A Comparative Overview ofLocal Government Organization and Finance in Selected Developing Countries

The New Vision ofLocal Governance 33

finance about 20 percent oflocal expenditures.Transportation,community amenities,and recreation and culture command two-thirds oflocal expenditures.Local government in New Zealand bears a close resemblance to the Australian model.

A Comparative Overview ofLocal Government Organization and Finance in Selected Developing Countries

The conceptual literature argues for a strong role oflocal governments in local development,thereby improving public services and quality oflife at the local level.It would therefore be instructive to learn about the role of such governments in developing countries.The following paragraphs provide a bird’s-eye view oflocal government organization and finance in 10 selected developing countries.

Legal Status ofLocal Governments The legal status oflocal governments varies across developing countries.In Brazil,Chile,India,South Africa,and Uganda,local governments have a constitutional status.In Indonesia,Kazakhstan,and Poland,local governments were created by national legislation,in Argentina by provincial legislation, and in China by an executive order ofthe central government.It is interesting to note that there is no clear pattern in the autonomy and range oflocal services provided by local governments deriving their status from national and state constitutions or legislation.However,local governments that are created through legislation,in general,are significantly weaker—with the notable exception ofPoland.

Relative Importance ofLocal Governments The relative importance oflocal governments in developing countries is compared using two indicators:share ofconsolidated public sector expenditures (figure 1.1) and local expenditures as a percentage ofGDP (figure 1.2).According to both criteria,local governments in China command the largest share—more than 51 percent ofconsolidated public expenditures and 10.8 percent ofGDP—whereas in India,it is the smallest share—3 percent ofthe expenditures and 0.75 percent ofGDP.The rank order ofsome countries,however,is not consistent across both criteria.For example,South Africa does better than Brazil on the first and worse on thesecond criterion.On average in sample countries,local government