Paying for Urban Infrastructure and Services: A Comparative Study of Municipal Finance in Ho Chi Minh City, Shanghai and Jakarta
Paying for Urban Infrastructure and Services: A Comparative Study of Municipal Finance in Ho Chi Minh City, Shanghai and Jakarta
June 14, 2013
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.