TABLE OF CONTENTS -- Abstract -- Acknowledgments -- Acronyms and Abbreviations -- Executive Summary -- 1. Introduction -- 2. Today's Decentralization Agenda-Challenges and Institutional Determinants -- The Legal Framework -- Deconcentration and Decentralization -- Control System -- Regional Planning Bodies -- Towards a More Service-oriented Administration -- 3. Fiscal Framework -- The Fiscal Gap -- Expenditures -- Revenues -- Transfers -- Improving Madagascar's Fiscal Framework -- 4. Communes -- Institutional Arrangements at the Commune Level -- Measuring Commune Finance: Sample and Methodology -- Commune Needs and Overall Flows of Funds -- Commune Revenues -- Commune Expenditures -- Improving Service Delivery at the Commune Level -- Annexes -- Annex A: Matrix of Policy Recommendations -- Annex B: Distribution of Ministerial Functions -- Annex C: Revenue Assignment in the 2000 and 2001 Budget -- Annex D: Deconcentration of Expenditures -- Annex E: The Local Financing Gap Methodology -- Annex F: The Representativeness of the 232 Commune Sample -- Annex G: Local Government Organigram -- Annex H: Local Government Revenue Assignments -- Glossary of French and Malagasy Terminology -- Bibliography -- TABLES -- 2.1 Administrative Parallelism -- 2.2 Personnel and Budget Functions in the Social Sectors -- 2.3 The Control Framework -- 3.1 Possible Expenditure Assignments by Level of Government -- 3.2 Composition of Central Government Expenditures -- 3.3 Possible Revenue Assignments by Level of Government -- 3.4 Revenue Assignments in Madagascar -- 3.5 Combining Objectives and Design -- 3.6 Transfers to Administrative Levels (in million FMG) in 2001 -- 3.7 Transfers to Commune Budgets (2001) -- 4.1 Local Financing Gaps (US per capita and % of total needs) -- 4.2 Sources of Financing (US per capita) -- 4.3 Revenue Items and Collection Mechanism.

4.4 Revenue Composition of Urban and Rural Communes (estimated) -- 4.5 Own Revenue by Recovery Mechanism -- 4.6 Breakdown of Expenditures in Urban Communes and Communes in the Greater Antananarivo Area -- 4.7 Breakdown of Recurrent Expenditures -- 4.8 Breakdown of Investments -- 4.9 Functional Classification-Overview -- CHARTS -- 2.1 Madagascar 's Territorial Administration -- 3.1 Madagascar's Revenues in the International Context-Government Revenues as a Share of GDP (excluding grants) 1998 -- 3.2 Madagascar's Revenues in the International Context-Government Revenues as a Share of GDP (excluding grants) 2001 -- 3.3 Shares of Recurrent Expenditures Executed Below the Center -- 3.4 Social Sector Spending by Administrative Level -- 3.5 Central Government Budgetary Revenue 1998-2000 (in % of GDP) -- 3.6 Delay of Unconditional Transfers to Rural Communes (sample of 15 communes) -- 4.1 Institutional Relationships at the Local Level -- 4.2 Data Sources -- 4.3 Gap per Sector (US per capita) -- 4.4 Breakdown of Total Local Revenues -- 4.5 Breakdown of Total Local Taxes -- 4.6 Breakdown of User Fees -- 4.7 Breakdown of Administrative Fees -- 4.8 Economic and Functional Expenditures of Rural Communes -- BOXES -- 2.1 The Intercommunal Association Fianarantsoa-Manakara -- 3.1 Municipal Revenues in South Africa (2001) -- 4.1 Local Development Planning (Plan Communal de Développement, PCD) -- 4.2 Managing Local Security Issues in Uncertain Environments -- 4.3 Case Study of the Schools in the School District of Farafangana and Andilamena -- 4.4 Social Funds and Decentralization-Moving Progressively Away from the Rural-Urban Divide?.