Municipal Pooled Financing of Infrastructure in the United States : Experience and Lessons
Despite a world awash with liquidity, large infrastructure supply gaps exist across developing and emerging markets. Infrastructure has been largely decentralized to subnational governments in many countries, and many policymakers are keenly intere...
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World Bank, Washington, DC
2017
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| Online Access: | http://documents.worldbank.org/curated/en/628371507561674012/Municipal-pooled-financing-of-infrastructure-in-the-United-States-experience-and-lessons http://hdl.handle.net/10986/28547 |
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okr-10986-285472021-06-08T14:42:45Z Municipal Pooled Financing of Infrastructure in the United States : Experience and Lessons Liu, Lili De Angelis, Michael Torbert, Sally INFRASTRUCTURE FINANCE PUBLIC INVESTMENT INTERGOVERNMENTAL RELATIONS DECENTRALIZATION POOLED FINANCING MUNICIPAL FINANCE Despite a world awash with liquidity, large infrastructure supply gaps exist across developing and emerging markets. Infrastructure has been largely decentralized to subnational governments in many countries, and many policymakers are keenly interested in developing subnational bond markets to give subnational governments access to private financing for infrastructure. Despite this, the transaction costs of bond issuance are still prohibitive for many subnational governments to access financing. Pooled financing, through regional infrastructure funds, municipal funds, or bond banks, has become a sought-after solution for helping subnational governments access private financing for infrastructure. In the United States, municipal bond banks that were established since the 1970s have become a cost-effective and stable model for expanding subnational financing for many small municipalities, while maintaining strong credit ratings with virtually no defaults from sub-borrowers. The municipal bond banks have been successful in lowering financing costs for many small, unrated local governments, with loan sizes as low as less than $50,000. This paper examines the policies and structures that have made pooled financing successful in the United States, including regulatory frameworks, governance and managerial systems, the role of project appraisal, operations and pricing, and managing the default risks of borrowers. The paper also explores broader lessons for developing countries that are interested in establishing pooled financing for subnational infrastructure. 2017-10-20T20:58:11Z 2017-10-20T20:58:11Z 2017-10 Working Paper http://documents.worldbank.org/curated/en/628371507561674012/Municipal-pooled-financing-of-infrastructure-in-the-United-States-experience-and-lessons http://hdl.handle.net/10986/28547 English en_US Policy Research Working Paper;No. 8212 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper United States |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
INFRASTRUCTURE FINANCE PUBLIC INVESTMENT INTERGOVERNMENTAL RELATIONS DECENTRALIZATION POOLED FINANCING MUNICIPAL FINANCE |
| spellingShingle |
INFRASTRUCTURE FINANCE PUBLIC INVESTMENT INTERGOVERNMENTAL RELATIONS DECENTRALIZATION POOLED FINANCING MUNICIPAL FINANCE Liu, Lili De Angelis, Michael Torbert, Sally Municipal Pooled Financing of Infrastructure in the United States : Experience and Lessons |
| geographic_facet |
United States |
| relation |
Policy Research Working Paper;No. 8212 |
| description |
Despite a world awash with liquidity,
large infrastructure supply gaps exist across developing and
emerging markets. Infrastructure has been largely
decentralized to subnational governments in many countries,
and many policymakers are keenly interested in developing
subnational bond markets to give subnational governments
access to private financing for infrastructure. Despite
this, the transaction costs of bond issuance are still
prohibitive for many subnational governments to access
financing. Pooled financing, through regional infrastructure
funds, municipal funds, or bond banks, has become a
sought-after solution for helping subnational governments
access private financing for infrastructure. In the United
States, municipal bond banks that were established since the
1970s have become a cost-effective and stable model for
expanding subnational financing for many small
municipalities, while maintaining strong credit ratings with
virtually no defaults from sub-borrowers. The municipal bond
banks have been successful in lowering financing costs for
many small, unrated local governments, with loan sizes as
low as less than $50,000. This paper examines the policies
and structures that have made pooled financing successful in
the United States, including regulatory frameworks,
governance and managerial systems, the role of project
appraisal, operations and pricing, and managing the default
risks of borrowers. The paper also explores broader lessons
for developing countries that are interested in establishing
pooled financing for subnational infrastructure. |
| format |
Working Paper |
| author |
Liu, Lili De Angelis, Michael Torbert, Sally |
| author_facet |
Liu, Lili De Angelis, Michael Torbert, Sally |
| author_sort |
Liu, Lili |
| title |
Municipal Pooled Financing of Infrastructure in the United States : Experience and Lessons |
| title_short |
Municipal Pooled Financing of Infrastructure in the United States : Experience and Lessons |
| title_full |
Municipal Pooled Financing of Infrastructure in the United States : Experience and Lessons |
| title_fullStr |
Municipal Pooled Financing of Infrastructure in the United States : Experience and Lessons |
| title_full_unstemmed |
Municipal Pooled Financing of Infrastructure in the United States : Experience and Lessons |
| title_sort |
municipal pooled financing of infrastructure in the united states : experience and lessons |
| publisher |
World Bank, Washington, DC |
| publishDate |
2017 |
| url |
http://documents.worldbank.org/curated/en/628371507561674012/Municipal-pooled-financing-of-infrastructure-in-the-United-States-experience-and-lessons http://hdl.handle.net/10986/28547 |
| _version_ |
1764467116891701248 |