This book examines and analyzes issues related to public finance in subnational governments
along with a discussion of case studies on decentralization. Most of the analysis applies to
all public goods and services provided by subnational governments with some placed on the role
of subnational governments in the management of environmental resources notably water and
waste Coverage includes optimal arrangements for sharing fiscal responsibilities among
different levels of government the potential impact of decentralization on the quality of
public goods delivery local governments' expenditure and revenue choices and the effect of
decentralization on accountability governance and policy outcomes. The scope of discussion
extends to both public finance theory and applied policy debates. The first chapter on trends
in financing of public services opens with an explanation of the how and why of government
intervention in the economy the nature and purposes of transfers between and among governments
and trends in decentralization. Case studies examine the impact of decentralization in such
areas as service delivery water and sanitation education and health and on poverty and
income inequality. Chapter 2 examines public budgets: governance structures norms and
organizational practices building up understanding of budgets budget cycles fiscal revenues
from fees and taxes expenses debt and political economy issues rules mandating balanced
budgets in government and more. Chapter 3 discusses issues of accountability and policy
outcomes offering important lessons from recent international experience including ways to
strengthen political administrative and financial accountability. The concluding chapter
recounts lessons from recent international experience and surveys implications for the nexus
approach to management of environmental resources. The information analysis and expert advice
presented here is particularly relevant for developing and emerging countries where well
designed decentralization reforms have a higher potential to improve efficiency in the
provision of public services and to enhance the development of integrated and sustainable
strategies for the use of water soil and waste resources and applications that advance the
nexus approach.
