Improving local government finance in a changing environment

This paper addresses key issues in local government finance reform in the context of decentralisation and more active engagement of the private sector in urban service delivery and its financing. A basic premise is that securing institutional arrangements for intergovernmental relationships and the incentive structure governing the performance of local government is essential in the design and implementation of policy to improve local finance. Within this framework, the paper discusses major subject areas in which changes are needed to promote viable decentralisation and successful private-public partnerships.