Democratic decentralisation through ‘conventional’ institutions of local government is facing increasing challenges, whether from financial pressures, questions of representativeness, difficult central-local relations and from a perhaps growing belief that local government has failed to realise its potential and there may be better ways of achieving societal goals. It is clear there is need to contemplate quite radical change to ensure local government becomes or remains ‘fit for purpose’. This collection of papers illustrates the way in which the role of local government is evolving in different parts of the Commonwealth and provides practical examples of new local government at work. It showcases emerging practice, and highlights success stories from new ways of working and challenges confronting local government in both developed and developing countries. New Century Local Government makes a very valuable contribution to helping understand the changing role of local government, and will ensure that practitioners are up-to-date with the most innovative initiatives in local government planning and administration.

Canadian cities have long called for access to more tax revenues. This paper argues that additional taxes are appropriate for major cities, describes the advantages and disadvantages of potential new taxes, and estimates the revenue from a city income tax, a city sales tax, and a city fuel tax for eight Canadian cities – Vancouver, Calgary, Edmonton, Winnipeg, Toronto, Ottawa, Montréal, and Halifax. The authors find that the property tax is a good tax, but cities would benefit from a mix of taxes. In particular, user fees are an important source of revenue and can alter economic behaviour. Taxes on income, sales, vehicle registration, fuel, and hotel stays are also an effective way to diversify local taxes. Of the available options, a personal income tax and a municipal sales tax are likely to generate the largest revenues. Although setting up their own tax systems would grant cities the greatest fiscal autonomy, doing so would be costly. It would be more cost-effective for cities to piggyback new taxes onto provincial taxes, with the province collecting the revenue and remitting it to cities. To promote local accountability, however, it is essential that local governments set their own tax rates. In this way, taxes levied would be linked to services consumed.

Despite growing fiscal devolution, efficient and effective intergovernmental transfers – the transfer of money from central to lower levels of government – remain a vital sub-national government financing in developing countries. This research study examines different approaches to intergovernmental transfers (ICTs) in developing countries in the Commonwealth, and assesses their relative strengths and weaknesses. It includes detailed case studies of India and Kenya, lessons learned from IGT systems in Australia and the United Kingdom.

This resource guide provides practical guidance for designing, implementing and evaluating decentralisation reforms and local government practices to ensure they are as effective as possible. It also synthesises and presents current debates on the impact of decentralisation and local government on poverty reduction, service delivery and conflict as well as providing links to cutting-edge research and recent case studies.

Decentralisation is now taking place in the public administrations of most countries of the world. A critical determinant of the effective performance of local governments is finance – their ability to both mobilise financial resources and to use those resources effectively and efficiently.

This book explores the variety of methods used to ensure that fiscal decentralisation takes place alongside administrative decentralisation. It considers the range of revenue sources available, the design systems of intergovernmental transfers between central and local government, and the kinds of rules and procedures necessary to ensure that local governments use their financial resources appropriately.

The experiences described in this book will help local government managers, and national policymakers charged with local government finance issues, to ensure that they follow good practice in their own programmes of local government reform.