Paperback | $40.00 | 448 pages
ISBN: 978-1-55844-254-2
PDF | Free | 448 pages
ISBN: 978-1-55844-283-2
Download PDF
EPUB | Free
ISBN: 978-1-55844-356-3

Financing Metropolitan Governments in Developing Countries

Edited by Roy W. Bahl, Johannes F. Linn, and Deborah L. Wetzel

April 2013, English

Lincoln Institute of Land Policy

This work uses case studies of urban financing mechanisms in China, India, and Brazil to help decision makers in developing countries address the challenges of rapid metropolitan growth. The report includes policy recommendations and explores the effective use of metropolitan revnue instruments, intergovernmental transfers, public-private partnerships, and more.

This book is also the basis for a Policy Focus Report, Governing and Financing Cities in the Developing World, by Bahl and Linn, published in May 2014.

About the Editors

Roy Bahl is Regents Professor of Economics Emeritus at Georgia State University.

Johannes F. Linn is a senior resident fellow at the Emerging Markets Forum and a nonresident senior fellow at the Brookings Institution.

Deborah L. Wetzel is country director for Brazil at The World Bank.


For the first time in human history, more people live in urban rather than rural areas; the number of metropolitan cities in developing countries far exceeds those in advanced economies; and the governance of megacities is of greater importance as national finances have become more precarious. This book skillfully weaves together the theory and history of metropolitan financial governance in Brazil, India, and China, among other countries. The authors address the politics of metropolitan government, the mysteries of the underutilized instrument of the property tax, and the question of financing urban infrastructure. This is an indispensable volume for policy makers and for those who are about the future of metropolitan cities.”

Rakesh Mohan, Executive Director, International Monetary Fund

The economic and political future of the developing world depends crucially on the ongoing processes of urbanization. The essays in this volume, by leading scholars intimately associated with these issues, provide a deep analysis of the critical role of metropolitan governance and financial structure in urbanization. It is the best treatment available: a wide-ranging and penetrating exploration of both theory and practice.”

Wallace E. Oates, Professor of Economics, Emeritus, University of Maryland

This well-written and informative book will put local governments, especially in metropolitan areas, on the map of public finance, where they belong. The importance of global and local public finance has grown world-wide along with national public finance, which has received most of the attention in the past. This book will surely contribute to that change. It contains a wealth of hard-to-get information on issues that range from how particular cities are financed to the complex fiscal arrangements in China. It is definitely a must-read book for public finance scholars.”

Vito Tanzi, Former Director of Fiscal Affairs, International Monetary Fund

Table of Contents

Foreword, Douglas H. Keare

1. Governing and Financing Metropolitan Areas in the Developing World

Roy W. Bahl, Johannes F. Linn, Deborah L. Wetzel

2. Metropolitan Cities: Their Rise, Role, and Future

Shahid Yusuf

3. Metropolitan Cities in the National Fiscal and Institutional Structure

Paul J. Smoke

4. The Decentralization of Governance in Metropolitan Areas

Roy W. Bahl

5. Institutions and Politics of Metropolitan Management

Inder Sud and Serdar Yilmaz

6. Metropolitan Public Finance: An Overview

Richard M. Bird and Enid Slack

7. Property Taxes in Metropolitan Cities

William J. McCluskey and Riël C.D. Franzsen

8. Local Nonproperty Revenues

Jorge Martinez-Vazquez

9. Grant Financing of Metropolitan Areas: A Review of Principles and Worldwide Practices

Anwar M. Shah

10. Metropolitan Public Finances: The Case of Mumbai

Abhay M. Pethe

11. Paying for Urbanization in China: Challenges Municipal Finance in the Twenty-First Century

Christine P. Wong

12. Metropolitan Governance and Finance in São Paulo

Deborah L. Wetzel

13. Metropolitan Infrastructure and Capital Finance

Gregory K. Ingram, Zhi Liu, and Karin L. Brandt

14. Slum Upgrading

Maria E. Freire

15. External Assistance for Urban Finance Development: Needs, Strategies, and Implementation

Homi Kharas and Johannes F. Linn


Development, Economic Development, Economics, Globalization, Housing, Infrastructure, Local Government, Municipal Fiscal Health, Poverty, Public Finance, Public Policy, Taxation, Urban, Urban Development, Urban Revitalization, Urban Upgrading and Regularization