Handbook of Multilevel Finance
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Handbook of Multilevel Finance

Edited by Ehtisham Ahmad and Giorgio Brosio

This Handbook explores and explains new developments in the “second generation” theory of public finance, in which benevolent rulers and governments have been replaced by personally motivated politicians and the associated institutions. Following a comprehensive introduction by the editors, the renowned contributors present fresh and original perspectives on the key multi-level issues, along with recent developments in theory and practice, as they relate to taxes, budget systems, the management of liabilities and macroeconomic stability. The book also explores special issues concerning the poor and marginalized, structural change and the environment, natural disasters, and the task of overcoming conflicts whilst keeping countries together.
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Chapter 13: Delivering and financing public services in metropolitan areas

Roy W. Bahl and Johannes F. Linn


The inadequate level of public services in the metropolitan areas of developing countries, and the prospects of continued high level of growth of city populations over the next three decades will almost certainly cause national leaders to revisit their urban strategy. The goal in this chapter is to support such efforts by reviewing the state of metropolitan governance and finance in developing countries, suggesting the lessons that might be learned from theory and from the international experience, and considering the policy reform choices that are open. There is a rich body of research literature on the subject of urban governance and finance in the industrial countries. But in developing countries, where the problems and reform options are fundamentally different, there is much less research, relatively little information that can be used to assess the success of policy, and almost no comparative data. We focus in this chapter specifically on the opportunities and challenges of metropolitan governments. We do so because the large cities around the developing world are where in the foreseeable future a large share of economic growth and its sources – innovation, competitiveness, skills, entrepreneurship, integration into global productive and knowledge networks and so on – will be located. Moreover, the special issues faced by metropolitan areas in developing countries are, if anything, even more neglected than the general urban management and finance issues.

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