Governing and Financing Cities in the Developing World

de Roy Bahl, Johannes F. Linn

Metropolitan cities are engines of growth and modernization in developing countries. They present special opportunities and many challenges. Among the biggest challenge is how to govern these rapidly growing urban agglomerations and how to finance the investments and operating costs needed to meet the needs of people and of businesses in metro cities. Drawing both on theory and worldwide practice, this report explores alternative metropolitan governance and management approaches and assesses various financing tools, including locally raised taxes and user charges. It also explores external financing tools, including locally raised taxes and user charges. It also explores external financing, such as transfers from higher-level government, borrowing, private-public partnerships, and international assistance.