First Call for Projects for Decentralized Cooperation in the Field of Local Finances
20.06.2023
The Delegation for External Action of Local Authorities (DAECT) of the French Ministry of Foreign Affairs and the global network United Cities and Local Governments (UCLG) are launching the first call for projects to support decentralized cooperation in the field of local finances. This call for projects aims to support joint initiatives of French and foreign local and regional governments with the objective of enhancing the capacities of subnational governments in managing their finances.
The urgency and intensification of global challenges require a change of paradigm and resolute mobilization from all actors for development, especially local and regional governments. When they have the legal and financial leeway to act, local and regional governments are best positioned to respond to the needs of their population. The work carried out by UCLG and the Organization for Economic Cooperation and Development (OECD) within the framework of the World Observatory on Subnational Government Finance and Investment reveals that decentralization, and in particular fiscal decentralization, enables a more efficient provision of public services.
However, the current financial systems at national and international levels do not involve local and regional authorities to the extent that they should. There exists irregularity, unpredictability and dependence with regards to intergovernmental fiscal transfers, which represented in 2020, at global unweighted average for 135 countries, 51.5% of local and regional government revenues. The lack of financial resources and budgetary flexibility, limited human resources, lack of institutional autonomy and limited access to capital markets are among the factors that hinder the ability of local and regional governments to act. Therefore, local and regional governments require additional support to make the most of their resources and access new financing opportunities, thus contributing to the implementation of the Sustainable Development Goals (SDGs).
For several decades, decentralized cooperation has been a complementary pathway for development in parallel to solidarity policies implemented by national governments and has provided practical solutions closest to the ground and the population. With just over 10 000 cooperation projects involving nearly 5 000 French subnational governments, in France, none of the decentralized cooperation projects have focused on local finances until now. This initiative aims to fill this gap and provide local and regional governments and opportunity to reinforce their resources and means of action by learning with their peers. By concentrating decentralized cooperation initiatives on actions related to local finances, local and regional governments contribute to strengthening their leeway for action. Deeply rooted in the principles of solidarity, reciprocity, mutual understanding and knowledge exchange, decentralized cooperation is a powerful tool for the practitioners of all territories.
Support in the search for co-financing, diversification of financial resources, strengthening of technical capacities of local and regional administrations, expenditure management, creation of new revenue sources, developing local observatories, reinforcing information systems and investment measurement tools, are among the areas of work that can be supported. All French local and regional governments and their partners are invited to explore this new financing opportunity for their cooperation initiatives.
This call for projects is open to all countries and territories worldwide. However, projects falling within the scope of one of the geographical bilateral call for proposals of the DAECT are not eligible. These geographical calls include: the Franco-Moroccan, Franco-Tunisian, Franco-Palestinian, Franco-Senegalese, Franco-Lebanese, and the Franco-Mexican calls as well as the Franco-Quebec Fund for Decentralized Cooperation (the list can be found on the website France Diplomacy). These countries are covered by a bilateral agreement between the Ministry of Europe and Foreign Affairs and a partner foreign government or by a special support fund for decentralized cooperation.
Closing date: 31 October 2023