Vanishing Borders of Urban Local Finance: Global Developments with Illustrations from Indian Federation

Foreword
Acknowledgments
Contents
About the Authors
List of Figures
List of Tables
1 Emerging Challenges in Urban Local Finance
	1.1 Genesis
	1.2 Sluggish Origin of Local Finance Institutions in India
	1.3 Absence of Targeted Local Fiscal Reforms
	1.4 Self Reliant vs. Borderless Local Fiscal Jurisdictions
	1.5 Vanishing Borders of Urban Local Finance: The Channels in India
	1.6 Focus on Global Interlinkages
	1.7 Ingredients of Local Fiscal Design
	1.8 Territorial Coverage of the Study
	1.9 Overview of Chapters
	1.10 Salient Remarks
	Note
	References
2 Public Goods Provision and Local Fiscal Domain
	2.1 Introduction
	2.2 Public Goods
	2.3 Common Pool Resources
	2.4 Global Public Goods
	2.5 Local Public Goods, Decentralization, and Decisions by Voting
		2.5.1 Assembly Voting and Local Expenditure
		2.5.2 Competing Forms of Decentralization
	2.6 Summing Up
	References
3 Tenets of Fiscal Federalism and Decentralization
	3.1 Introduction
	3.2 Conventional or the First-Generation Theory of Fiscal Federalism (FGTF)
	3.3 Second-Generation Theory of Fiscal Federalism (SGTF)
	3.4 Hard and Soft Budget Constraints
	3.5 Redistributing Fiscal Responsibility Between Public and Private Sectors
	3.6 Concluding Remarks
	References
4 Economic Globalization and Local Public Finance
	4.1 Background
	4.2 Globalization Trends and Urban Linkages
	4.3 Globalization and Fiscal Decentralization
	4.4 Globalization, Country Size, and Government Budgets
	4.5 Globalization and Privatization: Moving Outside Local Fiscal Domain
	4.6 Local Fiscal Policies and Global Governance
	4.7 Concluding Remarks
	References
5 Corporate Social Expenditure and Fiscal Decentralization: A Novel Framework
	5.1 Introduction
	5.2 Corporate Social Responsibility and Privately Supplied Public Goods
	5.3 Is CSR a Tax or an Earmarked Corporate Social Expenditure?
	5.4 Performance Auditing: Local Area Preference
	5.5 Does CSR Extend Fiscal Decentralization?
		5.5.1 Who Bears the Burden of CSR Tax?
		5.5.2 Whether CSR Expenditures Are Fungible?
		5.5.3 Whether Firms Stand for Not-For-Profit Social Activities?
		5.5.4 Whether Firms Are Appropriate for Local Public–Private Partnerships?
	5.6 Spatial Dispersal of CSR and Limited Decentralization
	5.7 Proposed Decentralization of CSR Activities Through Design of CSR Footprint
	5.8 Concluding Comments
	References
6 Global Climate Change and Local Fiscal Intervention
	6.1 Introduction
	6.2 Constitutional Framework and Functional Assignment in India
	6.3 Rationale for Local Government Participation in Global Climate Governance
	6.4 Inequality, Poverty, and Adaptation
		6.4.1 Innovation and Adaptation: Does It Reach Those Who Need It Most?
	6.5 Local Climate Finance
	6.6 Intergovernmental Fiscal Transfers and Local Climate Initiatives
	6.7 Integrating Global and Local Climate Governance
		6.7.1 City-Based and Individualized Initiatives
		6.7.2 Participation in Locality-Based Clean Development Mechanism
		6.7.3 International Funding, Adaptation Interventions, and Vulnerable Populations
	6.8 Conclusion and Way Forward
	References
7 Overlapping Local Water Supply Regimes
	7.1 Introduction
	7.2 Progress Toward SDG 6
		7.2.1 International Perspective
		7.2.2 Water Provision Inequalities Across States
		7.2.3 Inequalities Across Income Groups Within Local Areas
	7.3 Institutional Mechanisms of Water Provision
		7.3.1 Rationale and Taxonomy
			7.3.1.1 Rationale for Public Intervention
			7.3.1.2 Taxonomy of Provision Mechanisms
		7.3.2 Ownership Regimes of Water Utilities and Performance
			7.3.2.1 Public Provision vs. Privatization
			7.3.2.2 Ownership and Regulatory Effectiveness
			7.3.2.3 Corporatization Episodes
	7.4 Water Institutions in India
		7.4.1 Utility Privatization Experiences
	7.5 Models of Water Governance and Performance in India
		7.5.1 Demand-Side Management: Pricing Practices
			7.5.1.1 Direct Pricing Mechanisms
		7.5.2 Conservation and Water Pricing
		7.5.3 Affordability and Equity
	7.6 Financial Sustainability and Utility Performance
	7.7 Conclusion
	References
8 Local Fiscal Effort in Response to State Expenditure: Some Empirical Evidence
	8.1 Introduction
	8.2 Relevant Empirical Literature
	8.3 Indian Fiscal Constitution and Politics
	8.4 Measuring Local Government Willingness to Tax
	8.5 A Model of Fiscal Collusion and Retaliation
		8.5.1 Construction of Variables and Sources of Data
	8.6 Discussion of Empirical Results
	8.7 Conclusion
	References
9 Environmental Federalism and Atmospheric Pollution: Efficacy of Local vs State Expenditure
	9.1 Introduction
	9.2 Existing Literature on Environmental Federalism and Proposed Extension
	9.3 Air Pollutants in India’s Mega-Cities—with Focus on Delhi and Mumbai
		9.3.1 Nature of Pollutants
		9.3.2 Trends in Air Pollution and Source Apportionment
	9.4 Modeling Efficacy of Air Pollution Mitigation by State and Local Expenditure
		9.4.1 The Model and Construction of Counterfactuals
		9.4.2 Sources of Data
		9.4.3 Estimation Strategy
	9.5 Empirical Results and Discussion
	9.6 Conclusion and Emerging Policy Issues
	Appendix
	References
10 Local Tax Potential in an Urban Setting
	10.1 Introduction
	10.2 Neglect of User Charges
	10.3 Searching a Local Tax Base
	10.4 Property Tax Vs Business Profit Tax
	10.5 Business Property Tax
		10.5.1 Administration of Business Property Tax
	10.6 Pigouvian Tax on Industry and Business
		10.6.1 Alternative One: Tax on Corporate Expenditure on Land and Building
		10.6.2 Alternative Two: Local Carbon Tax
	10.7 Summing Up
	Notes
	References
11 Shaping Urban Public Finance
	11.1 Summary of Emerging Issues
	11.2 General Policy Context
	11.3 Specific Policy Context
		11.3.1 Grants Dependence and Fiscal Indiscipline
		11.3.2 Local Fiscal Response to Growth in State Expenditure
		11.3.3 Functional Decentralization and Creation of Parallel Institutions
		11.3.4 Sharing the Fiscal Divisible Pool
		11.3.5 Local Share in Corporation Income Tax
		11.3.6 Revitalization of Local Property Tax
		11.3.7 Local Carbon Tax as an Environmental Levy
		11.3.8 Local Climate Governance: Adaptation vs Mitigation
		11.3.9 Environmental Fiscal Federalism: State vs Local Action
		11.3.10 CSR as an Additionality to Local Finance
	11.4 Potential for Future Research
	References
Index