Commonwealth Local Government Forum

Local government finance

Resourcing local government remains a central challenge to effective decentralisation. This section has content relating to different models of fiscal decentralisation, options for identifying new sources of local revenue, such as local property tax; and strategies for improving collection and deployment of own-source revenue. It also offers information about improving the borrowing potential of local government, innovative financing models such as municipal bonds, shared services, and public private partnerships.



Sedibeng District Municipality assisted in achieving a clean audit for two years running

All activities of local government in South Africa are tightly regulated. There are numerous Acts governing how municipalities need to run operations. Municipalities are challenged by not having effective and efficient systems, tools, and processes to support managing their operations. This ultimately impacts on their ability to being able to effectively and timeously monitor their performance against their annual plans. However, the Sedibeng District Municipality was on a manual system that had a negative impact on its effectiveness and productivity. Sedibeng therefore needed to implement a performance management system that would comply with South African legislative requirements. The municipality went on an open tender and awarded the project to Microsoft partner Vision Activ that specialises in performance management solutions for both the corporate and public sectors.

Author: Microsoft CityNext Publisher: Microsoft CityNext Publication year: 2016

Land-based Financing in Metropolitan Cities in India: The Case of Hyderabad and Mumbai

Major cities in developing countries face infrastructure shortage and inadequate financial outlays to overcome it. One way to raise finances is by leveraging the increasing urban land values using different mechanisms. This article studies the experience of land-based financing in the metropolitan cities of Hyderabad and Mumbai in India. It assesses the performance of various mechanisms implemented by the principal urban local bodies and development authorities in these cities by examining their design, collections and utilisation of revenues from land-based financing mechanisms for infrastructure provision. It finds that although land-based financing contributes substantially to revenues of public bodies, there are issues regarding efficacy of design and legal validity that need to be addressed to make it sustainable. Further, the article finds that to a certain extent, some of the public organisations use revenues from land-based financing for capital expenditure.

Author: Sahil Gandhi and Vidyadhar K. Phatak Publisher: Ubansation Publication year: 2016

Intergovernmental Fiscal Transfers in Developing Countries Case Studies from the Commonwealth

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.

Author: Munawwar Alam Publisher: Commonwealth Secretariat Publication year: 2014

Local democracy and local governance: benchmarking Rwanda against the Aberdeen principles

The purpose of the study was to carry out an assessment of local democracy and local governance through benchmarking Aberdeen principles on the local government system in Rwanda to appreciate the achievements and establish gaps and suggest appropriate recommendations for future improvement. As laid in the terms of reference, the study was guided by research questions for each of the 12 principles, which include, Constitutional and legal recognition for local democracy, political freedom to elect local representatives, partnership and cooperation between spheres of government, defined legislative framework, citizens participation in local decision making, open local government – accountability, open local government – transparency, scrutiny of the executive, inclusiveness, adequate and equitable resource allocation, equitable services viii and capacity building for effective leadership. The said Aberdeen principles were used to analyse and assess Rwanda’s local government system vis a vis the Aberdeen principles. In terms of methodology, the study employed extensive desk research, analysing local democracy and local governance structures, systems policies and processes in Rwanda. Evidence was collected and collated through wide-ranging literature review with limited field research.

Author: Aimable Kabanda Publisher: CLGF, RALGA Publication year: 2013

Resource guide on decentralisation and local government

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.

Author: Zoe Scott and Munawwar Alam Publisher: Commonwealth Secretariat Publication year: 2011

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