Subnational governments around the world: Structure and finance

Monitoring local finances is an essential step towards
assessing subnational governments' financial capacity to
exercise the responsibilities assigned to them and to design
effective and efficient development policies.

At the international level, several initiatives and
instruments have been launched over recent years to
provide subnational finance data in a comparable and
reliable way. However, they remain limited or focused
on micro-data or on a limited sample of countries, and
do not provide a global vision of the state of subnational
finances worldwide. Moreover, there are still a number
of countries which have not yet implemented harmonised
national accounting systems according to the international
standards of the System of National Accounts.

The OECD and United Cities and Local Government
(UCLG) have decided to join forces to prepare this
statistical study launched in October 2016 at the
UCLG Summit in Bogota. It is a first attempt to build a
systematic data compilation on local finances on 101
countries in the world, based on quantitative and
qualitative data.

This study presents the main organisational and
financial indicators related to subnational governments
in 101 federal and unitary countries worldwide. It
provides, through country profiles and a synthesis
analysis, qualitative information on subnational
government structure and responsibilities, as well as
macro financial data assessing subnational government
spending, investment, revenue and debt. Financial
indicators of the country profiles are accompanied by
short comments on the structure of expenditure and
investment (by type and economic function), revenue
(tax, grants, user fees and property income, etc.) and
the main characteristics of the debt and fiscal rules.

This study is a first exploratory step: the study
process has identified the main information sources at
international and national levels, as well as some major
methodological and information gaps which will need
to be addressed for further development. The goal is
to also link this global overview to other national and
international initiatives, and as a second step, to include
“micro-data” at city or regional levels, based on the
collection of individual city and regional accounts.