Poor Municipal Spending for Infrastructure Development and Gap for Investment: A Case of Bangladesh

Mohammad Hossain


The study aims at assessing (Bangladeshi) municipal financial capabilities in meeting growing demands for
infrastructure facilities and other services. Determining municipal financial capacities is important mainly
because the factors such as around 3.1 percent (Note 1) annual urbanization growth, 40-50 percent (Note 2)
urban service gap and creation of new urban bodies put tremendous pressure on municipal authorities to meet
the growing demand for infrastructure facilities and citizenry services. By analyzing sampled municipal annual
budget documents along with urban population data, and questionnaire survey, the study finds that
municipalities are as poorly capable as to spend less than US$10 per person annually. The study also finds 18-97
percent shortage of estimated transfer revenues, which are generally being used for building infrastructure
facilities that literally requires huge capital investment. So vacuum for investment is found. Around 70 percent
respondents interviewed are dissatisfied with the service qualities and quantities they receive. Thus, the study
suggests that government should give immediate attention to find alternate financing options for
investment-hungry municipal infrastructure development sector.

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DOI: https://doi.org/10.5539/ijbm.v8n11p27

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