Most of the region's cities are highly dependent on intergovernmental transfers, limiting their autonomy and capacity to finance and guide their urban development. In the decentralization processes, growing gaps have been generated between expenditures and resources at the local level. In terms of urban finance, this has meant the reallocation of functions on the side of expenditures, but not in taxation and financing powers.
It is essential to strengthening municipal finances, intergovernmental fiscal systems, and instruments and capacities to innovate in funding mechanisms for urban investment. Financing urban development is not only about a challenge of infrastructure and urban services, but also of how to significantly contribute to the reduction of inequalities and inequities within cities, among them, and between their associated territories.
