Donors and local taxation: assessing the influence of development assistance on municipal revenue generation

Abstract

The impact of international development assistance (IDA) on developing countries is widely understood, especially in the context of government and administration at the national level. What is widely unexplored, is the extent to which such assistance, be it technical or financial, directly influence financial administration at the local level. Using regional-level panel data (2007–2016) on different local government financial indicators and a case study of three pilot technical assistance programs in Ghana, this article explores the direct influence of donors’ financial and technical assistance on municipal revenue generation. Findings of this study suggest that both financial and technical assistance positively influence local revenue collection efforts. Equally important for local municipal financial sustainability are contextual factors such as deliberate enforcement, proper local addressing system and lower levels of municipal poverty.