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Paying for Urban Infrastructure and Services: A Comparative Study of Municipal Finance in Ho Chi Minh City, Shanghai and Jakarta
Author: UNDP Viet Nam and the Institute for Economic Research HCMC
Published Date: 2007-07-06
Summary:

The objectives of this study are to:  analyze past trends and current practices in the generation and allocation of resources for the financing of municipal infrastructure and services in HCMC; perform the same analysis for Shanghai and Jakarta, and compare the results with the performance to date of HCMC; highlight effective policies and practices that should be continued, as well as those that require strengthening or modification; identify high-potential but untapped revenue sources; and suggest improvements in expenditure efficiency and effectiveness. This study is not an evaluation, audit, or inspection. Instead, it is an external assessment of  what  seems  to  be  working  well  and  where  there  is  substantial  room  for  improvement,  with  the  goal  of providing constructive recommendations to assist HCMC in fulfilling its development mission.

Although the research team has collected as much relevant data as possible to understand fiscal policies and practices in HCMC, Shanghai, and Jakarta, and has taken great care to present this data in as fair a manner as  possible,  this  study  still  has  limitations. Public  finance  is  both  quite  complex  and  extremely  sensitive. Municipal  managers  have  little  incentive  to  share  financial  data  with  outsiders: there is no obvious  direct benefit, but tremendous potential risk. Thus, there are apparently still some significant data gaps, which when filled, could alter the research team's findings and recommendations. Also, cross-country comparisons are commonly misinterpreted as proposals for replicating practices in one nation that might be inappropriate in another  country,  due  to  different  historical  and  economic  contexts  and  dissimilar  political, social,  and institutional  environments. We  should  view  similarities  and  differences  between  HCMC, Shanghai,  and Jakarta not as "best and worse practices," but rather, as a source for discussion and reflection in the hope that experiences elsewhere might help us to better understand our own situation, as well as provide us with ideas that might be adapted to our own requirements and capabilities.

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