Rethinking City Revenue and Finance

The report identifies a $15 trillion global infrastructure investment gap by 2040 and argues that cities must move beyond traditional funding to innovative, diversified sources. It categorizes cities into four typologies based on political autonomy and financial self-sufficiency: self-reliant, aspiring, striving, and dependent. Key recommendations include leveraging land-value capture, blended finance, and public-private partnerships (PPPs), while strengthening municipal creditworthiness and governance to attract private investment for green and inclusive infrastructure.

• There is a massive global infrastructure investment gap, estimated by the Global Infrastructure Hub in 2018 at $15 trillion through 2040, which must be addressed to make infrastructure net zero and climate-resilient.
• Cities face significant barriers to financing, including a lack of institutional capacity, limited private sector engagement, inaccessibility of international finance, and a lack of funding for emergency situations.
• The COVID-19 pandemic severely impacted city budgets, with 92% of large cities entering or expecting operating budget deficits and 48.48% of surveyed cities pausing or postponing infrastructure projects.
• The report establishes four city typologies based on political autonomy and financial self-sufficiency: 'self-reliant' (high autonomy, high self-sufficiency), 'aspiring' (high autonomy, low self-sufficiency), 'striving' (low autonomy, high self-sufficiency), and 'dependent' (low autonomy, low self-sufficiency).
• Land-value capture (LVC) is highlighted as a powerful but underutilized tool in developing countries to fund infrastructure by capturing windfall increases in property value caused by public action. Examples include São Paulo's use of Certificates of Additional Construction Potential (CEPACs), which generated over $1 billion in revenue.
• Blended finance, which combines public concessional funds with private commercial capital, is essential for high-impact projects without a commercial track record. In Colombia, FINDETER acts as a second-tier lender to provide long-term infrastructure financing to municipalities.
• Municipal bonds are a primary financing tool in the US, where they have historically shown lower default rates than corporate bonds. However, they are rare in developing economies; only 6% of the 500 largest cities in those regions have a track record of successful municipal bond issuance.
• To improve financial management, the report proposes five guiding principles: maximizing returns on existing assets, stewardship of finances, long-term planning with contingencies, exploring innovative revenue options, and establishing effective partnerships.
• The report advocates for a 'build back better' approach to recovery, prioritizing green infrastructure, inclusive mobility, and the integration of vulnerable neighborhoods to reduce socio-spatial segregation.

APA

World Economic Forum (2022). Rethinking City Revenue and Finance. https://www3.weforum.org/docs/WEF_C4IR_GFC_on_Cities_Finance_2022.pdf

Chicago

World Economic Forum. Rethinking City Revenue and Finance. 2022. https://www3.weforum.org/docs/WEF_C4IR_GFC_on_Cities_Finance_2022.pdf.

Wikipedia

{{cite report |author=World Economic Forum |title=Rethinking City Revenue and Finance |date=August 2022 |url=https://www3.weforum.org/docs/WEF_C4IR_GFC_on_Cities_Finance_2022.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{worldeconomicforum2022rethinking, author = {{World Economic Forum}}, title = {{Rethinking City Revenue and Finance}}, institution = {World Economic Forum}, year = {2022}, month = aug, url = {https://www3.weforum.org/docs/WEF_C4IR_GFC_on_Cities_Finance_2022.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }