Leveraging Governance Innovation for Urban Climate Resilience: Strengthening Municipal Fiscal Autonomy in Bangladesh
- Uswatun Mahera Khushi, Jatiya Kabi Kazi Nazrul Islam University
Summary:
This research investigates the critical nexus of fiscal autonomy, governance innovation, and urban climate resilience in Bangladeshi municipalities. A mixed-methods case study approach, combining an econometric analysis of seven municipal budgets with rich qualitative insights from Key Informant Interviews, reveals a systemic crisis: a self-reinforcing “governance-finance-resilience trilemma.” The findings demonstrate that municipalities operate with an illusory sense of fiscal autonomy, trapped in a “fiscal dependency trap” where inadequate local revenue is compounded by a “crowding-out effect” from external grants. This financial instability forces a reactive, project-driven “boom-bust cycle” for climate action, creating a perilous “maintenance trap” where new infrastructure lacks sustainable local funding for long-term upkeep. The study concludes that fiscal autonomy and governance innovation are co-dependent and synergistic: the former provides the resources (“fuel”), while the latter provides the mechanisms (“engine”) for their effective use. The report offers evidence-based, multi-level recommendations for national and local policymakers to reform the fiscal architecture, strengthen institutional capacity, and empower local governments as the primary agents of a sustainable, equitable, and resilient urban future.
This research was part of a multi-country research initiative led by the Global Disaster Preparedness Center of the American Red Cross. Access all final publications here.