Association for Public Policy Analysis & Management

Most cities in developing countries are experiencing a highly disorganized urban growth characterized by territorial dispersion and very low urban density. Besides, institutional and budgetary fiscal weaknesses resulted in a severe under-provision of urban infrastructure in those areas of new urban extension. This feature has been particularly dramatic in many metropolitan areas from Africa, Latin America and Southeast Asia where high and very low-income areas are framing rapid urban sprawl. This paper analyses the feasibility of widening public funding of infrastructure investment using Land Value Capture instruments. Using very innovative databases for Buenos Aires Metropolitan Area, it explores which are the redistributive aspects of LVC to be taken into account when they are applied in a highly dispersed income and wealth urban location, and, under which circumstances coordination with other fiscal instruments (such as the property tax) could be useful. Dissemination of these results among policy makers is a contribution to the development of local public finance in many developing countries.