Making Cities Work Assessment and Implementation Toolkit: Municipal Finance

Municipal finance has an impact on development in several different ways, so it is natural that USAID missions may want to provide assistance to improve the way that municipal finance functions. Municipal finance can affect the development of democratic governance through its impact on the ability of elected municipal leaders to meet the expectations of the local citizenry. Municipal finance affects economic development through its impact on the quality of local services and infrastructure required for expanding commerce and industry as well as its impact on the deepening of financial markets. Municipal finance affects the quality of the natural environment through its impact on municipal services such as water supply, sewage treatment, solid waste management, and public transportation. Municipal finance even affects poverty reduction through its impact on the ability of municipal governments to undertake effective pro-poor programs of social, economic, health, education, and community development.