Local Government Finance and Investments

Course introduction

Local governments have a key role in the planning and execution of investments and preparation of fundable projects. In some countries, local governments have become increasingly dependent on intergovernmental transfers, which have been shrinking over time in part because of the fiscal constraints. Moreover, investment decisions are at the core of any development strategy. All these, and many others aspects of financial investments, are addressed in this course.

Course objectives

The aim of this course is to help students understand the local government finance and a range of analytical approaches for the economic and financial analysis of the financial government investments. By the end of this course, students should be able to:

  • Understand the key principals and elements of local government finance including fiscal decentralisation, revenue management, and capital investment planning.
  • Understand and apply economic and financial analysis to investment projects relevant to local governments and incorporate uncertainty and probability in decision analysis. 

Course content

The course’s content divides into two weeks as follows:

First week:

1. Key principles underlying effective local government finance frameworks within the context of intergovernmental fiscal relations and fiscal decentralisation. 

2. Main revenue sources available to local governments and the issues and challenges concerning them (e.g. taxes, user fees, intergovernmental transfers, investment income, property sales, licenses, permits).

3. Established and innovative tools used by municipalities to leverage additional resources for financing capital investments through borrowing and accessing capital markets.

Second week:

1. Review key decision analysis theories related to investment projects, with a focus on economic and financial analysis.

2. The conceptual foundations of economic and financial Cost Benefit Analysis.

3. The discounted cash flow analysis principle, including cash flow modelling, project lifetime period, net present value, discount rate, and risk.

Course information

Programme

Local Government Finance and Investments

Period

Block 1

ECTs

3.5

Coordinator

Alberto Gianoli

Lecturers

Alberto Gianoli; Somesh Sharma

Language

English

Methodology

Lectures; Individual and group work; Guided discussions; Analysis of cases; Practical exercises

Assessment

Individual assignment 100%