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Intergovernmental equalization grants have been described as “the glue that holds a nation together.” Getting the grants system right is critical to countries as they decentralize. This paper illustrates general principles with an example based on Indonesia in 2000. A general grant should be used to supplement own revenues and to finance local service provision where there are no central mandates. The special needs of backward regions would be better provided for by specific grants. Specific grants need to be taken into account in the general grants scheme.
Public Finance --- Demography --- National Government Expenditures and Related Policies: General --- Education: General --- Demographic Economics: General --- Health: General --- Public finance & taxation --- Education --- Population & demography --- Health economics --- Expenditure --- Total expenditures --- Population and demographics --- Health --- Expenditures, Public --- Population --- Indonesia
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