The second type of fiscal decentralization is delegation. The process of
decentralization by delegation is that the central government gives the subnational
governments the power to perform functions and to raise resources according to explicit
norms and rules with the understanding that these powers can be changed or revoked by
the central authorities. The degree of discretion in providing services and raising tax is
often constrained by central government rules. During the process of decentralization by
delegation the power remains within the central government. Thus the process of
decentralization by delegation may be better identified with unitary forms of government.