Abstract
As discussed in the previous chapter, the discretionary system of intergovernmental transfers that was in place in Tanzania prior to 2004 had numerous serious shortcomings. Given the prominent impact of these shortcomings on the overall local government finance system, the Government of Tanzania sought to replace its largely discretionary system of local government finances with a sound transfer system that would not only take on board the principles of sound transfer design (Chapter 7) but also achieve the degree of decentralization that it wished to pursue with its transfer system.
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