Webinar: Are the linkages between businesses and local budgets for local economic development sufficiently strong?

Subnational governments in the region have overall mandate of promoting local economic development. Yet, there are questions about fiscal and administrative powers and capacities of local governments to promote local economic development in their jurisdiction. An important tool for promoting local economic development is local government budgets. In the region, local budgets are financed through revenues sources that are mainly controlled by central government such as revenue sharing arrangements and direct local business levies. The critical elements of revenue sharing are (i) how the total amount of shared taxes is defined (rule based or negotiated), (ii) what are the forms of actual revenue sharing (formula or origin based; local surcharges) and the (iii) scope of local autonomy in using the shared revenues (earmarked or general-purpose revenues). Municipal own revenues on businesses may operate also as regulatory instrument, if local governments have sufficient autonomy in setting rates and exemptions.

After a brief discussion on the role of subnational governments in local economic development, this session will specifically focus on how local governments can be more effective in promoting local economic development through local budgets. Panelists are invited to (i) evaluate national laws and legislations on the role of subnational governments and local economic development; and (ii) present the significance and evolution of fiscal revenues for local governments in their countries, to assess the local impact of the various schemes on local budgets and businesses.

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