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Coping with Change: The Need to Restructure Urban Governance and Finance in India

Author

Listed:
  • Richard M. Bird

    (University of Toronto)

  • M. Govinda Rao

    (National Institute of Public Finance and Policy, New Delhi)

Abstract

Over 330 million people live in India’s 5,165 cities, with 35 cities having a population of over a million. Three (Mumbai, Delhi, and Kolkata) of the 10 largest metropolises in the world are in India. Over two-thirds of GDP originates in urban agglomerations in the country. However, urban governance and finance in India leave much to be desired in terms of providing services to the country’s burgeoning urban population and with respect to its flexibility in accommodating different needs and pressures and its lack of resiliency in adapting to shocks, whether natural or manmade. This paper draws on lessons from fiscal federalism theory and experiences of governance institutions and financing systems around the world to identify some key reforms needed to ensure more citizen participation and greater accountability in urban governance, and to augment and strengthen the capacity of Indian cities to deliver more adequate services and provide needed urban infrastructure.

Suggested Citation

  • Richard M. Bird & M. Govinda Rao, 2012. "Coping with Change: The Need to Restructure Urban Governance and Finance in India," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1203, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    • Handle: RePEc:ays:ispwps:paper1203
    as

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    File URL: http://icepp.gsu.edu/files/2015/03/ispwp1203.pdf
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    References listed on IDEAS

    as
    1. Simanti Bandyopadhyay & M. Govinda Rao, 2009. "Fiscal Health of Selected Indian Cities," Development Economics Working Papers 22970, East Asian Bureau of Economic Research.
    2. R. Kavita Rao, 2008. "Goods and Services Tax for India," Macroeconomics Working Papers 22976, East Asian Bureau of Economic Research.
    3. János Kornai, 2014. "The soft budget constraint," Acta Oeconomica, Akadémiai Kiadó, Hungary, vol. 64(supplemen), pages 25-79, November.
    4. Breton,Albert, 1998. "Competitive Governments," Cambridge Books, Cambridge University Press, number 9780521646284, September.
    5. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64(5), pages 416-416.
    6. Richard M Bird & Andrey V Tarasov, 2004. "Closing the Gap: Fiscal Imbalances and Intergovernmental Transfers in Developed Federations," Environment and Planning C, , vol. 22(1), pages 77-102, February.
    7. M G Rao & A Das-Gupta, 1995. "Intergovernmental Transfers and Poverty Alleviation," Environment and Planning C, , vol. 13(1), pages 1-23, March.
    8. Eduardo Engel & Ronald Fischer & Alexander Galetovic, 2010. "The economics of infrastructure finance: Public-private partnerships versus public provision," Documentos de Trabajo 276, Centro de Economía Aplicada, Universidad de Chile.
    9. Robert P. Inman & Daniel L. Rubinfeld, 1997. "Rethinking Federalism," Journal of Economic Perspectives, American Economic Association, vol. 11(4), pages 43-64, Fall.
    10. Slack, Enid, 2007. "Managing the coordination of service delivery in metropolitan cities : the role of metropolitan governance," Policy Research Working Paper Series 4317, The World Bank.
    11. Richard M Bird & Enid Slack, 2007. "An Approach to Metropolitan Governance and Finance," Environment and Planning C, , vol. 25(5), pages 729-755, October.
    12. Weingast, Barry R., 2009. "Second generation fiscal federalism: The implications of fiscal incentives," Journal of Urban Economics, Elsevier, vol. 65(3), pages 279-293, May.
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    Cited by:

    1. Jonas Frank & Jorge Martinez-Vazquez, 2014. "Decentralization And Infrastructure: From Gaps To Solutions," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1405, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    2. Sundaresan, Jayaraj, 2017. "Urban planning in vernacular governance: land use planning and violations in Bangalore, India," LSE Research Online Documents on Economics 86388, London School of Economics and Political Science, LSE Library.
    3. Simanti Bandyopadhyay, 2014. "Some New Thoughts on Performance Evaluation of Governments: An Application to Indian Cities," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1430, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    4. Simanti Bandyopadhyay, 2015. "Financial management and service delivery: a nonparametric analysis for Indian cities," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 54(3), pages 721-751, May.
    5. Simanti Bandyopadhyay, 2014. "Municipal Finance in India: Some Critical Issues," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1421, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.

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    More about this item

    Keywords

    India; metropolitan areas; governance; finance;
    All these keywords.

    JEL classification:

    • R5 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis
    • H1 - Public Economics - - Structure and Scope of Government
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations

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