This publication with its background paper and the case studies should be useful to anyone interested in understanding the challenges in revenue mobilization and management in sectors, in particular relating to fees and charges. Determining the proper domain and design of user charges and fees in practice is not easy (Bird, 2003). While general government taxes are not specifically assigned to cover any specific government function, sector revenues (fees and charges) cover costs for providing services or the consumption of specific government-provided goods or services for a specific beneficiary. User charges and fees are an efficient tool to raise additional revenues but should be carefully analyzed, designed and implemented in transition countries.

Even though in theory considered efficient, the willingness to pay for user charges and fees might still be low in transition countries because they might be considered as just another tax for the citizens that previously were enjoying public goods and services free of charge or at subsidized level. User charges and fees are political instruments and as such they are inherently hard to change and tend to prevail until the political circumstances change (Bird, 2003).

Marjan Nikolov from CEA prepared the Background paper for this research and acted as Lead Expert.

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