Guidelines on Local Government Borrowing and Recent Developments in South East Europe
8. How local government associations can help improve the local debt legislation and credit market

8.5. In relation to donors and international financial institutions

The scarcity of resources which the local government associations can draw from their members should prompt them to look for alternative funding. To this end, donors represent the the most likely source of funds. The European Union, the United States Agency for International Development and the likes may provide much needed technical assistance and funding to the associations’ projects. Donor aid can materialize in direct support to member local governments. In the case of local public debt, the associations could draw technical assistance for development of analyses, handbooks, draft legislation, local debt strategies and even carrying out credit ratings.

As regards international financial institutions, the associations could play a role in facilitating contact to member local governments and promoting local credit market enhancement mechanisms, such as development funds or guarantee funds. Such examples are already present in South-Eastern Europe, as already described through the paper.