Local Governance in Industrial Countries PDF
Preview Local Governance in Industrial Countries
PUBLIC SECTOR GOVERNANCE AND ACCOUNTABILITY SERIES LOCAL GOVERNANCE IN INDUSTRIAL COUNTRIES Edited by ANWAR SHAH LOCAL GOVERNANCE IN INDUSTRIAL COUNTRIES Introduction to the Public Sector Governance and Accountability Series Anwar Shah,Series Editor A well-functioning public sector that delivers quality public services consistent with citizen pref- erences and that fosters private market-led growth while managing fiscal resources prudently is considered critical to the World Bank’s mission ofpoverty alleviation and the achievement of the Millennium Development Goals.This important new series aims to advance those objec- tives by disseminating conceptual guidance and lessons from practices and by facilitating learning from each others’experiences on ideas and practices that promote responsive(by matching public services with citizens’preferences),responsible(through efficiency and equity in service provision without undue fiscal and social risk),and accountable(to citizens for all actions) public governance in developing countries. This series represents a response to several independent evaluations in recent years that have argued that development practitioners and policy makers dealing with public sector reforms in developing countries and,indeed,anyone with a concern for effective public gov- ernance could benefit from a synthesis ofnewer perspectives on public sector reforms.This series distills current wisdom and presents tools of analysis for improving the efficiency, equity,and efficacy ofthe public sector.Leading public policy experts and practitioners have contributed to this series. The first 13 volumes in this series, listed below, are concerned with public sector accountability for prudent fiscal management;efficiency,equity,and integrity in public serv- ice provision;safeguards for the protection ofthe poor,women,minorities,and other dis- advantaged groups;ways ofstrengthening institutional arrangements for voice,choice,and exit;means ofensuring public financial accountability for integrity and results;methods of evaluating public sector programs,fiscal federalism,and local finances;international prac- tices in local governance;and a framework for responsive and accountable governance. Fiscal Management Participatory Budgeting Public Services Delivery Budgeting and Budgetary Institutions Public Expenditure Analysis Local Budgeting and Financial Management Local Governance in Industrial Countries Tools for Public Sector Evaluations Local Governance in Developing Countries Accountability for Performance Intergovernmental Fiscal Transfers: Macrofederalism and Local Finances Principles and Practice Citizen-Centered Governance PUBLIC SECTOR GOVERNANCE AND ACCOUNTABILITY SERIES LOCAL GOVERNANCE IN INDUSTRIAL COUNTRIES Edited by ANWAR SHAH THE WORLD BANK Washington,D.C. ©2006 The International Bank for Reconstruction and Development / The World Bank 1818 H Street,NW Washington,DC 20433 Telephone:202-473-1000 Internet:www.worldbank.org E-mail:[email protected] All rights reserved 1 2 3 4 09 08 07 06 This volume is a product ofthe staffofthe International Bank for Reconstruction and Development / The World Bank.The findings,interpretations,and conclusions expressed in this volume do not necessarily reflect the views ofthe Executive Directors ofThe World Bank or the governments they represent. The World Bank does not guarantee the accuracy ofthe data included in this work. The boundaries,colors,denominations,and other information shown on any map in this work do not imply any judgement on the part ofThe World Bank concerning the legal status ofany territory or the endorsement or acceptance ofsuch boundaries. Rights and Permissions The material in this publication is copyrighted.Copying and/or transmitting portions or all ofthis work without permission may be a violation ofapplicable law.The International Bank for Reconstruction and Development / The World Bank encourages dissemination ofits work and will normally grant permission to reproduce portions ofthe work promptly. For permission to photocopy or reprint any part ofthis work,please send a request with complete information to the Copyright Clearance Center Inc.,222 Rosewood Drive,Danvers, MA 01923,USA;telephone:978-750-8400;fax:978-750-4470;Internet:www.copyright.com. All other queries on rights and licenses, including subsidiary rights, should be addressed to the Office ofthe Publisher,The World Bank,1818 H Street,NW,Washing- ton,DC 20433,USA;fax:202-522-2422;e-mail:[email protected]. ISBN-10:0-8213-6328-X ISBN-13:978-0-8213-6328-7 eISBN-10: 0-8213-6329-8 eISBN-13: 978-0-8213-6329-4 DOI:10.1596/978-0-8213-6328-7 Library ofCongress Cataloging-in-Publication Data Local governance in industrial countries / edited by Anwar Shah. p.cm.– (Public sector governance and accountability series) Includes bibliographical references and index. ISBN-13:978-0-8213-6328-7 ISBN-10:0-8213-6328-X 1. Local finance–OECD countries. 2. Local administration–OECD countries. 3. Finance,Public–OECD countries.4.Public administration–OECD countries.I.Shah, Anwar.II.Series. HJ9105.L618 2006 336'.0141722-dc22 2005057766 Contents Foreword xv Preface xvii Acknowledgments xix Contributors xxi Abbreviations and Acronyms xxv CHAPTER 1 A Comparative Institutional Framework for Responsive, Responsible, and Accountable Local Governance 1 by Anwar Shah Introduction:Local Government and Local Governance 1 The Theory:Conceptual Perspectives on Local Governance and Central-Local Relations 3 The Practice: Alternative Models ofLocal Governance and Central-Local Relations 21 A Comparative Overview ofLocal Government Organization and Finance in Industrial Countries 27 Concluding Remarks 36 Acknowledgments 36 References 38 v vi Contents 2 Local Government Organization and Finance: Canada 41 by Melville L.McMillan Municipal Government Responsibilities Associated with Expenditures 45 Municipal Government Revenues 49 Municipal Government Borrowing 60 Recent Developments 62 An Overall Assessment ofMunicipal Government Finances 70 Lessons for Developing and Other Countries 75 Notes 78 References 80 3 Local Government Organization and Finance: France 83 by Rémy Prud’homme Jurisdictions 83 Economic Weight 85 Governance 87 Local Government Expenditure Responsibilities 89 Local Government Own-Source Taxes and Charges 93 Central-Local Fiscal Transfers 100 Local Government Borrowing 106 Local Government Administration 110 Conclusion 111 Notes 114 References 115 4 Local Government Organization and Finance: Germany 117 by Jan Werner Historical Development 119 Financial Situation ofthe Local Administrative Bodies:Problems and Reform Proposals Presented So Far 122 Contents vii Local Financial Equalization between the Federal States and Municipalities 135 Illustration:The Equalization System in Hesse 135 Local Government Borrowing 138 Local Government Administration 141 Local Tax Administration 141 Conclusion and Policy Implications 142 Notes 144 References 146 5 Local Government Organization and Finance: Japan 149 by Nobuki Mochida An Overview ofJapan’s Local Government 150 Expenditure Responsibilities 152 Tax Assignment between Central and Local Governments 155 Specific-Purpose Grants 165 Fiscal Equalization System 169 Local Bond and Borrowing 179 References 187 6 Local Government Organization and Finance: New Zealand 189 by Brian Dollery Overview ofthe Current Local Government System 189 Local Government Expenditure Responsibilities 194 Local Government Own-Source Taxes and Charges 196 Shared Taxes 198 Intergovernmental Fiscal Transfers 199 Local Government Borrowing 200 Local Government Administration 201 Overall Assessment ofLocal Government Finances 202 Lessons for Developing Countries 209 Notes 221 References 221 viii Contents 7 Local Government Organization and Finance: Nordic Countries 223 by Jørgen Lotz Legal and Organizational Frameworks:The Development ofNordic Decentralization 226 Size and Structure ofLocal Governments:Amalgamations and the Alternatives 230 Decentralizing Expenditure 234 Decentralizing Revenues 235 Borrowing 243 The Role ofGeneral,Specific,and Discretionary Grants 245 Horizontal Imbalances and Equalization 249 The Calculation ofExpenditure Needs 252 Summary and Conclusions 255 Notes 259 References 261 8 Local Government Organization and Finance: United Kingdom 265 by David King The Component Countries ofthe United Kingdom 265 A Comment on Recent Reforms 266 An Overview ofthe Current Local Government System 267 Local Government Expenditure Responsibilities 281 Local Government Own-Source Taxes and Charges 285 Intergovernmental Fiscal Transfers 291 Local Government Borrowing and Other Capital Revenues 303 Local Government Administration 306 An Overall Assessment 306 Lessons for Developing Countries 309 Notes 311 References 311 9 Local Government Organization and Finance: United States 313 by Larry Schroeder Organization ofSubnational Governments 314
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