Syndicate content

municipal governance

Boosting access to market-based debt financing for sub-national entities

Kirti Devi's picture



Many countries are experiencing urbanization within the context of increased decentralization and fiscal adjustment. This puts sub-national entities (local governments, utilities and state-owned enterprises) in the position of being increasingly responsible for developing and financing infrastructure and providing services to meet the needs of growing populations.
 
However, decentralization in many situations is still a work in progress. And often there is a mismatch between the ability of sub-nationals to provide services, and the autonomy or authority necessary to make decisions and access financing—often leaving them dependent on national governments. Additionally, they may also contend with inadequate regulatory and policy frameworks and weak domestic financial and capital markets. 

Sub-national pooled financing: Lessons from the United States

Kirti Devi's picture

As infrastructure projects are increasingly decentralized to sub-national governments (SNGs) in many countries, policymakers are keenly interested in developing sub-national bond markets to open up access to private-sector financing. However, the transaction costs of bond issuance are still prohibitive for small SNGs.
 
Pooled financing—through regional infrastructure funds, municipal funds, or bond banks—is being explored as a solution. Yet, many questions remain: 

Of tigers and elephants: The rise of cities in Asia

Judy Baker's picture
Rush hour traffic in Mumbai, India. Photo: Adam Cohn/Flickr
Over the next decade and a half the world will add a staggering 1.1 billion people to its towns and cities. About one half of this urbanization will happen in the regions of East and South Asia.
 
If history is any guide, this growth in urban population will provide tremendous opportunities for increasing prosperity and livability. One can look at the successes of a few Asian cities such as Tokyo, Seoul, and Singapore to demonstrate how, with the assistance of good policies, urbanization and economic development go hand-in-hand. More generally, no major country has ever reached middle-income status without also experiencing substantial urbanization.
 
Yet cities can grow in different ways that will affect their competitiveness, livability, and sustainability. The more successful cities of Asia have been effective at creating opportunities, increasing productivity, fostering innovation, providing efficient and affordable services for residents, and enhancing public spaces to create vibrant and attractive places to live. But many, many, more cities have neglected fundamental investments in critical infrastructure and basic services, and have mismanaged land, environmental and social policies. This has resulted in traffic congestion, sprawl, slums, pollution, and crime.
 
Among the many complexities of urban development that have contributed to success, two critical factors stand out – investing in strategic urban planning, and in good urban governance.

Earth Day 2016: In a rapidly urbanizing world, cities hold the key to a greener future

Kevin Taylor's picture
Photo: Mricon/Flickr
This Earth Day, we have good reason to celebrate. It’s been a year that saw historic commitments along the path of our collective response to climate change and how we will live on the planet in this century.
 
In September, global leaders adopted the Sustainable Development Goals and are now working to put them into force to end poverty, while also combating climate change and ensuring that our future is prosperous for all people.
 
The Paris Agreement reached at COP 21 last December represents our best foot forward toward cutting carbon pollution and building resilience to the climate threats we face. And that momentum continues this week, as leaders from around the world gather in New York City to formally sign the Agreement to turn those promises into action.
 
Increasingly, that future will be more urbanized than ever before. 6 out of 10 people on the planet will live in cities by 2030. However, more than 820 million people live in slums and this number, sadly, is increasing. Fortunately, more and more local leaders are stepping up efforts to make cities more efficient, inclusive, resilient, and productive to address the global challenges of climate change, poverty, and inequality.
 
This year, we can celebrate another global commitment in the launch of the Compact of Mayors. Nearly 500 mayors and local officials have signed the Compact to mark their pledge to tackle climate change. Most of these leaders were in Paris for COP 21 to call on nations to follow their example.
 
It is critical to seize this momentum to turn the promise of the Paris Agreement, SDGs, and Compact of Mayors into reality. For climate change, we need to significantly reduce CO2 emissions as soon as possible, as the window for avoiding the worst impacts of climate change is rapidly closing.

Urbanization reviews: connecting the dots between urban geography and economic development

Ede Ijjasz-Vasquez's picture
Over the last 5 years, the World Bank has conducted a number of in-depth, systematic analyses to zero in on the specifics of urbanization in its client countries. These so-called “Urbanization Reviews” pay special attention to the linkages between urban geography and economy: Where do people live within cities? Where are the jobs? How do residents move around cities? How do they move between cities? How does this affect cities’ economy as well as their country’s overall development?

In this video, Marisela Montoliu Muñoz, World Bank Director for Urban Development and Disaster Risk Management, provides a sweeping overview of the Bank’s Urbanization Reviews, and explains why a better understanding of the urbanization process is critical to helping countries grow sustainably and maximize their economic potential.

Click here to view a list of Urbanization Reviews that have been completed so far.

​Developing municipal credit markets: Experience with pooled finance

Kirti Devi's picture

Urbanization is a defining trend of our time. In 1900, 13 percent of the world’s population was urban. Today more than half of the estimated population of 7.2 billion lives in cities. And this growth has happened in one century.
 
On the upside: Urbanization and economic development are correlated and there are other benefits of density and agglomeration economies. Production is concentrated in cities, which are also centers of demand and social convergence. No country has achieved high-income status without significant urbanization. However, increasing energy use, accelerating CO2 emissions and more environmental pressures will accompany GDP growth. Mismanaged urbanization will impose social and environmental costs that will be difficult to reverse.
 
In many countries, this urbanization trend is playing out within the context of increased decentralization and fiscal adjustment, and local governments are increasingly responsible for the provision and financing of public infrastructure for their constituencies. This has placed an increased strain on local financing resources and led to an emphasis on the development of local credit markets and resorting to public-private partnerships (PPPs).

Lorne Turner: Remembering a city worker who made a difference

Dan Hoornweg's picture

Lorne Turner served as Manager of Performance Management for the City of Toronto.
People wandering through the labyrinth of booths of yet another UN urban conference in Nanjing (2008) or Rio de Janeiro (2010) may have stumbled across a friendly, unassuming man, looking somewhat out of place at the Global Cities Institute – Cities Alliance stand. These types of conferences were not the typical work venue for Lorne Turner, Toronto’s manager of city performance.
 
Lorne was a city practitioner, tasked with the professional, meaningful and honest monitoring of the progress of Toronto, alone and alongside other world cities. He firmly believed that all cities – in Ontario, Canada and around the world - succeed when working together, and that measuring this progress is absolutely critical. Lorne was a ‘details-guy’ who knew how the small brushstrokes blended together to paint a community, a country, and later in his life, he helped demonstrate how they could define urban life around the planet.
 
Lorne passed away last week, after a long battle with cancer. Lorne was in his role for almost 30 years (including Budget Director, North York, 1988-97).
 
Lorne’s passing is particularly poignant for city workers. Lorne was quiet and modest; he fit his professional accountant stereotype well. He was also highly effective. Last year, the global city indicator standard was published (ISO 37120). This standard is important for all cities and is anchored to Lorne’s perseverance, commitment and his ability to keep the City of Toronto actively engaged for the more than ten years it took to develop the idea. The idea and the standard owes much of its existence to Lorne.