Urban Public Finance in Developing Countries

by Bahl, Roy W.; Linn, Johannes

• ISBN13: 9780195208054
• ISBN10: 0195208056
• Format: Hardcover
• Copyright: 1992-05-28
• Publisher: Oxford University Press

Summary

The ability of developing countries to maintain their stock of urban infrastructure and to expand in line with rapid urban population growth depends on administrative capabilities and financial resource management. This book provides a comparative international basis on which urban finance and administrative problems in any particular city in a developing country can be assessed, and develops a better understanding of the types of solutions which might be successful in various cities. It offers an in-depth look at the urban finance, administrative practices, and problems in developing countries, and suggests methods for improvement.

Table of Contents

Foreword
Acknowledgments
Data Sources and Definitions
Introduction: Why Study Urban Public Finance?	p. 1
Urbanization and National Planning	p. 2
Objectives of this Book	p. 3
Scope, Method, and Limitations	p. 5
Plan of the Book	p. 7
A Framework for Analysis	p. 9
The Expenditure and Revenue Structure of Urban Governments	p. 11
The Importance of Local Government in Developing Countries	p. 11
What Do Local Governments Do?	p. 16
Expenditure Patterns	p. 23
Financing Urban Services	p. 32
Conclusions: Local Fiscal Performance	p. 47
The Urban Fiscal Problem in Developing Countries: Issues and Approaches	p. 49
Is There an Optimal Size for an Urban Government's Budget?	p. 49
The Fiscal Gap and the Budget Deficit	p. 52
Why Do Urban Government Budgets Grow?	p. 53
Revenue Constraints and Opportunities	p. 65
Reform and the Prospects for Urban Government Budgets	p. 68
The Prospects for and Politics of Urban Fiscal Reform	p. 73
Local Government Taxes	p. 77
Property Tax Systems: Practice and Performance	p. 79
The Importance of Property Taxation	p. 80
Types of Property Taxation	p. 83
Annual Value Systems	p. 84
Capital Value Systems	p. 90
Site Value Taxation	p. 96
Is There an Optimal Property Tax Structure for Developing Countries?	p. 97
Exemptions from the Property Tax Base	p. 100
Does the Property Tax Generate Adequate Revenue?	p. 101
Property Tax Administration	p. 109
Property Tax Reform	p. 117
The Incidence of Urban Property Taxation	p. 123
Conventional Theories of Incidence	p. 123
Limitations of the New Orthodoxy	p. 125
A Framework for a Theory of Incidence in Developing Countries	p. 131
Empirical Estimates of Incidence	p. 134
Distributive Effects of Structure and Administration	p. 143
A Case Study of the Effect of Structure and Administration on Incidence	p. 160
Summary	p. 164
Allocative Effects of Urban Property Taxation	p. 165
Property Taxation and Resource Allocation	p. 165
Property Taxation and Land Use Policy	p. 166
Allocative Effects and Property Tax Practices	p. 169
Appendix	p. 187
Automotive Taxation	p. 190
The Case for Automotive Taxation	p. 190
Local Automotive Tax Practices in Developing Countries	p. 193
Objectives of Automotive Taxation	p. 195
Fuel Taxes	p. 196
Sales and Transfer Taxes on Motor Vehicles	p. 199
Unrestricted Annual License Taxes	p. 200
Congestion Charges	p. 203
Summary and Evaluation of Local Automotive Taxation	p. 207
Other Urban Taxes	p. 209
Policy Objectives	p. 210
Local Income Taxes	p. 212
General Sales Taxes	p. 219
Local Taxes on Industry, Commerce, and Professions	p. 222
"Terminal" Taxes	p. 226
Local Sumptuary Taxes	p. 229
Entertainment Taxes	p. 231
Minor Local Taxes, Licenses, and Fees	p. 233
Summary and Evaluation	p. 236
User Charges for Urban Services	p. 239
Issues in Pricing Urban Services	p. 241
The Efficiency Argument for User Charges	p. 241
Fiscal Considerations and Full Cost Pricing	p. 265
Income Distribution Considerations	p. 271
The Politics and Institutions of Public Service Pricing	p. 280
Charging for Urban Water Services	p. 286
Pricing Water Supply Services	p. 289
Sewerage and Drainage	p. 333
Summary	p. 341
Charging for Other Urban Services	p. 346
Electricity and Telephone Services	p. 346
Collecting and Disposing of Solid Waste	p. 359
Mass Transit	p. 363
Housing	p. 367
Development Charges	p. 374
Intergovernmental Fiscal Relations	p. 383
The Structure of Urban Governance	p. 385
Fiscal Decentralization	p. 385
The National Structure of Urban Government	p. 394
The Structure of Large Metropolitan Areas	p. 403
Evaluating Experiences with Alternative Structures	p. 411
Summary and Conclusions: The Structure of Local Government and Decentralization	p. 420
Appendix: Application of the Constrained Maximization Model of Local Fiscal Behavior to Developing Countries	p. 422
Flows and Effects of Intergovernmental Transfers	p. 428
The Importance of Grants for Revenue	p. 430
A Typology of Grant Programs	p. 432
The Pure Shared Tax	p. 434
Formula Grants	p. 440
Grants to Reimburse Costs	p. 446
Ad Hoc Grants	p. 449
Capital Grants and Loans	p. 450
Evaluating the Alternatives	p. 454
Policy Choices	p. 466
Epilogue: Lessons for Policy	p. 470
The Importance of Urban Government in Developing Countries	p. 471
The Urban Fiscal Gap	p. 471
The Allocation of Urban Government Functions and Revenue Authority	p. 472
Issues in Urban Property Taxation	p. 473
Automotive Taxation	p. 474
Other Local Taxes	p. 474
User Fees and Development Charges	p. 475
Intergovernmental Transfers	p. 477
The Scope and Prospects for Reform	p. 478
Appendix: Data Sources for Tables	p. 481
Notes	p. 493
References and Selected Bibliography	p. 513
Index	p. 541
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