Can city governments in the South deliver for the poor?: A municipal finance perspective

Finance is a critical constraint for cities seeking to address the problems of urban poverty, but one that has received little attention in the literature. Using material from a study of urban governance and poverty in 10 cities in the South, this paper analyses the issue of finance under two broad headings: resource mobilisation and use, and budgeting and expenditure management processes. It examines the nature and scale of resources available to the cities concerned, whether these impinge on the poor, and how far they are used to meet the needs of the urban poor. It then examines the avenues that the poor have to influence decision making about the use of resources, through representative democratic and participatory processes, and how far that influence on budgetary choices feeds through into actual expenditures. A conclusion is that executive discretion and lack of transparency at the budget implementation stage undermine whatever influence the poor may have on the formal budget process.