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The UCLG Policy Paper on Local Finance was drafted by the UCLG Committee on Local Finance and Development and adopted by the World organization at the 2nd UCLG World Congress, held in Jeju on 28-31 October 2007. The recommendations call on local governments, central governments, donors, and international financial institutions to address urban expansion and the accompanying infrastructure requirements by redirecting development aid, and establishing national strategies to boost local public investment.

At the global level, UCLG advocates that at least 20 percent of development aid and debt relief be allocated directly to local governments to enable them to address poverty reduction through public infrastructure provision. At the country level, UCLG proposes boosting local public investment through several courses of action: increased local government autonomy, fiscal decentralisation, regular financial transfers from central to local governments, revenue generation at the local level, and improving the ability of local governments to borrow.

The Policy Paper sets out to give voice to a local government vision on financing with particular emphasis on how the relationships between local governments, multilateral organisations and national governments would ultimately shape such a process. The policy paper is an executive summary of the principles findings and recommendations from a broader technical paper, the UCLG Support Paper on Local Finance.

United Cities and Local Governments (UCLG)