Global Observatory on Local Finance


A first contribution to the Global Observatory on Local 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.