Designing the Fiscal Features of a Federal Form of Government: Autonomy, Accountability, and Equity Considerations

The paper provides estimates of the cost of shifting to a federal form of government under different scenarios in terms of the number of regions. Finally, it concludes with the discussion of why adopting a federal form of government should take into account not only the net benefits of the reform, but also the pre-conditions for its success: (i) reform of the party system so as to institutionalize strong political parties that sanction political turncoatism, (ii) the lowering, if not the outright elimination of the high barrier to entry in the political arena, including presence of political dynasties, and (iii) the reduction in the concentration of the power over resource allocation and resource mobilization in the President (and by extension, the executive branch).