regional states, 66 zones, 550 woredas and 2 city (Provisional) administrations (Addis Ababa and Dire Dawa) with almost the same status as regional states. The main objective of fiscal decentralisation is to devolve fiscal decision-making power to lower governments and thereby narrow the vertical fiscal gap as well as ensuring horizontal equalisation. 390 In line with the goals of poverty reduction and devolution of powers to the lowest levels, decentralising powers and duties to the woreda level is also being made effective along with capacity building at woreda and kebele levels. The devolution of power to regional states and then to the woreda is a centrepiece of Ethiopia’s strategy for ending poverty. The aim is to improve accountability, responsibility and flexibility in service delivery, thereby increasing local participation in democratic decision-making on factors affecting national livelihoods at the grassroots level. Following the big push to woreda decentralisation at the beginning of SDPRP, progress has been made on a number of other important areas during PASDEP implementation. Regional constitutions were revised with a focus on the division of power and structural reorganisation to reveal accountability checks and balance at regional, woreda, and kebele levels. Basic functional responsibilities are now transferred to woredas in most regional states. Human power was deployed to woredas from the centre at regional government and zonal government levels. The required operational institutions are being set-up for basic public functions including the promotion of asymmetric decentralisation to kebeles such as committees, school parent/teacher associations, etc. Some of the important progress includes the draft fiscal decentralisation strategy, introducing grassroots participation frameworks, and conducting pilot assessments to identify gaps, including manpower planning surveys, training needs assessments, bench marking surveys. 391 Proclamation 33/92 spells out the revenue-sharing power between federal and regional governments; this considers the ownership, the national or regional character of the sources of revenue, and convenience in levying and collecting taxes or duties. Moreover, the constitution stipulates that taxes of a highly progressive and distributive nature that are important for economic stabilisation be reserved for the Federal government, while taxes that are more local in nature and levied on relatively immobile assets be assigned to the Regional Governments. 392 To bridge the gap between own revenue and expenditure responsibilities of regional states, the government introduced the block grant transfer mechanism. The objective is to support regional governments in undertaking their assigned functions and provide standard services, narrow the vertical fiscal gap, ensure horizontal equalisation, promote efficiency in financial resource allocations, and - 162 -