Association for Public Policy Analysis & Management

The paper presents and overview of instrument designs that local government often use to mitigate problems associated with information resolution, and discusses how these instruments may facilitate the debt management function for cities. Given that the range of borrowing options and instruments depends upon the particularities of the institutional framework in a country, we conduct a comparative analysis of three representative countries—Bulgaria, Colombia, and South Korea. These three countries have adopted and implemented governance reforms in late 2000s, which seek to develop a broader set of regional and local government options for capital financing. The paper reviews governance institutions pre- and post reforms during 2000-2018, focusing on specific measures to improve information resolution mechanisms in newly adopted laws. Borrowing instrument options and debt compositions of three key cities in each country—Sofia, Medellin, and Seoul—will serve as case studies for the impact of top-down reforms on local governments. A comparative assessment of reforms from three emerging subnational capital markets will shed light on policy alternatives that other countries could consider to improve access to capital markets for their regional and local governments.