A global review of the economic crisis on local government

United Cities and Local Government have published a global survey on the impact the economic downturn to local governments. With regional studies and analysis, the report indicates a wide variation in the degree and types of impacts but that for many countries, weak decentralisation of powers is impacting local government’s ability to respond to the additional pressures created by the downturn.

1. Local stimulation role -  when local authorities are given the means and the possibility of managing their resources in keeping with local priorities, they are effective partners in combating the crisis by supporting economic activity and job growth.
2. Enabling local government - the crisis also demonstrates failures in decentralisation processes. The weak level of control that local authorities have over their own resources and their strong degree of dependence on transfers from the State makes their situation even more fragile in times of crisis, since for budgetary reasons, national governments reduce, slow down or simply eliminate the amounts allocated for local authorities. Thus, under the pretext of crisis, in different countries in the South and most notably in Africa, the growing risk of neglect, or even regression, with respect to decentralisation processes has been noted. On another scale, developed countries can also be confronted with questions about their sources of revenue.
3. Sustained support - Local authorities feel that the crisis will take time to overcome. This observation leads us to redouble our efforts to advocate in favour of decentralisation. In fact, local authorities are part of the solutions to the crisis and, if they have the means, offer an effective lever for promoting development. 

To view the full report click here