RC:Forum:Decentralization:Development finance
SD DIMENSIONS / Rural Administration & Cooperatives / Forum / Documents
Posted 9 February 1998

Food and Agriculture Organization of the United Nations United Nations Capital Development FundInternational Fund for Agricultural DevelopmentGerman Agency for Technical CooperationSwiss Agency for Development and CooperationWorld Bank

16-18 December 1997
Technical Consultation on Decentralization

Designing Intergovernmental Fiscal Relations and International Finance Institutions Allocations for Rural Development: Abstract

by Paul Smoke
International Development and Regional Planning Program, Massachusetts Institute of Technology
and Leonardo Romeo
United Nations Capital Development Fund
The full document described below is available for downloading by FTP (Word 6.0, zipped, 28K).

IN THIS PAPER we review some key issues related to the financing of rural development activities in developing countries. The first section very briefly summarizes various types of local own-source revenues typically available to rural local governments. The second section lays out options for intergovernmental transfer programs and raises some of the major issues often associated with designing them. The third section summarizes popular types of rural development programs funded by major international donor agencies and how they deal with intergovernmental and local fiscal concerns. We particularly focus on Local Development Funds (LDFs), a new type of local planning and financing mechanism recently developed and piloted by the United Nations Capital Development Fund (UNCDF). We believe that LDFs can alleviate some of the common problems of other approaches. Finally, based on our own experiences in many countries, the fourth section makes some comments and observations about the strategic design and implementation of general decentralization and intergovernmental fiscal reforms.

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