ABSTRACT
An emerging consensus in theoretical and policy analysis of development recognizes that investment in physical infrastructure can catalyze economic development. Large-scale historical and present-day physical infrastructural investments have, however, not been financed centrally, but locally, often through public financing. This chapter compares three contrasting models of local public financing for infrastructural investments in the People’s Republic of China (PRC), ranging from the most radical to the mainstream. The first is premised on the PRC’s former agricultural collectives, while the second is centered on the leasing of public land. The third, which is not yet in wide practice but is expected to gain importance, derives from the British local council tax system. The chapter argues that the choice of the best and most effective model of local public financing at any one time would depend on the underlying socio-economic conditions of a country at that time. When these conditions change, the choice of the model will also have to change.
