Local governments need resources in order to finance the services and activities for which they are responsible. This may include the direct provision of goods and services where the market fails to provide satisfactorily (e.g. ‘public goods’ and ‘merit goods’, such as health and education), or contracting or subsidising the private sector to provide them. Local governments also have a variety of regulatory roles, such as building and development control and consumer protection, which have to be financed. Moreover, local governments may need to subsidise certain services for low-income groups, even though redistribution is generally regarded as primarily a function of central government.

Decentralisation has been a major element of governance reform in developed, developing and transitional countries over the past two decades. The driving forces have differed, as have the outcomes. This paper reviews a number of issues concerned with decentralisation, drawing comparisons between the experience in Central and Eastern Europe with that in a range of countries in Asia, Africa and Latin America. The analysis focuses in six key areas: the size of local government units and the need for an intermediate tier; structures for local democratic control; citizen participation and engagement of civil society; assignment of financial resources; central-local relations; and the impact of decentralisation on service delivery, poverty reduction and corruption. The conclusion is that decentralisation needs to be carefully designed and implemented if it is to achieve the desired outcomes.

In the design of urban governance structures, there is an inherent tension between 'scale' and 'voice'. Both aspects are important considerations if city government is to address the needs of the poor. Metropolitan-scale government offers the potential for resources (notably finance but also land, natural resources and skills) to be mobilised from across the city to provide services and infrastructure for all, including the poor. But the metropolitan scale can also mean remoteness of decision-makers from citizens and hence a weakened citizen 'voice', especially of the poor. This article explores this tension, using material from recent research on urban governance and poverty in ten cities of Asia, Africa and Latin America. The analysis covers issues of jurisdiction boundaries, responsibilities for services and infrastructure, resource bases and mobilisation, performance in service delivery and access to services, political representation and accountability and mechanisms of citizen participation. The conclusion is that the tension between scale and voice may be best addressed by a two-tier or multi-tier structure involving both a very local level, with statutory rights and a share of resources, accessible and accountable to the poor, together with an upper level, also democratically accountable, covering the whole metropolitan area. Copyright (c) 2005 John Wiley & Sons, Ltd.

Foreword by Janelle Plummer * Preface * A Strategic Framework for Municipal Capacity Building in Finance * Part 1: Strategies for Capacity Building - Diagnosing Current Capacity * Focusing Financial Goals * Part 2: Mobilising More Money - Enhancing Tax Revenues * Exploiting Charges * Part 3: Spending Money Better - Towards Better Budgeting * Controlling Costs * Part 4: Sustaining Improvements - Accounting Reform * Finance for Investment * Framework for Action * Annexe: Background to the Case Studies * References * Index

The current fashion for decentralisation is built on the assumption that it will result in decisions that reflect local needs and priorities. Yet representative democracy through periodic elections is a crude mechanism for establishing these needs and priorities. Most local government systems offer few other opportunities for citizens to participate particularly for the poor and few mechanisms of accountability. This article reviews the literature relating local level decision-making citizen participation and accountability. It then presents the findings of a study of decision-making about the use of resources in a sample of municipal governments in Kenya and Uganda. Local governments in Kenya have traditionally offered minimal scope for citizen participation or accountability but this is beginning to change mainly as a result of performance conditions applied through the recently introduced Local Authorities Transfer Fund (LATF) together with an increasingly active civil society. In Uganda which has undergone a radical decentralisation there is much greater scope for citizen participation at the local level but there are still many of the same problems of local accountability as in Kenya. The article reviews some of the examples of and reasons for good (and bad) practice. It concludes that factors like committed local leadership central monitoring of performance articulate civil society organisations and the availability of information are critical. But even with these there is no guarantee that decentralised decision-making will be inclusive of the poor. (authors)

Finance is a critical constraint for cities seeking to address the problems of urban poverty, but one that has received little attention in the literature. Using material from a study of urban governance and poverty in 10 cities in the South, this paper analyses the issue of finance under two broad headings: resource mobilisation and use, and budgeting and expenditure management processes. It examines the nature and scale of resources available to the cities concerned, whether these impinge on the poor, and how far they are used to meet the needs of the urban poor. It then examines the avenues that the poor have to influence decision making about the use of resources, through representative democratic and participatory processes, and how far that influence on budgetary choices feeds through into actual expenditures. A conclusion is that executive discretion and lack of transparency at the budget implementation stage undermine whatever influence the poor may have on the formal budget process.

Licensing of businesses by local governments is a common practice in many countries. While business licensing has its origins in regulation, it is often seen as little more than a revenue source for local government. This article reviews the potentially conflicting objectives of regulation and revenue generation, and outlines the various forms which local taxation of business has taken in a number of countries. In practice, the regulatory aspects of local business licensing in many developing countries are ineffective at best and counterproductive at worst, and there are pressures to sweep away most local business licences as part of deregulatory reform. Yet local governments in many countries are in dire need of revenue sources in order to finance local service provision. The article analyses the reforms that have been introduced to business licensing in Kenya. There, traditional business licences have been replaced with a Single Business Permit, with the twin objectives of increasing local revenues and reducing regulatory compliance costs on businesses. Initial results suggest that, while there have been some initial start-up problems, both these objectives are being achieved. Copyright (C) 2001 John Wiley Sons, Ltd.

Decentralization has focused attention on city government but, at the same time, the growth of civil society means that urban governance is not limited to city government. Little attention has been paid, either in the literature or in practice, to the institutional and political processes which determine whether and how the poor benefit, or how the poor can influence the agenda of city governance. Drawing on studies of nine cities in Africa, Asia and Latin America, this paper identifies three broad areas which are of importance: a political system in which the votes of the poor count; a city government system with some capacity to deliver; and a dynamic civil society which can press the case of the poor. After reviewing what is involved in each of these areas, the paper identifies a number of specific policies and practices which impact on the urban poor.

Journal of International DevelopmentVolume 13, Issue 7 p. 989-996 Research Article The connections between urban governance and poverty Nick Devas, Corresponding Author Nick Devas International Development Department, School of Public Policy, University of Birmingham, Birmingham, UKInternational Development Department, School of Public Policy, University of Birmingham, Birmingham, UK.Search for more papers by this author Nick Devas, Corresponding Author Nick Devas International Development Department, School of Public Policy, University of Birmingham, Birmingham, UKInternational Development Department, School of Public Policy, University of Birmingham, Birmingham, UK.Search for more papers by this author First published: 07 September 2001 https://doi.org/10.1002/jid.823Citations: 24AboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onFacebookTwitterLinkedInRedditWechat Citing Literature Volume13, Issue7Special Issue: 2000 Annual Conference IssueOctober 2001Pages 989-996 RelatedInformation

It is now well recognised that reforms to tax administration are as important as tax policy changes for overall fiscal reform. One institutional model of tax administration, which has been quite widely adopted in Africa in recent years, is that of the semi-independent Revenue Authority. This approach is based on the executive agency model, widely adopted in the UK and elsewhere, as a way of improving performance of certain governmental functions. This article looks at the arguments for and against the Revenue Authority model, and examines a number of practical issues in the design of such an agency. It draws on the recent experience of Revenue Authorities in a number of countries. It concludes that the Revenue Authority model can offer an appropriate institutional framework for reforming tax administration, particular where low pay rates and rigid civil service systems inhibit effective management. However, Revenue Authorities do not solve all problems, and can only be expected to deliver results if they form part of a wider reform. Copyright (C) 2001 John Wiley & Sons, Ltd.

This paper describes how complex political struggles in Mombasa underlie the inadequate provision for basic infrastructure and services, and the corruption and lack of accountability within government. These struggles are underpinned by overlapping responsibilities and rivalry between central and local government, and a political system (both national and local) which plays on ethnic and tribal loyalties as a basis for support and reward. The paper also describes how and why the city has failed to fully realize its economic potential, has extensive poverty and experiences major inadequacies in provision for water, sanitation, garbage collection, health care, education and housing. Drawing on the findings of a recent participatory poverty assessment, the paper outlines the coping strategies of poor and very poor households and suggests measures which would help ensure that their needs receive more attention.

The Department for International Development has funded this research programme, which it hopes will be of value to policy makers and practitioners. The facts presented and the views expressed are those of the author, and do not necessarily represent the policies of DFID.