Cities now host half the world'spopulation and provide 70 percent of world Gross DomesticProduct (GDP). Managing them well is vital for development.The Bank has assisted nearly 3,000 municipalities worldwideover the past decade. This Bank assistance has helpedstrengthen the planning, finance and service provisiondimensions of municipal management through 190 operationsidentified by Independent Evaluation Group (IEG) asmunicipal development projects (MDPs). Best results formunicipalities came through stronger flows of revenues,better financial management, information systems and abilityto manage procurement. Weaker results were found inmonitoring and evaluation, operations and maintenance,private finance of services and lack of poverty focus. Thepurpose of this IEG special study is to illuminate the scaleand scope of Bank support for municipal development and todraw specific lessons from the achievements and failures ofa sample of individual projects. The study focuses on threedimensions of municipal management; planning, finance, andservice provision. The planning dimension refers to thecapacity of a municipality to forecast and oversee its ownprogress. It includes information systems, monitoring andevaluation (M&E), city planning, and investmentstrategies. The finance dimension refers to how amunicipality manages the resources needed to provideservices to its constituents. It covers financialmanagement, own-resource mobilization, access to credit, andprivate funding. The service provision dimension refers tothe capacity of a municipality to manage the servicesrequired by city residents and business people through theeffective prioritization of investments, management ofcompetitive procurement, and sustaining of services throughoperations and maintenance (O&M).
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