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By Region

Africa
  • Peterson, George and Patricia Clarke Annez (eds). 2007. Financing Cities: Fiscal Responsibility and Urban Infrastructure in Brazil, China, India, Poland and South Africa.
    Abstract: Urbanization is not a side effect of economic growth; it is an integral part of the process. While creating tremendous economic opportunities, urbanization also makes demands for infrastructure investment that can unbalance government budgets and stymie growth at the macro level. How can the goal of increasing public investment in urban infrastructure be reconciled with the need for prudent fiscal management? Different countries have approached this challenge in different ways -- from tight central controls on local investment to decentralized fiscal choice. Their experiences are recounted and assessed in this book -- from the perspective both of central government fiscal managers and local government officials who must provide infrastructure services to their citizens. The chapters compare the approaches taken by Brazil, China, India, Poland, and South Africa and examine the fiscal implications of different infrastructure financing options. The book offers a rare perspective on intergovernmental policy design and the politics of policy implementation.

  • Bahl, Roy and Paul Smoke. 2003. Restructuring Local Government Finance in Developing Countries: Lessons from South Africa. Edward Elgar Pub.


East Asia and Pacific

  • Peterson, George and Patricia Clarke Annez (eds). 2007. Financing Cities: Fiscal Responsibility and Urban Infrastructure in Brazil, China, India, Poland and South Africa.
    Abstract: Urbanization is not a side effect of economic growth; it is an integral part of the process. While creating tremendous economic opportunities, urbanization also makes demands for infrastructure investment that can unbalance government budgets and stymie growth at the macro level. How can the goal of increasing public investment in urban infrastructure be reconciled with the need for prudent fiscal management? Different countries have approached this challenge in different ways -- from tight central controls on local investment to decentralized fiscal choice. Their experiences are recounted and assessed in this book -- from the perspective both of central government fiscal managers and local government officials who must provide infrastructure services to their citizens. The chapters compare the approaches taken by Brazil, China, India, Poland, and South Africa and examine the fiscal implications of different infrastructure financing options. The book offers a rare perspective on intergovernmental policy design and the politics of policy implementation.

  • Institute for International Cooperation (JICA). 2001. Government Decentralization Reforms in Developing Countries (pdf file).
    Abstract: The wave of decentralization of governments throughout the world since the end of the Cold War has fostered decentralization as a theme of political importance in many developing countries. This movement has the power to dramatically change the relationships between the central and local institutions in such countries. These relationships are a fundamental aspect of a state’s institutional framework, along with an independent legislature, executive branch and judiciary. For those who are in charge of development assistance, decentralization itself is a new area for assistance; moreover, it requires us to re-examine existing assistance policies.

  • Asian Development Bank. 2000. Managing Urban Change: Strategic Options for Municipal Governance and Finance In the People's Republic of China (pdf file)

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Eastern and Central Europe

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Latin America and the Caribbean

  • Peterson, George and Patricia Clarke Annez (eds). 2007. Financing Cities: Fiscal Responsibility and Urban Infrastructure in Brazil, China, India, Poland and South Africa.
    Abstract: Urbanization is not a side effect of economic growth; it is an integral part of the process. While creating tremendous economic opportunities, urbanization also makes demands for infrastructure investment that can unbalance government budgets and stymie growth at the macro level. How can the goal of increasing public investment in urban infrastructure be reconciled with the need for prudent fiscal management? Different countries have approached this challenge in different ways -- from tight central controls on local investment to decentralized fiscal choice. Their experiences are recounted and assessed in this book -- from the perspective both of central government fiscal managers and local government officials who must provide infrastructure services to their citizens. The chapters compare the approaches taken by Brazil, China, India, Poland, and South Africa and examine the fiscal implications of different infrastructure financing options. The book offers a rare perspective on intergovernmental policy design and the politics of policy implementation.

  • Giugale, Marcelo, Adam Korobow and Steven Webb. 2000. A new model for Market-based Regulation of Subnational Borrowing: The Mexican Approach. Policy Research Working Paper 2370, World Bank.

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South Asia

  • Peterson, George and Patricia Clarke Annez (eds). 2007. Financing Cities: Fiscal Responsibility and Urban Infrastructure in Brazil, China, India, Poland and South Africa.
    Abstract: Urbanization is not a side effect of economic growth; it is an integral part of the process. While creating tremendous economic opportunities, urbanization also makes demands for infrastructure investment that can unbalance government budgets and stymie growth at the macro level. How can the goal of increasing public investment in urban infrastructure be reconciled with the need for prudent fiscal management? Different countries have approached this challenge in different ways -- from tight central controls on local investment to decentralized fiscal choice. Their experiences are recounted and assessed in this book -- from the perspective both of central government fiscal managers and local government officials who must provide infrastructure services to their citizens. The chapters compare the approaches taken by Brazil, China, India, Poland, and South Africa and examine the fiscal implications of different infrastructure financing options. The book offers a rare perspective on intergovernmental policy design and the politics of policy implementation.

  • Khemani, Stuti. 2002. Federal Politics and Budget Deficits: Evidence from the States of India. Policy Research Working Paper no. 2915, World Bank
    Abstract: This paper tests two predictions implied by models of the common-pool game in federations where subnational governments are more likely to have higher deficits because they do not internalize the macroeconomic effects of fiscal profligacy. The first is that subnational governments that belong to the same political party as the central government have lower spending and deficits because they are more likely to be influenced to internalize the macroeconomic effects of additional local spending; and the second is that subnational governments that are more dependent on intergovernmental transfers have higher spending and deficits. We find that in 15 major states of India over the period 1972-1995, states in fact have substantially higher spending and deficits (higher by about 10 percent of the sample average) when their government belongs to the same party as that governing at the center; and that intergovernmental grants tend to have a counter-intuitive negative effect on spending and deficits. The additional deficit of affiliated states is financed almost entirely by additional loans from the central government (as opposed to the market) leading to our interpretation that similar political considerations influence the distribution of deficits across states as they do other intergovernmental grants. We argue that the evidence from India, contrasted with broader international evidence, indicates that the effect of fiscal institutions in a federation is sensitive to underlying political incentives. This underscores the overall importance of political institutions in determining the consolidated government deficit, relative to specific rules of intergovernmental transfers.

  • UNDP-World Bank Water and Sanitation Program. 1999. Dialogue with Operational Staff Improvements in Municipal Management & Finance: Case Study of Four Medium Sized Cities in Southern Punjab. (pdf file)

  • Westfall, Matthew S. and Victoria A. de Villa (eds.). 2001. Urban Indicators for Managing Cities, Cities Data Book, Asian Development Bank, Manila.

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By Topic

General

  • Peterson, George. 2009. Unlocking Land Values to Finance Urban Infrastructure (pdf file). Also available in Arabic, French and Spanish

    Abstract: Urban growth throughout the developing world has created a challenge for financing infrastructure. Investment in infrastructure is needed to provide basic services for newly developed parts of urban areas. It is needed to meet the demand for a safer and more reliable water supply, higher standards for the removal and treatment of wastewater and solid waste, and the transportation requirements of a population whose expectations of mobility rise with household incomes. Infrastructure investment also is essential to the economic productivity of cities. This book examines an important option for local infrastructure finance: capturing land value gains for public investment. Land values are highly sensitive to infrastructure investment and urban economic growth. Public works projects such as road construction, water supply, and mass transit investment produce benefits that are immediately capitalized into surrounding land values. Many cities in developing countries have underused public lands that would be more valuable if sold and converged into infrastructure assets.

  • UN HABITAT. 2009. Guide to Municipal Finance.
    Abstract: This Guide to Municipal Finance describes the current issues in municipal finance and the ways in which local governments finance services and infrastructure. It sets out a basic economic framework that is used to evaluate the different aspects of municipal finance and that can be used by readers to evaluate other options. The Guide emphasizes that responsible, accountable, and efficient local governments need to raise their own revenues as much possible, adhere to an open and visible municipal budgetary process, and engage in transparent and prudent financial management.

  • Annez, Patricia Clarke, Gwénaelle Huet, and George E. Peterson. 2008. Lessons for the Urban Century: Decentralized Infrastructure Finance in the World Bank.
    Abstract: The world’s urban population doubled between 1970 and 2008, growing from 1.5 billion to 3 billion people. Future world population growth will be concentrated in developing countries—the majority in medium-size and smaller cities and towns. International institutions and governments alike face the challenge of efficiently financing the massive investment in infrastructure required to support this urban growth. The Urban Infrastructure Fund (UIF) is a tool designed to help meet this need. Responsibility for subproject oversight, credit assessment, financial management reform, and other critical tasks is delegated to the UIF, rather than performed directly by an institution like the World Bank. This book examines the track record of UIFs and what can be learned form almost 30 years of experience in implementation.

  • Matsukawa, Tomoko and Odo Habeck. 2007. Review of Risk Mitigation Instruments for Infrastructure Financing and Recent Trends and Developments. (pdf file)
    Abstract: Raising debt and equity capital to finance projects in developing countries remains a challenge. There is an increasing interest in using risk mitigation instruments to facilitate the mobilization of private capital to finance public and private projects, particularly in those infrastructure sectors in which financing requirements substantially exceed budgetary or internal resources. Risk mitigation instruments are financial instruments that transfer certain defined risks from project financiers (lenders and equity investors) to creditworthy third parties (guarantors and insurers) that have a better capacity to accept such risks. These instruments are especially useful for developing country governments and local infrastructure entities that are not sufficiently creditworthy or do not have a proven track record in the eyes of private financiers to be able to borrow debt or attract private investments without support.

  • Peterson, George and Patricia Clarke Annez (eds). 2007. Financing Cities: Fiscal Responsibility and Urban Infrastructure in Brazil, China, India, Poland and South Africa.
    Abstract: Urbanization is not a side effect of economic growth; it is an integral part of the process. While creating tremendous economic opportunities, urbanization also makes demands for infrastructure investment that can unbalance government budgets and stymie growth at the macro level. How can the goal of increasing public investment in urban infrastructure be reconciled with the need for prudent fiscal management? Different countries have approached this challenge in different ways -- from tight central controls on local investment to decentralized fiscal choice. Their experiences are recounted and assessed in this book -- from the perspective both of central government fiscal managers and local government officials who must provide infrastructure services to their citizens. The chapters compare the approaches taken by Brazil, China, India, Poland, and South Africa and examine the fiscal implications of different infrastructure financing options. The book offers a rare perspective on intergovernmental policy design and the politics of policy implementation.

  • Joumard, Isabelle and Per Mathis Kongsrud. 2003. Fiscal Relations Across Government Levels. (pdf file)
    Abstract: Despite its apparent advantages, devolution of fiscal responsibilities has not proceeded evenly over the past two decades. Decentralisation can strengthen the democratic process, allow governments to tailor the supply of public goods to local preferences and introduce some competition across jurisdictions, thus raising public sector efficiency. It can, however, entail efficiency losses, and make it difficult to implement redistributive policies and complicate macroeconomic management. On the spending side, local provision may fail to exploit economies of scale and internalise territorial spillovers a serious issue since few public goods are purely local by nature. On the revenue side, few tax bases can be exploited by subnational governments without risking making national objectives difficult to achieve and raising serious distributive concerns. This paper, which is largely based on country experiences in mitigating the potential drawbacks of decentralisation while obtaining most of its benefits, provides a framework for assessing fiscal relations across levels of government.

  • Fjeldstad, Odd-Helge. 2001. Intergovernmental Fiscal Relations in Developing Countries : A Review of Issues (pdf file)
    Abstract: Fiscal decentralisation - the devolution of taxing and spending powers to lower levels of government - has become an important theme of governance in many developing countries in recent years. Accordingly, restructuring of governmental functions and finances between the national and lower levels of government has entered the core of the development debate. A general conclusion emerging from this review of theoretical and empirical literature on intergovernmental fiscal relations is that sub-national governments need to be given access to adequate resources to do the job with which they are entrusted. At the same time they must also be accountable for what they do with these resources. Moreover, like all public policies, intergovernmental fiscal policies must take into account both the political constraints facing policy makers, such as the strength of different provinces and groups in political decisions, and economic constraints such as the stage of development of financial markets.

  • Noel, Michel. 2000. Building Subnational Debt Markets in Developing and Transition Economies: A Framework for Analysis, Policy Reform, and Assistance Strategy.

  • Crowder, William J. and Mark E. Wohar. 1999. The Changing Long-Run Linkage Between Yields on Treasury and Municipal Bonds and the 1986 Tax Act, Review of Financial Economics; 8, No. 2:101-19.

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Institutional Capacity

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Financial Management and Creditworthiness

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Local Government Investments and Access to Markets

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Role of Financial Intermediation for Local Governments

 




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