becoming one of the researchrntopics and agenda of discussion. It is in line with this direction that this paper focuses onrndescribing the governance arrangement of Addis Ababa and its inter-governmental fiscalrnrelations with the federal government, as the capital city of a federal government, seat of Oromiarnstate and African Union as well as a local government to its residents. In order to be able torninvestigate the current status of the city in the national governance and finance structure, the rolernand position of Addis Ababa city during the Imperial and the Derg Regimes has been criticallyrnreviewed and analyzed. Moreover, the changes in the governance and inter-governmental fiscalrnrelations of Addis Ababa due to the adoption of ethnic-based federal system have been addressedrnusing the empirical experience of other federal capital cities. The position of regionalrngovernments and urban local governments in the country’s governance structure is also describedrnbriefly to determine the ways Addis Ababa is being governed differently from other sub-nationalrnunits. Furthermore, through qualitative and quantitative approaches, expenditure responsibilities,rnrevenue powers and access to transfers have been analyzed.rnA general conclusion emerging from this thesis study is that the governance arrangement ofrnAddis Ababa is the most complicated and unique in the country mainly due to the challenge tornreconcile local, regional and national interests over the city. Additionally, the strong historicalrnattachment of the city with the nation-state formation process in Ethiopia, Addis Ababa has beenrnthe main center of the country’s economic, political and business activities, and then hasrnrelatively higher revenue bases with huge expenditure responsibilities. Contrary to thernexpectation of the writer from other federal capital cities, Addis Ababa is found the only sub-rnnational unit of the country to be deprived from federal government transfers. The study has alsorncome up with important recommendations.rnBasic Terms: Governance Arrangement, Intergovernmental Fiscal Relations, Ethnic BasedrnFederalism, and Fiscal Support

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