Finance for City Leaders Handbook

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Cities are a driving force of the 21st century. Through bringing large numbers of people into close proximity, they spark economic growth, foster innovation, and generate prosperity. But they face the pressing challenges of creating a livable environment for their residents, enabling economic activity that benefits all citizens, and fostering urban development that is environmentally sustainable, equitable, and resilient to disruptive forces. Finance for City Leaders presents an up-to-date, comprehensive, and in-depth analysis of the challenges posed by rapid urbanization and the various financing tools municipalities have at their disposal. By providing city leaders with a wide array of financing solutions that emphasize sustainability, inclusion, and financial autonomy, this publication contributes to the growing conversation on how cities can look inward to finance major capital expenditures, infrastructure maintenance and operation, and public services.



Non-tax own-source municipal revenues

The revenue available to local governments is a key determinant of a city’s ability to provide the services citizens need and to meet expenditure requirements. In cases where revenue is constrained, infrastructure investments often suffer, and government services are reduced. Consequently, the need to diversify, grow, and mobilize revenues is one of the most pressing challenges city leaders face in various regions of the developed and developing world. Building a solid revenue base depends on a number of factors, including empowering city leaders to grow and diversify their own-source revenue pool to complement external revenue flows (e.g., intergovernmental transfers) over which local government officials lack direct control. It also requires enabling city leaders to mobilize own-source revenues, after they are raised, by harnessing financial tools that can support their strategic priorities (e.g., land-based financing instruments, debt instruments, and public–private partnerships, among others).


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