Considerable attention has been given to enhancing subnational development finance in response to the 2008 global financial crisis and recent global development agendas, including the Sustainable Development Goals, Financing for Development, and Habitat III/New Urban Agenda. Much work on this topic is fragmented, focusing on specific elements of development finance: fiscal transfers, capital market access, public-sector lending agencies, or public-private partnerships. Most countries, however, have a range of subnational governments with varying needs and capacities that require different and evolving mixes of development finance mechanisms. Enabling greater subnational borrowing is often desirable but requires adoption of other reform policies to improve the fiscal capacity and creditworthiness of subnational governments over time. This paper reviews the rationale and potential for improving subnational development finance, outlines the overall landscape of institutional arrangements available for this purpose, and considers broad challenges involved. Based on a review of global practice and experience in selected Asian developing countries with a range of special entities and innovations to enhance subnational investment, it proposes a more integrated, strategic approach to building subnational development finance.

This article discusses gender-responsive budgeting (GRB) at the local level in Kerala by studying a village panchayat, the lowest tier of rural local government. GRB of a rudimentary form, known as Women Component Plan (WCP), had been in existence at the local level for the last 20 years as a key feature of participatory planning. The study adopts a fourfold classification of all projects implemented in the panchayat on the basis of their gender friendliness and calculates allocation and expenditure under each of these categories. The data on which the article relies relate to the expenditure incurred under the annual plans rather than budgets, which are based on inflated and unreliable data. The article ends by making some observations based on the data and the overall experience of Kerala in gender budgeting.

The multi-faceted problem of local government finance has attracted increasing attention in the new millennium. The reasons for the renewed interest in this thorny question are comparatively straightforward. In the first place, for the past two decades all public sector institutions have been profoundly affected by the twin revolutions simultaneously sweeping the world – the globalization of the international economy and the information revolution wrought by the computer age – and local government is no exception. Not only have these inexorable forces had dramatic implications for the structure of government as a whole, and relationships between the different tiers of government, but also for service provision and public finance, including local public finance. Secondly, substantially heightened demands on local government, together with limited access to adequate funding, have seen the genesis of a deepening crisis in the financial sustainability of local government entities.

A striking feature of local government reform in many Commonwealth countries has been a heavy reliance on structural reform, often in the form of forced local council amalgamation. This paper argues that the long-run success of structural change in local government hinges on several key factors, not least that voluntary rather than compulsory council mergers have a far greater chance of success. A second key ingredient resides in a high degree of local autonomy in both the composition and operation of decentralized governmental functions. A third vital factor lies in ensuring that revenue and tax assignment is sufficient to provide local government with financial autonomy. Finally, adequate powers of taxation need to be accorded to local government and this requires careful consideration of the types of taxes most suited to local government.

The Commonwealth Local Government Forum (CLGF) was established in 1994, coinciding with rapid moves towards decentralisation at that time, especially in Commonwealth Africa. It uniquely brings together national associations of local government and individual councils, ministries responsible for local government, and training and research institutes with an interest in local government, on a common platform. This reflects an understanding that local government needs effective central government and vice versa if decentralisation is to be truly successful, and that research, training and practice need to be brought together in a constructive and creative way. CLGF’s developmental work can be divided into three main categories: Promotion and advocacy of local democracy and good governance, Exchange of experience and Capacity building.This article provides a brief overview of the activities and projects which CLGF has underway in respect of these objectives. It will be complemented by more detailed papers on specific programmes and projects in this and future issues of the Commonwealth Journal of Local Governance.