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Intergovernmental Transfers for Environmental Infrastructure

Lessons from Armenia, the Russian Federation and Ukraine

image of Intergovernmental Transfers for Environmental Infrastructure

This report draws on three detailed case studies from Armenia, the Russian Federation and Turkey and on the experience of OECD countries to provide guidance on how transfers from central budgets to local authorities could be designed to finance environmental infrastructures in transition economies. The report also investigates mechanisms for transferring financial resources for water services from higher to lower levels of government.

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Main Findings from Case Studies

Although there is diversity in Eastern Europe, the Caucasus and Central Asia (EECCA), most EECCA countries have engaged in a systematic devolution of responsibilities for the construction and maintenance of urban environmental infrastructure to sub-sovereign levels of government (see Annex I). As owners of the communal service infrastructure, municipalities are responsible for its rehabilitation, modernisation, and development. Armenia and Tajikistan are notable exceptions.

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