Multilevel Government Problems Regarding Infrastructure


Government comprises different departmental levels tasked with specific functions to ensure that the administration is run smoothly and efficiently. In addition to the central tier of the jurisdiction, the provincial and local division of the authority exists to only operate within a particular municipality compared to the national government that extends to the whole country. According to Gildenhuys & Shaik (1997), there should exist equal and sensible distribution of resources to achieve just financial relations within different government levels. This essay analyzes multi-level government problems that need to be resolved, apart from clarifying the roles and responsibilities required by the different public entities and federal tiers to attain an ordered infrastructure strategy. The financial and fiscal instruments needed to streamline the framework are discussed as well.

Multi-Level Government Problems that need to be Resolved

The budgeting process is a regular business exercise that includes developing, implementing and evaluating a financial program (Gathure, 2002). Budgeting is an essential process in any running government; thus, budgetary decisions are made at different levels of the administration. A country comprising more than one level of governance experiences significant challenges in fiscal allocations, prompting concerns by the inter-governmental fiscal relations on the architect of public finances (Ajam, 2015). However excellent their operations might seem, their mode of taxation, spending and function allocation within the different tiers of government must be observed.

Budget prioritization is a factor that needs to be resolved within a multilevel government. Arranging the apportionment of a government’s budget is a complicated political and institutional procedure ( Schick, 2014). Consequently, the national government should put more effort into improving budget prioritization and planning. In addition, it should show how it is working to achieve transparency and specific links between intentions and fiscal property and resources.

A financial relationship within multilevel governments is an aspect that might lead to significant challenges within a government if not adequately monitored and controlled. It relates to the allocation of functions to various levels within a government (Gildenhuys & Shaik, 1997). Consequently, it decides the sharing of income among government tiers for financing their various financial projects. Additionally, financial resources decide the horizontal sharing of resources by governments of the same level; therefore, governments should develop mechanisms that will ensure thriving -balanced financial relations that are not biased.

Overdependence on federal transfers is another problem that needs to be addressed. However, in growing countries, the local administration collects little taxes from the large populations they service. Most people in such governmental tiers are poor and can only manage little contribution to the tax coffers (Shaw, 2016). The entire dependence on federal transfers creates situations of lack of accountability. As a result, the higher tiers of government receive blame for the lack of service delivery by the local administrations. The local community views their administration as not having the financial capabilities to perform and may not hold them accountable for lack of better services.

The tension between obtaining and redistributing resources is another major challenge within a multilevel state. According to Ajam (2015), a horizontal imbalance exists between different regions in a state. Moreover, they create unchanging difficulties between the principles of regional allocation founded on the derivation of resources and redistribution of the same across different states. Countries with more significant resources might want to lobby for greater weight for the derivation principle while sharing resources.

Roles and Responsibilities Required in Attaining an Ordered Infrastructure Strategy

The roles of different public entities and government tiers required to attain necessary infrastructural development have created significant debates in the new democratic environments in South Africa. On the contrary, there have been numerous cries for intergovernmental fiscal relations to be reassessed because they are not equipped with the required resources for better service delivery. The welfare services department is a function associated with both national and provincial governments. Presently, the central government is majorly responsible for deciding overall policy and noting implementation, whereas local governments deliver essential services (Fisher, 1995). Provinces also budget for award spending from their equitable share of national distribution. This fair share depends on a formula using a weighted demographic structure, reflecting the relative demand for social services between the provinces.

In most multilevel governments, ministers do not work at the local level governments. Instead, these local governments recruit chief administrative and executive officers who double up also as chief accounting officers (Schick, 2014). These officers are mandated to give accounts of financial reports to the provincial executive authority. Additionally, he plays a significant role in the final making of the budget since the budget is a work program expressed in monetary terms. Consequently, this position should be precious since he coordinates all financial activities at the local government level.

The role of heads of departments in the local administration has entirely shifted with the launching of corporate management systems. As a result, the leaders of departments are forced to play a more active role in the financial activeness of their jurisdiction (Gathure, 2002). Furthermore, they should accept they are responsible for financial matters and consequently shall be held accountable in case of any misappropriation of funds in their departments. Before cooperating management system launch, accountability at lower-level governments was not attainable. Consequently, all the misappropriation queries were directed to the national government, whether it was involved or not.

Financial and Fiscal Instruments Needed to Streamline the Strategy

An inclusive development strategy can be applied to attain an ordered infrastructural development plan. This plan focuses on job creation, poverty and inequality reduction, as well as creating an all-inclusive economic development (Ajam, 2015). Furthermore, social support is an essential redistributive programme where there exists high unemployment and minimal chances for saving and risk security. Agendas that enhance and promote human growth are education, better housing, land reforms, infrastructure and healthcare (Johnson et al., 2021). Unfortunately, no independent programme can achieve balanced growth and development. Therefore, public resources must be distributed throughout a comprehensive coverage of public programmes in order to achieve balanced infrastructural development.

The tier government can initiate an inter-governmental grant offering program to streamline the ordered infrastructural development strategy. Therefore, the national government can offer either non-conditional or conditional grants to the local governments (Fisher, 1995). The provincial and local governments should pump these grant funds into infrastructural development programs. A strict constitution can hinder performance and, consequently, the development of infrastructure within a government. Further, it can restrict the national government expenditure and redistribution of resources to the affiliate governments and set a ceiling for borrowing from a financial institution (Ajam, 2015). Fixing such a constitution and constitutional issues that hinder the overall performance of the national government can be a significant step towards attaining an ordered infrastructural development.

Doubtful legislation can sometimes reduce the pace of a performing budget in a government. When there occurs division among the members of parliament, progress in legislation will be hindered. Furthermore, their debate will be biased and deviate from facts and the preliminary plan. The best way to attain a streamlined infrastructural strategy is by creating a national framework that will ensure a well-balanced financial relationship between the different government levels. Furthermore, the framework should ensure that the roles and activities at the various government levels complement and supplement one another in a proper manner. A macro-organizational arrangement should be formed within which the existence of the different government levels must systematically be affirmed.

To achieve cohesion and development strategy to function well, the national government should acknowledge the right of existence of each government level. Equally, the presence of each government level must be proven by wise dispensation of duties and revenue shares (Gathure, 2002). Additionally, each government level should allocate pre-determined tasks with concurrent revenue resources. However, such government levels should be able to implement those functions most productively and fruitfully when needed.

How the Various Fiscal and Financial Instruments Should be Designed to Align Objectives and Ensure they are Achieved

The budget process can be of equal importance to ensuring that government objectives are attained by allocating adequate revenues to each government level. Each level of government should have enough income to ensure that financial activities operate smoothly. Undoubtedly, insufficient funds may place any government in an awful state at any level. It depicts a government with limited resources compared to the high demand for services required by the public.

Another way the budget process can enhance the process of achieving government objectives is by focusing on equal adjudication. The process should implement the moral regulation of fairness, equity and reasonableness (Gildenhuys & Shaik 1997). It is relevant for each government level to command enough revenue and equal adjudication to be employed and implemented when formulating the revenue allocation process. The disadvantaged levels of government feel the hit of poor adjudication; hence, they request more revenues before the end of a financial year. Therefore, it is essential to develop a sensible formula for the adjudication of revenue resources to create a more appealing economic relationship within the multilevel government.

Programme management is another aspect to be considered while formulating a budget to achieve desired goals. The program should be such that it allows the managers to adapt their activities quickly, consequently enhancing operations for services and programmes to be distributed efficiently and effectively. A multilevel government requires proper administration for it to thrive. For example, failure to allocate revenue equitably to each level will lead to imbalanced development and a feeling of not belonging. Consequently, it might lead to unrest and demand for an equal share of resources by the disadvantaged levels of government.

Medium-term expenditure framework is an instrument designed to improve the process of budget planning. However, it is still young when it comes to achieving advanced and complex budget planning and prioritisation intensions. Another fiscal and financial instrument that can help in achieving objectives is offering conditional grants and special projects. Lower level governments can be offered grants upon meeting certain conditions (Gathure, 2002). Such grants can be offered to enhance service delivery to the health sector within the lower level government. However, these grants might sometimes not work properly because of delay in the distribution of funds by the national treasury.


In summary, uniformed financial relations between the different government levels require a national framework within which duties and exercises of the multi-level governments correlate and boost each other in a reasonable manner. It was noted that a macro-organizational framework should be formed to emphasize interdependence of the different government levels for proper functioning. A country’s constitution always defines the form and nature of this macro-organization.


Ajam, T. (2015). Fiscal federation. In public economics (6th ed). Oxford University Press.

Fisher, R.C., (1995). Intergovernmental grants. In state and local public finance (2nd ed). Michigan State University.

Gathure, T (2002). Financial framework for comprehensive social protection. In transforming the present: Protecting the future. Taylor Group.

Gildenhuys, J.S. & Shaik, J.L. (1997). Intergovernmental financial relations (2nd ed.). J. L. van Shaik Publishers.

Interdepartmental Task on Social Security and Retirement Reform (2012). Comprehensive social security in South Africa.

Johnson, C. L., Luby, M. J., & Moldogaziev, T. T. (2021). State and local financial instruments: Policy changes and management. Edward Elgar Publishing.

Schick, A. (2014). The metamorphoses of performance budgeting. OECD Journal on Budgeting, 13(2).

Shaw, T. (2016). Performance budgeting practices and procedures. OECD Journal on Budgeting, 15(3).

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