Mapping municipal finance reform in developing countries

Municipal finance is foundational to making cities work. Consequently, it is also one of the most frequently demanded policy areas for urban economic research. Researchers are responding by documenting interesting reforms or experimenting with what works and what doesn’t work to enhance the financial position of cities.

One of the most important instruments available to raise revenue at the local level is land and property tax, but this faces significant challenges. As outlined in this IGC blog series and associated video, there are numerous factors driving why developing countries tax so little—informality, aid dependency, and limited government action being just three examples. At the local level, these drivers are often amplified with lower levels of capacity, reduced mandates as well as complex political systems and vested interests to navigate.

This storymap lays down studies documenting policy reforms and economic evidence to highlight effective drivers to reform. These reforms broadly fall into four different areas: capacity; borrowing and investment; regulation; and local taxation.

This interactive resource intends to aid cross-city learning and assist decision-makers seeking municipal finance reform. The information is—where possible—shared in an open access, non-technical format. We welcome further submissions from organisations charting municipal finance evidence and reform. The resource will act as a living database, updated as research is published and is available.

Please reach out to [email protected] and [email protected] for feedback or inclusion of your work.