Financing local and regional governments, the missing link in sustainable development finance


Commission publications
Decentralization, Financing for development, SDGs

This booklet contains the recommendations of the Global Task Force of Local and Regional Governments (LRGs) (which gathers over 30 networks that are active internationally) for the Third International Conference on Financing for Development, that took place in Addis Ababa, Ethiopia, on July 2015.

How can Local and Regional Governments mobilize part of the wealth produced within their jurisdiction (domestic resources) to finance and support development? 

What steps are necessary to enable them to play these roles? 

How can national and global actors improve LRG creditworthiness and access to long-term finance, and strengthen their capacities to deliver sustainable services, particularly in poor areas? 

Key recommendations are: 

  • Provide suitable regulatory and legal environments at the national level
  • Ensure appropriate fiscal decentralization and sharing of national resources
  • Increase technical assistance and capacity building for subnational governments
  • Strengthen local governments' access to the instruments enabling them to raise long-term financing
  • Develop innovative and responsible ways for Multilateral Development Banks to lend to local and regional governments
  • Improve monitoring of official flows invested in local infrastructures and services

This set of recommendations has been drawn up in collaboration with Paul Smoke, Professor of Public Finance and
Planning and Director of International Programs at New York University.