Financing the New Urban Agenda: towards a global observatory on local finances

Local government financing is one of the main challenges for the successful implementation of the new urban agenda, as well as the Sustainable Development Goals. Indeed, most of the investments to be made to reach these objectives will be led by local authorities. But what are the real capacities of Local Governments to finance these investments? As regards local finance, the imbalance between the responsibilities devolved upon local authorities and their resources have severe consequences on the wellbeing of inhabitants of urban and peri-urban areas. As the urgency to meet the needs and the costs of inaction call for a quick and collective action, there is a need to follow-up the financial capacities of local governments worldwide to implement the international recommendations, and alert if needed. United Cities and Local Government (UCLG), in collaboration with the OECD and with the support of the AFD, are launching a study, which is a first step towards a global observatory on local finances. It presents main organizational and financial indicators related to subnational governments in 100 countries worldwide, list the main information sources at international and national levels, as well as identify methodological and information gaps to be addressed. Now we have to go further to transform this building block into a more comprehensive and permanent tool, pooling our efforts to draft a 3-5 years roadmap, bringing together local elected officials, technicians from local and central governments, academics, and technical and financial partners, to gradually improve the quality of the information collected, its analysis, and the resulting recommendations. Such a tool, at the national level, will also promote and facilitate dialogue between the various levels of governments and enhance the multi-level governance needed for an efficient fiscal decentralization.